Our People are Our Main Asset
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Federal Grid3 Company of Unified Energy System Social Responsibility and Corporate Sustainability Report 2 3
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Our People are Our Main Asset
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Federal Grid3 Company of Unified Energy System Social Responsibility and Corporate Sustainability 2 Report 3 Contents
Annotation 4 Statement of the Chairman of the Management Board 5
Federal Grid Company General Corporate Governance Information
General Information 8 Federal Grid Company’s Governance Structure 16 Organizational Structure 12 Top Executives’ KPIs 19 The Company’s Mission and Values 14 External Quality Ratings of Corporate Governance and Information Transparency 20
07 15
Internal Control System The Risk Management System
21 25
Understanding of Corporate Human Resources Social Responsibility and Management Sustainable Development Personnel Management 40 The Basic Ideas of the The Formation of Attracting and Developing Young Professionals 52 Company Responsibility Non-financial Reporting 30 in Federal Grid Company Staff Trainin 56 Public Agenda for 34 Social Programs 62 Sustainable Development CSR and Sustainable Labor Protection 66 31 Development: 2012 Key Events 36 29 39
6 Managing of the Anti-corruption and Prevention Economic Impact of Conflict of Interests System
Key Aspects of Social and Economic Impact JSC Federal Grid Implementation of Management 72 Company`s Anti-Corruption Policy Anti-Corruption Policy 90 and Program for Participation in Implementation of Large Scale Anti-corruption and National Projects 83 Program for Prevention of Corruption and Settlement Settlement of Conflict of Tariff Policy 85 of Conflict of Interests in Interests in Federal Grid Russian Grids: Federal Grid Company and IDGC Federal Grid Company for Company in 2012 95 Holding 87 2012-2014 94 2013 Plans 100 71 89
Environmental Impact Stakeholders Relations Management
Environmental Impact Management System in the Stakeholders Relations in 2012 118 Company and its DSCs 102 Dialogue with Stakeholders, "Human Capital Key Indicators of the Environmental Impact 104 Management in Federal Grid Company" 129 Company`s Initiatives in the Field of Protection of the Public Hearings on Draft Report 137 Environment 112 Conclusion on the Results of Public Assurance 144 101 117
APPENDICES
APPENDIX 1. The UNEG Reliability Provisions 148 APPENDIX 5. A Table of Stakeholders’ Suggestions Pertaining to the Disclosure of Information in the Report, APPENDIX 2. Innovative Development of the UNEG 154 Voiced at the Dialogue on 05.04.2013 and at the Public APPENDIX 3. GRI Guidelines Indicators (G 3.1 and the Hearings on 26.04.2013 166 Industry Protocol for Electric Power Industry), Reflected APPENDIX 6. A List of Natural Areas in Preferential in the Report 159 Protection (NAPP) Accessible for JSC FGC UES for the APPENDIX 4. A Report on the Fulfillment of the 2012 CSR Purposes of Operation 168 Plans and Obligations of JSC FGC UES (Draft) 165 Independent Assurance of Social Reporting 171 Glossary and Abbreviations 178 148
6 Annotation
Federal Grid Company’s 2012 Report on Social Responsibility and Corporate Sustainability is the sixth report of Federal Grid Company (the Company) in the field of sustainable development, demonstrating the Company's focus on increasing the level of transparency and the quality of stakeholder engagement. This Report has been prepared in accordance with the following international standards: GRI Sustainability Reporting Guidelines (version 3.1) and Energy Protocol, Reporting Guidelines by Transparency International, an international non-governmental corruption research organization, AA1000SES Stakeholder Engagement Standard.
The Report covers the activities of The Report also describes the Federal Grid Company, its branches – approaches to the management of Backbone Electric Grids (MES), as well sustainable development, efficiency in as directly subordinated subsidiaries the socio-economic impact, and dependent companies listed in environmental impact figures, paragraph 1.1 of the Report. The GRI approaches to the implementation of application level is B +. anti-corruption activities undertaken by the Company during the reporting period, as well as information on reliability assurance and innovative ”Human Capital development. Management in Federal The Report includes information on the execution of the 2012 plans and Grid Company” is the commitments. priority theme of this To know the stakeholders’ opinions, in Report. the preparation of this Report, the Company held a dialog with stakeholders on the topic "Human The previous report was devoted to the Capital Management in Federal Grid implementation of the Company’s Youth Company” on April 5, 2013. Policy as part of the personnel After the Report had been prepared, it management process. Therefore, we was discussed at the public hearing can assume that the 2012 Report focus held on the basis of the AA1000SES is more large-scale compared to the standard. One of the outcomes was the previous report. signing by the stakeholders’ representatives of the Opinion on public assurance of the Report.
4 Statement of the Chairman of the Management Board
DEAR COLLEAGUES, PARTNERS AND FRIENDS!
The principles of sustainable development the public reporting over the past six and corporate social responsibility are years has enabled the intake of objective among the Company’s main priorities that feedback from the public. have been determining the activity of the Company since it was founded. In turn,
2012 was a special year for the Company, marking its 10th anniversary. In this regard, this Report presents a retrospective look at our work in the formation of the socially oriented company in recent years.
Our achievements are the It is also important for us that the Federal Grid CompanyFederal Grid Company’s result of hard work from all sustainable development activities have the employees of Federal earned the approval of state authorities, partners and the professional community. Grid Company. It is them In 2012, the Ministry of Energy of the who are the pride and the Russian Federation marked Federal Grid Company’s contribution to the key value of the company! development of social policy in the power industry. The Company’s 2011 Social Responsibility and Sustainability Report was recognized as the best social report in the country, and in the framework of Awareness of the role of each employee in the Second St. Petersburg International the overall success changes approaches Legal Forum, Federal Grid Company was to personnel development – from human named one of the leaders in the resources management to human capital implementation of anti-corruption policy management. Therefore, Federal Grid among the power industry enterprises of Company places high emphasis on the Russian Federation. attracting young professionals and Carrying out its mission to ensure a interacting with universities, develops the reliable energy supply to the country, reserve personnel system, and actively Federal Grid Company is counting on the implements new housing programs. Our support of all interested parties - experience is invaluable, and the shareholders and investors, universities, Company will use it in making future research institutions, and equipment plans for the development of corporate manufacturers. social policy. Goals can only be achieved together!
Kind regards, Oleg Budargin Chairman of the Management Board, Federal Grid Company 6 Federal Grid Company General Information
Federal of Unified Grid Company Energy System FEDERAL GRID COMPANY GENERAL INFORMATION
General Information
Federal Grid Company of the Unified Energy System was established in 2002 in accordance with Russia’s power sector reform as an organization to manage the Unified National Electric Grid (UNEG) for its maintenance and development.
The Company’s headquarters are for the reliable reliability of the supply of located at 117630, Moscow, Academic electricity supply in the territory of the Chelomeya Street, 5A. Russian Federation. In accordance with Federal Law № 35-FZ "On Electric Power Industry" The Company operates almost on dated 26.03.2003, Federal Grid Company is a natural monopoly that provides the entire territory of the Russian services for the electricity transmission Federation. The Company’s electric of electricity though the Unified National grid facilities are located in 75 Electric Grid (UNEG) and is responsible Russian regions.
Company’s geographical scope
MES NORTH-WEST
MES CENTER
MES WESTERN SIBERIA MES URALS
MES VOLGA MES EAST MES SIBERIA
MES SOUTH
8 The number of consumers with which Number of the Company's the Company signed agreements for electricity transmission through the Consumers UNEG has significantly increased during the 2008-2012 period. Growth in the number of consumers is due to: — Implementation of new technological 150 158 207 connections to the UNEG; 105 121 — Step-by-step termination of the "last 2008 2009 2010 2011 2012 mile" mechanism etc.
The main consumers of technological — Construction and reconstruction of connection to the Company’s grids are: integrated real estate facilities; — Large-scale business (oil and — Distribution grid companies. steelmaking industries, manufacture of construction materials, etc.)
Major Consumers of Technological Connection to Federal Grid Company's Grids % % 5% 54Large-scale business (oil and Distribution41 grid companies Other steelmaking industries, manufacture of construction materials, etc.)
The structure of major consumers of — Retail suppliers (RS); the UNEG-based electricity — Large power consumer companies; transmission services is as follows: — Exporters of electricity. — Distribution grid companies (DGC); — Independent grid companies (IGC);
Сonsumer breakdown by category (share in the total quantity) % % % % 26 26 25 22 1% DGC RS IGC Consumers Exporters FEDERAL GRID COMPANY GENERAL INFORMATION
The share of the Company's largest consumers in 2012 revenues from UNEG electricity transmission services
Tyumenenergo
10.5%
IDGC of the Center 9.8%
9% MOESK
47.8% IDGC of the Urals’ branch – 4.8% Sverdlovenergo
Lenenergo 4.5% % 3.3% 3.2 Kubanenergo
Other IDGC of the Urals’ branch – consumers Chelyabenergo
Key Operational Indicators
2008 2009 2010 2011 2012 Number of substations, pcs 800 804 805 854 891 Length of power transmission lines, total, 121.5 121.1 121.7 124.6 131.6 thousand km Electric energy supplied to the grids of the 471,958.118 452,662.172 470,648.072 484,663.552 498,287.684 distribution grid companies, to direct consumers and to the independent JSC-Energo, net (kWh, million) Electric energy supplied via UNEG grids to 16,704.763 13,628.309 15,716.33 19,284.808 15,768.82 bordering states, net (kWh, million)
Capacity demand (MW) 90,042 94,636 91,179 90,937 90,492 Electric energy losses in the UNEG grids 21,866 22,121 22,526 22,553 21,946 (kWh, million)
10 Shares and Shareholding Structure
In accordance with the Company’s The Company has more than 400,000 Articles of Association, as of 31 shareholders. December 2012, the share capital of The Russian Federation, represented by Federal Grid Company stood at the Federal Agency for State Property RUR630,193,329,370, divided into Management (Rosimushchestvo), which 1,260,386,658,740 ordinary registered owns 79.55% of the share capital, is the non-documentary shares with a largest shareholder. nominal value of RUR0.50 each share.
Shareholding Structure
Minority Rosimushchestvo shareholders % 79.55 20.45%
For the purpose of improving — Sberbank of Russia (1.1252%) - a shareholders relations, the Company professional securities market analyzed the shareholders database and participant that deals with securities identified key shareholder groups, of the most reliable and ordinary shares and DRs holders. The investment-attractive issuers; Company’s free float stood at 20.45%. — Index of Energy FGC UES company The main minority shareholders of the (1.0891%). Company are institutional investors and holding structures, with retail investors 20% of the Company’s free float accounting for 2.14%. includes: foreign institutional investors, such as major funds focused primarily The Company’s largest minority on Russia, whose assets under shareholders, owning more than 1% of management exceed USD 1 billion: Federal Grid Company shares, are: Market Vectors ETF Trust Russia ETF — Tsentrenergokholding (2.6534%); (USD 1.8 billion), East Capital Russian — Rusenergo Fund Limited (1.6922%) - Fund (USD 1.5 billion), Swedbank Robur Russia's largest fund in the energy (USD 1.2 billion) and BlackRock funds. sector, whose funds are invested in stocks of Russian electricity generators and electric grid companies; FEDERAL GRID COMPANY GENERAL INFORMATION
Investor Breakdown by Geography
Germany
Switzerland As before, 9% % American and 7 Scandinavian United Kingdom 6% shareholders % account for the USA 37 % Other 4 largest share (37%) of foreign investments.
37% Scandinavia
The Company’s shareholders are JSC IDGC Holding as JSC Russian Grids predominantly long-term investors, with and contributing to the share capital of low portfolio turnover exceeding two Russian Grids 79.55% State-owned years. shares in Federal Grid Company as the Russian Federation contribution. On November 22, 2012 Russian President Vladimir Putin signed Decree "On Open Joint Stock Company Russian Grids”. The Decree stipulates re-naming
Organizational Structure
As of 31 December 2012, the Company’s in different sectors of economy, functional structure incorporated: including supporting electric grid — Head Office (Moscow); facilities. Tomsk Backbone Grids and Kuban Backbone Grids are subsidiary — 8 backbone electric grids (MES), backbone grid companies. branches; — 41 backbone electric grid transmission line companies (PMES), branches;
In 2012, SDC Central — 1 dedicated production base “Bely Research Institute Rast”, branches; NPKenergo (100%) was — 1 Technical Supervision Center, voluntarily liquidated. branch. UEUK (33.33%) and UC As of December 31, 2012, Federal Grid Energetiki (100%) are also Company has 22 subsidiary and under liquidation. dependent companies (SDCs) operating
12 General meeting of shareholders
Board of Directors
Chairman of the Management Board
Executive Management Board Administration
Federal Grid Company’s Regional Branches — Backbone Electric Grids (MES)
MES MES West MES Center MES Volga MES South MES Urals MES Siberia MES East North-West Siberia
Federal Grid Company’s — Backbone Electric Grid Transmission Line Companies (PMES)
Valdaiskoye Bryanskoye Lower- Kaspiyskoye Permskoye Eastern Zabaikalskoye Amurskoye Volga Upper-Don Vyborgskoye Kubanskoye Sverdlovskoye Cenral West- Primorskoye Mid- Siberia Volgo-Okskoye Karelskoye Volga Rostovskoye South Southern Khabarovskoye Urals Krasnoyarskoye Volgo-Donskoye Leningradskoye Samarskoye Stavro- Yamalo- polskoye Orenburgskoye Nenetskoye Kuzbasskaya Moskovskoye Novgorodskoye Nizhegorodskoye Priokskoye Sochinskoye Omskoye Severnoye Chernozemnoye Tomskoye
SPC Hakasskoye Bely Rast
Technical Supervision Center
Subsidiaries and branches directly subordinated to the Company (share in charter capital)
Organizational Structure SRG FGS UES (100%) ESSK UES (100%) APBE (100%)
Severovostokenergo (49%) CIUS ES (100%) Index of Energy- FGS UES (100%) UC Energetiki (100%) Chitatekhenergo (100%) GVC Energetiki (50%) Elektrosetservice UNEG (100%) Mobile GTES (100%) Kuban Backbone Grid (48,99%) Glavsetservice UNEG (100%) Nurenergo (76,99%)
Tomsk Backbone GruzRosenergo (50%) Grids (52,025%) IT Energy Service (39,99%) Enin (38,24%) VESK (100%) UEUK (33,33%)
MUS Energetika (100%)
Energotechkomplekt (48,99%) FEDERAL GRID COMPANY GENERAL INFORMATION
The Company’s Mission and Values
The integration of a Our Mission is to ensure reliable Unified several-thousand-strong team of the National Electric Grid (UNEG) operation Company largely depends on how and development for the economic growth much the same way employees of Russia and uninterrupted power supply to consumers across all Russian regions. understand ethical and professional guidelines.
Federal Grid Company manages a unique In the course of doing work, specifically infrastructure that brings together the organized and collectively carried out, the IABILITY main units of electricity generation and Company established the range of the REL consumption in the country in the unified values that are important for the Company’s CY R team to carry out their mission. IEN ESP system. IC ON FF S E IB IL
I D Federal Grid Company’s value ring shows how the Company’s strategic T
Y E
V E goals (the outer circle) are achieved with the help of corporate values
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EMPLOYEES O T (inner circle), with a key role being played by Company’s biggest asset - P S I M S N U S E R its employees. N N T E O T N V M E A P S V T R LI I I OF NA T best, entrusting them new functions and O ESSIO C Employees N E projects and creating the conditions for S FF People are the Company’s main asset. E Uninterrupted power supply to the their career growth. regions, largest companies, cities and towns depends on the well-coordinated Responsibility Federal Grid Company’s employees must work of the Company’s employees. perform their duties with maximum Therefore, the Company values each responsibility, not to commit neglect and employee, regardless of age, gender, try to avoid mistakes. The Company, for nationality and position, providing equal its part, is striving to provide its opportunities for successful work, employees a fair wage, good benefits professional development and career package, safe and comfortable working growth. conditions. Development Federal Grid Company aims to match the Trust Trust in colleagues and confidence in country’s pace of development, learn new their professionalism, honesty and knowledge, and implement innovations. openness allow the Company’s team Working in the Company requires that members to effectively cope with the each employee not only meet the tasks and give the Company a high qualification requirements at the time of prestige in the eyes of partners and getting an employment, but wish to consumers. Federal Grid Company values constantly develop. its reputation and is striving to maintain Efficiency and improve it through daily reliable and The Company is one team aimed at the high quality work. overall result – an uninterrupted power supply to its consumers. Federal Grid The above-mentioned Mission and Values Company’s employees must strive to solve are reflected in the Code of Corporate all the problems in the set time frame and Ethics, which was adopted in 2009. In with reasonable resource costs. 2010 and 2011, it was updated*. * Order № 567 of Federal Grid Professionalism Company’s Chairman Federal Grid Company places high of the Management demands on employees' professionalism Board (dated and gives special attention to the problem 19.09.2011) on the of forming suitable personnel. Giving Code of Corporate employees an equal opportunity to prove Ethics. themselves, the Company promotes the
14 Corporate Governance
Federal of Unified Grid Company Energy System CORPORATE GOVERNANCE
Federal Grid Company’s Governance Structure
The Company's supreme management body is the General Meeting of Shareholders. The Board of Directors determines the strategy and main areas of the Company’s development and supervises the operations of the executive bodies in the interests of the Company and its shareholders.
In its activities, the Board of Directors of The Board of Directors shall be elected by Federal Grid Company is guided by the the General Meeting of Shareholders via Federal Law “On Joint Stock Companies”, cumulative voting for a period of one year. Russian legislation and the Company’s The Board shall include 11 members, 6 of internal documents: the Articles of whom should be representatives of the Association, the Code of Corporate State according to the Company's Articles Governance, the Regulations of the Board of Association. of Directors Activities.
Federal Grid Company’s Governance Structure
General Shareholders HR and Remuneration Meeting Committee
Chairman of the Board of Directors
Board of Directors, Audit Committee 11 members of the Board of Directors, including 4 Independent Directors
Chairman of the Management Board Strategy Committee
Management Board Everyday management of Federal Grid Company’s operations is carried out by the Chairman of the Management Board and the Management Board, which report to Investment Committee the General Meeting of Shareholders and the Board of Directors
16 Composition of the Board of Directors acting from 29 June 2012, Committees of the Board of Directors and the Management Board of Federal Grid Company
1. Ernesto Ferlenghi 2. Andrey Malyshev Board of Directors 3. Oleg Budargin 11 members of the Board of 4. Boris Ayuev Directors, including 4 Independent 5. Rashid Sharipov Directors 6. Vladimir Rashevsky 7. Elena Titova 8. Vyacheslav Kravchenko 9. Ilya Scherbovich 10. Boris Kovalchuk 11. Denis Fedorov
Audit Committee Chairman of Committee - Rashid Sharipov Board of Directors’ Committees HR and Remuneration Committee Currently, four Committees have Chairman of Committee - Denis Fedorov been established and are operating in the Company Investment Committee Chairman of Committee - Andrey Malyshev
Strategy Committee Chairman of Committee - Vyacheslav Kravchenko
1. Oleg Budargin Management Board 2. Andrey Kazachenkov Everyday management of Federal 3. Andrey Murov Grid Company’s operations is 4. Roman Berdnikov carried out by the Chairman of the 5. Yuri Mangarov Management Board and the 6. Andrey Cherezov Management Board, which are 7. Nikolay Varlamov subordinate to the General Meeting 8. Vladimir Shukshin of Shareholders and the Board of 9. Sergey Sergeyev Directors 10. Valery Sedunov
According to local regulatory documents of the Board of Directors of the Company. Federal Grid Company, a person performing The Board of Directors of Federal Grid the functions of the sole executive body may Company consists of 4 independent directors not be at the same time the Chairman of the (out of 11 directors): Vladimir Rashevsky, Board of Directors of the Company. Chairman of the Management Board, SUEK; The members of the Management Board may Elena Titova, Chairman of the Management not comprise more than 25% of the Board of Board, All-Russian Regional Development Directors of the Company. The members of the Bank; Rashid Sharipov, Deputy General Management Board are allowed to combine Director, KFK – Consult; Ilya Shcherbovich, their positions in the management bodies of President, United Capital Partners (UCP) other organizations only with the consent of Group of Companies. CORPORATE GOVERNANCE
The Audit Commission is elected annually The Company’s shareholders are entitled by the General Meeting of Shareholders to to manage the supreme governance body control the Company’s financial and or provide recommendations through the business operations. following mechanisms: In Federal Grid Company there are 1. Nominating a representative to the mechanisms designed to prevent conflicts Board of Directors, a Committee of the of interest in the supreme governing body Board of Directors, the Audit Commission; - the Board of Directors: 2. Making proposals for the agenda of the 1. The Members of the Board of Directors General Meeting of Shareholders; are recommended that they refrain from 3. Summoning an extraordinary General dealing in the Company’s securities Meeting of Shareholders; during the period when they have an access to insider information. 4. Direct voting at the General Meeting of Shareholders; 2. The Members of the Board of Directors’ obligations not to disclose insider 5. Requesting for information on the information, as provided by the Company’s operations. Regulation "On insider information", shall In 2012, the Company’s Board of Directors remain in force for a period not less than approved a new version of the six months after the elimination of the Regulations on the Internal Control grounds on which the person is System, according to which the Board of recognized as an insider, unless a longer Directors shall take the following period is provided by the agreement measures to supervise how the company between the insider and the Company, or assesses its economic, environmental internal documents of the Company. and social efficiency: 3. The members of the Board of Directors 1. Initiate audits of the Company’s of the Company are required to disclose to operations via the Chairman of the the Audit Committee of the Board of Management Board; Directors of the Company any information 2. Consider and make decisions on the on the ownership of the Company’s internal control procedure reports securities, as well as the sale (no later submitted by Chairman of the than 5 days) and/or purchase of the Management Board or the Audit Company’s securities. Committee of the Board of Directors; 4. Not later than the third day of the 3. Review the results of the internal month following the reporting month, control (opinions of the Company’s Audit insiders are required to submit to the Commission and other materials from the insider information control department a Company’s departments authorized to written declaration of transactions made carry out independent efficiency checking during the reporting month with the of the financial and economic activity and Company and/or SDCs securities. control procedures); In the event of a conflict of interest, the 4. Regularly assess the effectiveness of Chairman of the Management Board and internal control system and continuously Member of the Management Board shall improve internal control procedures. inform the Board of Directors, and refrain from voting on the relevant issues. The Chairman and Members of the Management Board are required to disclose information on the ownership of the Company’s securities, as well as their sale (disposal) and/or acquisition in accordance with the laws of the Russian Federation.
18 Top Executives’ KPIs
Payments to the members of top executives are made on the basis of the approved organizational and administrative documents of the Company (are developed by the HR and Remuneration Committee of the Board of Directors) and imply that the top executives have met key performance indicators (KPIs). In 2012, the following KPIs were applied Annual KPIs: (Annex № 1 (extract) to the Minutes of the — cost reduction for the acquisition of Board of Directors meeting (№ 166 dated goods (work, services) per unit of 28.06.2012): output of not less than 10% per year Semi-annual KPIs: within three years in real terms; — relative number of restrictions on — EBITDA, RUR million; electricity transmission services (%); — efficient implementation of the Cost — no fatal accidents or group accidents, if Management Program (CMP),%; there is a casualty that results in a — No major emergencies; serious injury to an individual; — electric energy losses in the grid used — financial stability indicator, i.e. the by Federal Grid Company to provide financial leverage ratio; electricity transmission services (in %); — meeting schedules for funding and — meeting schedules bringing on line developing the investment program power facilities and implementing plans with progressive totals up from the for financing and development (in %). beginning of the year (in %).
The approved target semi-annual and annual KPIs for the Company’s top executives in 2012 have been achieved in full. CORPORATE GOVERNANCE
External Quality Ratings of Corporate Governance and Information Transparency
The Russian Institute of Directors (RID) According to experts, this score informs completed an independent analysis of the the owners of a fairly low risks of losses main components of the Company’s related to the quality of corporate corporate governance system: the rights governance. of shareholders, the activities of the management and control bodies, Furthermore, the Company ranked information disclosure and corporate fifth in the information transparency social responsibility. ranking of Russian companies, RID experts assigned to the which was compiled by the Agency Company a score of "7+" on the for Political and Economic national corporate governance Communications.
scale, which corresponds to a "Developed Corporate Governance According to the experts, based on the Practice". survey of which the ranking was made, Federal Grid Company pays great attention to the development of The score of "7+" on the national information policy and strictly complies corporate governance scale is assigned to with the requirements of current companies which comply with the legislation on information disclosure. requirements of Russian legislation in the field of corporate governance, follow the greater part of the Russian Code of Corporate Conduct and certain recommendations of the international best practice of corporate governance.
20 Internal Control System
Federal of Unified Grid Company Energy System INTERNAL CONTROL SYSTEM
Objectives of the internal control system
The Internal Control System (ICS) was formed in 2008. Its main goals are improving the Company’s performance and reliability of the financial statements of the Company, strengthening investor confidence in the Company and its management bodies, preserving assets and the efficient use of the Company’s resources.
On August 2, 2012, the Company’s — achievement of the strategic goals of Board of Directors approved new development, the implementation of Regulations on the Internal Control financial and business plans; System. Particular attention is focused — prevention, timely detection of and on the preventive control of the response to threats to the Company’s Company’s activities by means of risk activities; management. This task is performed by means of early identification, — Prevention, detection and elimination assessment and management of risks of violations when business that threaten the Company’s business transactions are carried out; operations and reputation, the health of — completeness, reliability, usability workers, the environment and property and reliability of the Company’s interests of shareholders and investors. financial, accounting and Currently, the internal control system management information and provides: reporting. — compliance with applicable laws and internal policies, regulations and procedures of the Company;
Internal Control Principles
— system approach; — documentation of procedures; — timeliness; — documentation of results; — unity; — feasibility; — continuity; — interaction; — separation of powers; — development.
The principles of internal control disclosed in the 2011 Report have not changed and the Company continues to follow them.
The Structure of the Internal Control System’s Bodies and Communications
The internal control system’s — Chairman of the Management Board; participants are: — special-purpose bodies of the — Board of Directors; internal control system; — Audit Commission; — the Company’s Internal Units — Audit Committee of the Board of Directors;
22 Upper levels of the Internal Board of Directors Control System (ICS) – Level of Strategic Audit Committee Audit Commission Management (Principles of ICS Chairman of the performance) Management Board and monitoring of the ICS
Special-purpose bodies of the ICS – Internal Control Department of Control Department of Technical level of implementation, Department and Audit Supervision and Audit maintenance and monitoring of the Department of Investment Department of Reliability efficiency Planning and Reporting and Analysis of ICS performance
Control Procedure Owners – Control Procedures Owners Business Process Owners level of introduction, Sub-divisions Risk Owners implementation Control Procedure Owners of risk management activities / control Control Procedure Executives procedures and monitoring its efficiency
Further information about the functions of the internal control system bodies is presented in the 2012 Annual Report of Federal Grid Company.
The effectiveness of the internal control system is provided by the interrelation of the three constituents of management processes:
RISK MANAGEMENT INTERNAL CONTROL
INTERNAL AUDIT INTERNAL CONTROL SYSTEM
The Company widely uses the practice of conducting comprehensive inspections of its branches and SDCs, in which, along with the specialized control bodies, other departments of Federal Grid Company are involved.
In 2012, specialized control bodies — internal complex and target audits performed inspections in all Federal (including investment projects Grid Company’s branches – Backbone implementation, fulfillment of Electric Grids (MES). 21 SDCs of Federal budgets, programs and plans, Grid Company were audited. execution of agreements etc.). Subjects of inspections: Based on the inspection results, — internal audit of business processes; measures are being taken promptly and in full to address the revealed violations, — technical audit (complex and target shortcomings, deviations, with a audits); subsequent control over the — audit of financial and operating implementation of all planned activities. activities; — audit of facilities’ preparedness to operate in autumn-winter period and in special conditions;
2013 Plans to Improve the Internal Control
Following the adoption of the revised The following are key objectives of Regulations on the Internal Control upgrading the Internal Control System: System, development priorities are: — integrating the Internal Control implementing standardized approaches System and risk management into a to the realization of internal control single management system for the functions in the branches, updating the prevention, timely detection and similar regulations in subsidiaries and prompt responses to risks and dependent companies, introducing threats; IT-solutions in the area of internal control. — building effective working business processes unified throughout the In the first half of 2013, the Company entire command chain, including the plans to adopt the Strategy of Internal minimum necessary control Control System Improvement, which will procedures, which are developed be implemented in 2013-2014. considering implementation costs The Strategy defines the main goals and and its effectiveness; directions of development of the — introducing a risk-oriented internal internal control system and risk audit, also stipulating the planning of management at all levels (in the head inspection procedures based on risk office, branches and SDCs) and in all assessment – to focus on the most processes (areas of activities) of the vulnerable facilities and activity Company. sectors.
24 The Risk Management System
Federal of Unified Grid Company Energy System RISK MANAGEMENT SYSTEM
The Company has implemented a risk — a Procedure for the Application of the management system, which is Company’s Risk Management regulated by the organizational and System (regulates the procedures for administrative documents of two levels: the functioning of the risk — the Company’s Risk Management management system, techniques to Policy (specifies the requirements, identify and assess risks, the principles and approaches to risk procedure for reporting on risks and management system); risk response procedures).
The risk management system is intended to provide for the sustainable and continuous operation and development of the Company via the timely identification, assessment and efficient management of risks that threaten the efficient economic operation and good standing of the Company, the health of the Company’s employees, the environment and the property interests of its shareholders and investors.
The participants of the risk management system: — Board of Directors; — Structural Departments Managers; — Management Board; — Internal Control Division. — Deputies Chairman of the Management Board (Heads of Units), Directors;
The Risk Management System determines the following:
1. Risk identification methods combined actions. The choice of The identification of risks is performed strategy is approved by the using methods based on ISO/IES 31010 Management Board of Federal Grid and COSO standards (analysis, threat Company. assessment, expert assessment, and the event tree). 4. Procedures and terms for the submission of risk reports 2. Risk Assessment Criteria The Internal Control Division The risk assessment criteria include: systematizes quarterly risk reports. probability, financial impact and risk Based on the adjusted reports, the controllability. The probability and Company prepares the Risk Matrix and financial impact of the risk determines the Risk Minimization Actions its significance. Summary. These documents are subject to the approval of the 3. Risk Response Methods Company’s Management Board. Response to risks is carried out by implementing one of the types of strategy: risk taking, minimizing risk consequences, transferring risk to a third party, avoiding risk and other
26 After collection and evaluation of risk the Company’s objectives, the degree of reports, we systematize information their importance and the actions to about potential events that have a eliminate or minimize them. negative impact on the achievement of
Risk grouping
Operational risks: Compliance: — Interruptions in power supply — Tax risks — Technological disturbances — Errors in reporting — Health and safety, Environment — Legal risks — Accident recovery work — Overdue receivables TARGET: Designing risks: Ensuring the UNEG’s — Failure to meet plan figures of the renovation and technological smooth-running connection program operation and — Non-return risk of invested funds development Investment risks: — Lack of financing sources of the investment program Economy, Finances: — Failure to observe the fixed dates — Reduction of tariffs technological connection — Change in the macro-and — Failure to meet the innovation microeconomic operational development program objectives activities — Non-return of allocated temporarily free funds
More detailed information about risk management is presented in the Company’s 2012 Annual Report. 28 Understanding of Corporate Social Responsibility and Sustainable Development
Federal of Unified Grid Company Energy System UNDERSTANDING OF CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT
Traditional understanding of sustainable development is associated with the desire to meet the needs of the present generation without threating the future generations’ needs, which can only be done taking into consideration the positions of the parties concerned constantly interacting with them and integrating this practice into all business processes of the company.
Federal Grid Company agrees to this understanding and is forced (because of its special role in the energy industry, economy and social development of the country) to significantly supplement and define more exactly this understanding. This section also provides an up-to-date version of the public agenda in the area of sustainable development, as well as a retrospective of the development of the Company’s non-financial reporting and 2012 main events significant in the context of CSR and sustainable development.
The Basic Ideas of the Company Responsibility
The Unified National Electric Grid (UNEG) is a state-controlled public infrastructure that has a strategic importance for Russia, for the economic and social stability, to ensure the integrity of the country.
Being a sole operator company, Federal Federal Grid Company’s corporate social Grid Company provides electricity responsibility is the practice of transmission through the backbone responsible conduct of business and the electric grids and is responsible for the form of the Company’s organization, reliability of power supply to customers which arises in response to the public throughout the Russian Federation. agenda in the area of sustainable Federal Grid Company is intended to development. ensure faster growth of the country's The agenda in the area of sustainable backbone grid infrastructure in order to development is formed and updated in the meet the growing needs of society and regular interaction of the Company with the economy in the future. the parties concerned – stakeholders, Federal Grid Company’s responsibility for with those who publicly and responsibly the efficient management and defend in the dialogue with the Company development of the UNEG is associated the socio-meaningful interests of the of not only with the safe, reliable and the Russian civil society. It is the uninterrupted power supply, but also with existence of stakeholders - genuine social the establishment of non-discriminatory partners of the Company – that makes the access to the Company’s grid services, CSR practice a real transformative power which should be provided transparently, and long-term priority of the next decade honestly (with no corruption), and on the of Federal Grid Company’s life. innovation basis. Therefore, one of the most important tasks for the Company in terms of ideology and values of corporate social responsibility and sustainable development is to search for balance in the implementation of social and economic interests in the Company’s activities.
30 Public Agenda for Sustainable Development
As one of the largest energy companies in constructive interaction with a wide range Russia, Federal Grid Company is of stakeholders. In particular, with responsible for the state of UNEG, the suppliers, contractors, project and core of the country’s power grid, a vital research organizations, distribution grid public infrastructure. After evaluating the companies and IDGC, consumers, existing problems and potential threats, generators and infrastructure and the Company has developed and launched regulatory organizations, trade unions, a set of programs aimed at the state and local authorities, renovation, modernization and innovative non-governmental environmental development of UNEG. organizations and expert community. These programs are of a long and complex nature, and their success depends largely on the Company's
The analysis of a wide range of panel discussions that have been taking place in the past few years in Russia and abroad on the development of electric grids and sustainable development, as well as the results of the dialogue with the Company’s stakeholders allow us to formulate a number of relevant topics and problem contexts of social agenda in the area of sustainable development.
Creating mechanisms and practices to synchronize the stakeholders’ plans, suggesting the development and expansion of the Russian UNEG
For a complete and balanced development plans for the development of various of the country, some regions of the industries. This suggests a harmonization Russian Federation, the industrial of planning horizons and the strategizing business, it is necessary to synchronize of all participants of the Russian UNEG, plans and coordinate the efforts of all so that the pace of development of some UNEG members, including development entities does not make an obstacle programs of distribution grid companies, (ballast) to the realization of other plans for the development of cities and entities’ programs and projects. regions, the development strategies of major consumers, the governmental
Import substitution for the purpose of innovative development of domestic power industry Innovative development of the country's stimulating the development of new power industry needs to be carried out engineering and design solutions and together with the development of national forming long-term sustainable science and technology and engineering relationships with the Russian power base of the industry. This will allow Russia equipment manufacturers that are able to to take a leadership position in the global set up the production of innovative technology market. Activities aimed at equipment and ensure the necessary level consistent decline in the share of of its quality and performance, shall be imported equipment, including through carried out to achieve the same objective. UNDERSTANDING OF CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT
Creating a personnel reserve of "smart" energy industry The transition to a new technology addition, the Company require full-scale platform of power sector suggests a youth programs that involve young major change in the skills and personnel in the context of the Company’s qualifications of future electrical work at the earliest stages of their engineers. These changes cannot be professional careers, as well as create the made simultaneously, and the personnel life and career prospects for young market of the country cannot meet this employees in the future (including the need currently. This means that we issues relating to housing provision). should successively deploy personnel and educational programs for the chosen direction of the industry. It is necessary to form proper staffing and educational infrastructure for our own needs. In
Creating a responsible personnel management practice Increased labor productivity and changes programs for released staff. It is also in the structure of staff employment in important to continue to exercise the energy industry in the implementation increased care for veterans and former of innovative solutions suggest a change Company’s employees who retired, as this in the quantity and quality of human approach also forms the Company's resources. To create a responsible attractiveness as an employer. personnel management practice, it is necessary to prepare a variety of adaptation and professional reorientation
Improving labor safety and increasing operational safety Life, health and working capacity of task is to reduce the number of injuries in employees are the highest value and the the workplace, improve occupational area of heightened attention and safety and health protection, and systematic efforts of the Company. Labor implement everywhere corporate "safety safety requires constant work and culture". constant supervision. The most important
32 Ecologization and improvement of energy efficiency of electric grid activities Upgrading and improving the reliability, this activity should also be supplemented safety of electrical grids and forming a by massive use of environmentally-benign new grid architecture that provides a low practices of laying power transmission level of losses in the power system, lines and maintaining forests, minimizing boosting electricity generation from electromagnetic impact of power renewable energy sources, promoting the transmission lines on the environment. transfer of urban transport to the electric motors or hybrid technologies - all this creates a background for economical use of hydrocarbon fuels, and as a result, reduces the CO2 emissions. In addition,
Fair distribution of the created economic costs and economic feasibility assessment of innovation and new technologies implementation
Implementation of the Innovative spending and clear methodology of Development Program requires economic assessment of costs considerable funds, the source of which is practicality. It is also important to manage the investment component of the tariff for costs and make fair distribution of the electricity transmission, borrowings, as created value when implementing well as various allocated funds from the innovations and new technologies Russian Federation budget. Responsibility throughout the whole value creation for the efficient use of these funds shall chain. be implemented through transparent
Integration of corporate social responsibility strategy into internal business processes International initiatives in sustainable the need for systematic interaction with development suggest that the CSR stakeholders. Typically, this is achieved strategy will be integrated into the through the formation of a management internal business processes of the structure to deal with the CSR company management. This means that management, and the organization of the the strategic attitudes, efficiency targets, specialized structural unit. regulation and organization of business processes must take into account the context of sustainable development and UNDERSTANDING OF CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT
The Formation of Non-financial Reporting in Federal Grid Company Understanding the Company's contribution to sustainable development began to be formed owing to participation in RAO UES of Russia’s initiative to introduce non-financial reporting in the power industry in 2006-2008.
In 2007, the Company for the first time corporate social responsibility to the prepared a chapter "Corporate and Social management of specific aspects of Responsibility" in its 2006 Annual Report. sustainable development, which are As early as in 2008, after finalizing the meaningful to stakeholders. Company’s target structure, the first The Company all along has released its full-fledged non-financial 2007 Federal annual non-financial reports in Grid Company Report was published. It accordance with international standards became a launch attempt to describe the and "best practices", kept a dialogue with Company’s activities in terms of its stakeholders and steadily increased the impact on various aspects of the country level of reporting, and the breadth and and society’s life. At that time, as the depth of its performance disclosure. main tool for managing CSR, the Company defined its Public position regarding CSR, i.e. it formulated the principles of decision-making and the Company’s actions when interacting with stakeholders, and elaborated on its responsibility to various stakeholder groups. Then, the Company made a gradual transition from a fundamental and generalized understanding of its
Chapter "Corporate and Social Responsibility" in the 2006 Annual Report. This chapter defines a task to develop the CSR and non-financial reporting management practices, and an 2007 obligation to release in 2008 a full-fledged non-financial report.
First 2007 Report on Corporate Sustainability and Social Responsibility: in accordance with the 2008 GRI guidelines (G3, “C +” level of application) and AA1000SES standard. Dialogues on the topics: — Federal Grid Company’s strategy of interactions with the investment community: stakeholders’ requests; — Communications with regional authorities when grid companies’ investment plans are coordinated: status and prospects of development; Public hearing of the Report.
34 Second 2008 Report on Corporate Sustainability and Social Responsibility: in accordance with the GRI guidelines (G3 and industrial supplement, “C +” level of application) and AA1000SES 2009 standard. Dialogue on the topics: The implementation of the Company’s Environmental Policy and a reflection of this process in the Report. Public hearing of the Report.
Third 2009 Report on Corporate Sustainability and Social Responsibility: in accordance with the GRI guidelines (G3 and industrial supplement, “B” level of application) and AA1000SES standard. 2010 Dialogues on the topics: Disclosure of information about the Company’s activities aimed at ensuring and managing the UNEG performance reliability. Public hearing of the Report (absentee consultations).
Fourth 2010 Report on Corporate Sustainability and Social Responsibility: in accordance with the GRI guidelines (G3 and industrial supplement, “B+” level of application), Basic figures of Russian Union of Industrialists and Entrepreneurs’ performance, and AA1000SES standard. 2011 Dialogues on the topics: Federal Grid Company’s Innovative Development Program in the context of sustainable development. Public assurance by the Russian Union of Industrialists and Entrepreneurs’ Council for Non-Financial Statements.
Fifth 2011 Report on Corporate Sustainability and Social Responsibility: in accordance with the GRI guidelines (G 3.1 and industrial supplement, “B+” level of application), and AA1000SES and AA1000AS standards, public assurance. 2012 Dialogues on the topics: Federal Grid Company’s Youth Policy: young professional training, recruitment, development and motivation system; The formation of Federal Grid Company’s 2010-2012 Anti-Corruption Policy; Public hearing of the Report.
Sixth 2012 Report on Corporate Sustainability and Social Responsibility: in accordance with the GRI guidelines (G 3.1 and industrial supplement, “B+” level of application), and AA1000SES standard, professional non-financial audit, public assurance. 2013 Dialogues on the topics: Human Capital Management in Federal Grid Company; Environmental impact of Federal Grid Company: management, efficiency, plans. Public hearing of the Report; Professional non-financial audit, public assurance of the Report. UNDERSTANDING OF CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT
CSR and Sustainable Development: 2012 Key Events
On 26 February 2012, the opening ceremony of the playground in the village Sanamer, Predgorniy District, the Stavropol Region, took place. The playground was constructed with the Company’s participation.
On 21 March 2012, Federal Grid Company, with the assistance of the National Research University of Moscow Power Engineering Institute, held the second annual contest for the best scientific work in the electric power industry among undergraduates and graduate students from specialized higher education institutions. On 18 April 2012, in Moscow at the National Research University of Moscow Energy Institute, the Company organized an All-Russian Conference entitled “New Generation for the New Power Industry”. The Conference was attended by managers of higher and secondary occupational education institutions from across Russia. In May 2012, Federal Grid Company was named one of the leaders in the implementation of anti-corruption policy among the power industry enterprises of the Russian Federation (the award ceremony was held in the framework of the Second St. Petersburg International Legal Forum, organized by the Ministry of Justice of the Russian Federation with the support of the President of the Russian Federation). From 1 June to June 23 2012, in St. Petersburg, Federal Grid Company organized an action "Study Power Engineering". On 25 June 2012, the Company celebrated its tenth anniversary. On 25 June 2002, an official state registration of Joint Stock Company Federal Grid Company of Unified Energy System (Federal Grid Company) took place. In August 2012, Federal Grid Company placed fifth in the information transparency ranking of Russian companies, which was compiled by the Agency for Political and Economic Communications (APEC). On 12 September 2012, Federal Grid Company put in force the Anti-Corruption Policy approved by the Company’s Board of Directors. The document defines the Company’s main objectives, principles and areas of activities in the field of fighting corruption.
36 On 19 October 2012, the Personnel Training Center of Federal Grid Company’s branch – MES North-West, won “The Green Office: up to 2 thousand square meters" category at the Green Awards Contest (All-Russian Environmental Development and Energy Efficiency Contest). On 25 October 2012, the Ministry of Energy of the Russian Federation awarded a diploma to Federal Grid Company for its contribution to the development of social policy in the power industry. On 16 November 2012, the Company’s Social Responsibility and Sustainability Report was recognized as the best social report at the XV Annual Yearly Reports Contest of JSC Moscow Stock Exchange.
On 10 December 2012, Federal Grid Company was assigned a score of "7+" on the national corporate governance scale, based on an independent analysis made by Russian Institute of Directors.
On 12 December 2012, Federal Grid Company was assigned a “High Transparency” score by the National Procurement Transparency Rating 2012.
On 20 December 2012, in Khvalynsk, the Saratov Region, the grand opening of the new kindergarten "Svetlyachok" took place. The kindergarten was built with the participation of Federal Grid Company.
In December 2012, the Company’s management, on behalf of the Management Board of the Company, finalized the development and approved the application from 01.01.2013 of new evaluation criteria that provide for reduction in preference of applications made by participants of procurement procedures, the beneficiaries of which are registered in the offshore zones. 38 Human Resources Management
Federal of Unified Grid Company Energy System PERSONNEL MANAGEMENT
Personnel Management
Personnel policy and personnel management system Personnel management system of Federal Grid Company is one of the key factors to implement strategy of the electric power grid complex development. Accordingly, solution of the task of the UNEG development (increased reliability, investment attractiveness, availability of infrastructure) can be effective only by using the mechanisms of personnel policy.
However, there are a number of Given the internal request and external external and internal constraints for the constraints, the Company`s personnel development of the personnel policy at present is focused on the management system of Federal Grid following tasks: Company, among them: the — providing staff of qualifications deterioration of the demographic required in the right places and in situation in the country, the supply and the right quantity; demand imbalance in the education market, fall in the prestige of — promoting the Company's operating employment in the industrial sector, performance and cost optimization; limitation of the Company's expenses — move to personnel understanding of under the tariff regulation and, as a the Company’s human capital and consequence of all the above, the ensuring competitive advantage due increased competition for highly skilled to continuous personnel labor forces. development.
The Strategic Objectives of Federal Grid Company in the Field of Human Resources Management
Employee strength Timely provision of the management Company with the necessary number of qualified, motivated and loyal personnel to accomplish goals of the Company with adequate personnel costs Value Quality control Management
40 Tools and Measures Implemented by Basic Processes of Personnel Management System and Personnel Policy
Tools and measures Basic processes
— Planning the number of employee by key professionals for 5 years Planning of headcount — The planning horizon is determined by the horizon of the investment program — The analysis of demographics and plans by region in relation to commissioning of objects and required qualifications
— Employment by the Company (not involving external agencies) Recruitment — General techniques, processes for the selection for all divisions and levels of management — Centralized selection of managers
— The target indicators are set for employees each year and monitored on a quarterly basis Performance Management — Organization of appraisal process is included in a functional of HR divisions — System of appraisal of individual results is implemented in the Company — Bonuses, plan of training and development, rotation and promotion are based on performance results
— Use of common categories of payment including adjustments for the local market Compensation and incentives — Incentive system includes tangible and intangible benefits, social guarantees. A single transparent and simple compensation policy is used at all levels — There is periodic comparison of compensation with the market, if necessary; adjustments are made
— Internal training centers are established Career, training, development — Training programs are developed jointly with the heads of functional directions — Active interaction with higher educational institutions and institutions of specialized secondary education — System of internal personnel reserve
— Special training opportunities for the best employees Talent Management — Selection and individual educational and training programs of the most talented managers — Support system for career development of talented personnel (managerial personnel reserve)
— Target corporate culture (the values and standards of professional ethics) is defined and Development of corporate aligned with the strategic needs of the Company culture — Code of Conduct is approved and used — Internal communications system is developed PERSONNEL MANAGEMENT
The measures will result in a "rejuvenation" of the personnel, raising the prestige of the profession and the restriction of active personnel turnover of not more than 8% a year. At least 80% of the Company officers shall be appointed from employees previously employed on lower-level staff positions. And ultimately the realization of the main areas of personnel policy should lead to the provision of the Company with necessary personnel of required qualification, at the scheduled time and with an optimal level of costs on the activity. In total in view of the need to provide facilities of Investment Program with employees and fill employee withdrawal the need of Federal Grid Company 4,800 in new employees will be more than 4,800 people in 2011-2014. THE NEED OF FEDERAL GRID COMPANY IN NEW EMPLOYEES The system of bodies of personnel — Regulations on the social package management in Federal Grid Company formation by categories of positions of includes the Department of personnel Federal Grid Company; management, the Department of — Regulations on non-state pension organizational development, the provision for the employees of Federal Dmitry Chevkin, Department of social programs, Grid Company; HR Director Personnel training center and similar divisions in all branches of the Company - — Regulations on tutoring system of MESs of Federal Grid Company. Federal Grid Company; The main local regulatory documents — Regulations on recommendation of which regulate the issues of human employees of the executive apparatus, resources management in Federal Grid branches and SDCs of Federal Grid Company are: Company for a state, departmental, industrial and corporate awards; — Regulations on remuneration and motivation of the employees of Federal — Regulations on financial assistance to Grid Company’s branches (MES/PMES); veterans of Federal Grid Company.
Qualified personnel is required to solve the Company develops its youth policy and the Company employees successful in passing Company’s strategic tasks, whereas the establishes comprehensive personnel training the assessment procedures and training. opportunities of the Company’s HR Department programs, implementing efficient labor The Company takes pride in the record-breaking to recruit the workforce resource required are encouragement initiatives and social programs. low HR turnover (6%), while having one of the limited by a number of external factors. The key The Company provides for decent and safe labor, lowest average employee age in the industry factor among these is the worsening of forming the HR reserve based on the (38.8 years). This means that the Company demographic situation in Russia, with the assessment of its employees. Taken together, becomes more attractive for the young and working population decreasing in number, these actions can be characterized as a transfer promising employees. resulting in growing competition among the from the HR management to managing the power industry companies seeking the workforce human capital, attaching value to virtually every The Company’s target HR priorities include the they need. A supply-demand imbalance on member of the Company team. The Company enhancements in controlling the employee education market and a diminishing employees appreciate the changes in the attitude average age and the HR turnover level, while attractiveness of working in the production to the personnel as they influence their developing new tools to attract and motivate the sphere should also be taken into account, performance. Over 4.5 employees were awarded personnel and switching over to long-term together with the falling mobility of the human by corporate and industry awards in the end of employee demand planning. resources within the country. The Company’s 2012. In conclusion I should like to emphasize that the opportunities to use a traditional approach of The implementation of the updated concept of Company values the feedback from its employees increasing salary expenses are also limited, as the formation of the in-house HR reserve concerning the implementation of its HR policy the government is tasked with keeping the became one of the most successful HR projects. Together we will make the Company energy tariff growth rate down. innovations in 2012. Today the majority of one of the best employers in the country! Taking the internal and external factors into management and production employee consideration, the Company seeks and finds new vacancies are filled by the Company HR reserve efficient ways to solve the HR issues. The members, with the reserve being formed from
42 Headcount and quality of employees
Average headcount of Federal Grid constructed for reliable power supply to Company as of 31 December 2012 was the 2014 Olympic Games, and other 25,103 persons. Employee number newly introduced facilities of electric growth in 2012 by 2% compared to 2011 power grid complex, constructed as is due to the creation of new jobs at the part of the implementation of the power facilities of the Sochi Region, Company`s Investment Program.
The 2012 Dynamics of the Average Headcount of Federal Grid Company, persons
1 107 1 143
5 406 5 467
3 982 4 017 2 623 2 712 2 482 2 549 2 848 2 877 1 903 2 029 2 2812 308 1 971 2 001
Executive MES MES MES Volga MES South MES Urals MES MES MES East as of 31.12.2011 as of 31.12.2012 Apparatus Center North-West Siberia Western Siberia
In total, in 2010-2012 the Company of the programs to commission and headcount increased by 11%, the main activate new UNEG facilities. increase is due to the implementation
Changes of the Headcount of Federal Grid Company since 2010, persons as of 31.12.2010 22,623 as of 31.12.2011 +9% 24,603 as of 31.12.2012 +2% 25,103 PERSONNEL MANAGEMENT
Total Headcount by Employment Type and Region
The average including average including external part-timers number headcount (full-time and civil law contractors Branch of employees, total employment) (partial employment) MES Center 5 443 5 367 76 MES North-West 2 552 2 488 64 MES Volga 2 268 2 262 6 MES South 2 620 2 614 6 MES Urals 2 844 2 822 22 MES Siberia 3 982 3 966 16 MES East 1 933 1 932 1 MES Western Siberia 1 997 1 974 23
Staffing indicator as of 31 December, 2012 is 97% of the target headcount, which indicates a high level of staff sufficiency.
Total Headcount of Personnel Structure by Personnel Structure by Personnel Categories, Men Categories, Women Total 25,103 persons, of which persons, % person, %
Women Managers 3,404 17% Professionals/ 4 ,994 Officers Workers Managers 3,625 10,243 73% 51% Professionals/ 498 Men Officers 10% 6,462 Workers 20,109 32% 871 17%
Main Indicators of Staff Quality Average age, years In total 38.8 80% 20% Men Women
44 The Company Personnel Structure 45% 39% 16%
Workers Professionals Managers
1.3% of employees are covered by and in strict accordance with the Collective Agreements. Russian legislation. The managers are appointed in 90% of executives employed from accordance with the requirements of the local population of the Russian the position imposed by the Company pursuant to the Regulations on the regions where the Company employment to Federal Grid Company operates.
Annual rate of Employee turnover of Federal Grid Company decreased by 1.5% to 6% for 2008-2012. % 2012 6 2008 7.5%
Natural renewal of personnel which In addition, the vast majority of ensures continuity of generations and Federal Grid Company`s staff (56%) attracts young professionals is very important for the Company. Over the is employees of the most last few years the average age of economically and socially active employees has decreased. In age – up to 40 years. 2010–2012, the average age decreased from 39.8 to 38.8 (as of December 31, Thus, the Company achieved an optimal 2012). combination of young, enthusiastic and experienced, highly qualified employees which ensures the continuity of generations and professional knowledge and skills transfer. PERSONNEL MANAGEMENT
Turnover Rates by Age Group, Gender, and Region
Number of leavers Average to calculate Employee number turnover turnover rate Including leavers Under Beyond in 2012, in 2012, in 2012, the age the age Branch persons persons % Men Women of 30 of 30 MES Center 5 367 332 6,2 287 45 189 143 MES North-West 2 488 145 5,8 133 12 70 75 MES Volga 2 262 65 2,9 57 8 34 31 MES South 2 614 212 8,1 186 26 91 121 MES Urals 2 822 81 2,9 61 20 32 49 MES Siberia 3 966 229 5,8 189 40 109 120 MES Western Siberia 1 974 147 7,5 128 19 64 83 MES East 1 932 118 6,1 100 18 44 74
Proportion of Employees Who Attained Pension Age During 5-10 Years as a Percentage of Total Headcount 27.3 23.6 22.9 23.7 24.1 5 years 10 years 21.3 17.0 17.7 12.8 10.9 10.9 11.2 12.4 9.4 8.1 6.6
MES MES MES MES MES MES MES MES Center North- Volga South Urals Siberia East Western West Siberia Social obligations and incentives
One of the most important factors to Thus, the wage of each employee is achieve strategic and current corporate determined by the level of difficulty objectives is a well-formed employee motivation model. The remuneration and responsibility of its work, its system in Federal Grid Company qualification and contribution to the includes the categories of positions, main results of the Company. performance of branches and structural divisions, characteristics of regional labor markets and the individual contribution of each employee.
46 To determine the location of Federal To maintain and increase achieved Grid Company in the labor market level of financial motivation, ajustment studies of the level of salaries by key positions in competing companies in of salaries (base salary) of employees the Company's branches operation for the ammount of the actual areas are pursued on a ragular basis. increase in the CPI (Consumer Prise Studies`results indicate that the level of Index) in the Russian Federation is wages in Federal Grid Company corresponds to the average segment of carried out quarterly in the the labor market. Company`s branches. It ensures stable wage increases.
2010-2012 Employees` Average Wages, RUR
+8% +6.4% 58.032 53.695 50.450
2008 2010 2012
Minimum Wage in the Branches of Federal Grid Company (MESs) versus the Cost of Living in the Company`s Operation Areas
Regional Regions covered Minimum wage premium rate, Cost of living Minimum wage by the area of amount of a first northern and in the MES branch in MES branch/cost of responsibility of class employee, regional bonuses, location, living in the region, Federal Grid Company RUR % RUR %
Center 12,667 1.16 8,697 146 North-West 14,087 1.29 7,422 190 Volga 11,248 1.03 7,873 143 South 11,248 1.03 7,322 154 Urals 12,995 1.19 7,668 169 Western Siberia 23,041 2.11 10,651 216 Siberia 16,817 1.54 8,253 204 East 19,438 1.78 10,692 182 PERSONNEL MANAGEMENT
The Formation of personnel reserve of Federal Grid Company. Personnel appraisal
The Personnel Reserve Program Personnel reserve is the basis for applies in the Company since 2006. filling vacant positions and is Prior to 2010, numerous appraisal and formed from the Company`s development measures for the staff of various levels of management were employees who have successfully carried out. 2006 – 2010 results of the passed the appraisal procedures, work with personnel reserve, confirmed developed by representatives of the by statistics, allowed the Company to production unit and the Department make the next step on the way to the itemization of positions` professional of personel management. standards and creation of job profiles. As Federal Grid Company increasingly Tests offered to employees, assess the positioned itself as a production level of development of vocational and company, the goal of creating a technical competences. This approach personnel reserve has changed. The allows us as soon as possible to begin Company needed, primarily, educated work to develop the individual program production workers and experienced for the development of employee`s engineers. Since 2011 Federal Grid professional grade and the formation of Company introduces updated concept of the optimal vocational and qualifying forming personnel reserve of the structure of staff. Company`s production and technical unit.
In implementing the concept of personnel reserve the following basic problems were solved: 1. The comprehensive system of work 3. The tutoring system for participants with personnel reserve is established; of the program for personnel reserve is key business areas which need the developed. formation of personnel reserve for the 4. The continuity of production posts of director of a structural division technologies and corporate culture is and deputy director of a structural maintained. division of the branches of Federal Grid Company are identified. 5. To retain key employees of the Company - the best technical 2. The model of vocational and technical professionals by providing opportunities competences, theoretical knowledge, for career development and growth management experience and skills of a became possible. candidate for inclusion in personnel reserve is formed.
48 There are "tactical" and "strategic" In turn, the tutoring system allows the reserve by length of stay of the employees of pre-retirement and candidates in the personnel reserve. pension age participated in the Tactical reserve (redundant reserve) program of the formation of personnel comprises employees, who rapidly are reserve to get financial support. The able to take target, vacant or newly Company has developed a tutor freed positions, that is those need to be appraisal system which allows the trained for a period not exceeding 12 Company to select the best tutors to months. Strategic reserve comprises work with reservists. employees who need to be trained to take a target position over 12 but not In 2012, the assessment exeeding 36 months. methodology and assessment In 2011-2012 appraisal of candidates for measures in respect of the position enrollment in the reserve was conducted in all branches of Federal of "Director of PMES" were carried Grid Company, and a training tutor out. The above-mentioned measures program was implemented in MES involved 29 employees from the Center, MES North-West and MES personnel reserve and 38 Directors Volga. of PMES for the position of "Director The appraisal for enrollment in the of PMES". reserve involved 1,700 people, of which 478 are enrolled in a tactical All participants of the assessment personnel reserve, 27 people moved procedures, as well as CEOs of MESs of to the target staff positions. The Federal Grid Company received feedback on the results of the training tutor program was assessment procedures. participated by 288 people. In 2012 as part of cooperation with Moscow School of Management In 2013 it is planned to prepare 230 Skolkovo the Integrated Program - a tutors for employees of Federal Grid strategic personnel reserve of Federal Company, enrolled in the reserve. Grid Company was implemented. Over the entire period of work on the basis of the updated system, only 2 12 of 41 graduates of the Integrated persons left the group of reservists Program were received a promotion because they quit the Company. These within the professional development results suggest that the program creates and maintains the required level in Federal Grid Company. of motivation and loyalty of this category of employees. PERSONNEL MANAGEMENT
Award policy
To increase motivation of personnel to — achieved good results in operating, achieve high production results a constructing and reconstructing program to award state awards, awards power grid facilities and in creating, of the Government of the Russian using and implementing new Federation, departmental, industry and techniques and technologies, corporate awards to employees is — implemented advanced forms of being successfully implemented in work organization, Federal Grid Company. — showed competence in preventing or The Program provides for that the eliminating of accidents and following categories of employees may restoring power facilities, be recommended for award: — had authority and respect with labor — awarded for service to the country, collective, promoted corporate values the fuel and energy complex and and met it. Federal Grid Company, — demonstrated a high level of production efficiency and competencies in the field of management,
In 2012, on the recommendation of Federal Grid Company 4,585 employees were awarded. For merits for the electric power industry 171 employees were awarded by the Ministry of Energy of the Russian Federation,
including the title of RF "Honorary awarded on behalf of the Heads of Worker of the Fuel and Energy constituent entities of the Russian Complex" awarded to 2 employees; the Federation for their contribution to the title of "Honored Power Engineer" development of regional power grid awarded to 9 employees, Certificate of complex, and also were awarded for Merit awarded to 79 employees, services to the branch by MESs` commendation issued to 81 employees. management. All-Russian Industrial Association of In 2012, the Company celebrated its Employers in the power industry (RaEl) 10th anniversary. Merits of employees awarded 68 employees; including 16 with whom the Company shares its employees were awarded the title of success to enhance the reliability of "Veteran of Power Industry" for many electric power supply, upgrade power years of fruitful work in the electric grid and introduce innovative power industry. technologies were awarded by In addition 141 employees were corporate awards of Federal Grid awarded the titles, characters, inducted Company: 2,124 employees were into the "Hall of Fame" of Federal Grid awarded the Honorable Badge "10 years Company, 625 employees received the of Federal Grid Company of Unified diploma, commendation issued to 583 Energy System", which was established employees. Numerous employees of the in conjunction with the 10th anniversary branches of Federal Grid Company were of the establishment of the Company.
50 Federal Grid Company`s Employees` Awards in 2012
Government Awards Awards of the Ministry of Energy of the RF 2012 32 2012 171 2011 5 6.4 times 2011 128 34% Awards of RaEL Commendation of the Ministry of Energy of the RF 2012 68 2012 81 2011 38 79% 2011 50 59%
Corporate Awards of Federal Grid Company 582 2009 1,148 2010 1,237 2011
2012 3,473
Federal Grid Company`s Employees` Awards
2009 746
2010 1,557 1,540 2011
2012 3,746 PERSONNEL MANAGEMENT
Attracting and Developing Young Professionals
The UNEG’s innovative development, efficiency composed of employees under 40 years. specialists to the remote UNEG facilities under increase, the provisions for the reliable supply of During 2012 the Company actively interacted with construction. In 2012 the Company established a electric power, the commissioning of new senior high school students and the students of paid-for housing fund composed of 622 up-to-date substations and power transmission the industry-specific higher education apartments in 12 regions of the country. The lines to a considerable extent depend on the institutions by establishing additional Company employees who purchase the housing timely provision of qualified, motivated and loyal scholarship programs for occupations most using borrowed funds may turn to the Company personnel for the Company. urgent for the Company, and trying to attract the to obtain compensations and loans. Throughout The Company’s competitive advantage on the employees to some geographically remote 2012 the compensations and loans were granted labor market is achieved through continuous locations. In 2012 the Company’s targeted to 386 employees, including 141 young development of its personnel, the formation of scholarships were granted to 86 students. Over specialists. HR reserve, the investments in the adaptation 3000 students from partner institutions attended The 2013 priorities of the Company’s Youth Policy and development of young specialists, the the days of open doors and tours of duty hosted are associated with further development of the improvement of the employees’ housing by the Company branches. Seven hundred and initiatives pertaining to the attraction of young conditions, and the implementation of a number forty five students from 28 higher education and specialists to the formation of students’ of social programs. 3 secondary education institutions worked at 41 construction brigades. The Company is also The Company’s considerable efforts to Company facilities under construction in the going to encourage the students’ research implement the above initiative have already summer of 2012 (twice as many, compared to activities in the sphere of innovative development resulted in a decrease of the Company’s 2011). of the power industry. The Company’s 2013-2014 personnel turnover, an increase in the number of The two recent years were marked by the plans in regard of its housing policy include young and promising specialists, and the Company efforts to provide quality housing for its additional 1500 apartments with the total area of lowering of the employees’ average age. In the employees. The provision of paid-for housing 81 000 square meters in 47 regions of Russia, to end of 2012 over 50% of the Company staff was allows the Company to attract highly qualified complement the paid-for housing fund.
Youth Policy of Federal Grid Company
Federal Grid Company adopted an 3. popularize power engineer integrated approach to working with the profession; attract the interest of school young staff, attracting and retaining children to the activity of Federal Grid young professionals. The main areas of Company. work were formulated in the Youth Federal Grid Company actively works Natalia Ozhegina, Deputy Policy of Federal Grid Company*. In with senior high school students and Chairwoman of the accordance with this document, the students of specialized institutions, Management Board. strategic directions of work with youth establishes additional scholarship are: program for the most popular 1. increase the Company`s professions required by the Company, attractiveness for choosing a future job including the involvement of employees by students of higher educational in certain geographically remote institutions and secondary occupational regions. The Company conducts institutions and develop mutually traineeship and Doors Open Days at its beneficial cooperation with the branches aimed at rapid adaptation of specialized professional institutions. specialists to the conditions and 2. work socialization and adaptation of specific of work in Federal Grid young professionals in the corporate Company. environment of Federal Grid Company, promotion of professional development * Approved by Federal and professional growth of young Grid Company’s Order № professionals, formation of an active life 607 dated 07.10.2011. position and production initiative.
52 In 2012, the target scholarship programs of Federal Grid Company involve 86 students of specialized higher educational institutions. Upon completion of training, graduate scholarship holders will be offered jobs in various divisions of Federal Grid Company. In 2012, the Company recruited more than 1,800 young people. In 2013, the cooperation with leading specialized educational institutions aimed at attraction of talented young professionals in Federal Grid Company will continue.
Number of Participants in Scholarship Programs
2010 34
2011 78
2012 86
The implementation of Youth Policy
Measures for the implementation of the subjects, attraction of teachers and Youth Policy is part of the list of internal students to participate in research and corporate events approved annually**. practice conferences and various In this case, the measures included in competitions in support of innovation. the list in terms of youth policy are basic, but not exhaustive. ** On the 2012 anniversary year In 2012 measures for the events were approved by As part of the implementation of Youth Order of Federal Grid Policy Federal Grid Company continues implementation of Youth Policy of Company as of 14.10.2011 No to cooperate with leading Russian Federal Grid Company involved 630 "On Approval of the List of specialized higher educational more than 4,400 people: Internal Corporate Events for institutions, actively involved in the 2012 and the Events improvement of the educational Dedicated to the 10th subjects for electric power professions anniversary of the and formation of diploma coursework establishment of Federal Grid Company". PERSONNEL MANAGEMENT
— as part of the Day of Federal Grid — in collaboration with the NRU MPEI Company the Company's branches the All-Russian contest of organized meetings with students in manuscripts of educational, regional higher educational scientific, scientific-technical and institutions. The total number of reference literature for the electric participants of partner higher power industry was held for the educational institutions in the Day of second time. Based on the results of Federal Grid Company was 1,700 the contest of 2011 manuscripts 11 people; educational guidances with edition of — the Company continued the tradition 1,000 copies each were published. of student construction teams work During the year, these books were at its facilities. In July and August sent to the partner higher 2012 jobs were created for 745 educational institutions of the students (2 times more compared to Company; 2011) from 28 higher educational — on June 20 in St. Petersburg the institutions and three specialized solemn opening of the Center for secondary institutions at 41 facilities Professional Development and under construction of Federal Grid Retraining of employees of power Company; grid complex took place at the St. More than 720 higher educational Petersburg State Polytechnic institutions` students underwent University. The Center is equipped and renovated with the support of practical training at the facilities of Federal Grid Company. Federal Grid Company. For 200 of them — During the year, the Company temporary jobs for a paid practice were provide assistance to the North created in the Company`s branches; Caucasus Federal University in the — 9 faculty members of higher modernization of electrical educational institutions underwent laboratory equipment, as well as to production training at the power the Grozny State Oil Technical facilities of Federal Grid Company; University named after the Academician M.D. Millionschikov in — from 2 to 11 July in the Dmitrov providing the Faculty of secondary district, the Moscow Region at the vocational education with the Personnel Training Center "White necessary equipment; Rust" of the branch of Federal Grid Company - MES Center students of — from 1 to June 23 in St. Petersburg NRU MPEI and ISPU were trained on Federal Grid Company hosted the the program "School of the Young campaign "Study Power Engineer" for the third time; Engineering" and it was coincided to the XVI St. Petersburg International — during the year 13 employees of Economic Forum; Federal Grid Company involved in teaching process of higher — a new form of interaction between educational institutions, working in Federal Grid Company and the NRU collegiate and consultative MPEI to attract volunteers from management bodies, being a part of students of the higher educational the commissions on the defense of institution was tested. During the theses and the state examinations; UPGrid 2012 International Electricity Forum "Electric Power Grid Complex. — more than 760 higher educational Innovation. Development.” 52 institutions` students took guided students of NRU MPEI provided tours to production facilities of assistance to the organizers of the Federal Grid Company; event, working as assistants in the — from April to June, the second exhibition hall and at the contest for the best scientific work of participants` reception. Another 8 students and post-graduates of students were involved in holding the specialized higher educational II Open Chess Tournament of Power institutions was held on the subject - Engineers in memory of M.M. trunk electric power grids; Botvinnik. 54 In 2012, the cooperation of Federal Grid Company with specialized secondary educational institutions was continued: — Energy College building in Kaspiysk — in 2012 additional specialties of was reconstructed; classrooms for electrician for repair of electric 300 students, sports hall and dining power grids and electrician for hall were updated. There are maintenance of power plants and electrical laboratories equipped with grids were introduced in Energy modern equipment and simulators; College in Vladivostok opened in the necessary educational materials collaboration with the Administration were purchased; computer of the Primorsk Region and Hyundai classrooms were fitted out in the Heavy Industries. In 2012-2013 College. enrollment was 246 people, of whom 88 students were enrolled to specialized energy specialties.
As part of participation of Federal Grid Company in international economic forums youth roundtables were held: — from 18 to 22 June 2012 in St. — from 12 to 15 September 2012 in * Approved by Order of Federal Petersburg in the course of Ulan-Ude as part of the Baikal Grid Company and IDGC participation of Federal Grid Company Economic Forum "New Economy - Holding as of 29.12.2012 No in the St. Petersburg International New Approaches" a Youth 834/728 “On Approval of the Economic Forum in collaboration with Roundtable "Development of Power List of Internal Corporate MSM Skolkovo a Youth Roundtable Industry and Energy Infrastructure Events for 2012 and the "Power Industry Integration: in as a Factor of Economic Growth of Events Dedicated to the 10th Search of a New Paradigm. Youth Siberia and the Far East. Youth Anniversary of the Dimension" was held; Dimension" was held. establishment of Federal Grid Company.” The main objective to hold round tables is to promote creativity of young people, ** Approved by Order of Federal involve them in research activities of Federal Grid Company and solve future Grid Company as of problems in the field of innovative development and modernization of the electric 21.12.2012 No 798 "On Approval of the List of Internal power grid complex. Corporate Events for 2013."
Plans for the implementation of Youth Policy in 2013 In 2013, Youth Policy will be For example, on the basis of the implemented in accordance with the traditional contest for the best scientific priorities of Social Policy, staff training work of students and post-graduates of and staff development of Federal Grid specialized higher educational Company for 2013* and the List of institutions, the All-Russian contest of internal corporate events**. innovative projects and developments in Promising task of Youth Policy for 2013 the field of smart energy "Energoproryv" is qualitative changes in ongoing is being organized in 2013. measures on the basis of the experience gained during 2011-2012. PERSONNEL MANAGEMENT
The best students of specialized higher During the summer season of 2013, educational institutions will be attracted unlike previous periods, it is planned to to participate in the Youth Round Table attract student construction teams of not only on the basis of Federal Grid Company to more recommendations of the educational qualified, professionally-oriented works institutions, but also based on the for future power engineers. results of qualifying tests.
Staff Training
The Company imposes high According to the results of 2012, the requirements on the level of education share of employees with secondary and skills. Major changes in qualitative special education was 32%, while the indicators which characterize the structure of Federal Grid Company`s share of employees with higher Dynamics staff, are associated with an increase in education increased by 2% to 58%. of the Share the educational level of employees. of Employees with Higher Educational Level of Employees Education
% 58 General secondary education 10%
56% 32% 58%
Secondary education, Higher education % basic vocational 53 education
2010 2011 2012
56 Qualified personnel is the Company’s the Company’s training centers equipped with grid complex, the Company implements fundamental requirement to provide for the advanced facilities and training sets. large-scale initiatives, including innovation reliability of the unified energy system. That is A network of training centers covers all regions forums, round tables and training projects for why the Company’s HR policy is targeted at the of the Company operations. A training center has the young specialists. development of a comprehensive system of been built in Sochi to advance the qualification of In accordance with the power grid development occupational training for the needs of the the personnel engaged in ensuring the reliable strategy, the Company’s 2013-2014 priorities Company and for the industry on the whole. supply of power during the test competitions and include the implementation of a concept for the A continuous interaction with the personnel, during the 2014. This center is used to train unified personnel training system targeted at intended to provide for the preparedness of the employees of different categories according to improving the reliability and developing the Company employees to perform their the approved training programs. electric power industry. professional functions, the maintenance and The training of the personnel in the We are confident that the training provided by the advancement of the personnel qualification is Company-owned training centers allows for Company training centers and the training conditioned by the requirements of the federal managing the quality of training of the centers owned by JSC Russian Grids will bylaws and regulations. To comply with these production personnel in accordance with the contribute to further growth of the occupational requirements, the Company provides for Company requirements, as well as for the potential of the Company employees to achieve occupational training using its own personnel adjustment of qualification advancement the strategic and tactic goals of the power training centers and cooperating with external programs and for the development of new and industry companies, as the training is educational establishments, including the the optimization of the existing programs, accomplished on the basis of universal quality training centers owned by subsidiary and optimizing the costs and time resources used standards, using advanced equipment and dependent companies of JSC Russian Grids. during training. specialized power grid testing fields, and by In 2012 the number of employees engaged in In order to attract the talented and active young experts who know what personnel competencies different types of occupational training specialists to participate in finding solutions for are lacking. comprised 11 987, with 9657 of them trained at the innovation and modernization of the power
Training and Further Education Federal Grid Company seeks to the corporate training system the reproduce highly qualified cadres and Company uses effective, high-quality create human resource capacity which forms and directions for further is able to ensure innovative training and development of personnel. development of the Company. As part of
Structure of the Training System Yelizaveta Nikolova, Head of the Personnel Training Center Mandatory, Development Development standard training of managerial of professional competences competencies
— requirements of the — changes in — commissioning of new Federal Laws business equipment — requirements of processes — changes in job descriptions in industry regulations — appearance of new accordance with the and guidelines tasks requirements of business — changes in the — reconstruction of substations external — recruiting new employees environment — interaction with higher educational institutions
Innovation and development program PERSONNEL MANAGEMENT
In 2012, 11,987 people were involved Percentage of trained production staff in various forms of training and was 80% (9,657 people) of total number development, an increase by 18% or of trained personnel. by 2,176 people compared to 2011.
The average number of training hours per employee per year by categories of employees for 2012
Administrative and managerial Industrial - production personnel and maintenance personnel personnel
50hours/person 28hours/person
In 2012 as part of the formation of a — "Failures in the work of HV single training system for personnel of transmission lines caused by the power grid complex in collaboration intense icing and gust-and-glaze with IDGC Holding, the following loadings"; measures were held: — "Improving procurement system of — more than two thousand employees Federal Grid Company"; of Federal Grid Company and IDGC — "Organizing the interaction between Holding took part in a joint training press services of Federal Grid event in the framework of the "Day of Company and IDGC Holding and Knowledge" on the theme "Review mass media, as well as other target and Analysis of the Causes of audiences in the process of Technological Failures that Occurred formation of a unified power grid through the Fault of the Staff"; complex"; — grid-wide emergency response — Alignment meeting for managers exercise with the participation of which are responsible for working staff of Training Center of Federal with the staff in the branches of Grid Company, operational and Federal Grid Company, SDCs of IDGC maintenance personnel of MES Holding; Volga, MES Urals, and IDGC Holding was organized and held. — "The integration of innovative development programs of Federal A joint training was held on the Grid Company and IDGC Holding" (in following programs: cooperation with the Skolkovo — "Fire Safety and Labor Protection at Moscow School of Management). Power Grid Plants" as part of the cooperation with TMS of Rostechnadzor;
58 Percentage of trained production staff Managers and professionals of the 3. fire safety at power grid enterprises; was 80% (9,657 people) of total number Company one time every 3-5 years 4. fire-technical minimum at power grid of trained personnel. undergo mandatory training on the enterprises; programs of FCEI "Educational and Methodical Study" of Rostekhnadzor in 5. power grid construction. Organizing the following areas: and providing construction and internal technical supervision for domestic 1. labor protection at power grid power plants; enterprises; 6. environmental safety of power grid 2. the rules and regulations of work enterprises; with electricity generating equipment. The safe conduct of work related to the 7. industrial safety at power grid technical operation and maintenance of enterprises; electrical and electro-mechanical equipment;
In 2012, 750 employees of Federal Grid Company, as well as 1,014 employees of the equipment suppliers and 3,510 persons of outside contractors underwent training on the program of FCEI "Training and methodical study" of Rostekhnadzor.
Personnel Training Centers
Established in 2011 in all regions of train production personnel with the use operation of Federal Grid Company of common standards and training corporate network of its own personnel programs. training centers (hereinafter - PTC) provided a unified educational space to
In 2012 on the basis of PTC, 6,713 people were trained, accounting for 56% of the total number of trained personnel for 2012.
All personnel training centers are In 2012 in addition to planned provided with simulator complexes emergency response and firefighting designed for the specifics of electric exercises in simulation classes of PTC power grids of each branch and two grid-wide emergency response maximally simulated the possibility of drills were organized and conducted: the operational and information center — involving staff of PTC of Federal Grid of operator. In 2013-2014, it is planned Company, operational and to complete construction of educational maintenance personnel of MES power grid polygons, equipped with Volga, MES Urals, IDGC Holding; primary equipment of training substations, fragments of power — a large-scale emergency response transmission lines (transformer, exercise under the direct supervision switches, circuit breakers and poles), of the representative of the Ministry microprocessor-based panels of PRA of Energy of the Russian Federation and ECA. was held in the branch of Federal Grid Company - MES Urals. PERSONNEL MANAGEMENT
On June 20, 2012 Chairman of the thousand sq. m. - indoor space is Management Board of Federal Grid completely renovated and equipped with Company Oleg Budargin took part in the the latest equipment for practical solemn opening ceremony of the Center training on effective power of Professional Development and transmission and distribution, relay Retraining for professionals of power protection and automation in electric grid complex, created on the base of the power grids of 110-500 kV, line surge St. Petersburg State Polytechnic protection and protection lines from the University (SPU). The Company involved impact of thunderstorms. Each year, in reconstruction of a three-storey more than 1,000 people can be trained building of the Center with area of 1.5 and improve their skills in the Center.
Days of Knowledge
In 2012, an educational project "Days of technologies, so that the project can be Knowledge", which launched in Federal participated by all branches of Federal Grid Company in April 2011, was Grid Company. Both employees of developed further. The project is aimed Federal Grid Company which possess at systematic and continuous the necessary skills and work professional development of employees experience and employees of outside of Federal Grid Company, ensuring companies act as experts. On the professional mobility of the personnel, corporate portal of Federal Grid adapting new employees, as well as Company, there is a special section creating a knowledge management where every employee can find system. information on upcoming classes, read Days of Knowledge is a program of educational materials of held or internal employee training on various planned seminars, ask a question or current themes in the form of audio and leave feedback for the project video conferences, webinars, as well as organizers and trainers. with the use of remote training
In 2012, as part of the "Day of Knowledge" 368 training events were held, which were attended by 10,011 people.
Remote Training
In 2012, the Company continued work In the course of the experimental on the development of an automated industrial pilot operation additional remote training system (hereafter - requirements to the functionality of RTS RTS). The system completed were collected. Currently they are under experimental industrial pilot operation, finalization and the preparation to put during which proved its relevance the system into operation is carried out. among the Company's employees, the ability to improve control of the training quality and retraining of employees, as well as the performance of the reduction of direct and organizational costs for staff training and employee development in the conditions of geographically distributed Company.
60 In 2012, the Company's experts tested RTS courses certified by Rostekhnadzor and prepared for the introduction of are prepared for mass use for the RTS courses on the following themes: following programs: — work in ARTS; — first aid treatment, — elimination of technological failures; — fire-technical minimum, — introduction to energy industry; — basics of industrial safety, — rules of work with personnel; — occupational safety and health for — switching in electrical installations. office employees, — occupational safety and health for managers and professionals.
To form a plan for further development of training courses, studies of the needs of remote training among employees of Federal Grid Company was organized during 2012.
Improving the competence of the Company`s employees on innovative areas of work
Federal Grid Company uses three basic In 2012, as part of the cooperation with mechanisms to enhance professional the Skolkovo Moscow School of skills and managerial competences of Management the following programs personnel on innovative areas of work: were implemented: — Project for services staff training and — youth roundtables as part of the St. operation of microprocessor devices Petersburg International Economic of PRA, ECA and APCS of concrete Forum - 2012 and the Baikal manufacturers. The practice of Economic Forum; sending production staff overseas to — a joint training program "Integration undertake foreign internships to of Innovative Development Programs study the best innovative practices in of Federal Grid Company and IDGC the field of management and Holding; innovative technologies; — integrated program - a strategic — standard programs to improve personnel reserve of Federal Grid professional skills and training Company. programs for managerial staff of the branches of MES and PMES in personnel training centers (PTC); — annual integrated programs, youth roundtables, innovative forums, as well as corporate seminars and trainings for young people and top and mid-level management. PERSONNEL MANAGEMENT
Social Programs
Employment benefits are another effective tool that the Company utilizes to increase the Company’s social attractiveness and improve employee motivation, including non-material motivation.
OBJECTIVES EMPLOYMENT BENEFITS
Motivating personnel for — Pension plan long-term employment — Support programs for Company veterans — Rewards scheduled for anniversary and retirement dates — Rewards for pensioners scheduled for professional and anniversary dates
Efficient rotation and — Housing rent compensation relocation of personnel
Contributing to the health — Voluntary medical insurance and operating efficiency of — Accident insurance personnel — Compensation for wages lost due to temporary disability — Sanitarium and health resort treatment
— Financial assistance related to illness
Social support of personnel — Financial assistance connected with scheduled leaves, marriages, childbirth, and funerals — Additional leave ATTRACTION AND RETENTION OF HIGHLY AND RETENTION OF HIGHLY ATTRACTION QUALIFIED PERSONNEL — Monthly payments to employees with many children or children with disabilities
Employee housing improvement
Over the past two years Federal Grid In February 2012, Russian Prime Company has been making efforts to Minister Vladimir Putin approved the provide its employees with the quality initiative to develop in the Company its housing. The project aims at attracting own housing stock. and retaining highly qualified personnel that play a key role in ensuring the UNEG reliability.
The Company worked out the 2012-2014 Corporate Housing Program that provides for aquiring/constructing 1,500 apartments with a total area of 81,000 squre meters in 47 regions of the Russian Federation.
The source of funding for the program In 2011-2012, the Company created are the funds saved in the corporate housing stock (from implementation of the Company’s ready-made building projects or investment program, including funds housing under construction) in the resulted from the reduction in cost of number of more than 600 apartments in contract work and improvement of the Primorsk, Krasnoyarsk, Krasnodar, procurement activities. Stavropol, Trans-Baikal, Khabarovsk , Amur, Saratov and Tyumen Regions, in Yamal-Nenets Autonomous District and Khanty-Mansiisk Autonomous District, and the Chechen Republic. 62 In 2013, the implementation of the Corporate housing allows the Company program will continue, and the housing to provide key, remote power facilities, geography will expand significantly as well as those under construction, of through developing the corporate the Unified National Electric Grid with housing for the Company’s employees highly qualified specialists. in Leningrad, Kaluga, Belgorod, and Sverdlovsk Regions, the Republic of Dagestan, Adygea, Republic of Sakha (Yakutia), Buryatia, and in a number of other regions of Russia. In May and August 2012, the Company commissioned 182 apartments in Adler, settlements Shahumian and Shepsi for the personnel of the Company’s Sochi enterprise. Corporate apartments were also given managed to attract the best to the employees of Kubanenergo - professionals from all over Russia for Sochi Electric Grids. Thanks to the the construction and operation of the corporate housing, the Company has 2014 Olympic power facilities.
In early 2013, the Company is commissioning corporate housing for employees who ensure the operation of the Company’s facilities in the cities of Grozny, Budennovsk, Nevinnomissk snd Abinsk.
We are planning to build a house for the Company’s specialists are operating Company’s employees in the village power supply facilites of Russkiy Island, Mogocha, where there is one of the the Eastern Siberia - Pacific Ocean oil Company’s innovative facilities - a pipeline and other energy facilities that transforming compex using a DC link. In provide a reliable power supply to the the village of Tayozhniy in the Primorsk Region. Krasnoyarsk Region a house is being The Company also implemented a built for employees enganged in making long-term corporate assistance power delivery from the Boguchanskya program to upgrade employees’ HPP. A corporate housing stock was housing conditions. built in Vladivostok, where the
Employees who purchase an apartment of their own with the use of bank credits can apply to the Company for help in the form of compensation, loans and other financial instruments.
In 2012, this program benefited 386 employees renting various employees, including 141 young accommodations with corporate specialists. During the entire period of support was 653, including 334 young the program (since February 2011) the specialists. Young specialists are Company has helped 708 employees, eligible for this benefit for a period of including 282 young specialists, the first three years. This program is purchase housing options of their own. one of the most important factors for The Company compensates the cost of attracting young specialists graduated housing to its employees, whose from the universities of the country's working activity involves moving to leading energy instituitons to work at another locality. In 2012, the number of the Company’s power facilities. PERSONNEL MANAGEMENT
Non-governmental Pension Programs
A non-governmental pension program — Rewarding employees for their for corporate employees was approved services to Federal Grid Company in 2004. The implementation of this and the electric power industry, and program allows the Company to achieve for their continuous and the personnel rejuvenation effect, helps conscientious work. attract and retain the best industry Since the program launch (from 2004 to professionals and provide social 2012), non-governmental pension from support to employees, even after Federal Grid Company funds has been retirement. provided to 3,628 employees. The Program’s main principles are: — Unified approach to organizing a non-governmental pension fund scheme in Federal Grid Company; — Differentiated approach to the non-governmental pension amount;
In accordance with norms of the Regulation on Non-Governmental Pension Provision to Federal Grid Company employees, a total of RUR 320,735,413 was transferred to the non-governmental pension fund of the power industry in 2012.
Employees eligible for the NGPP
Full-time Company employees with at least 10 years of uninterrupted service prior to the date that the labor pension right is acquired
A personal account for an employee is opened with the Fund on the following dates:
The date that the labor pension The date a labor pension due to right is acquired in compliance with disability is acquired the law (60 years for men and 55 years for women), or at an earlier date (subject to beneficial conditions),
64 Help to flood victims in the Krasnodar Region
The flood in Krymsk, in the south of the non-repayable subsidies comprised Krasnodar Region, which happened at more than RUR 24 million. the beginning of July 2012, damaged The assistance program for affected homes and property of 22 employees of employees was developed in Federal the Company’s branch — Kubanskoye Grid Company on the initiative of the PMES. Federal Grid Company took all Chairman of the Management Board necessary steps to ensure that daily life Oleg Budargin who personally of the affected empoyees went back to controlled the program implementation normal as soon as possible. The since the first days and until the employees who had their properties fulfillment of social obligations taken by suffered from the Krymsk flood the Company. During this period, he received non-repayable subsidies to met twice with the affected employees construct, purchase and repair their and their families. housing. The total amount of Charity projects The spending limit for charitable charitable donation contracts, in 2012, purposes is approved by the Board of Federal Grid Company sent letters to all Directors of Federal Grid Company in donation recipients and requested to the annual business plan. The decision provide reports on the expenditure of to provide charitable aid to legal entities funds under the relevant contracts. on each request received in the head office is taken by the Management Board of Federal Grid Company. In accordance with the conditions of
In 2012, the Company donated a total of more than RUR 138 million to help numerous sports, cultural, scientific and charitable organizations.
Donations have been provided to the The amount spent by the Company to following legal entities: Regional provide aid to physical persons in 2012 Charitable Public Organization of comprised RUR3.7 million. Separately, Invalids and Pensioners of Chernobyl of by the decision of the Management the Ministry of Fuel and Energy, the Board of Federal Grid Company, twenty Charity Aid Fund to People Who Have employees of the Kubanskoye PMES Found Themselves in a Difficult facility (one of the Company’s branches) Situation “Step Forward", a non-profit who had properties suffered from the organization Joint Hockey Club Krymsk flood received non-repayable "Dynamo", the Development Fund of the subsidies to upgrade their housing Moscow Power Engineering Institute conditions. The total amount of and other. non-repayable subsidies comprised more than RUR24 million. Furthermore, Company employees collected more than RUR 5 million to aid the people of Krymsk. PERSONNEL MANAGEMENT Labor Protection
The top priority of the Company’s labor safety personnel on safe methods of work, taking into A positive effect of a set of measures comprising policy lies in sustaining the lives and health of account today’s requirements. a labor safety management system can be felt the employees. through a decrease in injury rates and the 3. The continued efficient operation of number of emergencies occurring in the course The Company has reviewed and introduced a psychological relief rooms to prevent and of the Company’s economic activities. In 2013 the revised version of the Labor Safety Management eliminate the adverse functional conditions of number of accidents occurring in the Company Policy (developed taking into account the substations’ personnel. and its SDCs fell by 14.5%, compared with the requirements of GOST12.0.230-2007 and OHSAS To prevent occupational accidents the Company previous year. The employee injury rate fell by 18001:2007 International Standard). The Policy performs annual employee injury risk 12.5%. was effected in March 2012. assessments. Nonetheless the Company is aware of current The Company also spends considerable amounts The Company performs annual employee injury labor safety issues and we are going to proceed to implement organizational, technical and risk assessments. with improving labor safety to preserve the preventive initiatives to improve the safety of the health of our employees. employees. The key initiatives implemented in The Company implemented a system to assess 2012 include the following: the efficiency of labor safety management. 1. The operation of mobile event data recorders The Company has approved a list of initiatives to used to record the most dangerous actions of prevent occupational accidents at the Company personnel operating electric installations. facilities. 2. The efficient operation of 50 stationary and 17 The Company conducts periodical certification of mobile labor safety units to organize and workplaces. promote safe labor conditions, and to train the
System for management of labor protection and priority directions of activity
Federal Grid Company attributes close attention to ensuring of safety at the workplace. In 2010 in the Company was created the risk management system in Sergei Savosko, Head the sphere of labor protection. Its aim is of the Production Safety avoidance and prevention of workplace Department of Federal injuries and creation of favorable Grid Company working conditions.
66 Labor Protection Management Scheme in Federal Grid Company
Labor protection committee of Federal Grid Company (Chairman: Deputy Chairman of the Management Board – Chief Engineer)
Production safety department Chief Engineers Chief Executives of (methodology of labor of SDC Engineers executive apparatus protection issues) of MES of Federal Grid Company
Structural divisions of labor protection MES Committee SDC Committee and reliability of MES
Structural divisions of labor protection and PMES Committee SDC branch reliability of PMES Committee
Authorized representatives for labor protection
Coordinated joint activity upon provision, organization, control, adjustment and development of managerial solution for prevention of hazardous situations and improvement of labor conditions
Company policy upon issues of labor At the level of branches protection is elaborated by the of the Company – MES, PMES are active Committee for labor protection, Labor protection committees*, usually collegial consultative body composed headed by chief engineers. The from the representatives of executive Committees monitor the observance of apparatus, chief engineers of the labor protection requirements by the branches of the Company (MES) and personnel, fulfillment of measures SDCs of the Company – 21 persons. In aimed at prevention of workplace 2012 were held 4 meetings of the injuries and occupational diseases Committee at which were developed among employees. measures aimed at prevention of workplace injuries.
In the branches of Federal Grid Company in 2012 were active 50 Labor protection committees comprised of 949 persons.
* The work of Committees is based upon "Sample regulation on labor protection committee in branches of Federal Grid Company – PMES", enacted since 2009. PERSONNEL MANAGEMENT
During the reporting period were held division. With their active involvement 279 meetings, at which were considered are held the Days of labor protection 1234 issues. Upon all considered issues and fire safety. Owing to the work of the the resolutions of Labor protection authorized persons was increased the committees were implemented. number of inspections of the working The labor teams of the production brigades with the aim of decrease of structural divisions of PMES errors during preparation of workplaces (substations, services of maintenance and clearance, including personnel of substations, high voltage lines as well detached for service. as relay protection and controls, The priority directions of the Company’s laboratories, metrology services, activities in the field of labor protection transport services etc.) elect the are: authorized persons (nominees) in the — exclusion of cases of production sphere of labor protection* by open injuries and occupational diseases; voting at the general meeting of the employees of the branch structural — forming of safe behavior among division for a term not exceeding 3 employees of the Company at years. In 1,153 structural divisions of production facilities as well as the EMEG branches were elected 794 skills for prevention of dangerous authorized persons (nominees) in the situations; sphere of labor protection. In other — continuous improvement of labor labor collectives the elections were not conditions. held due to territorial remoteness and In accordance with state normative separateness (mechanization areas, requirements in Federal Grid Company relay protection and emergency was introduced the Procedures for controls etc.). During 2012 607 identification of hazards and evaluation authorized persons underwent training of injury risk at facilities of Federal Grid at the special labor protection courses. Company. On an annual basis the The authorized persons control the Company conducts work aimed at labor protection conditions in theirs identification and elimination of risks of structural divisions as well as the injury at the Company’s facilities. observance of labor protection norms by the employees of the structural
A target KPI indicator was introduced in the Company for executives of the Company as well as executives of MES, PMES in the sphere of labor protection: “Absence of lethal accidents at production or group accident in case of availability of grievously injured.” As of year-end 2012, the KPI was fulfilled for Company executives and most of executives of MES and PMES, as during investigation of accidents by commissions, chaired by state labor inspectors from Federal Labor Inspectorate of Russia no guilt of Company executives as well as executives of MES and PMES was identified.
* By the Order of Federal Grid Company No. 781 dated 08.10.2010 was introduced the "Sample regulation upon authorized person (nominee) of the labor collective in branches of Federal Grid Company – PMES".
68 The Company invests significant funds conditions, training of personnel in the at organizational technical as well as sphere of safe labor technics taking into preventive measures aimed at increase account the modern requirements. in the level of safety of employees. The 4. Was continued the practice of key measures undertaken in 2012 are: effective functioning of psychological 1. Was implemented the project of release rooms for prevention and introducing mobile video recorders in correcting unfavorable functional operation for recording of most condition of the operating personnel of dangerous actions of personnel working substations. at power units. In 2012 was continued conduction of 2. Together with the respective review contest for best organization of structural divisions of the executive work in the sphere of labor protection apparatus of Federal Grid Company among branches of Federal Grid and branches of the Company – MES, Company – MES, PMES. Samara was developed the Complex program for enterprise of MES Volga branch was improvement of labor conditions at recognized as the best in terms of facilities for the period of 2012-2017. organization of labor protection work. 3. Was organized effective operation of 50 permanent and 17 mobile labor protection offices for organization and conduction of promotion of safe labor
Injury indicators
For the first time during 10 years the accident rate ratio (number of injuries
coefficient of general accident rate in for 1,000 employees); RLAR - lethal Federal Grid Company reached a accident rate ratio. minimum level. For objective evaluation of accident level the following specific
indicators are used: RG – general
General and Lethal Accident Rates at the Company’s Facilities
1.2
0.8
0.4 General Accident Rate Ratio
Lethal Accident Rate Ratio 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 PERSONNEL MANAGEMENT
In 2012 in MES branches of Federal Grid Company occurred 6 accidents, during which were injured 7 persons: — 6 persons during work at the UNEG — 1 person during a road traffic objects (substations and high voltage accident. lines);
In SDCs (Elektrosetservic UNEG, CIUS UES and MGTS) no cases of production accidents were recorded, in comparison with the previous year the number of injured employees decrease (from 2 persons in 2011 to absence of injured in 2012).
On the whole in 2012 in branches and The most widespread types of accidents SDCs of the Company in comparison in 2012 were: with the previous year the number of — injury by current including from accidents decreased by 14.3% (from 7 induced voltage at high voltage lines; to 6 cases). At the same time the number of injured employees — impact of voltaic arc (while decreased by 12.5% (from 8 to 7 approaching current-carrying lines persons). The level of lethal injuries under voltage at an impermissible increased by 33% (from 3 to 4 persons). range).
Protection from electromagnetical impact at workplace
Federal Grid Company conducts regular Protection of employees from appraisal of workplaces in terms of unfavorable impact of EMI is performed working conditions. One of the by conduction of organizational evaluated indicators is the level of measures (insulation of zones of EMI electromagnetic interference (EMI) at impact, location of workplaces and the workplace. According to sampling directions of the servicing personnel at performed by specialized organizations: sufficient range from EMI sources, — the level of electromagnetic intensity ensuring the observance of maximum at permanent workplaces of permissible levels) as well as substations did not exceed 5 kV/m; engineering and technical measures (introduction of new technologies and — in places of temporary fulfillment of usage of individual protective maintenance works the level of equipment for protection against electromagnetic intensity was in the electromagnetic fields (EP-1-summer, interval between 5 and 30 kV/m. EP-3-winter). In accordance with SaNPiN (sanitary norms and regulations) 2.2.4.1191-03 "Electromagnetic field under production conditions" the maximum permissible level of intensity of electric field under impact of less than 1 hour per shift is 60 kV/m.
70 Managing of the Economic Impact
Federal of Unified Grid Company Energy System УПРАВЛЕНИЕ ЭКОНОМИЧЕСКИМ ВОЗДЕЙСТВИЕМ
Key Aspects of Social and Economic Impact Management
Component 2009 2010 2011 2012 Created economic value Revenue, RUR thousand 96,107,857 119,476,792 221,254,674 143,484,851 Distributed economic value, 54,301,730 62,867,299 69,546,019 62,602,964 RUR thousand Operational costs, 38,739,394 35,932,957 40,507,713 37,242,997 RUR thousand Wages and other payments and 7,156,666 14,266,825 16,164,714 18,551,998 employees benefits, RUR thousand. Payments to suppliers of capital, 1,717,506 273,751 0 0 RUR thousand Payments to the State, RUR thousand 6,645,304 12,215,820 12,590,956 6,466,405 Investment in communities, 42,860 177,946 282,636 341,564 RUR thousand Undistributed economic value, 41,806,127 56,609,493 151,708,655 80,881,887 RUR thousand
Technological connection of consumers
Technological connection is a complex Agreement on technological connection service providing for actual connection is a public document, disclosure of of power receivers (power units) of information about the main consumer potential counteragents to the facilities characteristics of technological of electric grid system. The company connection services is performed in provides services of technological accordance with the Government connection to consumers, distribution Regulation No.24 “On adoption of grid companies and facilities producing standards for information disclosure by electric energy. subjects of the wholesale and retail markets of electric energy” dated 21.01.2004.
During the reporting year the Company signed 388 agreements on technological connection, which is 56% more than in 2011.
The total amount of maximum capacity to 2.9 GW, which exceeds the level of upon the realized technological the previous year by 26%. connections of consumers and distribution grid companies amounted
72 Change in the Number of Concluded Contracts on Technological Connections of Consumers and Distribution Grid Companies in 2008-2012
2008 250 2009 308 2010 444 2011 248 2012 388
Change in the Volume of Maximum Capacity for the Implemented Technological Connections of Consumers and Distribution Grid Companies in 2008-2012, GW
2,3 2,9 1,6 0,7 1,0 2008 2009 2010 2011 2012
Since 2012 the Company actively introduces modern methods and participates in elaboration and principles of management in the work implementation of the Plan for of grid: preparation of legislative acts, aimed at — designation of key performance increasing the availability of energy indicators; infrastructure, adopted by the Order of the Government of Russia No.754-r and — increase in the standards of client Plan of measures (“roadmap”) service quality in the part of “Increase of accessibility of energy technological connection measures; infrastructure adopted by the Order of — arranging of grid organization on the the Government of Russia No 1144-r basis of international best practices; dated 30.06.2012. — introduction of unified standards for The roadmap “Increase of accessibility servicing of clients of the grid of energy infrastructure” provides for a organizations. complex of measures of expansion of — Introduction of acceptance of preferences for connection of objects requests for capacity of up to 150 kW up to 150 kW and enhances the rules of inclusively and with voltage of up to technological connection in the part of 10 kV inclusively through information arrangement of conditions for telecommunication network Internet decreasing of terms and number of with option of real time tracking of stages of technological connection. It application fulfillment. also enhances the mechanism for redistribution of free capacity and УПРАВЛЕНИЕ ЭКОНОМИЧЕСКИМ ВОЗДЕЙСТВИЕМ
With the aim of increasing of awareness of applicants and ensuring the transparency of provision of technological connection services the Company developed new information portal “technological connections services” presented at the official website of Federal Grid Company.
During implementation of this project knowledge in the field of electric energy particular attention was attributed to industry. The information that is most ensuring of interactive access to data highly sought by consumers appeared concerning technological connection, to be the information on accessibility of systematization and placement of main substations of the Company information is such a way, that it would represented in linkage to the be clear and accessible for any geographical map of Russia. consumer, not having special Purchasing activity
A proper organization of the purchasing activities the purchasing system development became Companies with State Participation” survey is vital for the efficient operation of the Company closely associated with the broadening performed by Expert RA Rating Agency, the in general, due to the cost, as well as the quality e-commerce opportunities, while a continuous Company became one of the top three state of purchased products. Therefore, the Company monitoring system is under development from companies in terms of the quality of adherence is interested in cooperation with the 2010, allowing to obtain data on the condition of to the requirements of the federal laws manufacturers of reliable electric equipment, any purchasing procedure. regulating the purchases performed by state and with contractors capable of ensuring high The current purchasing policy has been updated companies, and the compliance with the quality and optimal terms for the works in line with the requirements of the Federal Law common business practices in the organization performed. No 223 “On the Purchasing of Goods, Works, and of purchasing activities. The 2012 purchasing campaign consisted of 4 Services by Certain Types of Legal Entities” as of We appreciate the recognition of the Company 198 purchasing procedures for the total amount 18.07.2011, effected on January 1, 2012. The achievements by the Rating organizers and of RUR 174,243.298. Ninety one percent of the current policy complies with all requirements of experts. We are going to proceed with the purchasing procedures were based on tenders. civil, as well as antimonopoly law. intense development of our purchasing system in The positive effect (savings) resulting from the We make every effort to streamline the Company the future. 2012 purchasing procedures amounted to RUR approaches to the purchasing activities in 20, 616.583 million. accordance with the best practices, keeping abreast of external regulations in the field. In The above indicators were achieved by the December 2012 the Company was given High Company due to the continuous development of Transparency Rating in the 2012 National Rating the purchasing system. The first purchasing of Purchasing Transparency. The Rating includes policy was approved in 2004. The policy state-owned companies engaged in purchasing underwent continuous adjustments in line with activities in compliance with the provisions of the the changing law requirements and the federal law No 223-FZ. In 2013 based on the acquisition of purchasing experience by the results of “The Quality of Purchasing Company, with new editions approved. In 2008 Management in State Corporations, and
During implementation of the organizations able to ensure high investment program as well as annual quality and meet optimal deadlines for rehabilitation and target programs the work. Federal Grid Companies performs Federal Grid Company performs purchasing activities aimed at acquiring purchasing activity in strict conformity of the required equipment and services with Regulation on purchases the first at the competitive market. The amended of which was adopted in 2005. Company is interested in collaboration with producers of highly efficient Yuri Zafesov, Head of electrical equipment, construction, Consolidated Planning and engineering and other contractor Purchasing Department
74 The methodology for purchasing activity — best practices of state purchases; of the Company is based upon the — advanced international experience; following: — standards of purchasing activity of — legislation of Russia (Civil Code, RAO «UES of Russia». Federal Laws 135-FZ, 223-FZ, 94-FZ); In accordance with the requirements of the Federal Law No. 223-FZ «On purchases of goods, works and services by certain types of legal entities” dated 18.07.2011 later referred to as “the Law” was developed and adopted in 2012 the new amendment of Regulation on purchases.
In accordance with the requirements of The document tightens regulations the Law the Regulation on purchases is concerning conduction of available at the website of Federal Grid non-competitive purchases, regulations Company (www.fsk-ees.ru) since the concerning participants of purchasing day of its implementation and since procedures and also provides for 01.10.2012 in accordance with the decrease in the threshold amount for requirements of the Order of the open competitive purchasing procedures Government of Russia No. 662 «On published in mass media, from 2 500 term of publication during purchases of thousand rubles to 500 thousand rubles. goods, works, services by certain types of legal entities of information at Internet network at the All-Russian website for placement of information on requests for supply of goods, fulfillment of works and provision of services (www.zakupki.gov.ru) dated 30.06.2012.
In December 2012, Federal Grid Company was attributed the rating of «High transparency» in the «National rating of transparency of purchases 2012» in nomination, evaluating state companies subject to regulation by the Federal law No.223-FZ.
The main indicator of the rating is Procedure regulation of purchases observance of transparency standards ensures proper and effective use of and economical effectiveness of the funds as well as economically justified purchasing activity by the company. The costs (market price of products). participants of the rating are the most During the purchasing campaign of the important federal, regional and year 2012 Federal Grid Company municipal purchasing agents as well as conducted 4,198 purchasing procedures the leader of the Russian corporate for an overall sum of RUR 174,243.298 sector. million of which 91% were on a competitive bidding basis.
As a result of conduction of purchasing procedures in 2012 the economic effect amounted to RUR 20,616.583 million (economical effect is defined as the difference between the price limit and actual cost of purchasing). УПРАВЛЕНИЕ ЭКОНОМИЧЕСКИМ ВОЗДЕЙСТВИЕМ
Purchasing from local suppliers
Due to realization of purchases by For fulfillment of highly specialized regions, in which the Company works can be attracted organizations, branches are located, a significant which perform such works on the whole number of local suppliers and territory of the Russian Federation. contractors are involved in purchasing During construction and entry into procedures. service of power facilities are created new workplaces and are attracted Up to 75% of local suppliers and workers from among local population contractors participate in purchases and related branches of economy. in each region.
Volumes of Purchases of Federal Grid Company in the regions in 2012
Region Share in overall volume Total procedures conducted in 2012 of purchases, % Total sum, RUR thousand Number of procedures Siberia 5.92 10,313,300.20 491 Center 45.00 78,404,338.40 1181 East 2.92 5,094,315.50 432 South 20.13 35,073,888.90 585 Volga 5.35 9,323,901.30 326 Urals 5.30 9,233,751.20 296 North West 10.30 17,953,82.50 529 West Siberia 5.08 8,845,981.90 358 TOTAL 100.00 174,243,298.90 4198
Basic principles and the organizational structure disclosed in the Report for the year 2011 remained unchanged.
Import substitution In 2012 Federal Grid Company — development of production and continued to implement the import scientific potential; substitution Policy. Main principles of — ensuring of the required level of the Policy are: energy security and industrial safety — decrease of dependence on the of the country; import; — increase of the technological level of — introduction of innovative energy domestic production; efficient technologies; — creation of new workplaces. — development and modernization of the domestic industrial production;
76 Target indicators for implementation of the Program of import substitution for equipment, material and technologies of the Company for the years 2011-2014 Actual share of domestic equipment Target Main types of equipment purchased
Autotransformers 45% 80% Shunting reactors 60% 75% Controlled shunting reactors 50% 65% Switches, three phase unit 20% 40% Disconnecting devices, three phase unit 59% 80% Current transformers, three phase unit 40% 50% Shunt transformers, three phase unit 21% 35% Insulated switchgears, cells 0% 50% Cable with cross-linked polyethylene insulation 0% 15%
To achieve target indicators, the Company signed 95 agreements on cooperation in the field of development and implementation of the newest technologies and modern equipment in the electric grid complex. 77 agreements were signed with the producers of the electric grid equipment among which are 72 domestic companies.
In 2012 took place a number of events Within the framework of long term important for the Company in the field agreement on supply of electrotechnical of import substitution. production concluded by Federal Grid Within the framework of Long-term Company with Power Machines was agreement on supply of electrotechnical established a joint venture Izhora production signed with Elektrozavod transformers, which performs the Holding Company, transformer construction of transformer plant in equipment with voltage class of 110-500 Kolpino. Production and supply of kV started to supply to the Company transformer equipment with voltage facilities. class of 110-500 kV to the objects of the Company will begin in 2014. Construction of the plant of Hyundai Electrosystems producing switchgears In accordance with long-term with voltage class of 110-500 kV was agreement signed the year before with completed in Artyom, the Primorsk Elektrozavod Holding Company were Region. In accordance with the long started the first deliveries of power and term agreement on supply of distribution transformers to the electrotechnical production concluded facilities of Company. by Federal Grid Company and Hyundai Electrosystems in 2013 will be started the supply of switchgears to the power grid objects of the Company. УПРАВЛЕНИЕ ЭКОНОМИЧЕСКИМ ВОЗДЕЙСТВИЕМ
Consumer relations
Starting from 2009, Federal Grid The transition from telephone to written Company annually conducts the studies interviewing in 2012 allowed to increase of satisfaction level of the customers for the number of responses from those the technological connection services surveyed by 2.5 times in comparison provided by the Company. with 2011 and bring the share of In 2012 the clients, who were in the irrelevant client information in line with beginning of the process of the norm of B2B sector (the share of technological connection, and the those surveyed that the Company failed clients that had been connected before, to contact decreased from 38% to 2%). participated in the survey. At the same In addition, in order to improve the time the main bulk of those surveyed information disclosure at the official were at the stage of realization of site of the Company («Technological measures of technological connection connection services» portal) was (35%), and a part of those surveyed filed introduced the services of online more than 2 applications to the interviewing of clients in the personal Company (17%). The analysis of area of consumer. categories of the respondents on the whole reflects the general features of corporate clients.
Categories of Clients Surveyed
Electricity consumer Generating Company Grid Organization
10% 20% 30% 40% 50% 60%
Change of Response from Those Surveyed in 2009-2012
% Failure to contact 19% 2 40% 38% Refusal from survey % 34 % 26% 56 % 40 Response received 34% 47% 22% 43% 2009 2010 2011 2012
78 The study of 2012 identified an increase in the satisfaction level in comparison with 2011: the average satisfaction level for submitters of the applications was at “above average” level (8.9 out of ten), which is higher than the 2009-2011 level.
The analysis of evaluation of importance increased. The decrease of importance for clients of the studied parameters for parameters “Form of sample confirms the correctness of criteria application for technological selected for evaluation: the average 9.3 connection” as well as “Form and out of ten maintains since 2009. At the contents of sample agreement on same time the importance of such technological connection” (decrease by criteria as “Compliance with deadlines” 1.3 and 0.6 points respectively) shows and ‘Effectiveness of work in the field of the improvement in the level of provision of information during legislative regulation of the issue within technological connection” (increase by the last year. 0.8 and 1.1 points respectively) has Change in Satisfaction Level for Submitters of the Applications Compliance with deadlines Transparency of Readiness of employees for preliminary 10 constructive resolution of points calculations for at issue technological connection 8
Effectiveness of 6 work in the field of Form of sample provision of application for information during technological 4 technological connection connection 2
Availability of Form and contents information on of sample technological agreement on 2009 connection technological connection 2010 2011 2012 Quality of Goodwill and incoming politeness of information employees Quality and results of design and survey works
The conducted study also allowed to 2013: compliance with deadlines and identify the parameters for which is transparency of preliminary calculations observed the most deviation between for components of technological “importance” and “satisfaction” level connection. and which require specific attention in УПРАВЛЕНИЕ ЭКОНОМИЧЕСКИМ ВОЗДЕЙСТВИЕМ
Procedure and sources of investment program financing
Energy Ministry of Russia adopted the investment program of Federal Grid Company for 2013-2017 (Order No. 531 dated October 31, 2012) in the overall volume of RUR 775.5 billion including VAT.
The program provides for introduction and 16,985 km of electricity of 66,870 MVA of transformer capacity transmission lines.
Indicator 2013 2014 2015 2016 2017 Total Volume of financing, RUR 155 177 154 596 155 135 155 499 155 124 775 531 million Length of high voltage 3 358 4 397 3 690 3 112 2 428 16 985 line introduced, km Introduced transformer 17 034 14 994 16 576 8 334 9 932 66 870 capacity, MVA
The investment program of the — power output of introduced power Company is aimed at achieving the units; following priorities: — introduction of innovation projects — development of the UNEG for and energy effectiveness programs; ensuring its reliable operation; — development of technological — ensuring renewal of the Company’s infrastructure for the functioning of grid assets; competitive market of electric energy — realization of electric grid and capacity. construction projects, having state The program provides for equal importance (Olympics-2014 in Sochi, distribution of investment expenses in ESPO, Skolkovo innovation center, the five year period, which will allow the improvement of reliability of power Company to maintain a balanced supply of Moscow, St. Petersburg structure of its financing sources. The etc.); financing of investment program will be — providing technological connection to performed out of funds of the federal Federal Grid Company’s grids; budget and own funds of Federal Grid — taking measures upon Agreements Company. concluded with regional administrations for ensuring of electricity supply to consumers;
Financing of the investment program through loans and credits is growing.
80 Starting from 2010 the Company is one In 2012 Federal Grid Company attracted of the most active participants of the RUR 55 billion at the Russian bond Russian capital market. The yield curve market. In the beginning of December for the Company’s bonds is a 2012 the Company entered the benchmark for determination of international capital markets with its borrowing costs of other debut long term issue of ruble quasi-sovereign issuers and issuers of Eurobonds with an overall volume of the energy industry of Russia. RUR 17.5 billion. The 2012 events show that the Company has support and trust from investment community.
In October 2012 the leading global rating agency Standard & Poor’s confirmed the long term credit rating of Federal Grid Company at the investment level BBB according to international scale with stable outlook.
In its report Standard & Poor’s points In December 2012 Federal Grid out that the main factors supporting the Company received “Issuer of the year” high credit quality of the Company are award according to Cbonds information significant financial soundness of agency. The award ceremony took place Federal Grid Company as well as the in St. Petersburg within the Cbonds X state support. Russian Bond Congress.
Company input into economic development of the Russian regions Payment (transfer) of taxes to budgets in 2012 (RUR thousand) TOTAL Federal Grid JSC ESS ENES JSC CIUS UES BUDGET Company Federal 8 308 365 6 955 213 373 688 979 464 Regional 3 071 206 2 954 328 55 873 61 005 Municipal 71 127 70 689 438 0 TOTAL 11 450 698 9 980 230 429 999 1 040 469 УПРАВЛЕНИЕ ЭКОНОМИЧЕСКИМ ВОЗДЕЙСТВИЕМ
Investment plans of the Company upon The Company contributes to introduction of new grid capacity for development of production as well as development of the regions were social and economic infrastructure of fulfilled nearly in full. The Company the Far East. The branch of Federal introduced 3,656 km of high voltage Grid Company – MES East started lines against the planned 4,023 km implementation of the project aimed at (91%), 17,852 MVA of transformer ensuring external power supply of the capacity against the planned 14,152 Elgin sky coal complex at the South of MVA (126%). The capital investments the Sakha (Yakutia) Republic – large were used at 99% (RUR 186,378 scale social and economic project, million). which will give further momentum to In 2012 Federal Grid Company closely the development of Yakutia, the Amur, interacted with the representatives of Khabarovsk and Primorsk Regions. By the regional authorities and largest the end of 2015 the Company will create consumers of services both upon the conditions for supply of the complex issues of planning of grid infrastructure with electricity in the volume of 134 MW. development and in the part of The branch of Federal Grid Company – implementation of large scale projects, MES Siberia put into operation a 220 kV which have significant importance for controlled shunt reactor (CSR) at 220 kV social and economic development of the Taksimo substation in the Republic of Russian regions. Buryatia. Putting of new equipment into operation increased the reliability of The branch of the Company – power supply of the Baikal-Amur MES Siberia elaborated Mainline Railway, including the 278 proposals for development of the Kodarskiy tunnel. Usage of CSRs at substations of the Company allows to Eastern Siberia, which can be taken manage the mode of operation of the into account during the elaboration of grids so as to decrease losses, increase the program for development of the the electricity transmission capacity Unified energy system of Siberia until and prevent their overload. This allows to achieve high reliability of the system year 2020. as well as to achieve significant economy of electricity during transmission. The document was developed by a specially created workgroup upon instruction of the Chairman of the Management Board of Federal Grid Company Oleg Budargin. The composition of the workgroup included the representatives of the authorities of the Eastern Siberia, executives of energy companies as well as of large consumers of electric energy.
82 Participation in Implementation of Large Scale National Projects
Provision of electric energy to the constructed objects for the 2014 Olympics
At year-end 2012 the personnel of Among them are: ice arena for figure Federal Grid Company was marked by a skating and short track competitions, letter of appreciation from the roofed speed skating center, President of Olympstroi state bobsleigh/luge track in Krasnaya corporation Sergey Gaplikov “For Polyana and five-star hotel for prompt organization of technological accommodation of the representatives connection of power receiving facilities of International Olympic Committee. For of sports Olympics objects to the the power supply of 2014 Olympics Company’s grid”. Federal Grid Company performs construction and modernization of 33 Federal Grid Company already main electric grid objects in accordance provided supply of electricity to eight with timeline set by the International Olympic Committee and the Program of Olympic facilities of the state construction of Olympic objects and corporation. development of city of Sochi as a mountain climatic resort.
Electric grid infrastructure for the objects of soccer World cup 2018
On November 20, 2012 at the branch of of a number of large scale projects: in Federal Grid Company — 2013 will be completed the complex Nizhegoroskoye PMES took place the rehabilitation of 220 kV Zarechnaya joint meeting of the representative of substation, will be implemented the Company and IDGC of the Center projects of technological connection of and Volga Region upon the issue of two substations — 110 kV Strelka synchronization of measures needed for substation, 220 kV Diesel substation as realization of energy supply to the well as technological connection for objects of the soccer World Cup 2018. realization of capacity output schemes Within the framework of preparation to of Novogorkovskaya TPP and World Cup – 2018 it is planned to Nizhegorodskaya TPP. reconstruct 7 existing stadiums and construct one new stadium as well as to improve the transport infrastructure, in particular to construct four new metro stations; in addition will be completed the Within the framework of preparation construction of International airport in for the World Cup IDGC of the Center Strigino, new hotel facilities and medical and Volga Region plans to introduce institutions will appear in the city. 107 MW of new capacities. With the aim of reliable and uninterrupted energy supply of these objects MES Volga branch of the Company planned the implementation УПРАВЛЕНИЕ ЭКОНОМИЧЕСКИМ ВОЗДЕЙСТВИЕМ
Energy supply of Skolkovo Innovation center
The Project of energy supply of Skolkovo expenses on electricity by consumers Innovation center realized by Federal Grid through difference between “day” and Company is in a class by itself in terms of “night” tariffs; complexity and technological intensity. — large energy storage units; During realization of the project were implemented high tech achievements: — solar batteries and many other achievements. — ecologically safe gas-insulated equipment; — automated system for management of technological processes of Federal Grid Company developed a substations; unique “smart energy system” for — modern micro processing devices of “smart city” – a prototype of energy relay protection and emergency control automatics; system, which will be used in large cities of the future. The investment — automated data measuring system for commercial measurement of electric in construction amounted to RUR 3.6 energy contributing to optimization of billion.
External energy supply for construction of Vostochny spaceport The branch of Federal Grid Company – Implementation of the project is planned MES East completed project design to be completed in 2013. Until the end of works for external energy supply of the 2013 three new linear cells of 220 kV construction of Vostochny spaceport and switchgear will be installed at the the objects of its infrastructure, which substation, which will allow to provide provide for expansion of the operational with electrical energy the construction of 220 kV Ledyanaya substation in Amur the space port and of its infrastructure, region. including the cosmonaut training center, spaceport control point and communications center. Energy supply of the objects of Eastern Siberia - Pacific Ocean oil pipeline (ESPO)
The construction of oil pipeline system stations and the oil loading port of “Eastern Siberia – Pacific Ocean” is the Transneft. Currently within the largest project of the last decade framework of the Basic agreement implemented by Transneft for transport concluded between Federal Grid of Russian oil to the prospective market Company and Transneft, the Company of the Asian-Pacific region. Since 2010 realizes external energy supply schemes within the framework of Agreement on for another oil pumping stations of cooperation between Federal Grid Transneft (including Zapolyarie-Purpe Company and Transneft, the Company pipeline) as well as 3 oil pump stations performed construction of objects of pipeline allotment to Komsomolsky oil external energy supply for ensuring of refinery plant with the commissioning reliable supply of 13 oil transfer pumping period from 2014 to 2016.
84 Tariff Policy
Until 2010 tariffs for services of For tariff calculation for each year of the transmission of electrical energy calculation period, the required gross through the UNEG for the Company revenue is estimated by summarizing were set with the use of the method of the values of repayment, return on the economically justified costs invested capital and the costs needed (“cost-plus”). for provision of electricity transmission Since 2008 a principally new system of services through the UNEG. To avoid a tariff regulation based on RAB sharp increase of tariffs the RAB methodology (regulatory asset base – regulation methodology provides for a return on the invested capital) has been smoothing mechanism, which consists introduced in separate territorial grid in reallocation of required gross organizations of the Russian revenue by years for the whole long Federation. term regulation period.
Transition of Federal Grid Company to RAB regulation of tariffs took place on January 1st, 2010. For the first long term regulation 2010-2014 period FTS of Russia set the following key long term parameters of regulation of the Company's tariffs by the method of return on the invested capital:
Indicator 2010 2011 2012 2013 2014 Rate of return on capital 3.9 % 5.2 % 6.5 % 7.8 % 10 % invested as of January 1st, 2010* Rate of return on capital 11.0 % 11.0 % 11.0 % 10.0 % 10.0 % invested after January 1st, 2010
Period of return on invested 35 35 35 35 35 capital, years Investments of Federal Grid 647.6 - - - - Company, RUR billion**
* In accordance with the Basic principles of pricing in the field of regulated prices (tariffs) in the power industry, adopted by the Regulation of the Government of Russia No. 1178 “On pricing in the field of regulated prices (tariffs) in the power industry” dated 29.12.2011 the rate of return during the first long term period of regulation, excluding its last year, may be set on a separate basis in respect to capital invested before transition to regulation with the use of methodology of return on the invested capital and also in respect to capital created after transition to regulation with the use of methodology of return on the invested capital. ** Due to adoption of the Regulation of the Government of Russia No. 1178 “On pricing in the field of regulated prices (tariffs) in the power industry” dated 29.12.2011 and transition to accounting of objects in the base of the invested capital upon their actual entry into operation since 2012, for calculation of the required gross proceeds for each year of the long term period of regulation the actual cost of objects put into operation in 2011 and the objects planned for entry in operation in 2012-3013 was decreased by the cost of the construction in progress accounted in the cost of investment capital during transition of Federal Grid Company to regulation of tariffs with the use of methodology of return on the invested capital in the sum of RUR 205.6 billion allocated by 3 years. УПРАВЛЕНИЕ ЭКОНОМИЧЕСКИМ ВОЗДЕЙСТВИЕМ
In April 2011 due to the necessity of companies (deferral of part of the restraining of tariffs on electrical required gross revenue to the energy was adopted the resolution on subsequent years). smoothing of tariffs of electric grid
By the Order of FTS of Russia No.552-e/2 dated December 29, 2009 (as amended by the Order of FTS of Russia No. 325-e/1 dated December 6, 2011) the tariffs on electricity transmission by the UNEG for the Company since January 1, 2012 till July 1, 2012 are set at the level of 2011 tariffs.
In accordance with Basic principles of The tariff rates on services of electric pricing, by the order of Federal Tariff energy transmission on maintenance of Service No.113-e/1 dated May 21, 2012 electric grid facilities, which are part of was adjusted the rate of return on “old” the UNEG, for republics of the Northern capital set for the 2014: the rate of Caucasus and the Stavropol Region: return on old capital in 2014 is set at the For 2010 – 37,845.23 RUR/MW*month. level of rate of return on “new capital”- 10%. For the period from 01.01.2011 till 31.03.2011 – 46,029.88 RUR/MW*month; For the period from 01.04.2011 till 30.06.2012 – 43,783.55 RUR/MW*month; For the period from 01.07.2012 till 30.06.2013 – 48,540.01 RUR/MW*month.
2008- 2012 Tariff Rates on Services of Electric Energy Transmission on Maintenance of Electric Grid Facilities, which are Part of the UNEG Set for the Company (RUR/MW*month)
48,170 2008 58,159 2009 87,869 2010 116,783 01.01.2011—31.03.2011 111,083 01.04.2011—30.06.2012 123,328 01.07.2012—30.06.2013
86 Russian Grids: Federal Grid Company and IDGC Holding
With the aim of increasing effectiveness and development of electric grid complex of the Russian Federation and coordination of works upon management of the complex, restraining the tariff growth for the end consumers of the electric energy on November 22, 2012 the President of the Russian Federation signed decree No. 1567 “On open joint-stock company “Russian grids”.
For realization of measures of the decree in Federal Grid Company was created a Coordination committee headed by the Chairman of the Management Board Oleg Mikhailovich Budargin. Russian Grids УПРАВЛЕНИЕ ЭКОНОМИЧЕСКИМ ВОЗДЕЙСТВИЕМ
88 Anti-corruption and Prevention of Conflict of Interests System
Federal of Unified Grid Company Energy System ANTI-CORRUPTION AND PREVENTION OF CONFLICT OF INTERESTS SYSTEM
Federal Grid Company`s Anti-Corruption Policy
The Company strives to deal with contractors To perform according to the instructions of the Company about instances of corruption. Other who conduct their business in open and fair President Putin V.V., and the decisions of the initiatives included managing the conflicts of manner. Presidential Commission on the Development interests, and anticorruption monitoring, etc. Strategy of Fuel and Energy Complex and Based on the analysis of the global best practices In 2012 the Company was focused on corruption Environmental Issues, to provide for the the Company management decided to move the prevention, legal education and the formation of transparent financial and economic activities and anticorruption priority to the next level in 2012. loyal behavior of its employees. The initiatives to prevent the conflict of interests, the Company Therefore the Company started to implement a included different topical training sessions, and launched an automated process of acquisition compliance system, meaning the organizational seminars for the Company employees. The and analysis of data on the owners (including end principles of financial and economic activities Company employees and those of its branches beneficiaries) obtained from the contractors. The that prevent groundless damage and the loss of and dependent companies participated in an Company introduced annual declarations stating goodwill occurring due to corruption, the anonymous survey intended to identify the data on property, income and property liabilities violation of the norms of the Russian laws, or the personnel’s understanding and attitude to the of the Company top managers. internal corporate regulations. A Corporate and Company’s Anticorruption Policy. Anticorruption Procedures Department One more activity pertaining to the exclusion of The Company’s continuous efforts have their established within the Executive Body of the contractual relationships with unfair contractors results, with 4 546 contractors checked in 2012 Company is responsible for the formation and consists in the inclusion into the contracts of an (twice as many, compared to 2011). The number implementation of the compliance system. In anticorruption stipulation, which allows the of industry guideline documents checked for accordance with the international standards, the establishment of business relationships only with corruption potential grew twice, with the number Department reports directly to the Chairman of partners supporting the Company’s of documents checked during anticorruption the Company’s Management Board. Anticorruption Policy and conducting their monitoring of purchasing activities growing business in open and fair manner. Apart from the changes in the organizational thrice (compared to 2011), while the economic structure, there also took place a number of Apart from the priorities of the Anticorruption effect amounted to RUR 116 million. changes in the Company’s legal framework in Policy listed above, in 2012 the Company Throughout the formation period of the 2012. The first thing to note is the approval by the exercised anticorruption control over the Company’s Anticorruption Policy we had to deal Board of Directors of the Company’s purchasing activities, including the control over with a number of difficult tasks and despite the Anticorruption Policy, which is a fundamental the execution of legal documents pertaining to success of the Company’s actions, we are going document regulating anticorruption initiatives the land used for the UNEG facilities to proceed with improvement and development and defining key tasks, principles and priorities construction. The Company also conducted of our anticorruption priority, conducting of anticorruption activities. anticorruption assessment of the industry anticorruption initiatives on a systematic basis. guideline documents and their drafts, controlled A precondition required to achieve the goals We plan to actively revise the Company’s internal the Company’s participation in charity initiatives stated in the Anticorruption Policy consists in the legal framework pertaining to the and the interaction with government officials. development of a set of the Policy implementation of corporate and anticorruption The Company’s subsidiary and dependent implementation initiatives, meaning a Program compliance procedures, and to implement new companies implemented their own to prevent corruption and to regulate the conflict preventive measures within the existing business anticorruption policies. The Company checked of interests within the Company in 2012-2014. processes. the applications submitted by the Company The Program was approved by the Company’s employees, contractors and other physical Management Board. persons and legal entities, informing the
The formation of JSC Federal Grid In 2010-2011 Federal Grid Company Company`s Anti-Corruption Policy was improving legal regime of began in 2010 by adopting JSC Federal anti-corruption activities. Grid Company`s Program for Viktoria Nikiforova, Director Anti-corruption and Settlement of of Corporate and Conflicts of Interest for 2010-2011 and Anticorruption Procedures the Plan of main activities on Department implementing Program for 2010 - 2011.
90 Federal Grid Company`s Anti-Corruption Policy
During this period, the Company: contractors - legal entities and — developed a number of individuals - via a "hot line" (Internet organizational and administrative site, "helpline"); documents in the field of — began corruption prevention work, anti-corruption; legal education and developing the — set up anti-corruption examination foundations of law-abiding behavior of documents, anti-corruption of the Company`s employees. control over procurement activities, and anti-corruption monitoring The activities resulted in the approval* system; of JSC Federal Grid Company`s — formed a Commission to observe the Anti-Corruption Policy in 2012, the basic rules of corporate conduct and document setting out the main settlement of conflict of interests; objectives, principles and areas of anti-corruption activities of the — set up an interactive channel to Company. communicate with the Company`s
Goals, objectives, principles and areas of Federal Grid Company`s Anti-Corruption Policy
Goals: — prevention of corruption; — ensuring liability for cases of corruption; — forming anti-corruption awareness.
Principles: — intolerance of corruption in implementing functional business processes and strategic projects; — minimizing the risk of business relationships with contractors that may be involved in corrupt activities or tolerate corrupt practices; — head is an ethical standard and an example of an uncompromising attitude toward all manifestations of corruption; — priority of preventive measures to prevent corruption and raising moral principles which do not accept corrupt practices; * The Anti-Corruption — inadmissibility of privileges and immunities that limit liability for cases of Policy was approved by corruption; the Company’s Board of — inadmissibility of restrictions on access to information on corruption and Directors (Minutes No 171 dated 24.08.2012, anti-corruption policy measures; put into effect by the — monitoring, control and improvement of procedures to prevent corruption. Company’s Order No 545 dated 12.09.2012) ANTI-CORRUPTION AND PREVENTION OF CONFLICT OF INTERESTS SYSTEM
Objectives Areas — Formation of uniform understanding of the Company's — anti-corruption expertise; position on the rejection of corruption in all forms and — anti-corruption procurement monitoring; manifestations of the shareholders, the investment — anti-corruption monitoring; community, contractors, administrative authorities and employees; — considering applications of corruption of the Company’s employees, contractors and other persons; — minimizing the risk of involving the Company`s employees in corrupt activities; — conflict of interests management; — ensuring liability for cases of corruption; — anti-corruption clause in interacting with contractors; — compensation for damage caused by corruption — analysis of income in forming the Company`s top manifestations; management; — monitoring the effectiveness of anti-corruption policy; — transparency of participation in charitable activities and sponsorship; — setting up a legal mechanism to prevent bribery of subjects of anti-corruption policy; — facilitating the implementation of its own anti-corruption policies in subsidiaries and dependent companies of the — placing the Company's employees under an obligation to Company; know and comply with the requirements of the Policy and key norms of anti-corruption legislation; — monitoring of payments made through intermediaries or in favor of third parties. — providing incentives to replace positions in the Company by incorruptible persons.
The Company`s Anti-corruption Activities Management Structure
THE BOARD OF DIRECTORS
CENTRAL COMMISSION FOR THE DEPARTMENT OF THE OBSERVANCE OF THE NORMS CHAIRMAN OF THE CORPORATE AND OF CONDUCT AND SETTLEMENT MANAGEMENT BOARD ANTI-CORRUPTION COMPLIANCE OF CONFLICT OF INTEREST PROCEDURES
Consideration of issues related to Implementation of areas of the implementation of the Organizes the implementation of anti-corruption policies, prevention, provisions of the Code of Conduct of all activities aimed at the identification, examination and the Company, standards of implementation of the principles restriction of corruption, conflicts of corporate governance, and and requirements of the interest settlement of conflicts of interest Anti-Corruption Policy
CEOs OF DSCS CEOs OF BRANCHES STRUCTURAL UNITS
Compliance with and follow the principles and requirements of the Anti-Corruption Policy
92 Effective management of the — coordinates activities of structural Company`s anti-corruption activities is units of the executive apparatus, achieved by the interaction of the branches, DSCs of the Company in following participants: the field of implementation of the 1) The Board of Directors: Company`s Anti-Corruption Policy. — approves the Anti-Corruption Policy, 4) Commission for observance of the including amendments and rules of conduct and settlement of additions; conflict of interests is a collegiate authority which examines cases of — identifies key areas of non-compliance standards of corporate Anti-Corruption Policy; ethics and corporate conduct requiring — controls the overall results of the resolution of conflict of interests, implementation and application of including cases of discovery of the Anti-Corruption Policy. corruption. 2) Chairman of the Management Board: 5) CEOs of branches and DSCs of the Company, as well as specially created — is responsible for the organization of structural units of DSCs of the Company anti-corruption activities, including are responsible for implementing the appointment of responsible persons; provisions of the Company`s — monitors the implementation of Anti-Corruption Policy in branches and Anti-Corruption Policy and submits a DSCs. The Company`s structural units report to the consideration of the and employees directly observe the Board of Directors; principles and fulfill the requirements of 3) The Department for corporate and the Company`s Anti-Corruption Policy anti-corruption compliance in their current performance. procedures: — carries out activities aimed at the implementation of the Anti-Corruption Policy; — carries out activities to prevent, identify, examine and curb cases of corruption, conflict of interests;
More information about the participants of anti-corruption activities of the Company is presented in 2011 Federal Grid Company Corporate Social Responsibility and Sustainability Report
Compliance with and follow the principles and requirements of the Anti-Corruption Policy ANTI-CORRUPTION AND PREVENTION OF CONFLICT OF INTERESTS SYSTEM
Program for Prevention of Corruption and Settlement of Conflict of Interests in Federal Grid Company for 2012-2014
The Program for Prevention of Corruption and Settlement of Conflict of Interests in Federal Grid Company in 2012-2014* contains a list of measures to implement Anti-Corruption Policy areas: anti-corruption expertise, procurement, anti-corruption monitoring and conflict of interests management, etc. Particular attention is paid to the creation of intra-corporate climate that is conducive to effective prevention of corruption, legal education and laying the foundations of law-abiding behavior of the Company employees.
The effectiveness of implementation of Federal Grid Company expects that the the Program will be evaluated on the implementation of the Program will: basis of a number of indicators: — reduce the level of corruption in the — the number of identified or Company; prevented cases of corruption on the — enhance the trust of shareholders, part of the Company's employees; the investment community, — dynamics of discovered cases of administrative authorities and corruption in Federal Grid Company contractors to Federal Grid in the reporting period; Company`s activities; — the proportion of the total number of — reduce the risk of involving the reports about the facts or signs of Company and its employees, corruption practices on the part of regardless of position, in corrupt the Company's employees confirmed activities; by inspections. — form anti-corruption awareness among employees of Federal Grid Company; — reduce costs of the Company`s operations; — improve the Company's reputation and image.
* Approved October 18th, 2012 (Order No 640)
94 Implementation of Anti-Corruption Policy and Program for Anti-corruption and Settlement of Conflict of Interests in Federal Grid Company in 2012
Anti-corruption expertise of organizational and administrative documents (OAD) and its drafts
Employees of the Department of the In 539 drafts of 673 examined OADs 46 corporate and anti-corruption corruption factors were identified. compliance procedures (hereinafter - the Department) in 2012 carried out an The most common violations are: anti-corruption expertise* of 673 OADs, accounting for 38.3% of the total illegitimate vesting with powers, number of OADs issued in 2012. In exclusion from the general course of 2011, an anti-corruption expertise of action and the use of vague wording, 29.7% of the total number of OADs ambiguous terms and evaluative issued in 2011 was performed (a 9% increase in the number of OADs of the categories. Company, which were submitted to anti-corruption expertise).
Anti-corruption monitoring in procurement
Anti-corruption monitoring in procurement procedures at the stages procurement** includes checking of planning, conclusion and execution of mechanism on non-competitive a transaction.
During the reporting period, anti-corruption expertise of 1,210 documents to be drawn up for the transaction was carried out, which is three times higher than in 2011.
Anti-corruption expertise allowed Cost-effectiveness of anti-corruption * The Order of Federal reduction of the level of violations, Grid Company as of monitoring in procurement in 2012 16.05.2011 No 280 "On identification of bottlenecks to optimize amounted to RUR 116,918,604. organizing and procedures, etc. conducting anti-corruption measures in Federal Grid Company” is the legal basis of Conflict of interests management anti-corruption expertise of OADs and In 2010, Federal Grid Company Company and IDGC Holding for its drafts. established Commission for observance observance of rules of conduct and ** The Order of Federal of rules of conduct and settlement of settlement of conflict of interests was Grid Company as of 16.05.2011 No 280 “On conflict of interests and approved the established. Commissions for organizing and Regulations to the Commission. In 2012, observance of rules of conduct and conducting on the basis of the Commission of settlement of conflict of interests were anti-corruption Federal Grid Company and similar set up in all branches of Federal Grid measures in Federal Commission of IDGC Holding a Joint Company. Grid Company” is the legal basis of Central Commission of Federal Grid anti-corruption monitoring in procurement. ANTI-CORRUPTION AND PREVENTION OF CONFLICT OF INTERESTS SYSTEM
To avoid conflict of interests the — The Regulations for Organization of following documents were developed: Work to Declare Information on the — The Regulations for Monitoring of Property, Income and Property Conflict of Interests. It reveals the Obligations of Federal Grid Company concept of conflict of interest, scope and its DSCs Management. of emerging and consideration procedure of pre-conflict situations and identified conflict of interests;
Consideration of possible corruption manifestations applications
In 2011, Federal Grid Company has on facts that require anti-corruption implemented a specialized telephone examination.* "hot line" which accepted applications During the reporting period the "hot line" has recorded 16 reports of which 8 were anonymous and another 8 were from concrete persons.
Interaction with the Office Prosecutor General of the Russian Federation on the matter of abuse in registering land plots
To protect the interests of the Russian The activities of the Interdepartmental Federation during the implementation Work Group resulted in conducting the of the Company’s investment program procurator’s audits in the Republic of pertaining to the construction and Dagestan, Krasnodar and Krasnoyarsk reconstruction of the electric power regions, Irkutsk, Nizhny Novgorod, Orel * The Order of Federal facilities, and to eliminate the regions and other subjects of the Grid Company as of administrative barriers hindering the Russian Federation. The audits resulted 07.10.2010 No 776 is the documenting of titles to the land plots in opening criminal cases pursuant to legal basis of the used for the construction of the UNEG Articles 285, 159, 327, and 201 of the activities to consider and resolve applications of facilities, an Interdepartmental Work Criminal Code of the Russian employees of Federal Group was established, attached to the Federation. An analysis has also been Grid Company, Office of the Prosecutor General of the conducted of violations made in the contractors and other Russian Federation, consisting of the sphere of documenting the title to the individuals and legal entities on facts of representatives of said Office and of the land plots during the implementation of corruption and Company. the Company’s investment program. examination of the facts The analysis was conducted in order to in Federal Grid Company. develop suggestions on changing the current land and construction laws of the Russian Federation.
96 Interaction with contractors
In 2012, the Company was issued an contracts with legal entities Order** "On providing information by (including foreign ones) in contractors and amending the accordance with a form set by the contracts" which provides: order; — a ban on conclusion any contracts — termination (extinction) of a contract with legal entities (including foreign in case of failure of contractor to ones) by Federal Grid Company enter into a supplementary without the prior submission of the agreement in a form set by the order; information referred to potential — monthly electronically filing of contractors on the whole chain of received information about the owners, including beneficiaries (inter owners of contractors by Federal alia the final ones), as well as Grid Company to the address of the information on the composition of Ministry of Energy of Russia, Federal the executive bodies of contractors; Tax Service of Russia and the Federal — conclusion of supplementary Financial Monitoring Service in a agreements related to ongoing form set by the Order.
In 2012, employees of the Department of the corporate and anti-corruption compliance procedures improved the order of work with information on the chain of owners of contractors - an automated system "Accounting of the beneficiaries of contractors of Federal Grid Company (AS ABC)" aimed at collection, analysis and storage of information about the owners of contractors was set up.
Efforts to analyze information about the anti-corruption clause to be included in chain of owners of contractors and all contracts which Federal Grid information contained in the Company entered into both with legal declarations of the Company's entities and state and municipal management allow employees of the authorities, with the exception of Department to identify and prevent contracts for technological connection. cases of conflicts of interest. In 2012, employees of the Department The Company seeks to do business with of the corporate and anti-corruption contractors that support the compliance procedures were examined Anti-Corruption Policy of the Company 478 contracts with regard to and run its business transparently and anti-corruption clause. Section honestly without resorting to corruption "Anti-corruption clause" was included schemes. In this regard, the Company in the text of 66 contracts being finalized (including practical application) concluded. ** The Order of Federal Grid Company as of 16.01.2012 No 17 issued under the execution of instructions of Prime Minister Vladimir Putin ANTI-CORRUPTION AND PREVENTION OF CONFLICT OF INTERESTS SYSTEM
Preventing corruption. Forming anti-corruption awareness
In 2012, the Company carried out Legal Forum and reported about the awareness-raising activities aimed at formation and development of preventing corruption and forming Anti-Corruption Policy of JSC Federal anti-corruption awareness, intolerance Grid Company, anti-corruption activities of employees, shareholders, the of the Company and development of investment community, contractors and compliance procedures, etc. administrative bodies to corrupt Participation in substantive initiatives practices. allowed the employees of the In 2012, employees of the Department Department to improve the draft of of the corporate and anti-corruption Anti-Corruption Policy of the Company, compliance procedures participated in a establish a system of compliance, numerous of conferences and seminars develop a comprehensive system of on the issue of corruption. In particular, training and awareness-raising of Viktoria Nikiforova, the Director for management and employees of the Compliance — Head of the Department Company in the field of compliance. spoke at the Fourth Anti-Corruption Summit of Russia and the CIS and the Second St. Petersburg International
A special place in the fight against corruption is given to prevention of corruption in the Company.
As part of the area educational In order to explore how workforce seminars, trainings, counseling for understands Anti-Corruption Policy of employees of the Company to ensure a JSC Federal Grid Company and how common understanding of measures the effectiveness of its anti-corruption policy are held on a implementation, an anonymous survey regular basis. On the problem in 2012 6 was conducted among the employees of articles were published in the corporate the executive apparatus, the branches newspaper "United Grid". As part of the of Federal Grid Company and also as a Knowledge Day seminar on pilot survey was conducted in one DSC "Anti-Corruption and Corporate of Federal Grid Company - JSC TZIUS Compliance Procedures" for employees UES. of the executive apparatus, branches Today a special section "Anti-Corruption and DSCs of the Company was held. Policy" is created at the Company's Together with the Department of official website, which gives an idea strategic communications develop and about the goals and objectives of put in place social advertising and visual anti-corruption activities, its principles propaganda. and directions, management structure The agreements on compliance with and objectives of the Department of the anti-corruption policy to employment corporate and anti-corruption contracts of employees of the executive compliance procedures, and also apparatus of Federal Grid Company contains links to the full texts of the were developed and signed. Induction Company`s official documents on the training on the provisions of issue. Anti-Corruption Policy and related documents is conducted for all newly hired employees.
98 In addition, in the section International anti-corruption acts, "Anti-Corruption Policy" you can find anti-corruption acts of the Russian information about the Company`s legislation as well as organizational and activities on observing the norms administrative documents of Federal corporate conduct (compliance with the Grid Company to implement Code of Conduct), standards of conduct anti-corruption policy of the Company and settlement of conflict of interest. are listed in the subsection «Regulatory Subsection "Feedback" propose to Framework». undergo survey on anti-corruption, leave your question or share your opinion.
Implementation of Anti-Corruption Policy in the branches and DSCs of the Company
In 2012, as part of Anti-Corruption Policy of Federal Grid Company anti-corruption expertise of organizational and administrative documents and drafts, anti-corruption monitoring of procurement activities, resolution of appeals on cases of corruption of the Company`s employees, contractors and other individuals and legal entities and conflicts of interest management and other activities were carried out in the branches of the Company.
In DSCs of Federal Grid Company anti-corruption legal framework is being improved. In 2012, in the following ten DSCs listed below its own anti-corruption policies, similar to anti-corruption policy of the Company, were adopted:
— JSC Glavsetservice UNEG; — JSC Chitatechenergo; — JSC Mobile GTPP; — JSC ESSK UES; — JSC MUS Energetiki; — JSC Electrosetservice UNEG; — JSC RDC FGC UES; — JSC Kuban main grids; — JSC TZIUS UES; — LLC IT Energy Service. ANTI-CORRUPTION AND PREVENTION OF CONFLICT OF INTERESTS SYSTEM
2013 Plans
Implementing the best Russian and organizations will allow the Company to international anticorruption, develop suggestions on introducing compliance and risk management changes in the land and construction practices, the Company continues to laws of the Russian Federation, handing actively cooperate with law enforcement them over to the corresponding agencies, state authorities, the Institute authorities, and to improve the internal of Law and Comparative Legal Science corporate legal framework in the attached to the Government of the sphere pertaining to the Russian Federation, the Institute of implementation of corporate and International Accounting and anticorruption compliance procedures Management, the Transparency and to implement new preventive International Russia – a center for measures within the existing business anticorruption studies and initiatives processes. and the International Compliance Services. The cooperation with these
100 Environmental Impact Management
Federal of Unified Grid Company Energy System ENVIRONMENTAL IMPACT MANAGEMENT
The environmental safety is a key issue among implementation of new technologies of laying implementation of the state policy and corporate the Company’s strategic priorities and is vital for and construction of electric power transmission requirements pertaining to the Company’s the daily operations of the Company. This is lines. environmental safety provisions and the conditioned by the Company’s acceptance of the The organizational measures, among others, implementation of EMS in line with ISO 14000 principles of sustainable development and our include environmental training of personnel, the international standard. awareness that we ought to limit the Company’s improvement of the existing system of The 2013 plans include: impact on the environment. We also take into environmental production control, the conduct of consideration new opportunities that lie open for — The implementation and certification of EMS environmental audits, and the implementation of in MTPL of Center, a branch of the Company, the environmentally-friendly companies. These the Environmental Management System (EMS). opportunities include the attraction of and the maintenance of the optimal operation The EMS was successfully implemented and of EMS within the Company’s Executive Body, investments on international markets, as the certified for compliance with ISO 14001:2004 in investments may become handy for the Company the MTPL of South and the MTPL of MPTL of North-West. The Company’s Executive North-West; development. Body and the MPTL of South were certified in Considering the above, the Company conducts 2011, with supervisory audit of these units — The conduct of internal environmental audits periodical technical and organizational measures conducted in 2012. The audit results confirmed in the branches of the Company; intended to improve the Company’s the compliance with the standard. — The organization of environmental training for environmental friendliness. The technical To additionally improve the efficiency of managers and specialists in order to comply measures include the replacement of equipment environmental impact management, the with the environment protection laws of the containing hazardous substances, the repair of Chairman of the Company’s Management Board Russian Federation, and to improve the oil collectors, the furnishing of locations for decided to establish a new structural division of environmental awareness of the Company’s temporary storage of wastes, and the the Company’s Executive Body in 2012, meaning personnel. construction and reconstruction of sewage a department for the implementation of the systems and treatment plants. The construction environmental policy. The Department is and reconstruction of the Company’s electric responsible for developing guidelines for the power grid facilities involves the installation of Company’s environment protection activities. The new environmentally-friendly equipment, and the Department’s other responsibilities include the
Environmental Impact Management System in the Company and its DSCs
Issues of environmental safety in "Environmental Policy of JSC Federal Federal Grid Company are governed by Grid Company", Program on the federal laws of the Russian Federation - implementation of the Environmental Nikolai Shvets, Deputy "On Environmental Protection", the Policy of JSC Federal Grid Company for Chairman of the Water Code of the Russian Federation, 2011-2013, Regulations on industrial Management Board "On Air Protection", "On Production and environmental monitoring, "Corporate Consumption Waste" as well as by standards of environmental safety of internal organizational and power facilities at all stages of life administrative documents - cycle," and others.
102 Environmental Policy
The objective of Environmental Policy of JSC As part of the implementation of Federal Grid Company* is to increase the Environmental Policy in 2012 the following level of environmental safety of the UNEG environmental measures were taken: facilities and provide reliable and — systems and devices of oil receivers were environmentally safe transmission and repaired at 56 substations; distribution of electric energy. As part of the Program on the implementation of the — places of temporary waste storage were Environmental Policy, Federal Grid Company organized at 188 substations; carries out technical and organizational — sewerage systems, waste treatment measures to minimize the negative impact of facilities of domestic and storm its industrial activities on the environment. discharges were reconstructed at 28 Technical measures: substations. — replacing equipment which contains To improve environmental activity in July hazardous and toxic substances; 2012 the Company established Department of Environmental Policy Implementation — repairing systems and devices of oil which main objectives are: receivers; — methodological support for — organizing places of temporary waste environmental activity of the Company storage; and its DSCs; Organizational measures: — implementation of state policy and — introducing environmental management corporate requirements to ensure the system that meets the requirements of environmental safety of the Company and the international standard ISO its DSCs; 14001:2004; — implementation and maintenance of the — improving current system for environmental management system in self-monitoring and conducting accordance with the international environmental audits; standard ISO 14001:2004 in the Company — carrying out environmental training of and DSCs. personnel. Environmental Management The procedure for environmental management in the branches of Federal Grid Company is divided into stages of Federal Grid Company carries out * Environmental Policy of JSC planning**, implementation, monitoring phased introduction of the Federal Grid Company was approved by the Company`s and control action (if necessary, environmental management system environmental policy may be adjusted). Board of Directors as of 28 (EMS) in MES. February 2008. On September Environment Action Plans of the 23, 2010 Chairman of the branches necessarily include the Management Board of Federal following items: Grid Company Oleg Budargin approved the Program on the — implementation and development of In 2011, EMS was successfully Implementation of the environmental management Environmental Policy of JSC implemented and certified for system (EMS) that meets the Federal Grid Company for compliance with the international requirements of the international 2011-2013 and on 30 standard ISO 14001:2004 in the December 2011 targeted standard ISO 14001; executive apparatus of Federal Grid quantitative environmental —conducting industrial environmental indicators of Federal Grid Company and MES South. In 2012, EMS Company for 2013-2015 were monitoring and environmental was implemented and certified in the approved. audits; branch of Federal Grid Company - MES ** Updated standard forms of —carrying out environmental training North-West. the Environment Action Plan of personnel; In 2012, there were no fines and and Report on its performance for the branches —developing legal and technical non-financing sanctions imposed on the of Federal Grid Company - documentation and improving Company for noncompliance with MES approved by the Order of documentation to support environmental legislation and Federal Grid Company as of environmental activity. regulations. 28.12.2012 No 903r. ENVIRONMENTAL IMPACT MANAGEMENT
Key Indicators of the Environmental Impact
Emissions into the atmosphere of pollutants
Transmission of electricity as core in comparison with other sectors of activity of Federal Grid Company has a electric power industry. much lower impact on the environment Power grids specifics related to environmental impact is that emissions, discharges and waste are not the result of the production process, but arise from general economic activity and are characterized by a very low level relative to the maximum permissible values.
In 2012, Federal Grid Company`s Indirect emissions of greenhouse gases indicators of negative impact on the in the activities of the Company are components of the environment were: formed by the loss in power grids and — the total amount of emissions into electricity consumption for own needs the atmosphere — 114.7 tons; of substations. In 2012 equivalent emissions of CO that — the volume of discharges to surface 2 water bodies — 88.34 thousand m3; corresponds to power losses in Federal Grid Company`s grids and electricity — the amount of I-IV hazard class consumption for own needs was waste generated — 13.3 thousand 11,712.35 thousand tons. In 2011, this tons. indicator was 12,055.93 thousand tons*. In the process of production activity Other relevant indirect greenhouse Federal Grid Company uses gases emissions are absent. gas-insulated equipment equipped with accidental release sensors. By that the Ozone-depleting substances are absent Company doesn`t keep account of the in the Company's emissions. volume of sulfur hexafluoride added to the equipment in the event of losses. Under the terms of the International Electrotechnical Commission (IEC) sulfur hexafluoride leakage may be up to 0.5% per year. * In calculating indirect emissions and the In 2012, there were no relevant equivalent emissions of transformer oil spills. CO2 a grid average emission coefficient in Transportation of materials and 2007 (511 g / kWh), employees to organize and execute established by works is carried out at short distances «Guidelines for specialized technical and does not have significant impact on documents in greenhouse the environment. gases trading» was used.
104 Air Emissions of NOx, SOx and Other Relevant Pollutants by Type and Weight, tons
Total emissions of air pollutants, 2011 2012 Total, including: 90.31 114.53 solid 26.68 5.74 gaseous and liquid 63.63 108.79 of which: sulfur oxide 2.67 0.65 carbon oxides 24.78 27.35 NOx 5.24 3.09 hydrocarbons (without volatile organic 7.52 53.24 compounds) volatile organic compounds 23.41 18.47
Total emissions of pollutants into the emission sources (transformers, atmosphere in 2012 increased due to an welding stations, garages, workshops, increase in emissions of gaseous and etc.) which have not been included liquid pollutants into the atmosphere, before in the draft emission limits and which in turn is driven by the valuation considered in the overall calculation. of a significant number of stationary
Generation of waste Quantitative indicators of waste "Total weight of waste by type and generation are presented in the table disposal method".
Total Weight of Waste by Type and Disposal Method
Waste generated (thousand tons) 2011 2012 Total, of which 12.87 13.29 I hazard class 0.001 0.05 II hazard class 0.02 0.02 III hazard class 0.37 0.56 IV hazard class 4.14 5.07 V hazard class 8.34 7.59 Transferred to specialized 4.08 4.44 institutions for further recycling or disposal Deposited in landfills 8.79 8.71 ENVIRONMENTAL IMPACT MANAGEMENT
Total volume of waste of I-IV hazard requirements of applicable classes generated in 2012 increased environmental legislation. Certification slightly compared with 2011. However, for compliance with the International it should be noted that in 2012, the Standard ISO 14001 in the Russian amount of waste deposited in landfills Federation is a voluntary procedure decreased due to growth in the amount and, according to the Company’s of waste transferred for recycling or managers, requirement for contractors disposal. to have international certificate is The Company's enterprises in redundant. conducting its activities do not In addition, in the processes associated transport, import or export waste. All with the reception, transmission and types of waste generated from distribution of electricity the production activities of the Company are Company`s enterprises do not use transferred to specialized organizations recycled waste and reuse waste, except which operate in the territory of the for reuse of refined transformer oil. Russian Federation for further However, the volume of oil reused in recycling, utilization or final disposal. total amount of waste generated at the The main condition to conclude Company's enterprises is very contracts with contractors that accept insignificant, so in 2012 it was 0.32%. the Company`s waste is that they have Federal Grid Company has not produce a license for decontamination and any products which should be packaged waste disposal issued by the authorities therefore the Company does not use of the Federal Service for Supervision of packaging materials. Natural Resources that meets the
Electromagnetic effect Health standards and regulations designed, built and operated in full adopted in the Russian Federation compliance with the SanPiN contain stringent standards on the 2.2.1/2.1.1.1200-03 "Sanitary protection influence of electric and magnetic fields zones and sanitary classification of on biological objects. The basic enterprises, buildings and other principle to protect public health facilities. New edition". This SanPiN against electromagnetic fields of power defined boundaries of sanitary transmission lines is to establish protection zones for high-voltage lines sanitary protection zones (SPZ) and (HV lines): roadside clear zones for UNEG facilities. — 20 m for the 330 kV HV line; The size of buffer zones are defined in accordance with the — 30 m for the 500 kV HV line; sanitary-epidemiological norms of — 40 m for the 750 kV HV line; permissible noise levels, — 55 m for the 1150 kV HV line. electromagnetic radiation and other physical factors at the external For the substations under construction boundary of the sanitary protection and reconstruction SPZ boundaries are zone. All the Company`s facilities are defined in the design documentation.
106 The impact on flora and fauna, soil and ground
The medium-term program on the — full automated technological implementation of Environmental Policy processes to operate power facilities, of JSC Federal Grid Company provides which allow remote service of for including the introduction of facilities and excludes the necessity environmentally friendly technologies to construct water pipeline, for the transmission of electricity, canalization and waste utilization. reducing the burden on the Electric grid companies have impact on environment: the state of the vegetation mainly in — the use of tapered multi-faceted constructing power lines, when cutting steel poles instead of lattice to save glades in a wooded land and clearing occupied land space that is especially vegetation along power transmission important in case of route of lines on lines. protected areas; Clearing vegetation along power — construction of underground cable transmission lines is performed lines to free up land, preserve the manually, mechanically and with the existing land space and avoid use of herbicides permitted for use in negative impacts on the the Russian Federation which do not environment; have a negative impact on the — the use of gas-insulated switchgears environment. (GIS), which are placed in enclosed buildings, that significantly reduces its impact on the environment and saves land space occupied by the substations;
Chemical means of clearing will not apply in specially protected areas and in water protection zones.
In 2012, the amount of clearance was as and technological road to the Mzymta follows: substation from mudflow masses with — manual clearing – 28,613.0 ha; the use of "McCaffery" gabions overlaid on the adjacent slope and construct — mechanized clearing – 6,701.9 ha; gabions and mudflow galleries. — chemical clearing – 4,464.0 ha. In December 2012 compensatory Branches of Federal Grid Company measures for the removal of topsoil for carry out recovery of vegetation and the Mzymta substation on the territory terrain in accordance with the of the Sochi National Park were re-cultivation of disturbed soil projects. executed. It includes the recovery of In particular, as part of construction of Sochi administration costs on execution facilities of the 2012 Olympic Games in of work under the plan to restore Sochi a joint protocol to conserve ecosystem of the Sochi National Park ecosystems in the Mzymta river basin disturbed in the course of construction was signed between the main of Olympic facilities. organizations-participants of construction. Federal Grid Company takes measures to protect the cable line ENVIRONMENTAL IMPACT MANAGEMENT
In most cases, compensatory measures — performance of measures at the are carried out at the end of power grid facilities to protect construction, reconstruction and wildlife (equipment of HV lines` modernization of the power grid towers with special devices to facilities. Compensatory measures are prevent birds nesting on the provided for in the design structural elements of the towers documentation. Issues of designing, and the use of deterrents and bird construction, reconstruction and control devices, etc.). modernization in the Company are It should be noted that the total number within the competence of the subsidiary of species listed in the IUCN Red List JSC TZIUS UES. and national conservation species list Completed facilities are transferred to habitats of which are in specially Federal Grid Company for operation protected areas affected by operations only after all compensatory measures of the Company is 156 species including provided for in the project plants — 62 species, mushrooms — documentation are executed, but this 3 species and animals — 91 species. information is not available to At present, the Company keeps environmentalists of the branches of statistics on birds / animals deaths only Federal Grid Company. on the cases that led to blackouts and JSC TZIUS UES does not keep statistics other technological disturbances. on all executed compensatory Given the large number of remote measures. production facilities and the overall Federal Grid Company takes necessary significant length of the Company`s grid measures to reduce the impact of today it is not possible to keep full power grid facilities on the species statistics on bird deaths. composition of animals. The Company`s The Department of the implementation Technical Policy provides for the of environmental policy plans in 2013 to following measures: introduce mandatory reporting for the — the use of self-supporting insulated Company's branches on activities aimed and protected wires to avoid bird at protecting wildlife. deaths;
The usage of water
Federal Grid Company`s enterprises` The usage of recycling water is used at discharges and runoffs to water bodies are several substations of the Company. 400 kV insignificant and have not significant impact Vyborgskaya substation is equipped with on the biodiversity of water objects. the largest water recycling system with volume of 4.85 thousand m3.
Total volume of reusable water at the Company in 2012 was 27.5 million m3, which exceeds more than 20 times the total volume of water used for household and drinking and industrial needs.
108 Total Water Withdrawal by Source, thousand m3
withdrawal and receiving water 2011 2012 total, 1,390.016 1,317.37 including: from surface sources 93.000 78.63 from groundwater sources 774.280 687.07 from other sources (municipal water 522.736 551.67 supply systems and private providers of bottled drinking water)
Total Water Discharge Indicating the Quality of Waste Water and the Receiving Facility, thousand m3
The volume of waste water discharges 2011 2012 Total, including 810.022 1,156.97 Water disposal to surface water 62.74 88.34 facilities, total including: without water treatment 6.70 0.00 insufficiently treated 45.78 76.21 treated to standard quality 0.00 12.13 water diposal to terrain, total 747.28 1,068.63 including: without water treatment 538.55 854.3 insufficiently treated 0.000 56.84 treated to standard quality 0.000 157.49
The growth of total discharges is due to branches of federal Grid Company - an increase in precipitation in 2012 and MES and PMES. In addition the disposal of it to terrain. Company`s enterprises have no The decline in water consumption significant impact on water sources compared with 2011 due to the used. Representatives of the implementation of measures for environmental community the maintenance, repair and reconstruction Company`s impact was assessed as of water supply facilities in the negligible. ENVIRONMENTAL IMPACT MANAGEMENT
Environmental protection costs
Total Costs and Investments in Environmental Protection, by Types, RUR thousand
Expenses and investments in environmental protection 2011 2012 Fee for a negative impact on the environment, 6,611.20 7,119.27 total including: for emissions of pollutants 115.10 43.76 into the atmosphere: standard 86.21 10.35 in excess of the standard 28.89 33.41 for the discharge of pollutants into water bodies: 1 387.47 2,505.98 standard 524.68 1,603.71 in excess of the standard 862.79 902.27 for waste disposal: 5,108.63 4,445.40 standard 1,934.64 2,494.59 in excess of the standard 3,173.99 1,950.81 Penalties for violations of environmental 0.00 0.00 legislation Investment in fixed assets allocated for environmental protection: planned 352,197.78 113,951.44 actual 107,549.80 82,120.72 Current costs on environmental protection, 47,467.86 67,788.33 total including: on the protection of water bodies 20,295.45 16,506.36 on air protection 1,562.76 4,258.79 on the protection of land resources from 21,783.65 35,644.97 production and consumption waste on recultivation of land 0.000 0.00 on the implementation and certification of 3,826.00 3,917.75 environmental management systems
Fee for a negative impact on the discharges. However, it should be noted environment as a whole for Federal Grid a significant reduction in fees in excess Company in 2012 increased due to the of the standards by 38% compared to commissioning of new facilities, 2011, resulted from the receipt of standardization of new previously necessary permits for almost all unrecorded sources of emissions and branches of the Company.
110 Environmental development
Staff Training Center of the branch of creation of the conditions for alternative Federal Grid Company — MES modes of transportation (bikes, etc.) North-West was recognized winner of were the main criteria for selection in the All-Russian competition for the category «Green Office: up to 2 environmental development and energy thousand sq. m.». efficiency GreenAwards in the category GreenAwards competition is held "Green Office: up to 2 thousand sq. m.". annually since 2007. Its main goal is to The competition results were spread the successful experience in announced at the VI International design and implementation of Investment Forum on Real Estate resource-efficient and environmentally PROEstate 2012 in St. Petersburg. friendly projects in Russia and the Sustainable development of territory, public recognition of the contribution of energy efficiency, efficient use of water, builders, developers and architects in materials and resources, internal the development of "green" environment quality, innovations in construction. design, specific characteristics and ENVIRONMENTAL IMPACT MANAGEMENT
Company`s Initiatives in the Field of Protection of the Environment
Studies on the Company`s impact on biodiversity
The issue of power grid companies` In areas immediately adjacent to the impact on biodiversity is poorly studied. routes of 500 kV Ulyanovskaya - Since 2009 Federal Grid Company Northern and Ulyanovskaya - Southern carries out environmental monitoring in HV lines, the following events, most the area of the passage of 500 kV HV notably affecting the dynamics of line in the national park Smolny (the terrestrial ecosystems were registered: Republic of Mordovia), located in the — climatic and phenological variations operation area of Nizhegorodskoye of different seasons (years), primarily PMES. The aim of monitoring is the variations of surface soil moisture long-term flora and fauna observation and development dynamics of in the impact area of 500 kV HV line, herbaceous and shrubby plant impact degree assessment of 500 kV HV communities; line on wildlife objects and development of recommendations to prevent their — felling and thinning woody and shrub deaths as well as rehabilitation and undergrowth in some areas of 500 kV long-term development of ornithological HV lines routes; complexes in the area of HV lines. — forest fires and they long-term As a result of these monitoring studies transformation of plant formations carried out in 2009-2012, significant caused by it. fluctuations in species diversity and abundance of birds in the area of HV line were registered.
Environmental auditing and training of employees In 2012, annual inspections were problems in organizing and carrying out carried out as part of industrial environmental activities in the branches environmental monitoring (hereinafter - were analyzed. Based on the results of IEM) in all branches of Federal Grid IEM programs of activities that improve Company. In the course of IEM environmental performance both the compliance with environmental branches and the Company were legislation, environmental developed. documentation completeness and the technical condition of environmentally protected sites were verified. The
112 Company`s Initiatives in the Field of Protection of the Environment
Environmental training of employees is carried out every year in Federal Grid Company:
Environmental Training by Areas, Persons
191 170 Waste 134 128 97 110 Environmental safety 72 59 Internal audit
2010 2011 2012
Disposal of equipment containing trichlorobiphenyl
Federal Grid Company yearly trichlorobiphenyl is performed as it is * In the framework of the implemented measures to replace and worn as well as part of works in Stockholm Convention, dispose equipment containing reconstructing and modernizing signed and ratified by the Russian Federation, persistent organic pollutant - substations. Dismantled capacitors are according to which the trichlorobiphenyl, which is a type of transferred to specialized organizations Parties shall cease, "... polychlorinated biphenyls*. for utilization. the use of polychlorinated Replacement of equipment containing biphenyls in equipment (i.e. transformers, capacitors or other receptacles containing liquid stocks) by 2025"
The cost and quantity of equipment with TCB transferred to neutralization
39,380
21,049 18,166
7,200 7,726 4,036 2,398 713 Number, units 2009 2010 2011 2012 Price, RUR thousand ENVIRONMENTAL IMPACT MANAGEMENT
Construction and reconstruction of sewage systems, water treatment facilities, household and storm water discharges. Protection of water resources
The Company`s enterprises include — to repair (reconstruct) water supply measures in the annual water and sewerage systems, treatment resources environmental action plans: facilities for domestic and storm — to execute the terms of license water discharges and artesian wells; agreements entitled to use subsoil — to repair (reconstruct) oil receivers (extraction of fresh groundwater) - systems and devices to prevent spills constructing and maintaining water and prevent transformer oil from sources sanitary protection zones, entering soil and water reservoirs; conducting analytical monitoring of — on analytical monitoring of condition groundwater quality and necessary of wastewater. hydrogeological works;
In 2012, the Company`s water consumption decreased compared to 2011, which is related to technical maintenance, repair and reconstruction of water supply systems in the Company’s branches (MES and PMES).
Energy saving
The Program to reduce electric energy — reducing energy consumption for losses in the Unified National Energy own needs of substations; Grid in 2012 was developed under the — construction, reconstruction and Program for energy conservation and development of power grids, enhancing energy efficiency of Federal commissioning of energy-saving Grid Company for the period 2010-2014 equipment. and included the following three key areas: — optimizing circuit and operating parameters under service conditions and operational management of power grids;
114 As part of work to optimize circuit and As part of measures aimed at reducing the operating parameters under service electricity consumption for own needs of conditions and operational management sub-stations, the following activities were of power grids the maintenance of carried out: optimization of work duration optimum conditions for reactive power and the number of activated cooling fans and voltage, disconnection of electric grid of transformers and auto-transformers, equipment (transformers and HV lines) in optimization of heating and lighting the modes of small loads, reduction of equipment work of control buildings of maintenance duration and repair of the substations, installation of energy-saving basic grid equipment were ensured. lamps and lighting fixtures for outdoor switchgear, enhancing energy efficiency of buildings etc.
The measures to reduce energy consumption in 2012 resulted in saving 214.87 million kWh of electricity.
Measures to construct, reconstruct and — work to optimize the load of electric develop electric power grids as well as power grids via construction of commission energy-saving equipment overhead lines and substations. included: As a result of the implementation of — installation of reactive power measures aimed at reducing the losses in compensation devices; the UNEG, at the end of 2012, the effect — replacement of overloaded achieved was 214,019.1 thousand kWh. transformers and installation and commissioning of additional power transformers at existing substations; 2013 Environment Action Plan The main tasks in the field of — disposal of dismantled equipment environmental activity of Federal Grid containing trichlorobiphenyl; Company in 2013 are: — planning and implementing technical — introducing and certifying an and organizational environmental environmental management system measures; which meets the international — conducting internal environmental standard ISO 14001:2004 in the audits in the branches of Federal branch of Federal Grid Company - Grid Company; MES Center and maintaining optimal functioning of the environmental — organizing environmental training for management system in the executive management and personnel. apparatus of the Company, MES South and MES North-West; 116 Stakeholders Relations
Federal of Unified Grid Company Energy System STAKEHOLDERS RELATIONS Stakeholders Relations in 2012
The Company’s infrastructural role in national pertaining to the UNEG development, as such The Company maintains its public activities at economy makes it a subject to multifaceted and dialogue is possible only if the Company is high level, being a participant and co-organizer multi-tasked relationships with a broad circle of transparent. of major events, including the Saint-Petersburg stakeholders. The major stakeholders include Economic Forum and many regional industry Since then the Company’s interaction with the state as the main shareholder, the source of events dedicated to the development of stakeholders evolved in many different ways. The tariff regulations and the customer of the reliable innovative activities, anticorruption control, and Company cooperates with the Russian Ministry of uninterrupted functioning of backbone grids. social policy, etc. Energy and the Federal Tariff Service, with the Other stakeholders include regional authorities, Company experts participating in the development The stakeholder dialogues conducted during the energy market players, consumers, the of law drafts regulating the energy market. The preparation of the Company’s annual investment community, the domestic and foreign Company forms a pool of agreements with non-financial reports are considered to be one of manufacturers of electric equipment, regional authorities to develop the backbone the most successful forms of interaction. A contractors, environmental organizations and the infrastructure in the regions. Individual dialogue of the Company with stakeholders titled Company’s staff. agreements govern the relationships with almost “Human Capital Management in Federal Grid Taking into consideration that the interests of all energy producers, as well as with major Company” took place on April 5, 2013. The public different groups of stakeholders interact with the transactions, thus allowing to coordinate the hearing of the draft of the 2012 social Report interests of the Company, Federal Grid Company facility commissioning programs. The agreements took place on April 26, 2013. During the events has developed a fundamental principle of with the leading domestic and foreign equipment the stakeholders made over 50 suggestions balancing the public welfare and the Company’s manufacturers allow the Company to localize the concerning the text of the Report and the economic expediency as early as during the first manufacture of the required equipment on the Company operations in 2013-2014. We treat years of the Company existence. territory of Russia, implementing innovative these suggestions as stakeholder developments, forming SMART grid clusters, and recommendations to improve the Company’s The approach described above permitted the implementing the programs for equipment transparency and information openness. Company to efficiently fulfill its main mission, modernization and import replacement. The consisting in the provision of reliable interaction with industry-specific higher uninterrupted supply of electric power to education institutions supplies the Company with consumers, while maintaining a constructive talented employees, while allowing the students to dialogue with the public on the major decisions be confident about their future.
Personnel communications
As part of the celebration of the 10th section on the corporate intranet portal anniversary of the Company in 2012 devoted to the anniversary of the there was a series of measures aimed Company; edition of commemorative at enhancing the corporate culture, book of pictures "Federal Grid Oleg Mikhailov, Head of the supporting the continuity of generations Company. Ten years ", which Strategic Communications of employees of power grid complex, presentation was brought together Department forming a respectful and interested representatives of the Government of attitude to the profession of power the Russian Federation, the State engineer, including: edition print-run of Duma, the Court of Accounts, the music CDs "Favorite songs of Federal Company`s clients and partners. Grid Company"; creation of special
118 In addition, the Company's employees employees of Federal Grid Company held contests of children's drawings, and IDGC Holding and SDCs of IDGC stories, photos and video works about Holding; family dynasties of Federal Grid — a New Year party for children of Company. The "Dynasty" Program employees of the executive which firms labor traditions and apparatus of the Company and DSCs, increases loyalty of employees, is and New Year's events for children implemented in the Company since of employees of the branches (MES 2010. In 2012, under this program the and PMES); following events were organized: — On December 22 solemn — excursions of the Company`s presentation of government and employees` children to production industry awards and celebration of sites; the best labor dynasties of Federal — children's drawing contest "Unified Grid Company featuring the Minister Grid - a single country", whose of Energy of the Russian Federation participants were children of A. V. Novak
At the beginning of April 2012 in Sochi Winter Spartakiada Games of employees of power grid complex was held. Sports events were held at sports grounds of the upcoming 2014 Sochi Olympics.
Spartakiada was the first joint the best. Nine teams represented the corporate event in the framework of executive apparatus and the branches forming a single energy complex and of Federal Grid Company, twelve teams the most massive Spartakiada in the represented the distribution grid history of sports and athletics complex (IDGC) and three teams of competitions in electric grid companies students of power engineers of the - about 650 employees was taken part Moscow Power Engineering Institute, in this event. 24 teams, previously Ivanovo State Power University and the passed the regional qualifying rounds, North Caucasus Federal University competed for the right to be the best of were also involved.
In June 2012, in the Moscow Region V Summer Spartakiada Games of Federal Grid Company was held. More than 200 employees of the Company take part in sporting events.
In October 2012 the second chess In June 2012, a traditional Doors Open tournament in memory of M.M. Day for the children of employees of Botvinnik among power engineers, Federal Grid Company was held. organized jointly by Federal Grid During 2012 an information campaign Company and STC FGC UES, was held. aimed at raising awareness of The tournament brought together 26 employees of Federal Grid Company on teams from the executive apparatus, social policy and the provision of social branches and DSCs of the Company, as guarantees and benefits of the year was well as other local electric power conducted in intra-media (newspaper companies. "Unified Grid", an internal portal, information boards). STAKEHOLDERS RELATIONS
In February 2012, the intranet portal section "Question the Chairman of the Management Board" with the possibility of anonymous access of users was created.
There is the section "Questions & social policy. Each employee can send Answers", which publishes the answers e-mail to [email protected]. In of the heads of structural divisions of 2012, a number of questions was the Company on issues related to received; an answer was given on each production activities, corporate life and question.
Veterans communications Each year, the Company hold On April 21 on the eve of Victory Day, celebration events for veterans to the more than 1,500 employees of the holiday dates (Victory Day, Power executive apparatus, MES Center and Engineer’s Day), which involved more DSCs with families and children, as well than 300 veterans of the Company and as the Company`s veterans took part in the Board of Veterans of Energetic. In volunteer clean-up of the territory of addition, cultural program included memorial complex "Poklonnaya Gora" visits to the best theaters and museums (Moscow) and laying of the Power of Moscow is organized twice a year for Engineer Alley. Upon completion of veterans. Besides, the Company is work, the veterans were honored and actively promoting the work of the flower-laying ceremony at the Eternal Board of Veterans of Energetic. Flame was held.
Consumers communications
In June 2012 Federal Grid Company and Irkutsk Region, Fund for Development Polyus Gold signed a cooperation of the Far East and the Baikal region, agreement on the development of Polyus Gold, DVEUK signed a electric power grid infrastructure of the Cooperation Memorandum on the Irkutsk Region. Implementation of the formation and gradual organization of electric power grid construction project, implementation of construction project referred to in the agreement will of 220 HV double circuit line Peleduy - contribute to the elimination of security Chertovo Koryto - Sukhoi Log - limitations, power and energy deficits in Mamakan from 220/110/6 kV Chertovo Bodaibo district of the Irkutsk Region Koryto substation and 220/110/35/6 kV and ensure reliable power supply to Mamakan substation. Polyus Gold`s enterprises located in the On June 21, 2012 at the St. Petersburg region, in particular gold deposits International Economic Forum a Zapadnoe, Verninskoye, Pervenetz and Cooperation Memorandum in the field Chertovo Kory to, sector Mdvezhii as of improving the instruments which well as 94 of alluvial deposits in the forms energy policy and promoting the river basins of Vitim, Zhuya, Bolshoy spread of energy efficient technologies Patom and Maliy Patom. in Russia between the International On June 22, 2012 Federal Grid Company Energy Agency, Federal Grid Company in cooperation with the Governments of and EFA was signed. the Republic of Sakha (Yakutia) and the
120 In September 2012 Toshiba Corporation, a Working Group was established Federal Grid Company and (Protocol on the establishment of the Energostroy-MN signed an agreement Working Group No 000000220175 as of on the implementation of a project to 12.11.2012 under the Agreement on the create a highly efficient energy implementation of the project to create infrastructure in the North Caucasus a highly efficient energy infrastructure Federal District. Under the Agreement, in the North Caucasus Federal District).
In addition, the Company entered into:
1. Cooperation Agreement with KESC in the Rostov Region. 2. Cooperation Agreement with KESC in the Krasnodar Region. 3. Cooperation Agreement with Lafarge Cement and the Government of the Kaluga Region. 4. Cooperation Agreement with Aqua Story TEC. 5. Cooperation Agreement with Kuznetsk Ferroalloys.
Government relations
One of the main goals of the Company information support for the public in cooperation with the regional authorities, coordination of plans for executive authorities in Federal Grid fuel and energy complex, transport Company`s operation areas is the infrastructure and programs of coordination of schemes and programs territorial planning. In addition for long-term development of electric coordination of the development of power industry of subjects of the backbone and distribution grid Russian Federation. In the course of infrastructure is conducted. interaction activities there are The Interaction in Developing Schemes and Programs to Develop Electric Power Industry of Constituent Entities of the Russian Federation
Executive bodies of Demand forecast for electrical energy and power, developed for regional constituent entities of energy systems and the main large load nodes located on the territories of the Russian Federation constituent entities of the Russian Federation
Annual report on the operation of the UES and the monitoring data on execution Electric power industry of schemes and programs for development of electric power industry Federal Grid development schemes Company and programs of Information on applications for grid connection of energy receivers of constituent entities of SO UES consumers the Russian Federation The system of operator`s proposals to develop distribution grids as well as proposals of power grid companies and the executive bodies of constituent entities of the Russian Federation to develop grids and generation facilities UES development on the territory of a constituent entity of the Russian Federation scheme and program STAKEHOLDERS RELATIONS
The branches of Federal Grid Company, bodies of constituent entities of the MESs, play a huge role in the process Russian Federation on issues of the which operate under the Order of development of schemes and programs Federal Grid Company as of 26.07.2010 to develop electric power industry of No 534 "On the interaction between constituent entities of the Russian Federal Grid Company and the executive Federation.
Currently, there are cooperation agreements with the following constituent entities of the Russian Federation: 1. St. Petersburg 12. The Omsk Region 2. The Amur Region 13. The Republic of Buryatia 3. The Chechen Republic 14. The Republic of Dagestan 4. The Kaluga Region 15. The Republic of Ingushetia 5. The Karachay-Cherkess Republic 16. The Republic of Sakha (Yakutia) 6. The Khanty-Mansiysk Autonomous 17. The Tomsk Region District - Yugra 18. The Tula Region 7. The Leningrad Region 19. The Tver Region 8. The Moscow Region 20. The Smolensk Region 9. The Nizhny Novgorod Region 21. The Stavropol Region 10. The Novosibirsk Region 22. The Sverdlovsk Region 11. The Novgorod Region 23. The Zabaikalye Region
In October 2012, a working meeting In November 2012, the Chairman between the Chairman of the of the Management Board of Federal Management Board of Federal Grid Grid Company Oleg Budargin held a Company Oleg Budargin and the meeting with the governor of the Governor of the Samara Region Nikolay Kemerovo Region Aman Tuleyev. The Merkushin was held. Participants of the head of Federal Grid Company said at meeting discussed plans of Federal the meeting that the Company plans to Grid Company to improve the reliability, invest 7 billion rubles in the modernization and development of development of power grid complex of transmission facilities taking into Kuzbass. The result of investment account the interests of the Samara should be the reconstruction and Region. The participation of Federal modernization of existing UNEG Grid Company in designing and facilities and an increase in developing grid infrastructure to transformer capacity by 50% and an provide electricity to facilities designed increase in the length of power for the FIFA World Cup in 2018 was also transmission lines by 10%. discussed at the meeting.
122 In November 2012 the investment projects in the Tver Region development of power grid complex in is the lack of capacity. The Governor the Tver Region was discussed at the Andrei Sheveliov also noted the need to meeting of the Chairman of the bring in proper condition and to ensure Management Board of Federal Grid uninterrupted operation of distribution Company Oleg Budargin with the grids of the western zone. Oleg governor of the Tver Region Andrei Budargin said that Federal Grid Sheveliov. The event was also attended Company will soon consider a decision by managers of Federal Grid Company, to develop the Program for power grid MES of the Centre, IDGC of the Center complex development of Upper Volga and representatives of the Government taking into account the economic of the Tver Region. One of the main development plan of the Tver Region. problems in implementing new
Interaction with power grid companies
In September 2012, a working meeting the visit, a meeting with the leadership of the heads of Federal Grid Company of the U.S. Department of Energy was and the State Grid Corporation of China held. At the meeting a dialogue (SGC of China) was held in Moscow. between the head of Federal Grid During the negotiations the possibility Company and the Minister Steven Chu of current and future science and launched in 2011 was continued. In the technology and innovation cooperation framework of the working visit a and the joint implementation of meeting of the delegation of Federal large-scale international projects were Grid Company with the management of discussed. In particular, U.S. power grid company «PJM» was representatives of SGC of China also held. In the course of it both addressed a proposal to Federal Grid parties exchanged experiences of Company for a joint development of a power grid complex development and feasibility study to construct AC considered the principles of centralized extra-high voltage power transmission energy supply zones development and line and DC ultra-high voltage power improvement of the reliability of electric transmission line on the territory of the power grid and the issues of Russian Federation, including the comprehensive substantiation of development of options to increase construction of powerful extra and electricity supply from the Russian ultra-high voltage transmission lines. Federation to the People's Republic of Participants also discussed the China. experience of the implementation and In October 2012, a delegation of Federal operation of technologies "smart grid" - Grid Company paid a visit to USA at the "digital substations", controlled invitation of the Ministry of Energy of transmission lines and electrical energy the United States of America. During storage devices for high power. STAKEHOLDERS RELATIONS
In October 2012, in Moscow within the In November 2012 representatives of framework of the International Energy Federal Grid Company discussed with Forum UPGrid Federal Grid Company Iberdrola Engineering & Construction, and JSC United Energy Company (UEC) one of the world's leaders of electric signed a cooperation agreement in the power industry, various issues of future field of implementation of intelligent cooperation, including in the field of technologies. The companies plan to introduction of innovative solutions in implement a set of measures to design, the power grid sector. operate and repair transmission facilities of Moscow as part of creation of Russian intellectual power grid system.
The List of Existing Agreements (Memorandums) on Cooperation, Information Exchange and Implementation of Joint Projects in the Field of Scientific and Technical Cooperation:
1. Agreement on the implementation of 3. Agreement on the transfer and a project to create a highly efficient protection of information classified energy infrastructure on the as commercially confidential territory of the North Caucasus concluded between Federal Grid Federal District, concluded between Company, NRU HSE, Fund Foresight Federal Grid Company, and EnergoFichtner Energostroy-MN and Toshiba 4. Agreement on information exchange Corporation concluded with Institute 2. Protocol on the establishment of a EnergoSetProekt working group under the Agreement 5. Memorandum of Understanding on the implementation of a project to between the International Energy create a highly efficient energy Agency, Federal Grid Company and infrastructure on the territory of the EFA North Caucasus Federal District concluded between Federal Grid 6. Agreement on scientific and Company, Energostroy-MN and technological cooperation concluded Toshiba Corporation with the Company Hitachi Ltd.
124 Shareholder and investor relations
In 2012, the Company's management has In September 2012 Federal Grid been actively involved in investment Company entered the British community conferences and forums (Adam Smith, on Investor Relations to enhance the APEC summit, "Russia Calls!" etc.) cooperation with foreign partners and and met with representatives of stock promote the Company at the exchanges and analysts of investment international level. funds. In October 2012, the Chairman of the In addition in the reporting year two Board of Directors of Federal Grid roadshows were held. The first roadshow Company Ernesto Ferlenghi participated was held in April in London, Zurich and in the second Russo-European Economic Geneva, and was devoted to the Forum "Investments in modern Russia. Company's 2011 financial results under IPO, stocks and bonds", held in Milan IFRS. The second roadshow was held in (Italy). The forum, organized by the November following the publication of investment and finance company General IFRS for the 1st half of 2012. Meetings Invest and the Stock Exchange with international investment funds MICEX-RTS, was attended by the heads including Blackrock, Charlemagne of more than 400 large enterprises, Capital, Baring AM, JP Morgan AM, investment companies and banks. Nomura AM, Pictet, T Rowe Price, UBS, In November 2012, delegation of Federal Fidelity, Pioneer Investments, Grid Company headed by the Chairman of Renaissance Investment Management, the Management Board Oleg Budargin HSBC Global Asset Management, Credit made an official visit to the London Stock Suisse were also held. Exchange (LSE). In June 2012, the Company held a meeting with minority shareholders - individuals as part of preparation for the Annual General Meeting of Shareholders.
The Company's active work in the field of investor relations was highly appreciated by the investment community: — in July 2012 Federal Grid Company — in December Federal Grid Company entered the top 5 best large-cap has received award the "Issuer of the companies according to the IR Year" according to the news agency Magazine. Cbonds. — in October 2012 the world's leading Other activity in the field of IR was credit rating agency Standard & conducted on the basis of the approved Poor's affirmed the long-term credit "2012 Action Plan for Cooperation with rating of Federal Grid Company of Shareholders and Investors (IR plan)". BBB on the international scale of the To obtain all necessary information there investment, the outlook on the rating is a section «For shareholders and is "stable". Investors» on the corporate website for — in November 2012, the annual shareholders and investors of Federal financial statements of Federal Grid Grid Company. Company was awarded the first place for the quality of preparation and disclosure of information among 100 largest Russian companies for 2011 by the rating agency "Expert RA". STAKEHOLDERS RELATIONS
Participation in Conferences, Forums and Roundtables
In February 2012 Federal Grid Company the project to create a "smart" power participated in the IX Economic Forum industry, including backbone power grid in Krasnoyarsk, the largest economic of a new generation. The event was and cultural center of Central and attended by Assistant to the President Eastern Siberia. Deputy Chairman of of the Russian Federation Arkady the Management Board of Federal Grid Dvorkovich, the Chairman of the State Company Roman Berdnikov presented Duma Committee for Energy Yury the results of Federal Grid Company to Lipatov, the Chairman of the modernize and update the UNEG in Management Board of Federal Grid 2011 and promising directions in the Company Oleg Budargin, heads of major development of the trunk power grid Russian and foreign energy and sector both at the federal level and in technological companies, including, the regions of Siberia and the Far East. Alstom, Hyundai Heavy Industries, In June 2012, the branch of Federal Grid American Superconductor, Rostelecom Company - Backbone Electric Grids as well as scientists and authoritative (MES) South participated in the second experts. Dagestan Economic Forum, held in In 2012 Federal Grid Company for the Kaspiysk. The event was attended by fifth time in a row acted as co-founder the heads of the subjects of the North of the prestigious international "Global Caucasian Federal District (NCFD) and Energy" Award. In June 2012, the the South of Russia, heads of major winners of the "Global Energy" Award Russian companies, as well as leading 2012 visited 220 kV Prospect Ispitatelei scientists and experts, businessmen, substation of Federal Grid Company in heads of major international companies St. Petersburg which is the most in Austria, Italy, Hungary, Turkey, high-tech and compact power facility of Moldova, the Czech Republic, 220 kV voltage class in the North-West Azerbaijan, Turkmenistan, Iran, region of Russia. Russian scientists Kazakhstan, the Russian Federation involve in the project to create the and the United States of America - intellectual power grid, assist Federal about 1,300 participants. The main Grid Company in monitoring of global theme of this year's forum was to find innovations and its implementation at the most effective tools for social and the UNEG facilities. economic development of the Republic In September 2012, the top of Dagestan and the North Caucasus, management of Federal Grid Company including the development of electric participated in the Business Summit of power grid infrastructure to ensure the Asia-Pacific Economic Cooperation economic development of NCFD. (APEC 2012), on Russky Island In June 2012 as part of the St. (Vladivostok). Head of the delegation of Petersburg International Economic Federal Grid Company, the Chairman of Forum (SPIEF-2012) Federal Grid the Management Board Oleg Budargin Company conducted second round table took part in the discussion devoted to issues of creation of energy "Infrastructure as a basis for system with intelligent power grid in sustainable growth" devoted to the Russia, called "Smart Grids - the impact of infrastructure on the Projects of the Future". Roundtable development of the regional and global participants discussed the progress of economies of APEC countries.
126 In September 2012, the top BRESLER, SIEMENS, ABB, SIE AKRA, management of Federal Grid Company 3M, Electrozavod, RTSoft, AMZ, Togliatti joined the XI International Investment Transformer, SC Electroshield - TM Forum "Sochi-2012". During the forum, Samara, etc. Federal Grid Company and Sim-Ross In November 2012 Federal Grid Lamifil concluded a memorandum on Company participated in the round table the localization of the production of "Sustainable Development as a Major energy-efficient wires of a new Trend in the Global Economy in the XXI generation within the Russian Century". The panelists, including Federation. The signing ceremony took former German Chancellor Gerhard place in the presence of the Governor of Schroeder, President of SAP EMEA the Yaroslavl Region Sergey Yastrebov. Frank Cohen, CEO of SAP SIC Igor In October 2012, the Company Bogachev, a professor in the field of participated in III All-Russian corporate social responsibility and conference "Russian fuel and energy sustainable development of the complex, from human resources to University of Siegen, Dr. Martin Hill, human capital". As part of the discussed the initiative in the field of conference, the Ministry of Energy of sustainable development in Russia and the Russian Federation noted the achievements of world economic Company's contribution made to the leaders in sustainable development. In development of social policy in the particular, the roundtable participants electric power sector – Minister of noted the need to advance development Energy of the Russian Federation in the Russian energy efficient Alexander Novak handed a diploma and technologies, alternative and the prize "For contribution to the distributed energy. development of social policy in the In December 2012 the Company's electric power sector" to management delivered a report on representatives of the Company. "Innovative Development of Federal Grid Company "at the II International Forum In October 2012, Federal Grid on Innovation in the fuel and energy Company with the participation of the sectors “NewGen - Energy of the Ministry of Energy of the Russian Future". Federation organized the First In December 2012 Federal Grid International Grid Forum UPGrid Company participated in the IV International Energy Forum "Electric Power Complex. "Innovations. Infrastructure. Security". Innovations. Development".
More than 200 companies have demonstrated its innovations and new technologies, among them ALSTOM GRID, CISCO, HYUNDAI HEAVY INDUSTRIES Co., TOSHIBA, IC STAKEHOLDERS RELATIONS
Awards to the Company`s management from external stakeholders
In July 2012 the Patriarch of Moscow recognition of his assistance in the and All Russia Kirill awarded the restoration of the Valaam monastery". Chairman of the Management Board of The awarding ceremony took place in Federal Grid Company Oleg Budargin by the upper church of Order of St. Sergius of Radonezh of the Spaso-Preobrazhensly Cathedral, second degree. Oleg Budargin was Stavropigialny Valaam Monastery. awarded with high church award "in
Participation in the preparation of the report "Association" RaEl"
In 2012, Federal Grid Company portrait of energy organizations, on participated in the preparation of the building social and labor relations in the annual "Public industry report of the organizations of the sector, on the social partnership`s parties in the development of social partnership and electric power industry of the Russian the implementation of the Federation in 2012", published by the commitments made by each party. The Association RaEl and VEP. Russian Union of Industrialists and This report, prepared in view of the Entrepreneurs (RUIE) included the Guide Global Reporting Initiative (GRI), Public Report in the National Register promotes formation of a vision of the of corporate non-financial reports. consumers of electricity on a collective
128 Dialogue with Stakeholders, "Human Capital Management in Federal Grid Company"
Minutes Summary of Dialogue with Stakeholders as Part of the Preparation of the 2012 Report on Social Responsibility and Corporate Sustainability of Federal Grid Company
Theme of the Dialogue: Human Capital The dialogue was held on April 5, 2013 Management in Federal Grid Company from 14:00 to 17:00 in the conference room of Federal Grid Company at the address: 9/11 B. Nikolovorobinskiy lane, Moscow.
Before the meeting, participants in the resource management system in dialogue received the following Federal Grid Company; information materials: — personnel reserve of Federal Grid — the program of dialogue; Company; — presentation materials on the topics: — staff training and development in — personnel policy and human Federal Grid Company.
The event was attended by representatives of the following stakeholders:
Representatives of State Representatives of Industry Regulatory Authorities: Organizations: — Sergey Abyshev, Deputy Director of — Pavel Ushkarov, Head of Department the Department for administrative and for regulation of SLR in the electric legislative work of the Ministry of power sector in association RaEl Energy of the Russian Federation Representatives of the Expert Representatives of Educational Community: Institutions and Scientific — Svetlana Epikhina, a Member of the Organizations: Working Group "CSR and Sustainable — Zagir Atayev, Deputy Director for Development" of the Agency for studies and educational work of the Strategic Initiatives NGO "Energy College" Kaspiysk — Mikhail Kolesnikov, Head of the — Vadim Vostokov, Director of Energy Committee of the NGO Support Innovation and Technology Centre, MIPT of Russia — Alexey Gusenkov, Provost for — Anastasia Mokritskaya, Chief Academic Affairs, ISPU Specialist of the Department of Personnel Development of MUEGC — Sergey Mishcheryakov, CEO of NPO KONTZ UES — Larisa Nozdracheva, Director of the Administrative Department of the International Centre under the auspices Representatives of Youth of UNESCO "Sustainable Energy Organizations: Development" — Gennady Gromyatzky, Deputy Chief of the Central Staff of YNGO "Russian student teams" STAKEHOLDERS RELATIONS
— Valeriy Oskin, CEO of non-profit Internal Stakeholders: partnership "National Confederation" — Sergey Savosko, Head of the Development of human capital" to Department of Occupational Health and promote faster development Safety of Federal Grid Company — Natalia Ponomarenko, Senior Expert of HR management and organizational development block of INTER RAO UES Representatives of consulting — Darya Prokhorova, Head of the companies on issues of Center of personnel evaluation non-financial reports and RusHydro — "KorUnG" corporate development — Igor Rogojin, CEO of the Association — Ivan Barzola, Manager of Corporate SIZ Governance and Sustainable — Elena Savlyuk, Director of the Development, KPMG Information Department of the — Vladimir Mityashin, the auditor of International Centre under the auspices BureauVeritas Rus of the UNESCO "Sustainable Energy — Vladimir Scobarev, Partner, Deputy Development" General Director of NPI Consult — Larissa Semenova, Head of Public Relations Department of TGC-1 Speaker of the Dialogue: — Andrey Chechin, Head of Project — Sergey Nakvasin, Head of Business Office of staff management and Direction "Reporting" of GC organizational development block of Yes-Strategy. INTER RAO UES — Alexander Fedorets, Director of the NGO Workplace Safety Institute
I. The Opening of the Dialogue 1. formulate requests of future readers of the report to its content; In opening the dialogue, First Deputy Head of Strategic Communications 2. collect recommendations of the Department Kozlov O.E. noted that the expert community to improve human 2012 Report on social responsibility and capital management in Federal Grid corporate sustainability of Federal Grid Company. Company is aimed at the description of Nakvasin S.Y. particularly noted that the the performance of one of the most management of Federal Grid Company important issues for the Company - attaches great importance to human capital management. In non-financial reporting, as evidenced by preparing this report the Company is the Company`s victories in various focused on the best of foreign and competitions of reports. domestic practices. Further Kozlov O.E. listed the key events of Federal Grid After the speaker of the dialogue had Company in the year and gave the floor fixed time limits of the event, the floor to lead the dialogue. was passed to the first speaker - Chevkin D.A, Director on Human Speaker of the dialogue Nakvasin S.Y. Resources Management of Federal Grid spoke about the history of social Company. reporting in Federal Grid Company. Further, objectives of the dialogue were formulated:
130 II. The Report on «Personnel — ongoing collaboration with higher Policy and Human Resources educational institutions and specialized secondary education Management System in Federal institutions. Grid Company» Further areas, which are implemented The speaker, HR Management Director as part of personnel policy for the of Federal Grid Company Chevkin D. A. classic areas, human resources began his presentation with brief management (human capital), planning, information about Federal Grid recruiting, assessment and staff Company. development were described. Further the speaker described the With regard to personnel capacity indicators related to human resources planning Chevkin DA noted that the management and personnel policy of Company has a system focused on the the Company. Chevkin D.A. noted that needs for a planning horizon of one none of the objectives of the year. In terms of the recruitment development strategy of electric power Federal Grid Company shifts for itself, grid complex, which was recently without using the resources of discussed at public hearings in open recruitment agencies. The incentive government, could be solved system at all levels, from senior satisfactorily without the support of managers to grass-roots linear Human Resources Management divisions is based on key performance System. indicators. They are developed and fixed Then, the speaker pointed out the due to functional and regional factors which affect the implementation specificity. There are several hundreds of personnel policy: of indicators. Each is controlled by at its own level control. The variable part of — deterioration of the demographic the remuneration depends almost situation; entirely on performance. — increased competition for labor Continuing the theme of employees` resources; motivation speaker called the average — imbalance of supply and demand in wage in Federal Grid Company. In 2012, the education market; it was about fifty-eight thousand rubles. — reduced mobility of employees within To determine the amount of wage the the Russian Federation; Company conducts regional studies of payment levels. — state regulation of tariffs. Standard elements of benefits package Continuing his report, Chevkin DA and social safety used by the Company identified key priorities and principles of are health insurance, financial aid the system of human resources system, non-state pension schemes management and personnel policy of system, housing program. Federal Grid Company: In addition, Federal Grid Company — improving the efficiency of the attaches great importance to the organizational structure of the development of corporate culture in the Company; internal communications system. — increasing the level of staff training Finally Chevkin DA analyzed the targets by means of both improvement of set by the Company taking into account training system and upgrading of strategic goals of the existing power qualifications; grid complex in general and Federal Grid Company in particular. STAKEHOLDERS RELATIONS
When the report had been finished, the initiated in 2006. Two years ago, the representatives of stakeholders were Company decided that it is necessary to given the opportunity to ask questions. create an internal structure within the Abyshev S.V.: Does Federal Grid Personnel Management Department, Company have a mission? Is the which would deal with personnel reserve. workforce productivity calculated in the Next Fillipova E.A. got down to Company? description of the concept of the Chevkin D.A.: The Company has a personnel reserve of Federal Grid mission the concept of which is to Company. One of the first tasks in this ensure a reliable operation of the UNEG area was that the Company needed to while ensuring growth rates of identify the project customer for infrastructure which correspond growth personnel reserve and understand who rates of the economy, business demand would use the results of this project. and so on. Workforce productivity is Chairman of the Management Board, calculated, but there is a question Chief engineer and those who were related to the correctness of the subordinated to him were identified as technique because power grid the customers. The main areas of work companies do not produce a tangible with the personnel reserve were product. specialties in the field of protective relaying, substation equipment, power Oskin V.V.: What is the goal of reducing transmission lines and operational and the average age of the company? Will process control. the concept of "high-performance workplaces" be included in the report? Then, the reserve personnel assessment system was established: Chevkin DA: Reduction of middle age is not a goal in itself and in this area there — 70% of the assessment test is is a serious problem in the electric professional and technical power industry. It is necessary to competencies, which consisted of the increase the proportion of young diagnosis, prevention, forecasting, professionals who come to the operational activities and mitigation Company for a long time. The gap that of consequences; exists between the generations should — 30% of the assessment test is be reduced and an indicator is the value managerial competencies. of average age. The degree of The reserve personnel assessment workplace productivity is primarily system was designed in the form of determined by the technology and standard and methodology. The equipment used. assessment was conducted in person Mishcheryakov S.V.: Is the concept of meeting with a reservist. business culture overlooked or In the future, own assessment deliberately bypassed? methodology will be applied to tutors for Chevkin DA: Almost all aspects of which KPI is designed. Tutors do not production activities, including the receive the full amount that they are procedure of work of the production entitled for the entire cycle of tutorship. staff are really standardized and They get 50% of that amount on a regulated in the Company. monthly basis, and only as a result of the positive performance dynamics of a reservist they can get their remaining III. Report on the Personnel amount. Reserve of Federal Grid At the end of the report Fillipova E.A. Company announced statistics on personnel Speaker, Deputy Head of the Department reserve and noted that the work to of Organizational Development of Federal improve the personnel reserve Grid Company Filippova E.A. began her management of Federal Grid Company discourse with the history of the project is carried out on ongoing basis. to build personnel reserve, which was
132 When the report had been finished the fixed by order. Currently, Federal Grid representatives of stakeholders were Company is implementing this project: given the opportunity to ask questions. all reservists assessed and trained but Abyshev S.V.: Is there such an area of all tutors not yet trained. And not all work as talent management? Is there tutors who attended training further get assessment of reserve fluctuation? into the system. Fillipova EA: The information about Talent Management will be available in IV. Report on Training and the next report. Currently, none of the Personnel Development in number of reservists left the Company. Federal Grid Company This is one of the indicators of tutor`s KPIs. So tutor`s task is to retain this Speaker, Head of the Staff Training reservist, and if the reservist leaves, Center of Federal Grid Company tutor does not get the appropriate Nikolova E.A. began his presentation remuneration. with a notation of the principles of training programs and personnel Prokhorova D.A.: Is there a division into development in Federal Grid Company: perspective (youth) reserve and experienced employees for reserve in — system approach; the Company? — integration; Fillipova EA: There is a division into — hierarchy; strategic and tactical reserve in the — proactivity; Company. — manageability. Epikhina S.B.: How did the reservists assessment results take into account at Next, the Company`s Personnel this stage and is there a connection Training System was described. The between past stages of projects and Staff Training System of Federal Grid present ones? How did the Company consists of the following assessments of reserve work effect the elements: formation of professional standards? — mandatory training established by Was the assessment of reservists taken federal laws; into account in the design of organizational structures? Does the — industry regulatory standards; Company use a data of 2005-2007 — acts, permits; projects to analyze and disclose the — managerial competences` dynamics of personnel reserve in the development; report? — changes in business processes; Fillipova E.A.: CEO of MES and Chief Engineer supervise for connection of — changes in the environment in which past and present stages of projects. the Company operates; Federal Grid Company has not yet been — new problems` identification; integrated into the system of professional standards. The — professional competencies` development of professional standards development; is the next step in the personnel — interaction with higher educational management development. The institutions. Company enjoys and takes into account the results of 2005-2007 personnel reserve projects. Oskin VV: How are the numbers "475 reservists" and "276 tutors" harmonized in the report? Fillipova EA: Here are the numbers of those tutors who have already been trained and work with reservists and STAKEHOLDERS RELATIONS
Further Nikolova E.A. got down to the Knowledge" and "The School of creation history of the staff training Professional Power Engineer". "Day of centers of Federal Grid Company, Knowledge" in Federal Grid Company is analysis of statistics on personnel held usually on Thursdays. "The School training and development, and joint of Professional Power Engineer" will be programs and the overall concept of implemented in the Company`s education with IDGC Holding. Nikolova branches to ensure that young EA noted that the main task was to professionals do not just receive create eight training centers (later training, but obtain additional there were ten) in all operation areas of professions. Federal Grid Company. When the report had been finished, the The speaker enlarged upon a point of representatives of stakeholders were the structural elements of the training given the opportunity to ask questions. centers: training classes and ranges. Abyshev S.V.: Does the Company have A simulator that completely replicates the practice of employees` adaptation power transmission scheme that by training tools? Is there statistics on belongs to a branch for each of the reduction of failures or increase of the branches was created. That is, in the reliability of the equipment after course of a training dispatcher sits on employees trained? Does the system the workplace equipped exactly as a use management by objectives or usual workplace equipped with. All management by projects? equipment of training range is the equipment from reconstructed Nikolova E.A.: Adaptation through substations. The problem was to training is not performed in the organize training of people, skill Company. Statistics on reduction of training that is essential for people in failures as a result of training is difficult situations, on the equipment conducted. Management by projects is that they face every day, both for used in the training system. operating personnel and for protection Fedorets A.G.: Do you divide training relay personnel and all other categories into health and safety and safety in of staff. operation in Federal Grid Company? Particular emphasis as part of Does the Company implement personnel training is associated with behavioral audits? What is the quality of the 2014 Olympic Games in Sochi, administrative documents on personnel because one of the next important tasks management and how the responsibility of Federal Grid Company is to ensure a of officials distributed in it? reliable electric power supply to Olympic Nikolova E.A.: Behavioral audits are facilities. conducted. In the administrative Talent Management Program is documents of Federal Grid Company implemented jointly with the Skolkovo. responsibility is distributed very clearly The program is designed for mid-level and with a glance to employment managers under 45 years of age. The duties. leaders are selected and write an essay "Why should I participate in this program. The integrated program consists of six modules. This is MBA short course. According to the results of the first integrated program ten of forty people were enough sufficiently promoted. To summarize, Nikolova E. reported on two projects implemented: the "Day of
134 VI. Queries and Proposals from Queries and Proposals in the field of Stakeholders to Disclose Personnel Reserve of Federal Grid Company: Information in the Report, Received in the Course of Dialogue — describe employees` assessment technology for personnel reserve of Federal Grid Company with (Epikhina S.B.) Stakeholders. — give an explanation if there is a division Queries and Proposals in the field of into perspective (youth) reserve and a Personnel Policy and Personnel reserve pool of experienced employees Management System of Federal Grid (Prokhorova D.A.) Company: — give an opinion of fluctuation of — present data on KPI in the field of HR personnel reserve (Abyshev S.V.) management in the report (Skobarev — describe the extent to which the V.Y.) experience to form personnel reserve in — specialize the key documents in the field the past (since 2006) is currently used of personnel management (Fedorets (Epikhina S.B.) A.G.) — present the dynamics of reserve — describe the consistency and continuity personnel capacity (Epikhina S.B.). of management approaches to — describe the impact of work to assess personnel management. The investment reservists on the formation of objectives in human capital should be professional standards (if any) (Epikhina emphasized in the Report. (Epikhina S.B.) S.B.) Queries and Proposals in the field of — present data on calculation of workforce Training and Development in Federal Grid productivity (Abyshev S.V.) Company: — describe the concept of "high — include Statistics on reducing failures or performance workplaces" (if any). It is increasing after training reliability as a advisable to emphasize on training quality indicator in the Report high-performance workplaces in the (Abyshev S.V.) report, in particular, to make a notation, that an increase in labor productivity — include performance indicators of cannot occur without job cuts (reflect training centers in the Report (Abyshev that the Company analyzes this) S.V.) (Epikhina S.B., Oskin V.V.) — give an explanation (if relevant) whether — present a target for reducing the training is divided on occupational average age of the Company (if any) health and safety and safety in operation (Oskin V.V.) in Federal Grid Company (Fedorets A.G.) — include information on the change of — present information on whether there activity in the field of personnel are special training courses dedicated management (if any) in the Report in learning to develop documents (Fedorets connection with the new requirements A.G.) of state regulation on standards ISO, — present information on whether Federal ISAE, OHSAS, etc. (including Russia`s Grid Company participates in the entry into the WTO) (Mishcheryakov S.V.) presidential program for training of — describe the work to create the engineers` personnel and which of Company`s competencies profile, subprograms are implemented jointly passports of positions (Prokhorov D.A.) with higher educational institutions? (Oskin V.V.) — include evaluation of employee engagement in the Report — describe the interaction experience (Mishcheryakov SV) between Federal Grid Company, Ivanovo State Power University and other higher — include in the report analysis of educational institutions (Gusenkov A.V.) personnel lifts (Mishcheryakov SV) — describe the approach to talent management (Abyshev S.V.) STAKEHOLDERS RELATIONS
Proposals to disclose information on VII. End of the Meeting social responsibility and corporate In conclusion of the dialogue Chevkin sustainability of Federal Grid Company D.A. and Kozlov O.E. thanked the for 2012 on the theme "Human Capital participants of the dialogue for the Management in Federal Grid Company: proposals. Speaker of the dialogue — include a point about ensuring Nakvasin S.Y., in turn, informed that at occupational health and the end of April there will be public psychological training of employees hearings on the draft report and in the Report (Mishcheryakov S.V.) thanked the participants for active — give an explanation (if work is discussion of the topic during the underway), whether behavioral dialogue. audits are implemented in the Company (Fedorets A.G.) — describe the approach to the business culture development (Mishcheryakov S.V.) — describe the results of an employee loyalty evaluation program: what employees like and what they do not like, and the way the Company's response (Semenova L.G.)
136 Public Hearings on Draft Report
MINUTES SUMMARY of Public Hearings on the 2012 Report on Social Responsibility and Corporate Sustainability of Federal Grid Company
Public hearings on the Draft Report on — draft Report on corporate social responsibility and corporate sustainability and social sustainability of Federal Grid Company responsibility of Federal Grid for 2012 was held on 26 April 2013 from Company for 2012; 16:00 to 18:00 at the address: 9/11 — presentation materials on the topics: Bolshoy Nikolovorobinskiy lane, Moscow. — Youth and Social Policy of Federal Grid Company; Prior to the meeting, the participants in public hearings received the following — The environmental impact of Federal information materials: Grid Company: management, performance, plans. — the program of public hearings; — a list of participants;
The event was attended by representatives of the following stakeholders:
Representatives of educational Representatives of industry institutions: organizations: — Igor Boldyshev, Executive Director of — Alexander Burdin, Head of NP KONTZ UES; Department of the Regulation in Social — Vadim Vostokov, Director of and Labor Relations in Electric Power Innovation and Technology Center of Industry of the Association RaEl; Moscow Physical-Technical Institute — Arkady Zamoskovny, CEO of the (State University); Association RaEl. — Vyacheslav Grechikhin, Provost of Academic Affairs of Moscow Power Representatives of the expert Engineering Institute; and the business community: — Evgeny Knyazev, Director of — Svetlana Epikhina, a member of the University Management Center of the working group "CSR and Sustainable National Research University “Higher Development" of the Agency for School of Economics"; Strategic Initiatives; — Oleg Kuznetsov, Director of the — Vladimir Mityashin, auditor of Bureau National Research University "Moscow Veritas Rus; Power Engineering Institute"; — Larisa Nozdracheva, Director of the — Sergey Mishcheryakov, CEO of NP Administrative Department of the KONTZ UES. International Centre under the auspices of UNESCO "Sustainable Energy Representatives of labor unions Development"; and youth organizations: — Elena Savlyuk, Director of the Information Department of the International Centre under the auspices — Sergei Zemnukhov, Chairman of of UNESCO "Sustainable Energy labor union committee of students of Development." the National Research University "Moscow Power Engineering Institute." — Alexander Fedorets, Director of NGO Workplace Safety Institute STAKEHOLDERS RELATIONS
Internal stakeholders: Representatives of — Natalia Vaguina, Chief Specialist of environmental organizations: the Department of customer — Elena Zubakina, Executive Director of relationship and interaction with the Russian Bird Conservation Union; market of Federal Grid Company; — Alexey Knizhnikov, Program Manager — Yuri Krutov, Senior Specialist of the on Environmental Policy of the Fuel and Executive Apparatus of Federal Grid Energy Complex of the World Wildlife Company(Moscow); Fund (WWF) of Russia; — Elena Titova, Chief Expert of the — Dmitry Ochagov, Head of the Department of the Implementation of Laboratory of Reserve Management the Environmental Policy of Federal and Studies of All-Russia Research Grid Company; Institute of Nature Protection. — Sergey Chernousov, Head of the Power Transmission Lines Operations Speaker: Department of Federal Grid Company; — Sergey Nakvasin, Head of Business — Alexey Chistyakov, Head of Division of Direction "Reporting" of GC the Department of Substations of Yes-Strategy. Federal Grid Company.
Representatives of state authorities: — Alexey Zamyslov, Deputy Director of the Department of Operational Control and Management in the Electric Power Industry of the Ministry of Energy of the Russian federation
I. The Opening of Public the program: the Project Manager for Hearings Social Reporting of Federal Grid Company Louks N.Y. will make a report Speaker of the hearings, the Head of on key topics of 2012 Report instead of Business Direction "Reporting" of GC the Head of the Department of Strategic Yes-Strategy Nakvasin S.Y. briefed the Communications of Federal Grid participants of public hearings with Company Mikhailov O.M. time limits of the Public Hearings. Speaker said that three representatives Speaker outlined that the problem of of Federal Grid Company are expected public hearings is to collect proposals of to make reports on significant topics of stakeholders on the disclosure of the Report: on the implementation of information in the text of the Report for the housing and youth policies and on 2012 and the activities of Federal Grid the environmental impact management. Company in 2013. Then the speaker Nakvasin S.Y. explained the changes in gave the floor to Louks N.Y.
138 II. Key Topics and Features of assessing the level of accountability the Report on Social and quality of interaction with stakeholders. Responsibility and Corporate Sustainability of Federal Grid When the report had been finished the stakeholders were given the opportunity Company for 2012 (Report to ask questions. presented by Louks N.Y.) Mityashin V.G.: What version of GRI will Project Manager for Social Reporting of be used? Federal Grid Company Louks N.Y. Nakvasin S.Y.: GRI G3.1. outlined core objectives of the Report on corporate sustainability and social responsibility of Federal Grid Company III. Youth and Social Policy of for 2012. First, the Report shapes and Federal Grid Company (Report structures the statistics and indicators in the field of human capital presented by Kindyashova O.S.) management, combating conflicts of Head of the Department of Social interest and in other areas of Programs of Federal Grid Company sustainable development, and, secondly, Kindyashova O.S. presented the main ensures transparency and results of the implementation of accountability of the Company on a wide Housing and Youth Policies of Federal range of topics and issues that are Grid Company to the stakeholders. essential for stakeholders. The main objective of the Housing Further the speaker presented the Policy of the Company is to attract and main parameters of the Report. In retain personnel, which plays a key role preparing the Report the Company in reliable electricity supply to traditionally focuses on "best practices" consumers and to improve the reliability and the international recommendations of the Unified National Energy Grid. in the field of non-financial reporting: In implementing housing policy three GRI (G 3.1) and AA1000 SES standards areas were highlighted: were used, a dialogue with stakeholders was held and public hearings on the — forming corporate housing and draft report are being held. providing employees with service apartments from corporate housing; Key topics of the Report for 2012 are human capital management and — corporate assistance in purchasing anti-corruption in Federal Grid of ownership of accommodation; Company. — rental costs compensation for The Report consists of 10 chapters and employees. 6 annexes. Structure of the Report is At the end of the first part of the report consistent with the text of the Report on the housing policy of the Company for 2011, which makes it easier to Kindyashova O.S. unveiled plans relating compare data. to the implementation of housing policy Finally, N.Y. Louks announced tasks of in 2013, and noted that the plans and Public Hearings: obligations of Federal Grid Company in the field of housing policy, adopted in — developing common views with the Report for 2011 (on the amount of stakeholders related to the funding for programs to promote Company's effectiveness in the field purchase of accommodations and rental of sustainable development; cost compensation, and also on an — the Company`s rapid response to emphasis on the provision of issues that are essential for accommodation for young stakeholders; professionals) were implemented in full. — providing conditions for public assurance and non-financial audit of the Report, including terms of STAKEHOLDERS RELATIONS
The second part of the report was Boldyshev I.V.: Will the housing policy of devoted to youth policy. In 2012 Federal Federal Grid Company be continued in Grid Company acted within the Russian Grids? framework of agreements with 51 Kindyashova O.S.: Yes, the Company educational institutions, including 14 has formulated such a task. specialized secondary institutions. With the participation of students and Burdin A.A.: How many employees are teachers of the educational institutions, in need of better housing conditions and the following measures were carried how the interaction between the needy out: employees and management of the Company is conducted? Is there the — field trips; Young Professionals Council in the — training of teachers at the facilities Company? of Federal Grid Company; Kindyashova O.S.: The Housing policy of — development of joint training Federal Grid Company is a tool to solve programs; operational and personnel problems, — participation of specialists of Federal rather than a tool of social insurance, Grid Company in the educational while having a social resonance. The process; housing program is funded by the Company`s profits. Of course, the — Day of Knowledge; Company is contributing to — involvement of higher educational accommodation provision for institutions in joint scientific and employees who do not have their own research work; homes. But it does not set itself the task to provide accommodation for all — scientific, technical and reference employees. literature on electric power industry contest; There is no the Young Professionals Council in the Company, but there are — students` works related to power plans to create it. transmission grids contest. At the end, the speaker outlined the main results of the interaction with IV. The Environmental Impact of higher educational institutions and Federal Grid Company: spoke about the Company's plans to Management, Performance, develop student construction teams. Plans (Report presented by When the report had been finished the Leonov N.N.) stakeholders were given the opportunity to ask questions. Head of the Department of Environmental Policy Implementation of E.A. Knyazev: Does Federal Grid Federal Grid Company Leonov N.N. Company participate in the began his report with a description of development of professional standards? the goals and objectives of the Kindyashova O.S.: Yes, but the Company's Environmental Policy. Department of Personnel Management Environmental policy of the Company is responsible for this area. was adopted in 2008. Its main goal is to Grechikhin VA: What are the support increase the level of environmental mechanisms for students in the regions safety and the investment attractiveness of Russia used by the Company? of the Company by providing a reliable and environmentally safe transportation Kindyashova O.S.: To support learning of energy via electric power grids. in higher educational institutions (either in the form of tuition or social The Environmental Policy has 2 main guarantees and benefits) targeted objectives: support is performed. Support — facilitating the reduction of negative decisions are taken in the Company`s effects of electric power grid branches. enterprises on the environment through the implementation of technical measures;
140 — creating organizational mechanisms programs for principles of to upgrade methodological environmental safety and handling with approaches, standards, guidelines production waste for managers and and implement an environmental employees. After the completion of the management system, not only in the report the stakeholders were given the executive apparatus, but also in the opportunity to ask questions. branches. Zubakina E.V.: What is the smart grid? Further the speaker presented Speaker of the meeting: Annex 2 to the information on the implementation of Report contains information on the the Program for the implementation of UNEG innovative development and other the environmental policy of Federal Grid additional information on this issue. Company for 2011-2013. In accordance with the Program, the Company Foci N.N.: Do you want that Far East implements the environmental stork will not nest in certain places of management system at all branches. the poles or want them to leave these These measures must be successfully poles? completed by 2016. Leonov N.N.: The Company decided to Prevention of emergency outages in create artificial support devices on the transporting electricity that can occur poles. Existing Far East stork nests were when nesting storks on the electric transferred to the newly established power transmission lines` poles is specialized courts. To prevent re-nesting carried out in MES East. Artificial storks’ of storks on dangerous sections of the nests are created. Death of these birds poles special types of barbed wire listed in the Red Book was never obstacles are used. registered over the entire period of Burdin A.A.: How does the process of operation of electric power transmission waste disposal take place in the line in MES East. Company, whether contractors of the Federal Grid Company introduces Companies which dispose waste comply advanced, innovative equipment in with international environmental constructing new and reconstructing standards? existing substations, which is capable of Leonov N.N.: Federal Grid Company releasing a large enough amounts of does not obtain license to transport land in a metropolis. In addition, the waste. In all regions the Company has Company replaces lattice poles for signed agreements with specialized multi-faceted steel ones, which can contractors which are engaged in reduce the width of the forest belts and disposal. This service is sold on a thereby minimize the area of felling of competitive basis. In MES South and trees. MES North-West the requirement to In conclusion, N.N. Leonov presented comply with international environmental the main plans of the Program to standards is included in the agreements. implement environmental policy of the Company for 2013. Among them is the further disposal of equipment containing trichlordiphenyl, introduction of new safety-related equipment from an environmental point of view, the further implementation of the environmental management system in the branches of the Company. The Company plans to continue ongoing research on the effects on biodiversity in specially protected natural areas and implement training STAKEHOLDERS RELATIONS
V. Proposals and — Add the information on the internal Recommendations of personnel displacement coefficient and labor productivity to the Report Stakeholders (Burdin AA, Association RaEl) Proposals to the text of the 2012 Report: — Disclose the information on the from higher educational institutions: salary fund (Burdin A.A., Association — Provide information on the activity to RaEl) develop professional standards from environmental organizations: (Knyazev E.A., NRU HSE) — Disclose Statistics on birds` deaths — Disclose the information on the associated with the activity of Federal Company's interaction with academic Grid Company (Zubakina E.V., community of higher educational Russian Bird Conservation Union) institutions, with the collegiate — Specify the method of calculation of governing bodies of universities, with indirect emissions of greenhouse expert councils under the partner gases (Knizhnikov A.Y., WWF) higher educational institutions (Knyazev E.A., NRU HSE) — Provide complete information on all compensatory measures in Section — Describe mechanisms to support "Basic indicators of the impact on students in the regions of the the environment" in paragraph "The Russian Federation - tuition, social impact on flora and fauna, soil and benefits, etc. (Grechikhin V.A., NRU ground" (Knizhnikov A.Y., WWF) MPEI) — Improve the information content of — Disclose the information on the the sections relating to biodiversity, Company`s scholarship programs for specially protected natural areas and students (Grechikhin V.A., NRU birds` death. (Knizhnikov A.Y., WWF) MPEI) — Discover more detailed the theme from industry organizations: "Impact on Biodiversity" of the — Specify the number of employees Section "Initiatives of the Company in who need to improve their living the field of environmental protection" conditions and how the Company`s (Ochagov M.D., VNIIPriroda) management interacts with those in from the expert and the business need of accommodation (A.A. Burdin, community: Association RaEl) — Specify what Federal Grid Company — Disclose the information on that how meant by sustainable development the process of waste disposal is (Epikhina S.B., ASI) carried out in the Company and whether the contractors which — Amend Chapter 5, taking into account dispose waste comply with that the sustainable development of international environmental the Company is due, primarily, to standards. (Burdin A.A., Association operation activities, provision of RaEl) electricity and a reliable electric power supply (Epikhina S.B., ASI) — Reflect the survey findings of Federal Grid Company`s employees` — Delete references to 2011 Report. If satisfaction with employer and the changes compared the previous indicate the survey mechanisms Report did not occur, write "The used in the Report. (Burdin A.A., principles, disclosed in 2011 Report, Association RaEl) did not change, the Company continues to follow them." (Epikhina — Provide the information on how S.B., ASI) conflicts are resolved in the Company`s labor collective (A.A. — Disclose more detailed the theme of Burdin, Association RaEl) interaction with consumers: how the results of surveys measuring
142 — customer satisfaction level use in — Complete Sections of the Report management and what survey data devoted to impact on the species are included in the indicators. listed in the Red Book and (Epikhina S.B., ASI) biodiversity, particularly in specially — Disclose more detailed the protected natural areas. (Zubakina information on management E.V., Russian Bird Conservation approaches to every aspect of the Union Knizhnikov A.Y., WWF) Company`s activity (Epikhina S.B., ASI) VI. Completion of the Public Proposals for activities of Federal Grid Hearings Company in 2013: At the conclusion of the hearings the — Continue work to develop managers of Federal Grid Company professional standards (Knyazev E.A., expressed their attitude to the SRU HSE; Grechikhin V.A., NIU MPEI; proposals of stakeholders. Epikhina S.B., ASI) Head of the Department of Social — Present Draft Report to participants Programs of Federal Grid Company O.S. in public hearings at least one week Kindyashova thanked the stakeholders prior to the event (Knizhnikov A.Y., for their comments and noted that most WWF; Zubakina E.V., Russian Bird of the proposals of stakeholders in Conservation Union; Grechikhin V.A., terms of housing and youth policy to the NIU MPEI) Sections of the Report will be taken into — Create centers for professional account. advancement and training at higher Head of the Department of educational institutions (Grechikhin Environmental Policy Implementation of V.A., NIU MPEI; Vostokov V.Y., MIPT) Federal Grid Company N.N. Leonov also — Provide support for students by the thanked all participants and promised Company in the form of scholarship to complete Sections of the Report with programs (Grechikhin V.A., NIU the information relating to the MPEI) implementation of the environmental policy of Federal Grid Company, and — Expand the orders from Federal Grid take into account all comments and Company for R & D of higher proposals of stakeholders made during educational institutions (Grechikhin the public hearings. V.A., NIU MPEI) — Develop and launch the implementation of a plan on interaction with stakeholders of environmental organizations (A.Y. Knizhnikov, WWF) STAKEHOLDERS RELATIONS
Conclusion on the Public Assurance of 2012 Federal Grid Company Social Responsibility and Corporate Sustainability Report
General Information internal control and audit divisions, tax authorities and other authorized The management of Federal Grid organizations. We took into Company invited us to assess 2012 consideration the following criteria: the Social Responsibility and Corporate orientation of the Report to the Sustainability Report (hereinafter - the requirements of the selected standards Report) in terms of completeness and and guidelines for reporting in the field materiality of the information disclosed, of sustainable development (GRI G 3.1 as well as give an opinion for the and AA1000 SES); application of the Company's management response to basic principles of reporting, stakeholders inquiries. For this, the completeness and balance of Company gave us and our information; matching to the representatives the opportunity to sustainable development context, participate in the dialogue with response to stakeholders` suggestions; stakeholders on the topic "Human materiality of topics presented in the Capital Management in Federal Grid Report; credibility and consistency of Company" (April 5, 2013) and Public information presented in the Report`s Hearings on the Draft Report (April 26, main sections. 2013), where we could freely express our opinions on the issues discussed. The results of our work are presented in the form of Public Assurance Conclusion, which contains opinions on Report Assessment Process which we have come to a mutual Our Conclusion is based on a agreement. Our own viewpoint is comparative analysis of the two presented in the Conclusion. We versions of the Report (Draft Report for express our opinions as individual Public Hearings and the final version), members of society, and not as as well as on the analysis of comments representatives of the organizations we and answers to our questions that we work. We have not received received from the management and remuneration from the Company for the employees of Federal Grid Company time spent for doing the work. during the Dialogue and Public Hearings. Assessment We were also able to evaluate the In general, our evaluation of the Report Company's ability to respond to relating to its format and scope of the stakeholders` suggestions and information provided is positive. We are comments that they expressed at these not aware of any facts that cast doubt events. When evaluating, we made on veracity of the information provided. recommendations to improve the quality of future Reports and improve The Company's efforts to inform the the reporting process as a whole. public about its activities in the field of Verification of fairness of the sustainable development in the form of information presented in the Report is regular release of non-financial not a matter of public assurance, so we reporting (this is the sixth report) meet did not set the task to verify the with approval. To improve the quality of authenticity of the Company`s financial its reports Federal Grid Company and non-financial performance, which organizes meetings with stakeholders is monitored by independent auditors, and thus demonstrates a willingness to engage in open dialogue on various
144 aspects of its activities to increase the and problematic aspects of the transparency of the Company and the Company`s activities. However, we electric power industry as a whole. believe that the Company has to focus The apparent advantage of the Report is on informativeness of sections related selection and detailed provision of the to biodiversity, SPNR, bird kill and the information on the Company's priorities development of the Company` in the field of corporate social professional standards in economic, responsibility and sustainable environmental and social spheres. development. Special attention is given to human capital management: hiring Stakeholders Involvement in the and development of young employees, Preparation of the Report training and personnel development, improvement of the competence of the The communications between the Company's employees on innovative Company`s management and us, as areas of work and housing representatives of stakeholders, was improvement of employees. Thus, we organized at a high level, that, in our can state that the information on the opinion, had a positive impact on the selected priority topic is adequately quality of reporting information. During disclosed. the Dialogue and Public Hearings we were given the opportunity to make suggestions and proposals to disclose Materiality of Information important to us aspects of the The Report provides comprehensive Company's activities in the Report. information on the performance in the Company`s specific areas of CSR Company`s Response to the management (human capital management, combating corruption, Comments and Suggestions of ensuring reliability, innovative Stakeholders development), on the impact of Federal The Company's management Grid Company on the environment, responded to comments and questions society and economy and on managing from stakeholders both in the these impacts. The continuity of the framework of the Dialogue, giving content in relation to previous reports answers to our questions, and in the gives insight into the direction of the form of inclusion of updates and Company`s development to the readers additional information into the final of the Report. version of 2012 Report on our requests, announced at the Public Hearings. In Balance particular, the Company added the following information: We appreciate the achieved information balance level in 2012 Report. The — experience of cooperation with Report sufficiently provides information higher educational institutions; on all key aspects of activities in the — key documents in the field of field of sustainable development, personnel management; reflects management`s approaches in these areas, describes both successful — personnel assessment technology STAKEHOLDERS RELATIONS
for personnel reserve; In addition, we would like to draw the — dynamics of the number of personal Company`s attention on the desirability reserve; of the following actions as part of communications with stakeholders in — the Company`s waste disposal the field of corporate social process; responsibility and sustainable — calculation procedure of indirect development: emissions of greenhouse gases; — timely presentation of the Draft — other information requested within Report to the Public Hearings (no the hearings. later than one week prior to the event); In our view, in preparing the final version of 2012 Report the Company's — full implementation of the management has proved the ability to engagement plan with stakeholders respond to the suggestions and presenting environmental proposals of stakeholders and respond organizations. constructively to the issues raised. Comments and recommendations made Recommendations by us do not take from the merit of the In preparing reports for future periods Report. We hope that the Federal Grid the Company should pay particular Company will consistently implement attention to the disclosure of the plans and commitments in the field of following essential topics: CSR and sustainable development, as reflected in this Report, and will also — development of professional develop the practice of interaction with standards; stakeholders. — employee loyalty assessment programs, the Company`s employee satisfaction with the employer surveys; — labor productivity; — high-performance workplaces; — behavioral audits; — approach to talent management; — indicators of the effectiveness of training centers; — Federal Grid Company’s scholarship programs for students; — compensatory measures due to the impact on flora and fauna, soil and ground; — impact on biodiversity.
146 Representatives of Educational Institutions — Vyacheslav Grechikhin, Provost of Academic Affairs, NRU Moscow Power Engineering Institute; — Sergey Mishcheryakov, CEO, NP CTS Center UES; — Vadim Vostokov, Director of Innovation and Technology Centre of MIPT.
Representatives of Youth Organizations — Gennady Gromyatsky, Deputy Chief of Staff of the Central Headquarter of Russian Youth NGO "Russian student teams";
Representatives of Industry Associations: — Arkady Zamoskovny, CEO of RaEL Association;
Representatives of the Expert Community — Svetlana Epikhina, a member of the working group "CSR and Sustainable Development" of Agency for Strategic Initiatives; — Valeriy Oskin, Chairman of the Management Board of non-profit partnership to facilitate faster development "National Confederation" Human Capital Development";
Representatives of Environmental Organizations: — Alexey Knizhnikov, Program Manager on Environmental Policy of Fuel and Energy Complex of the World Wildlife Fund (WWF) Russia; — Dmitry Ochagov, Head of the Reserve Management and Studies Laboratory of All-Russia Scientific Research Institute for Environmental Protection. APPENDICES
APPENDIX 1. The UNEG Reliability Provisions
Reliability System Control
Starting from 2010 Federal Grid Deputy Engineer-in-Chief, the Chief Company develops a system of Operations Control Officer of Federal operations and process control in Grid Company. The basis of the accordance with the UNEG Facilities hierarchy is made of 35-750 kV Operations and Process Control substations, while the middle part of the Concept adopted by the Company. hierarchy is composed of the Grid The Company has established an Control Centers (GCC) controlling the efficient operations and process control operation of the Main Power hierarchy. The control hierarchy is Transmission Line Facilities (MPTLF) topped by the Operations and Process and of the Main Power Transmission Control Division (OPCD) and by the Lines (MPTL), with GCC being the first Power Modes Division (PMD) led by the structures of the type in the history of the industry.
Executive Apparatus (EA), OPCD, PMD
GCC MPTLF, MPTL
35-750 kV SS
The main functions of the Company’s The operations and process control operations and process control system system, its structure and functions are are: based on the following principles: — to provide for the reliable operation — the unification of the structure of the of the UNEG facilities and to perform Company’s operations and process in accordance with the performance control divisions, equipped with mode conditions preset by the consistent process hard and Systems Operator’s control centers; software; — to provide for the proper quality and — the optimal distribution of functions safety of operation of the UNEG and responsibilities among the facilities; Company’s operations and process — to provide for the functioning of the control divisions; operations personnel training — the prohibition to assign the system, etc. operating functions to the divisions not directly responsible for the operation of corresponding facilities, etc.
148 APPENDIX 1. The UNEG Reliability Provisions
General Accident Rate
Federal Grid Company makes every considerable results in this field due to effort to decrease the accident rate. In 4 the following: recent years the Company achieved
Equipment operation quality improvement 60.8% decrease in the number of Production culture improvement accidents caused by operation defects Accident rate analysis
Enhancing the responsibility of employees in charge Enhancing the responsibility of specialists and managers controlling the progress 32.8% decrease in the number of of the works accidents caused by human factor Improving the personnel motivation Publication of industry guidelines and information accident prevention materials 57.4% decrease in the number of accidents Implementation of the target investment caused by damaged base insulators programs involving the replacement 35.2% decrease in the number of accidents caused by damaged high-voltage switches of outdated equipment
Electric Power Supply Reliability 2008 – 2012 Incident Rate Dynamics Broken Down by Causes
Accidents caused by operation Accidents caused by deficiencies human factor
159 145 129 100 % 100 110 54 39 97 67%
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
Accidents caused by damages base Accidents caused by high-voltage insulators switches 135 108 100 100 89 % 83 57 43% 68 65
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 APPENDICES
The efforts made by the Company resulted in 19.5% decrease of the specific (per 1,000 conditional units) accident rate, compared with 2008:
2008-2012 Specific (per 1000 conditional units) Accident Rate Dynamics
100.0 * The data on specific 96.9 accident rate for 94.1 2008 92.0 December 2012 are 2009 2010 specified on the basis of 2011 80.5 the statements presented 79.8% on January 28, 2013 (the data may be updated). 2012 2013 forecast
The number of disturbances The number of violations of the standard
The Number of Disturbances Caused by Human The UNEG voltage quality has been improved Factor Has Been Decreased Compared with the significantly. No violations of the acceptable Previous Years voltage level in the UNEG has been registered (such violations amounted to 71 in 2007, decreasing gradually).
71
82 61 57 57 39 9 3 3 16 32 19 12 9 0 0 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012
The disturbances caused by The disturbances caused by human factor (meaning all human factor (meaning categories of employees) operating personnel)
150 The in-depth analysis of the modes of operation of the energy systems resulted in the identification of 195 bottlenecks, limiting the normal and repair mode operation of the grid (134 bottlenecks in 2011, 79 in 2010 and 73 in 2009):
The Number of Bottlenecks
2009 73 79 2010 134 2011
The UNEG voltage quality has been improved 2012 195 significantly. No violations of the acceptable voltage level in the UNEG has been registered (such violations amounted to 71 in 2007, In 2012 the Company implemented a Also prepared for publication was the decreasing gradually). number of managerial solutions procedure for the Company divisions influencing the reliability of power interaction while determining the supply directly: limiting current loads; — the operation functions have been — the Company hosted the IV assigned to the Grid Control Center Interregional Competition with the of the Primorskoye PMES in participation of the operating accordance with the Operations and personnel working at substations Process Control Concept; and at the GCC of the Company. — the Company published a standard The initiatives planned for 2013 include Policy on the Interaction with the the following: Operating Personnel of Federal Grid — Further assignment of operating Company, a Procedure for the functions to GCCs of PMESs; Development and Implementation of Measures to Maintain the Required — Publication of standard instructions Voltage Level in the UNEG, and a for performing switching operations Company Standard “Instructions on at substations of Federal Grid the Calculations to select type, Company, and for the elimination of parameters and locations to install disturbances at the Company the reactive power compensators facilities, as well as for the conduct of within the UNEG”; negotiations and for the execution of documents at substations and at the — the Company finished the test Company GCCs; operation of the methods to calculate the limiting current loads while — Preparation of technical and preserving the mechanical strength organizational solutions for the of wires and the acceptable transfer of new generation dimensions of overhead lines. The substations under the control of test operation resulted in preparation PMES’s GCCs, eliminating the need of the methods of calculation of the for continuous on-duty personnel at limiting current loads for publication. such substations. APPENDICES
Reliability Provisions and Special Periods
During 2012 autumn-winter period of IDGC Holding have developed and peak loads the Company provided for approved a combined operation scheme 33.3% decrease of the specific accident for the power grid facilities and rate at the UNEG facilities, compared optimized the allocation of resources. with the same period of 2011. This These successful measures resulted in became possible due to special the obtainment by the Company of the measures taken by the Company, certificate of preparedness for including two-stage preliminary 2012-2013 autumn-winter period. The assessment of the readiness of the certificate confirming the timely and power grid facilities for operation properly fulfilled set of measures to during increased loads period. improve the reliability of consumer The Company general managers, power supply was obtained on meaning the MES directors and SDCs of November 9.
Renovation of the Company’ Fixed Assets
An increase of capital investments in The total amount of the Program new construction and reconstruction, financing in the period from 2013 to and the implementation of special 2017 comprises RUR 194,703 million. reliability improvement programs The planned complex reconstruction resulted in changing the trend for will cover 154 substations and 95 power ageing the Company facilities and transmission lines. equipment. In 2012 the implementation of the The program for the renovation of the Company’s renovation program resulted Company’s fixed assets as part of the in energizing 23 key facilities under 2013-2017 Investment Program of the complex reconstruction and 20 key Company was approved by the Ministry facilities under non-complex of Energy of the Russian Federation on reconstruction. The most vital facilities October 31, 2012. The renovation under renovation include 220 kV SS program intended to provide for the Irtysh, 220 kV SS Taksimo and 500 kV reliable and efficient operation of the SS Arzamasskaya. power grid complex implies the commissioning of 31 357 MVA and the reconstruction of 1 231 km of power transmission lines.
152 Design and Forecasted Ageing of Power Lines, Taking into Account the Changes in the Stable Operation of the Energy System* (the expected renovation of the power lines, taking into account the new construction is 40 years, with the length exceeding 120,000 km)
73% 70% 68% 65% 63% 60% Ageing (w/o renovation) 61.1% % 58 59.3% % 55% % 57.9 % 57.0 53% 56.6 54.7% % Ageing (taking into account the actual 50% 53.5% 55.6 and planned commissioning/repairs 52,2% pursuant 2013-2017 IP)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 FORECAST
In 2013 Federal Grid Company plans to invest RUR 41,208.76 million * During the implementation of the in the renovation of fixed assets pursuant the Renovation Program. Company’s 2013-2017 The volume of power commissioned at the facilities under complex Investment Program, as approved by the Order No renovation will comprise 8,170 MVA. 531 of the Ministry of Energy of the Russian Federation on 31.10.12.2012. APPENDIX 2. Innovative Development of the UNEG
The Innovative Development Program The goal of the UNEG innovative the cooperation with Russian academic development consists in the and higher education establishments. establishment of an Intellectual Energy Federal Grid Company launched the System with an Active-Adaptive Grid establishment of the active-adaptive (IES AAG) or Smart Grid. The electric power grid in 2010. The achievement of this goal involves a active-adaptive electric power grid transfer to the new quality grids based implies the unification of the power on the use of new principles and grids, the consumers and the producers processes of energy transmission and of electric energy in a unified transformation. This approach forms a automated system. Today the innovative part of the Innovative Development processes and solutions are tested in Program of Federal Grid Company for real time at the existing power grid the period till 2016*. facilities. The next stage is the The Program priorities include the establishment of energy clusters used development, testing and to test the solutions and the element implementation of the “breakthrough” base of the intellectual grid and the “improvement” technologies at (identification of cons and pros, and of the UNEG facilities. The processes synergy effects from the use of different include electric energy storage, high processes) for further multiplication of temperature superconductivity, direct these technologies within the UES of current energy transmission and other Russia. innovations. The Program is also intended to encourage the Company’s system of innovative activities, including the expansion of the Company’s research and engineering basis in Russia, attracting foreign partners, and
The Innovative Development Program priorities Technological effects Russian UES systemic — Improving the lightning-surge proofness of the reliability improvement overhead power transmission lines (decreasing the technologies accident rate by 25-30%); — Improving the explosion safety of the electric equipment; — Limiting the short-circuit currents in urban areas (savings on the installation of additional equipment at substations comprised 1.5-2 times); — Increasing the grid’s throughput capacity while * Federal Grid Company’s decreasing the grid’s mass and dimensions (HTSC Innovative Development Program till 2016 with the view till 2020 was technologies, new type wires for overhead power approved on April 7, 2011 by the transmission lines). Company’s Board of Directors (Minutes No 128, dated The Smart Grid Technologies — Development of electric equipment with controlled 07.04.2011). The Program is (improving the Grid’s flexibility electric characteristics (FACTS, RPSC, CSR, etc.); based on the Company’s Policy for and controllability) Innovative Development and — Development of self-recovery technologies for the Modernization and on the Concept power grid equipment and infrastructure; (principal provisions) of the Innovative Development Program, — Development of electric equipment based on power approved by the Company’s Board of Directors (Minutes No 120, electronics; dated 16.12.2010). — The use of electric power storage equipment (optimizing the generation and consumption, saving up to RUR 15 billion annually).
154 APPENDIX 2. Innovative Development of the UNEG
The Innovative Development Program priorities Technological effects Reducing the grid’s operating — Improving the grid’s automatics (preventive control, costs automatic changing of the grid’s characteristics and topology); — Reducing the grid elements installation and repair time. Lowering the cost of —Lowering the cost of equipment up-to-date, reliable and (including the cheapening of efficient equipment semi-conductor based power electronics by 2-3% per year).
2013-2017 Research and Development (R&D) Program and related financing costs
Pursuant to the Innovative Development Pursuant to the Company’s 2013-2017 Program the Company suggested to Investment Program the financing for higher education establishments, the 2013-2017 R&D Program of Federal research and development institutes, Grid Company* (hereinafter called the the design, production and other R&D Program) in 2012 comprised RUR industry organizations to participate in 3,100 million. The Company spent RUR the formation of the Company’s R&D 2,913.99 million (or 94% of the planned Program for 2013-2017. amount in 2012 and 153.5% compared to 2011).
R&D Program Financing, RUR billion 0.14 2008 0.39 2009 1 2010 1.9 2011
2012 3.1
*The Program was approved by the Order No 564 “On the Approval of the 2013-2017 R&D Program of JSC FGC UES” of the Company APPENDICES
R&D Priorities Works R&D Financing Structure Improving the New types of power grids’ energy Design High Education Developing the smart equipment for efficiency Organizations Establishments grid’s concept and substations and theory power transmission Academic lines SME 2 6 Organizations 8% 5% Institutions % 9 9 14% Production 2% Organization
14 25 62% 2 The power grids New types of control Industry R&D external impacts equipment and Intitutes monitoring systems Smart grid control automation systems
The Company’s Innovative Development and the UNEG condition monitoring Program sets the goals for R&D system, a general information model priorities to be achieved in 2020. The of the UES based on MEC standards, a goals to be achieved by 2020 include the set of programs for the automated following: control of the Smart Grid, the Smart — theoretical concepts, models and Grid’s architecture and the structure programs forming the basis of the of the unified process control system; Smart Grid; — the experimental prototypes of — new types of power equipment for equipment and systems for the electric power grids, including SF6 protection of overhead power insulated switchgear for digital transmission lines from the external substations, controlled shunt reactors impacts (thunderstorm, ice, and devices based on pollutions), including high composite high-temperature superconductivity towers, ice-resistant nano-composite (HTSC), vacuum triggered spark gaps, wires, automatic remote system for the grid power storage devices based direction finding and monitoring of on accumulators and super lightning discharge impacting the capacitors. All equipment should be overhead power transmission lines, systematically tested; the combined installations for ice melting and reactive power — new types of control equipment and compensation, etc. automation, protection and metering systems for the Smart Grid, including — the technical solutions pertaining to the Parametric Measurement Units the improvement of reliability of the (PMU), the complex systems for the power transmission along the UNEG relay and emergency protection grids, including the classifier, automation and the concept for the breaking down the consumers into development and application of the the levels of reliability required, the systems of relay protection and calculation of the numeric indicators automation for the Smart Grid; of the reliability of consumers of the electric power transmission services — the equipment and theoretical rendered by Federal Grid Company; foundations for the Smart Grid control systems, including a pilot Digital — the technical solutions and electric Substation test field, the systems for equipment to reduce the losses of the acquisition and transfer of data energy within the UNEG grids. 156 The Innovative Development results
Key Performance Indicators of the Program, Describing the Results of the 2012 Innovative Development
Indicator values
unit of 2012 2012 Group of indicators KPI measurement target actual Energy saving and The share of energy losses energy efficiency vs. the amount of energy supplied to consumers % 4.7 4.24
Improvement of The share of energy services rendered undersupplied to consumers in the total % 0.0026 0.0006 amount of energy supplied from the UNEG Efficiency of Innovative The number of patents number 44 64 Development resulting from R&D activities in 2012
In 2012 the Company implemented have a number of advantages. These certain elements of the intellectual grid transformers are completely safe (as and other innovative solutions at the they are explosion and fire safe), with facilities of Federal Grid Company. sulfur hexafluoride being used as An experimental prototype of the insulating and cooling agent. No less system for continuous monitoring of the important is an efficient compatibility of transformer overload capacity was such automatic transformers with commissioned at 500 kV SS Noginsk. gas-insulated switchgear, which The system makes it possible to use provides for the compact substation automated calculation methods which layout. This innovative solution will take into account the latest reduce the cost of construction of the developments in the field of control over closed-type electric power facilities in the thermal condition of transformers urban areas. at low-maintenance 110-750 kV The MES Ural, a branch of the Company substations. The implementation of the implemented the newest technology for system will contribute to the the strengthening of foundations of establishment of fully automatic 220-500 kV power transmission line maintenance-free substations. This is a towers, using high-strength carbon typical example of the Company’s fiber. The carbon fiber strengthening innovative developments with the end restores the carrying capacity of the results achieved. structure completely, blocking the The MES Center, a branch of the processes damaging the towers. This Company equipped the underground polymeric material is highly resistant to power supply substations of Skolkovo earthquakes. It is also resistant to Innovations Center with the newest chemicals and raptures – the fiber is gas-insulated automatic power stronger than metal. Besides, the transformers. This was the first time simplicity of use of carbon fiber reduces such automatic transformers were repair times, cutting down the repair used at substations operated in urban costs. This new method has been areas. Compared with the traditional developed by the Yekaterinburg Institute oil-insulated automatic transformers, for High-Strength Reinforcement gas-insulated automatic transformers Systems NII VSU INTER/TEK. APPENDICES
The innovations most popular with the The towers of new generation Company include suspended polymeric high-voltage power transmission lines insulators which is far better compared are made of steel many-sided stands, with the traditional porcelain insulators. which are highly reliable and durable. The polymeric insulators are more The stands are resistant to ice and wind hydrophobic, which is important for loads, and corrosion effects. The stands highly salted territories, such as Perm are quick to assemble and install. and Solikamsk. The insulators are also resistant to mechanical and electric loads, while being durable in operation. Other innovative equipment includes STC-1, a static thyristor compensator of reactive power, an essential element for the establishment of a new generation main power transmission grid.
The expert assessment of the Innovative Developments
Federal Grid Company is one of the borne by their foreign competitors (FGC leading companies in the Innovative UES- 2.64%, Edf – 0.7% and National Development Rating prepared by Expert Grid – 0.1%). The authors of the survey RA rating agency for state corporations also note that the innovative and companies with governmental development program of Federal Grid participation. In the opinion of the Company contains a number of authors of the rating, the energy breakthrough projects pertaining to the companies are more motivated to establishment of the intellectual energy develop their competitive advantages, in system based on the active-adaptive order to develop their business abroad. grid. No high and super-high voltage In the result, the R&D costs borne by mains can boast such technologies even the Russian energy companies are at the design stage, except those owned comparable and even exceed those by Federal Grid Company.
158 APPENDIX 3. GRI Guidelines Indicators (G 3.1 and the Industry Protocol for Electric Power Industry), Reflected in the Report
Indicator Location in the № Index Indicator Description Disclosure Report Comments Report Element Characteristics 1. Strategy and Analysis 1 1.1. A message from a person responsible for decision-making and occupying the Message from the top position in the hierarchy of the organization (for example the Chief Chairman of the Executive Officer, the Chairman of the Board of Directors, or an equivalent Management
position), publishing the Report, stating the significance of sustainable Board development for the organization and its strategy. 2 1.2. Description of key impacts, risks and opportunities. Chapter 4 2. Description of the Organization 3 2.1. Name of the organization preparing the Report Paragraph1.1 4 2.2. The main brands, products and/or services Paragraph 1.1, 7.1 5 2.3. Functional structure of the organization, Paragraph. 1.2 including main divisions, operation companies, subsidiaries and joint ventures 6 2.4. Location of the company headquarters Paragraph 1.1 7 2.5. The number of countries of the company operation and the names of the Paragraph 1.1 countries where the company’s chief operations are located, or those significant from the point of view of sustainable development issues covered by the Report 8 2.6. Proprietary and organizational and legal form Paragraph 1.1 9 2.7. The markets where the organization operates Paragraph 1.1 (including geographical scope, the sectors services and the categories of consumers and beneficiaries) 10 2.8. The organization’s scale, including: Paragraph 6.1 — The number of employees; Paragraph 7.1 — The net sales volume (for private sector organizations) or net receipts (for state-owned organizations); — The total capitalization broken down by borrowed and own capital (for private sector organizations); — The quantitative characteristics of products or services
11 2.9. Essential changes in the scale, structure or proprietary form of the organization Paragraph 1.1, 1.2 during the reporting period, including: — Location or the nature of the change in operations, including opening, closing or extending the operations; — Any changes in the structure of the equity and other actions pertaining to the formation, maintenance or changing the capital (for private sector organizations) 12 2.10. Awards received during the reporting period Paragraph 6.1 3. Parameters of the Report 13 3.1. Reporting period (for example, a fiscal/calendar year) for the information Full Annotation reported 14 3.2. Publication date of the last of the preceding reports (if any) Paragraph 5.3
15 3.3. Reporting cycle (annual, biannual, etc.) Annotation 16 3.4. Contact information to enquire about Contact the Report or its content information 17 3.5. The Report content determination process, including: Annotation, The Report content definition process is — Determination of relevance; Paragraph 10.1, based on stakeholder dialogues — Determination of the Report priority topics; 10.2, 10.3. (conducted in 2012-2013) — Identification of stakeholders considered to be the potential users of the Report The priority topic (Human Capital Management in Federal Grid Company) is conditioned by the focused attention of stakeholders to this particular aspect of the Company’s activity in 2012.
The potential users of the Report include the representatives of stakeholders participating in projects implemented jointly with the Company, as well as the Company business partners. The Company employees are among the key users of the Report. APPENDICES
Indicator Location № Index Indicator Description Disclosure in the Report Comments
18 3.6. Limits of the Report (for example, countries, divisions, subsidiaries, leased Annotation facilities, joint ventures and suppliers) 19 3.7. Specify any limits in the scope of the Report Annotation 20 3.8. The grounds for the inclusion to the Report of data on joint ventures, No grounds subsidiaries, leased facilities, the transfer of a part of functions to external contractors and other organizational units that can exert considerable influence on the comparability with the preceding reports, and/or other organizations
21 3.9. The methods of measurement of data and calculations, including assumptions Annotation The Report mostly includes the data obtained in and methods used to assess the indicators and other data included into the the result of direct measurement. In some Report cases (for example, to calculate the volume of green gas emissions) indirect calculation methods were used, based on the rated values of individual parameters
22 3.10. A description of the meaning of any re-definitions of the information contained No re-definitions are available in preceding reports, and of the grounds for such re-definitions (for example, mergers or acquisitions, changes in the reporting cycles, the nature of business and the evaluation methods) 23 3.11. Essential changes as compared with preceding reporting cycles, pertaining to The limits of the Report are unchanged the scope, the limits, and the methods of measurement used in the Report 24 3.12. The table listing the position of standard elements in the Report Appendices 3 25 3.13. The policy and practical approaches used for the external approval of the Chapter 10 Report. If no approval report is attached to the Sustainable Development Report, describe the subject and grounds for any external approval obtained. Describe also the nature of relationships between the reporting organization and the approving authority
1.Governance, Liabilities and Interaction with Stakeholders 26 4.1. The organization’s governance structure, including main committees included Paragraph 2.1 into the supreme governing body, responsible specific tasks, for example, for the development of strategy or for overall supervision over the operations of the organization 27 4.2. Specify, whether the chairman of the supreme governing body is Paragraph 2.1 simultaneously an executive manager of the company (if so, provide details on the role of this manager in the organization’s governance and what are the reasons for such state of affairs) 28 4.3. Specify the number of non-executive members of the supreme governing body, Paragraph 2.1 and/or the members who do not belong to the executive management of the company (for organizations having a unitary Board of Directors) 29 4.4. The mechanisms used by the shareholders or the employees of the Paragraph 2.1 organization to direct the activities of the supreme governing body, or to give recommendations to it 30 4.5. A dependence between the payments to the members of the supreme Paragraph 2.2 governing body, the executive top managers and senior managers (including severance pay) and the organization’s performance results (including social and environmental performance results) 31 4.6. The processes existing within the supreme governing body, used to prevent the Paragraph 2.1 conflict of interests 32 4.7. The processes used to determine the qualification and competencies of the In accordance with the Policy on HR and members of the supreme governing body, required to direct the organization’s Remuneration Committee of the Board of strategy, including the economic, environmental and social performance Directors of Federal Grid Company, the results competencies of the Committee include the development of suggestions to determine the essential conditions of agreements with the members of the Company’s Board of Directors. Besides, the Committee determines the criteria for the selection of candidates to the members of the Company’s Board of Directors, and performs a preliminary assessment of said candidates 33 4.8. Internally developed mission, statement of values, corporate codes of conduct Paragraph 1.3 and principles essential from the point of view of economic, environmental and social performance results, and the degree of their practical implementation
34 4.9. The procedures used by the supreme governing body to supervise over the Paragraph 2.1 organization’s assessment of its economic, environmental and social performance and to govern the above, including risks and opportunities, and the adherence or compliance with the international standards, the codes of corporate conduct and principles
160 Indicator Location № Index Indicator Description Disclosure in the Report Comments
35 4.10. The processes of performance assessment of the supreme governing body in Chapter 2 connection with the economic, environmental and social performance results of the organization Explanation of whether the organization applies the precautionary principle and Chapter 9 36 4.11. how Externally developed voluntary economic, environmental and social charters, Chapter 9 37 4.12. systems of principles or other initiatives joined or supported by the organization
38 4.13. The membership in associations (industry associations, for example) and/or Federal Grid Company is a member of national and international organizations on the protection of interests, where RaEl Association. The activities of 16 the organization: research committees of SIGRE are part — occupies a position in governing bodies; of Federal Grid Company’s competency. The participation in the work of these — participates in projects or committees; committees contributes to the sharing of — provides material financing beyond the membership contributions; experience and information in the field of innovative developments pertaining to — considers its membership to be strategic electric power equipment, its diagnostics and modernization and a number of other issues related to the functioning of the global electric power systems.
39 4.14. A list of stakeholders involved in interaction with the organization Chapter 10
40 4.15. The grounds for the identification and selection of stakeholders for the purpose Chapter 10 Decisions pertaining to the interaction of further interaction with them with stakeholders are made by the Company management based on the fundamental concept of the Company responsibility (subparagraph 5.1) and the understanding of the Public Agenda in the field of sustainable development (subparagraph 5.2). The evolution of the approach to the interaction with stakeholders is presented in subsection 5.3 of this Report.
41 4.16. Approaches to the interaction with stakeholders, including interaction Chapter 10 periodicity by stakeholder types and groups 42 4.17. The key topics and interests raised or identified in the process of interaction Chapter 10, with the stakeholders and how the organization responded to said topics and APPENDIX 5 interests, including the organization’s reporting
2. Information on Management Approach and Performance Indicators Economic Performance Indicators 43 ЕС1 Created and distributed economic value, including income, operating costs, Full Paragraph 7.1 employee payments, donations and other community investments, undistributed profit, payment to capital suppliers and countries
44 EC3 Provision for the organization’s liabilities related to pension plans and benefits Partial Paragraph 6.4 set 45 ЕС5 The range of entry level salary vs the preset minimal salary in the key regions of Full Paragraph 6.1 operation
46 ЕС6 The policy and practical approach to the purchasing from local suppliers and the Full Paragraph 7.1 share of such purchases in the significant regions of operation of the organization 47 ЕС7 Procedures for the hire of local personnel and the share of top managers hired Full Paragraph 6.1 locally in the significant regions of operation of the organization
48 ЕС8 The development and impact of investments in infrastructure and services Partial Chapter 7 rendered for the public in the first place, by way of natural, commercial or charitable participation Environmental Performance Indicators 49 EN2 The share of materials produced from processed or recycled wastes Full Paragraph 9.2
50 EN5 The energy saved in the result of initiatives on reducing energy consumption Full Paragraph 9.3 and increasing energy efficiency
51 EN8 The quantity of water intake, broken down by sources Full Paragraph 9.2 52 EN9 The water sources influenced by the organization’s water intake Full Paragraph 9.2 APPENDICES
Indicator Location № Index Indicator Description Disclosure in the Report Comments
53 EN10 The share and total volume of water used repeatedly and reused Partial Paragraph 9.2 54 EN11 The location and the area of lands owned, leased, or managed by the Full Appendices 6 organization, and located on natural territories and on territories with valuable biological diversity beyond them or adjoining such territories
55 EN12 The description of material impacts of activities, products, and services on the Full Paragraph 9.2 biological diversity on the protected natural territories and on the territories with valuable biological diversity beyond them 56 EN13 The preserved or recovered habitats Full Paragraph 9.2 57 EN14 The strategies, implemented actions and future plans pertaining to managing Full Paragraph 9.2 the impacts on biological diversity
58 EN15 The number of species entered into the International Union for Conservation of Full Paragraph 9.2 Nature Resources’ Red List and into the national list of protected species, with habitats located on the territory affected by the organization’s operation, broken down by the degree of threat to the existence of said species 59 EN16 Full, direct and indirect emissions of greenhouse gases, specifying their mass Partial Paragraph 9.2
60 EN17 Other essential indirect emissions of greenhouse gases, specifying their Full Paragraph 9.2 masses 61 EN18 The initiatives on greenhouse gas emission reduction and their results Partial Paragraph 9.3
62 EN19 The emission of ozone-destructive substances, specifying their masses Full Paragraph 9.2 EN20 Emission of NOХ, SOX and other heavy pollutants to the atmosphere, specifying Full Paragraph 9.2 63 their masses
64 EN21 The total amount of drainage, specifying the quality of waste waters and the Full Paragraph 9.2 receiving facility
65 EN22 The total amount of wastes broken down by type and handling method Partial Paragraph 9.2 66 EN23 The total amount and the volume of essential spillages Full Paragraph 9.2 67 EN24 The mass of transported, imported, exported or processed wastes which are Full Paragraph 9.2 considered hazardous pursuant to Appendices I, II, III and VIII to the Basel Convention, and the share of wastes transported between the countries
68 EN25 The ownership, size and biological diversity protection status of water bodies Full Paragraph 9.2 and related habitats, which are influenced by the organization’s discharge and the surface water from the territory of the organization’s facilities
69 EN26 The initiatives to mitigate the environmental impact of products and services Full Paragraph 9.2 and the resulting mitigation scale
70 EN27 The share of sold products and related packaging returned to the manufacturer Full Paragraph 9.2 for recycling, broken down by categories
71 EN28 The material fines in money terms and the total number of non-financial Full Paragraph 9.1 sanctions imposed for non-compliance with the environmental laws and the normative requirements
72 EN29 Any material environmental impact of transportation of products and other Full Paragraph 9.2 goods and materials used for the operations of the organization and for the transportation of the workforce
73 EN30 The total costs and investments in environmental protection, broken down by Full Paragraph 9.2 types Labor Organization Approach and Decent Work
74 LA1 The total number of employees broken down by employment type, labor Full Paragraph 6.1 contract and region
75 LA2 The total number of employees and employee turnover rate broken down by Partial Paragraph 6.1 age, sex and region
76 LA4 The share of employees covered by the collective bargaining agreements Full Paragraph 6.1 77 LA7 The level of occupational traumatism and occupational deceases, the lost Partial Paragraph 6.5 workdays ratio and the absence from work ratio, and the total number of work-related lethal incidents, broken down by regions
78 LA10 The average number of training hours per an employee annually, broken down Partial Paragraph 6.3 by employee category 79 LA12 The share of employees periodically assessed in terms of their performance Partial Paragraph 6.1 and career development 80 LA13 The composition of the organization’s governing bodies and personnel broken Full Paragraph 6.1 down by sex and age, specifying the minority representatives, and other diversity indicators
162 Indicator Location № Index Indicator Description Disclosure in the Report Comments Indicators Pertaining to Human Rights 81 HR1 The percentage and the total number of material investment agreements, Full The Company’s investment agreements including the human rights provisions or assessed from the point of view of were not verified and assessed from the human rights point of view of human rights
82 HR2 The share of significant suppliers and contractors assessed from the point of Full Suppliers and contractors were not view of human rights, and actions taken assessed from the point of view of human rights. Their share is 0% 83 HR6 The activity bearing a considerable risk of children’s labor, and the actions Full Not applicable due to advanced level of taken to eliminate it production and strict requirements as to the occupational training of employees.
84 HR7 The activity bearing a considerable risk of forced or mandatory labor, and Full Not applicable actions taken to eliminate the forced or mandatory labor
Indicators Pertaining to the Interaction with the Public 85 SO4 The actions taken to fight corruption Full Paragraph 8.3
86 SO5 The position in relation to the state policy and the participation in the formation Full — The Federal Grid Company participates in the of the state policy and lobbying formation of the state policy by preparing petitions to the government of the Russian Federation, the chambers of the Federal Assembly of the Russian Federation, and the federal executive authorities. The petitions contain suggestions to the drafts of normative regulations being considered by the federal authorities listed above. The Company representatives substantiate their suggestions, participating in work groups established by federal executive authorities, the committees and commissions established by the Federation Council and the State Parliament. These activities result in the preparation of drafts of federal laws, governmental decrees and normative regulations of the federal executive authorities. The drafts take into account the specific features inherent to the functioning and development of the electric power grid facilities. The drafts are prepared in accordance with law development plans of the legislative and executive authorities.
Product Responsibility Indicators The practices pertaining to the customer satisfaction, including the results of 87 PR5 Full Paragraph 7.1 customer satisfaction degree surveys
Indicators of GRI Industry Protocol for Electric Power Industry The Organization’s Area of Business 88 EU3 The number of business accounts of household, industrial, institutional and Partial Paragraph 1.1 commercial customers
89 EU6 The governing method providing for the operational preparedness and the Full Appendix 1, reliability of electric power supplies in short, middle and long term Appendix 2
90 EU8 Scientific research and developments intended to provide for the reliable supply Full Appendix 2 of power and to contribute to sustainable development, plus related costs
91 EU12 The losses of electric energy during transmission in terms of percentage of the Partial Paragraph 1.1 total volume of the electric energy Environmental Section 92 Aspect – Long-term strategy to gradually stop using the materials with high and low Full Paragraph 9.3 Materials content of polychlorinated biphenyl
93 Aspect – Water The drainage basins and reservoirs management methods to provide for the Full Paragraph 9.3 complex usage (for example, for irrigation, drinking water supply, environment protection, etc.). The long-term plans for the protection of water resources in order to provide for the needs of the organization. The description of criteria for controlling the maximal/minimal inflow of surface waters and the volume of ground waters, and the method to identify and maintain these indicators
94 Aspect – The methods of protection of greenery from blights and to control the greenery Partial Paragraph 9.2 Biological along the power transmission and distribution lines Diversity Partial Paragraph 9.2 Full Appendices 6
Full Paragraph 9.2
Full Paragraph 9.2 Full Paragraph 9.2
58 EN15 Full Paragraph 9.2
59 EN16 Partial Paragraph 9.2
60 EN17 Full Paragraph 9.2
61 EN18 Partial Paragraph 9.3
62 EN19 Full Paragraph 9.2 EN20 Full Paragraph 9.2 63
64 EN21 Full Paragraph 9.2
65 EN22 Partial Paragraph 9.2 66 EN23 Full Paragraph 9.2 67 EN24 Full Paragraph 9.2
68 EN25 Full Paragraph 9.2
69 EN26 Full Paragraph 9.2
70 EN27 Full Paragraph 9.2
71 EN28 Full Paragraph 9.1
72 EN29 Full Paragraph 9.2
73 EN30 Full Paragraph 9.2
74 LA1 Full Paragraph 6.1
75 LA2 Partial Paragraph 6.1
76 LA4 Full Paragraph 6.1 77 LA7 Partial Paragraph 6.5
78 LA10 Partial Paragraph 6.3
79 LA12 Partial Paragraph 6.1
80 LA13 Full Paragraph 6.1
APPENDICES
Indicator Location № Index Indicator Description Disclosure in the Report Comments 95 Aspect - Emissions, The management strategy and the methods of storage of different types of Full Paragraph 9.2 liquid industrial wastes radioactive nuclear wastes and production wastes
96 CommEN20 NOx, SОx and other essential emissions to the atmosphere per a MWh of the Partial Paragraph 9.2 net volume of the electric energy produced. The examples of “other essential emissions to the atmosphere”, include but are not limited to the emissions of mercury, coal dust, ash sediment ponds and traps and dust generated during the dewatering of a water body 97 CommEN22 The total mass of wastes by type and method of removal of wastes, including Paragraph 9.3 PCB wastes Social Section 98 EU14 The programs and processes providing for the availability of qualified workforce Full Paragraph 6.1 99 EU16 The policy and requirements regarding the health and safety of employees and Partial Paragraph 6.5 of the contracted and subcontracted employees Social Responsibility (Governance Methods) 100 EU19 The participation of stakeholders in decision-making process, said decisions Partial Paragraph 10.1 relating to the planning of development of the Unified (all-Russian) National Energy Grid
164 Comments
APPENDIX 4. A Report on the Fulfillment of the 2012 CSR Plans and Obligations of Federal Grid Company (Draft)
Plans and Obligations Completion Report Comments
1. Preparation of the 2012 Corporate Social Responsibility and Sustainable Not completed Development Report of Federal Grid Company at A+ compliance level (GRI Guidelines)
2. Approval and launch of the Company’s Anticorruption Policy Completed The information is to be found in Chapter 8
3. Improving the corruption prevention system, legal education and the Completed The information is to be found in Chapter 8 formation of the fundamentals for the law-abiding behavior of the Company employees
4. Implementation of the System for Anticorruption Control of the Company Completed The information is to be found in Chapter 8 purchasing operations
5. Implementation of anticorruption expert assessment of all organizational Completed The information is to be found in Chapter 8 and administrative documents of the Company’s executive body
6. Implementation of a universal procedure for conducting anticorruption Completed The information is to be found in Chapter 8 expert assessment of documents in the Company branches and SDCs
7. Establishment of the Young Specialists Council of the Company Not completed
8. Establishment of the competency centers based on higher education Not completed establishments
9. Implementation of the 2012-2013 pilot project of Corporate Housing Completed The information is to be found in Chapter 8 Program. The Program includes 397 housing premises in five Company branches in 11 subjects of the Russian Federation
10. The Company will prepare stakeholder communication plans to discuss and Not completed Completion postponed to 2013 solve the issues on the Public Agenda of the CSR and sustainable development. The plans will be ready by the end of 2012 and the Company will report on them in the next 2012 non-financial report (an obligation from the 2010 Report left unfulfilled). APPENDICES
APPENDIX 5. A Table of Stakeholders’ Suggestions Pertaining to the Disclosure of Information in the Report, Voiced at the Dialogue on 05.04.2013 and at the Public Hearings on 26.04.2013.
№ The Description of the Stakeholders’ Suggestions As Disclosed in the Report Suggestions on the Disclosure of Information in the 2012 Report
Recommendations suggested by the representatives of higher education establishments
1 To include the information on the changes in HR management (if any) pursuant The information will be acquired during the preparation of the 2013 Report to the new state regulation requirements in line with ISO, ISAE, OHSAS, etc. standards (in connection with joining the WTO)
2 To include the personnel involvement assessment The information will be acquired during the preparation of the 2013 Report 3 To include the analysis of HR lifts The information will be acquired during the preparation of the 2013 Report 4 To describe the cooperation of Federal Grid Company with the Ivanovo State Paragraph 6.2 Energy University and other higher education establishments 5 To include a paragraph on the provision of occupational health and The information will be acquired during the preparation of the 2013 Report psychological training of employees 6 To describe an approach to the development of the production culture The information will be acquired during the preparation of the 2013 Report 7 To include the information on the development of occupational standards The information will be acquired during the preparation of the 2013 Report
8 To disclose the information on the Company interaction with the academic Paragraph 6.2 scientific community and the collegial university government bodies, and with expert councils attached to the partner higher education establishments 9 To describe the students support mechanisms in the regions, meaning The information will be acquired during the preparation of the 2013 Report education payments, social benefits, etc. 10 To disclose the information on the Company’s scholarship programs for The information will be acquired during the preparation of the 2013 Report students
Recommendations suggested by the representatives of the state authorities
11 To include the data on working efficiency calculations The information will be acquired during the preparation of the 2013 Report 12 To assess the HR reserve turnover The information will be acquired during the preparation of the 2013 Report 13 To include the statistical data on the decrease of failure rate or the increase of The information will be acquired during the preparation of the 2013 Report reliability in the result of training, as an indicator of the training quality 14 To include the indicators of training centers’ efficiency The information will be acquired during the preparation of the 2013 Report 15 To describe an approach to talent management The information will be acquired during the preparation of the 2013 Report
Recommendations suggested by the environmental protection organizations
16 To disclose the statistical data on birds mortality rate resulting from the Paragraph 9.2 operations of Federal Grid Company 17 To describe the indirect hothouse gas emissions calculation method Paragraph 9.2 18 To disclose the information on all compensation initiatives in “The Key Paragraph 9.2 Environmental Impact Indicators” section under “Impacts on the Flora and Fauna, and the Soils” provision 19 To improve the content of sections describing biological diversity, the natural The information will be acquired during the preparation of the 2013 Report areas under preferred protection and birds mortality 20 To describe the “Impact on Biological Diversity” in “The Environment Protection The information will be acquired during the preparation of the 2013 Report Company Initiatives” section in greater detail
Recommendations suggested by the experts and business community
21 To include the information on HR management KPIs Paragraph 6.5 22 To list the key HR management documents Paragraph 6.1 23 To describe the comprehensive and continuous leadership’s approach to HR The information will be acquired during the preparation of the 2013 Report management and to emphasize the goals for the investments in human capital
166 № The Description of the Stakeholders’ Suggestions As Disclosed in the Report
24 To focus on high-performance workplaces, stressing the fact that an increase The information will be acquired during the preparation of the 2013 Report in working efficiency is not possible without the workforce reductions (to show that the Company analyses the situation)
25 To describe the activities pertaining to the development of competency profiles The information will be acquired during the preparation of the 2013 Report and position certificates 26 To describe the employee assessment procedure in place for HR reserve Paragraph 6.1 27 To explain, whether there is a division into the promising reserve (young Paragraph 6.1 specialists) and the reserve composed of experienced employees 28 To describe how the HR reserve formation experience acquired in the past Paragraph 6.1 (from 2006) is used today 29 To include the HR reserve dynamics numbers Paragraph 6.1 30 To describe the effects of the HR reserve members assessment on the The information will be acquired during the preparation of the 2013 Report development of occupational standards To explain (if necessary) if there is a division in Federal Grid Company between The information will be acquired during the preparation of the 2013 Report 31 the labor protection and labor safety training To include the information on special training (if any) on document development The information will be acquired during the preparation of the 2013 Report 32
To include the information on the Company participation in the presidential The information will be acquired during the preparation of the 2013 Report 33 program on engineer training and whether any of the subprograms are implemented jointly with higher education establishments 34 To provide information on the implementation of the behavioral audits in the The information will be acquired during the preparation of the 2013 Report Company (if any) To describe the employee loyalty assessment program results, including the The information will be acquired during the preparation of the 2013 Report 35 things employees like and those they do not, and the Company’s response
Recommendations suggested by the representatives of the industry organizations
36 To include the information on the number of employees in need of housing The information will be acquired during the preparation of the 2013 Report conditions improvement, and to describe the interaction of such employees with the Company management 37 To provide information on the waste disposal procedures adopted by the Paragraph 9.2 Company, and whether the waste disposal contractors comply with the international environment protection standards 38 To include the Company employee satisfaction survey results, specifying the The information will be acquired during the preparation of the 2013 Report mechanisms used during the survey
39 To describe the conflict settlement procedures adopted by the Company The information will be acquired during the preparation of the 2013 Report
40 To complement the Report with the information on the internal HR substitution The information will be acquired during the preparation of the 2013 Report ratio and working efficiency 41 To disclose the information on labor compensation fund The information will be acquired during the preparation of the 2013 Report APPENDICES
APPENDIX 6. A List of Natural Areas in Preferential Protection (NAPP) Accessible for Federal Grid Company for the Purposes of Operation
A type of title Location (RF region, № Federal Grid Company Facility Land area, hectares to the land city, etc.) Name of NAPP MES of Center
Upper Don PMES
1 220kV HVL Voronezhskaya 1.2 (11.944km) 35.8 Leased Russia, Voronezh The Voronezh State Natural Region, Verkhnehavsky Biospheric Reserve District Volga-Don PMES
2 500 kV HVL Balashovskaya-Lipetskaya (8.468km, supports 0.3157 Leased NN 894-9150) Novokhopersk District, The Khoper State Natural Voronezh Region Reserve 3 500 kV HVL Balashovskaya – Lipetskaya 2 (with a branch to Novovoronezhskaya NPP), 8.777 km, supports NN 894-916. 0.8406 Moscow PMES Moscow Region, 4 220 kV Kashira-Oka 1,2 11.97 In actual use The Prioksky Terrace State Serpukhov District Biospheric Reserve
Priokskoye PMES Kaluga Region, 5 500 kV HVL Smolenskaya NPP – Kaluzhskaya 0.984 In open-ended Ugra National Park permanent use Ukhnovsky District
0.135 Leased Kaluga Region, 6 220 kV HVL Cherepet – Liteinaya Kaluga Blaze Reserve Kozelsky District 7 220 kV HVL Cherepet – Tsementnaya 0.051 500 kV HVL Smolenskaya NPP - Mikhailovskaya Kaluga Region, 8 2.912 Leased Uljanovsky District Chernozemnoye PMES
9 500 kV HVL Novobryanskaya – Yelets (commissioned in 185.5 Leased Orel Region, Orel Forest National Park 1997, supports NN 212-308, 26.5km long) Khotynetsky District MES Siberia Khakasskoye PMES 10 500 kV HVL Sayano-Shushenskaya HPP – Leased Republic of Khakassia Shoria National Park Novokuznetskaya (HVL-541) 26.61 11 500 kV HVL Sayano-Shushenskaya HPP – Novokuznetskaya (HVL – 542) 12 220 kV HVL Shushenskaya Backbone – Minusinskaya Leased Krasnoyarsk Region Shushenskoye Pine Wood Backbone (D-37/38) National Park 0.07488 13 220 kV Shushenskaya Backbone – Turan (D-46) Zabaikalskoye PMES 14 220 kV HVL Mysovaya – Vydrino (HVL-273) Leased Republic of Buryatia The Baikal State Natural Biospheric Reserve 15 220 kV Mysovaya – Baikalskaya (HVL-274) 3.5418 16 500 kV HVL Irkutsk – Gusinoozersk SDPP MES East Khabarovskoye PMES Bolshekhekhzirsky State 17 220 kV double-circuit HVL Khekhzir-Gidroliznaya with a 48.0 Leased Khabarovsk Region branch to Kruglikovo/t SS L-227 and Khekhzir – Natural Reserve Dormidontovka/t with a branch to Kruglikovo/t L-228 from support 14 till support 38
168 A type of title Location (RF region, № Federal Grid Company Facility Land area, hectares to the land city, etc.) Name of NAPP MES Urals South Ural PMES 18 500 kV HVL Zlatoust-Chelyabinskaya 22.7 (protected zone), Leased Chelyabinsk District, The Ilmen State Reserve named 0.5865 (under Miass City County after V.I. Lenin (the Ural Branch of supports) the Russian Academy of Sciences)) Permskoye PMES Leased 19 500 kV HVL Votkinskaya HPP - Vyatka 0.064 Udmurtia Republic, Netchkinsky National Park Votkinsky District MES South Rostovskoye PMES Rostov Region, 20 330 kV HVL NchSDPP - Yuzhnaya 2.0637 Leased Lysogorka Kuibyshevo District 0.5356 Rostov Region, 21 220 kV HVL R20-T10 Leased Kamennaya Balka Myasnikovsky District 1.2435 Rostov Region, 22 220 kV HVL R30 – T15 Leased Tchulekskaya Balka Myasnikovsky District 0.2719 Rostov Region, 23 500 kV HVL – 509 Rostov NPP Shakhty Leased Dendrological Park Volgodonsk 0.1905 Rostov Region, 24 220 kV HVL NchSDPP - NZB Leased Persianovskaya Steppe Reserve Oktyabrsky District 0.0339446 Rostov Region, 25 220 kV HVL Pogorelovo - Donetskaya Leased Glubokaya River Chalk Kamensky District
26 500 kV HVL – 509 Rostov NPP - Shakhty 0.6612 Leased Rostov Region, Donskoi Natural Park Tsimlyansk District 27 220 kV HVL Central SDPP – SH30 0.40525 Leased
28 500 kV HVL – 505 Rostov NPP - Tikhoretsk 0.9328 Leased Rostov Region, Veselovskoye Water Reservoir Proletarsky District and Manych-Gudilo Lake 29 ВЛ 220 кВ РП Волгодонск - Сальск 1.4255 Leased
Stavropolskoye PMES 30 330 kV SS Mashuk 5.5107 Leased Stavropol Region, Located on health resort grounds Pyatigorsk
31 330 kV HVL -03 HPP-2-Mashuk 0.0662 Leased Stavropol Region, Located on health resort grounds Zheleznovodsk
32 330 kV HVL – 04 Mashuk – Prokhladnaya. The land area is 0.0662 Leased Stavropol Region, Located on health resort grounds part of a populated locality Zheleznovodsk
Sochinskoye PMES
33 220 kV HVL Psou-Poselkovaya with 220 kV SS Poselkovaya 10.66 Servitude Krasnodar Region, Sochi Sochi National Park National Park
34 500 kV HVL Vardane-Psou Section till the Georgian Border 3.0917 In use Krasnodar Region, Natural areas in preferential Sochi, Central, protection Lazarevsky, Khosta, and Adler Districts
35 220 kV overhead HVL 220 kV SS Psou, support No 47 0.229368 In actual use Krasnodar Region, Natural areas in preferential (11.06km to the Georgian border) Sochi, Adler District protection
Natural areas in preferential 36 220 kV overhead HVL, 220 kV SS Psou, support No 47 (0.67 0.02542 In actual use Krasnodar Region, protection km to the Georgian border) Sochi, Adler District
Located within the second zone 37 220/110/10 kV SS Dagomys – the land is a part of a 3.86 In actual use Krasnodar Region, populated locality Sochi, Lazarevsky of the mountain-sanitary District and Dagomys protection county Located within the second zone 38 220/110/10 kV Psou – the land is a part of a populated 2.59 In actual use Krasnodar Region, locality Sochi, Adler District, of the mountain-sanitary Veseloye Village protection county MES Volga Nizhegorodskoye PMES Smolny National Park 39 500 kV HVL Ulianovskaya Severnaya (24.5km) 500 kV HVL Republic of Mordovia, Ulianovskaya Yuzhnaya (24.4km) 244.4 Leased Ichalkovsky District Mid-Volga PMES Samarskaya Luka National Park 40 500 kV HVL Volzhskaya HPP named after Lenin – Samara Region, Veshkaima (Kuibyshevskaya-Yuzhnaya) (14.91km) 1.481 hectares under Leased Stavropol District, the supports Zhigulevsk APPENDICES
Land area, A type of title Location (RF region, № Federal Grid Company Facility hectares to the land city, etc.) Name of NAPP Lower Volga PMES 41 220 kV HVL Saratov HPP – Kubra (2.52km) 4,5 hectares under Leased Saratov Region Kvalynsky National Park the supports MES North-West Karelskoye PMES 42 L-397 330 kV HVL Kolskaya NPP – Monchegorsk, supports Monchegorsk District, NN 91-105 (10 intermediate supports and 4 anchor 0.515 Murmansk Region supports) on the territory of the reserve. (western part of Kolsky The Lapland State Biospheric Leased peninsula) Natural Reserve L-398 330 kV HVL Kolskaya NPP – Monchegorsk, supports NN 88-102 (10 intermediate supports and 4 anchor supports) on the territory of the reserve.
43 L-392 330 kV HVL Kondopoga - Petrozavodsk, supports NN Kondopoga District, not Sanitary protection county, 81-90, (3 anchor and 6 intermediate supports) 0.16 far from Kondopoga city, termed as Marzialnye Vody Leased 35 kV cable HVL Laskelya – Valaam No1, 632 wooden near Marzialnye Vody Sanatorium health resort supports, 90 anchor supports and 542 intermediate supports Settlement forests 44 35 kV cable HVL Laskelya – Valaam No1, 632 wooden Located in Sortavala District of Karelia supports, 90 anchor supports and 542 intermediate 0.162 Valaam Archipelago Natural Republic, in the northern supports Park part of Ladoga Lake, in Leased 22 km from the 35 kV SS Valaam 0.130 mainland 6kV DPP Valaam 0.232
170 INDEPENDENT ASSURANCE OF SOCIAL REPORTING
Addressed to Open Joint Stock 4. To assess the degree of compliance Company "Federal Grid Company of of the Report with B+ level of the Global Unified Energy System" and its Reporting Initiative Sustainability stakeholders. Reporting Guidelines, declared by the Company. Introduction 5. To make recommendations on the preparation of corporate public This audit assurance refers to the non-financial reporting for future public report on social responsibility periods. and corporate sustainability of Federal Grid (hereinafter - the Report) based on 2012 FY results. The report prepared by Type and Level of the Assurance Federal Grid (hereinafter - the The assurance of the Report is based Company), which is responsible for the on the following provisions of АА preparation, compilation and 1000AS (2008) standard: presentation of all information in the Report. Within the agreed task CJSC — the type of assurance - 2 ("Type 2 - Bureau Veritas Certification Rus bears AccountAbility Principles and responsibility only to the Company for Performance Information"), which the results of work on limited provides for assessment of the assurance of the Report and does not degree of compliance of the above assume responsibility to any party for accountability principles in the decisions made, deferred or withdrawn aggregate with the assessment of on the basis of the assurance. the reliability of performance indicators (data, statements) included in the Report; Objectives and Criteria for — the level of assurance - "moderate". Assurance Work on the assurance of the Report is performed on the basis of a formalized Methodology and Scope of Work methodology of assurance standards Performed on the Assurance AA1000 Assurance Standard (AS) 2008 — Interviews with the Company`s and audit of non-financial reporting management` representatives to ISAE 3000. clarify how the Company accounts for While working on the Report the key aspects of corporate social following problems were set and solved: responsibility in forming long-term business development strategy and 1. To assess compliance with the how these aspects are integrated principles of inclusivity in the Report, into the Company`s business materiality and responsiveness, processes system. described in AA1000 Accountability Principles Standard (APS) 2008. — Interviews with key personnel of the Company, involved in the preparation 2. To assess the level and quality of of various sections of the Report, to stakeholder`s engagement in the confirm the fairness of the preparation of the Report in accordance statements and information in the with AA1000 Stakeholder Engagement Report. Standard (SES) 2011. — Verification of the objectives` 3. To assess the degree of the implementation in the field of implementation of principles by the corporate social responsibility for Company to determine the content and 2012 set by the Company in quality of the Report on Global 2010-2011reports. Reporting Initiative Sustainability Reporting Guidelines, including the — Verification of documents context of sustainable development, the (regulations, guidelines, etc.) and complete coverage of material topics information (including the primary and indicators, balance, comparability sources of information), which and accuracy etc. characterize the results of responsible business practices in the
field of corporate social — participation of a representative of The Basis for the Formation of diagrams, which have a positive responsibility. Bureau Veritas Certification Rus in our Opinion effect on the overall perception of the — Assessment of the effectiveness of the Company's dialogue with reporting information. stakeholders (April 5, 2013) and Work on the assurance of the Report economic, environmental and social was based on the analysis of supporting — The Company has effective aspects of managerial approaches public hearings on the Report (April management systems, which can 26, 2013); information provided by the Company`s applied by the Company. management and its structural identify material economic, social — Verification of the Company`s — visit of assurer the Company`s divisions, on data of the state statistical and environmental aspects of the communications with stakeholders in headquarters in May 2013, interviews reporting and on other information activities, plan, manage and improve the reporting period, including via with managers and specialists on from available sources using analytical related processes, define the the presence of the representatives environmental management, methods for confirmation. Assurance expectations of stakeholders on the of Bureau Veritas Certification Rus at occupational health and safety, social includes the Company`s size, role and material aspects, reflect them in its public events with stakeholders to and personnel policies and corporate place in the Russian energy sector and policy and timely respond to them in assess the criteria and procedures communications; entitative limitations of a confidential the course of operating activity. for selection of material economic, — visit of assurer the Company`s nature. Selective verification of — Systems of organization, social and environmental aspects to branch MES of the Center in May information in the Report carried out management and monitoring for the be included in the Report. 2013, interviews with managers and within the framework of the "moderate" process to prepare the public — Verification of the processes, used by specialists on issues of the branch`s level of assurance provides a lower level non-financial reporting on the part of the Company, of the collection, participation in the preparation of of guarantees of assurance than a full the Company's management are fully consolidation, processing, analysis information for the Report. audit of all information ("higher" level). complied with the Company`s and documentation of information In preparing assurance, in addition to With respect to numerical information mission, its policies, procedures and included in the Report. the Report`s information, the in the Report, the work performed resources. cannot be considered exhaustive to — Study of documents based on the information published on the corporate — Corporate social responsibility and website http://www.fsk-ees.ru/, as well identify all possible inaccurate sustainable development policy is an results of the Company and information. However, data collected by stakeholders dialogue (information as materials of mass media, including important part of the overall process news agencies ITAR-TASS, Interfax, RIA the assurer in the course of work is a to develop the Company`s materials, lists of participants, sufficient basis to form our conclusions minutes of meetings, changes and Novosti, RBC, Finam.Ru, federal development strategy, implement newspapers "Kommersant Ъ", with the accepted "moderate" level of planned measures, evaluate its additions made to the Report on the assurance as to the degree of the results of these events.) Komsomolskaya Pravda, corporate performance and develop key areas newspaper "Unified Grid" were used. Company`s compliance with the for improving business. — Analysis of data extract from mass principles of inclusivity, materiality and media and Internet resources with responsiveness of AA1000APS (2008) — The Company`s top management references to the Company's Scope of Assurance standard, as well as the quality of demonstrates its commitment to the information disclosure on performance principles of corporate social activities in the field of assurance, — Assurance was not conducted with indicators of sustainable development responsibility and sustainable and published statements of third respect to performance indicators, in accordance with AA1000AS (2008) development, and is directly involved parties which characterize the beyond the timeframe of the current standard and the GRI`s in the preparation of the Report. Company's commitment to the 2012 reporting cycle. values of corporate social recommendations. — Some inaccuracies, errors and responsibility as an evidential base to — Assurance was not conducted with discrepancies in figures identified on respect to financial performance, verify the feasibility of the statements Our Opinion on the Report as a a selective basis during the work on in the Report. verified by other independent audit the preliminary version of the Report organizations. Whole — Review of the preliminary version of are not critical. They generally do not the Report to identify possible — Assurance did not extend to the — The Report adequately reflects the distort the information contained in inaccuracies, contradictions and opinions, assumptions, suggestions Company`s performance in terms of the Report and have not significant unfounded statements. or intentions of the Company to take corporate non-financial public impact on stakeholders` ability to any actions in the future. reporting. draw corresponding conclusions in — Verification of the compliance of the terms of the results of the — Assurance did not include the — The structure of the Report is information published on the Company`s activity and are performance indicators of Global rational; it is presented in an Company`s corporate website with eliminated by the Company in the Reporting Initiative Sustainability understandable form, sufficiently standards AA1000APS (2008), final version of the Report. AA1000SES (2011) and the GRI`s Reporting Guidelines, recognized accurate, objective, informative and recommendations. irrelevant by the Company at the time balanced in content. The Report of preparing this Report. contains information in an amount Compliance of the Report with Verification of the adequacy of sufficient for stakeholders and, at the presented statements, applications and — The work on the assurance was AA1000APS (2008) Principles carried out prior to its official same time, avoids excessive details. information in the Report was carried Abbreviations and technical terms Stakeholders` Engagement out using the following procedures: publication on the Company`s corporate website. are explained. Text part of the Report — The information presented in the is accompanied by charts and Report and direct and indirect
evidences obtained by us suggest social and environmental aspects of development, which would have been prevention of industrial injuries and that in preparing the information to the Company`s activities for missed or wrongly excluded from occupational diseases, the be included in the Report the stakeholders. The Report provides a reporting, can be called. improvement of working conditions interests of key stakeholders were list of 2012 key events in the context — Sufficient information about the and occupational safety and health of taken into consideration. of its sustainable development. Company's compliance with employees. Ensuring safe work of — The Company provides a — In determining material aspects the regulatory acts of the Russian personnel is one of the Company`s comprehensive, coherent and Company took into account the key Federation is provided in the Report. key priorities. consistent approach to consideration internal and external factors of — Responsiveness to the regions of of all material aspects identified activities, as well as risks. presence` needs is accomplished during communications with the Responsiveness to through a wide range of economic — The Report discovers essential Stakeholders` Expectations stakeholders, as well as to identify — information on maintaining the and social programs and projects. ways to address them. Company's economic sustainability, — Currently we are not aware of such The Company is the largest taxpayer — The Company assesses the degree of priority areas of activities, the areas, which could be but were not at the federal, regional and local implementation of the identified implementation of its investment disclosed in the Report, in which the levels and contributes to the interests and proposals of program and innovative policy and Company would be unable to respond formation of industrial and stakeholders with its documentation gives self-esteem of the social to reasonable inquiries from socio-economic infrastructure in the in the Report. commitments` fulfillment for 2012. stakeholders. regions and involves in the preparation of the 2014 Olympic — The main channels of informing and — The degree of attention paid to the — The Report contains information on Games, as well as the 2018 FIFA communicating with stakeholders various topics in the Report is accounting proposals from World Cup. Cooperation agreements include: reports, including this proportional to their relative stakeholders made during the were signed with 25 constituent Report, meetings with the importance (materiality). dialogue and the public hearings on entities of the Russian Federation. Company`s top management, its the Report. — The Company demonstrates an — The right of the population to a subsidiaries and dependent understanding of the concept of — The Company fulfilled a significant companies with managerial and favorable environment is ensured by corporate social responsibility and part of the plans and commitments the Company`s planned operational personnel, news, press sustainable development, uses presented in the previous period releases, interviews, negotiations, environmental activities. The objective information in reflecting Reports. Some commitments are Company has developed a corporate conferences, forums, surveys, the different topics in its Report. The being fulfilled. Company`s website, publications in environmental policy and its Report contains the long-term — The Сompany is customer-oriented. implementation program and an mass media, audits and verifications, objectives of sustainable written appeals and complaints, as Requirements of consumers are environmental management system development for 2013-2014 and for provided with reliable and quality based on the ISO 14001:2004 well as other public access the long term for some areas of mechanisms. power supply and short terms of international standard is consistently activities (anti-corruption efforts, technological connection to power implemented. Environmental — The Company has a long-standing environmental policy and innovation grids. In forming the Company`s monitoring and environmental audits practice to prepare reports on social development). positive image as a reliable partner, are conducted. The Company`s responsibility and corporate — The format of the provision of the investment and innovation managerial and investment decisions sustainability with engagement of information and data in the Report activities which received provide for the consideration of stakeholders, while ensuring enables users to identify trends in considerable attention in the Report, environmental aspects. continuity and transparency of the the Company`s performance play a significant role. Over a period Environmentally friendly technologies reporting preparation process. indicators, its achievements and of several years, the Company of power transmission which reduce partially - unsolved problems in the surveys level of satisfaction with the the burden on the environment are The Materiality of the context of economic, environmental quality of services on technological introduced. The Company`s and social aspects. connection. Positive dynamics of technical policy provides for Information Provided satisfaction is achieved. measures to reduce the impact of — The provided information about the — The Company has implemented a power grid facilities on the species material aspects of corporate social — Opinions and expectations of the process to identify the material composition of animals. Register for responsibility and sustainable Company's shareholders are aspects of activity due to specificity specially protected natural development of the Company has recognized by implementing the of energy industry and the GRI reservations, where Federal Grid sufficient traceability of the corporate governance principles. guidelines with respect to the operates, is maintained. processes of gathering, processing, reporting principles. During the — Interests of employees are taken into Implementation of a wide range of transfer and presentation of reporting period, the process of account by accepting collective organizational and technical information. actualization of material aspects was agreements. measures resulted in the maintained on a continuous basis. — Based on an analysis of the Report`s — The Company has developed and achievement of positive dynamics on information and interviews, no key indicators of the environmental — The Report is a balanced and implemented a risk management material aspects of corporate social impact. reasonable presentation of system in the field of occupational responsibility and sustainable information on material economic, safety and health, aimed at
Compliance of the Report with identification of stakeholders on the Sustainability Reporting Guidelines The Statement of Bureau the GRI Guidelines basis of multi-criteria approach, using GRI G3.1 and industry-specific Veritas Certification Rus on the criteria of dependency, responsibility, application for the electric power The Report is prepared by using the degree of impact, etc. The process of industry. Independence, Impartiality and recommendations of the Global stakeholders` engagement in the Competence Reporting Initiative Sustainability — More detailed description of the preparation of corporate reporting is — Bureau Veritas is an independent Reporting Guidelines GRI G3.1. The Company`s risk management planned well in advance. Responsibility professional international company Report contains information on all directly in the reports of social and authorities of the Company`s which specializes for over 180 years standard reporting elements, as well as responsibility and corporate management and employees in the area in providing services in the field of the needed GRI key performance sustainability, including the risks` of communications with stakeholders accredited certification of various indicators. Table of the GRI Guideline’s register, risks` priority ranking, are identified, the necessary resources management systems (in particular, indicators in the Report objectively description of existing methods of are being allocated. Periodic monitoring quality management systems, reflects the actual level of information managing these risks, the measures and updating of key interests, needs occupational health and safety, disclosure. The principles to determine taken to mitigate the risks and to and expectations of stakeholders, on environmental protection, social the content and quality of the Report, assess their effectiveness. the basis of that priorities and best responsibility, etc.). including the context of sustainable practices for communications with — Increasing the scope of the development, timeliness, balance, them are determined. The results are implementation of infographics in the — CJSC Bureau Veritas Certification comparability, completeness, accuracy, documented and promptly sent to disclosure of the material aspects of Rus officially declares that this clarity, etc. are implemented. The stakeholders. Evaluation of the the Company`s activities. Assurance is an independent assessment of a third party auditor. Report complies with the declared level effectiveness of the communications — The development of the practice of CJSC Bureau Veritas Certification of accountability B+. The fact that the with stakeholders is carried out. As a public dialogues with stakeholders` Rus has no commercial interest in Report does not contain detailed result of the preparation of the Report, representatives on the most the Company`s activities except for information on certain GRI performance public assurance that confirms the substantive issues of the Company`s the assurance services rendered. indicators is due to the fact that materiality and completeness of the sustainable development, including currently the Company collects information disclosed and the in the regions where the Company — The auditors of CJSC Bureau Veritas statistical data to justify them. In Company's responsiveness to the operates. Certification Rus involved in the work addition, the Company believes that inquiries from stakeholders is carried on assurance have the necessary — Conducting social reporting process certain performance indicators are not out. level of competence in the assurance internal audit in the Company and material for stakeholders and their of public non-financial reporting in presenting materials in subsequent contribution to the reporting can be accordance with our internal reporting cycles. neglected. Recommendations to Prepare procedures and best practices. Corporate Public Non-Financial The Extent and Quality of Reporting in the Future Based Stakeholders Engagement in on Best Practices Accordance with AA1000SES — Disclosure of information in the (2011) Standard reports according to "completed tasks - plans for next year - the The process of public reporting is prospects for the next few years" generally follows the recommendations principles. of the AA1000SES (2011) standard. The Company has developed, implemented — Further disclosure of performance and maintained a methodology for the indicators in the reports provided by the Global Reporting Initiative Addressed to Open Joint Stock 4. To assess the degree of compliance Company "Federal Grid Company of of the Report with B+ level of the Global Unified Energy System" and its Reporting Initiative Sustainability stakeholders. Reporting Guidelines, declared by the Company. Introduction 5. To make recommendations on the preparation of corporate public This audit assurance refers to the non-financial reporting for future public report on social responsibility periods. and corporate sustainability of Federal Grid (hereinafter - the Report) based on 2012 FY results. The report prepared by Type and Level of the Assurance Federal Grid (hereinafter - the The assurance of the Report is based Company), which is responsible for the on the following provisions of АА preparation, compilation and 1000AS (2008) standard: presentation of all information in the Report. Within the agreed task CJSC — the type of assurance - 2 ("Type 2 - Bureau Veritas Certification Rus bears AccountAbility Principles and responsibility only to the Company for Performance Information"), which the results of work on limited provides for assessment of the assurance of the Report and does not degree of compliance of the above assume responsibility to any party for accountability principles in the decisions made, deferred or withdrawn aggregate with the assessment of on the basis of the assurance. the reliability of performance indicators (data, statements) included in the Report; Objectives and Criteria for — the level of assurance - "moderate". Assurance Work on the assurance of the Report is performed on the basis of a formalized Methodology and Scope of Work methodology of assurance standards Performed on the Assurance AA1000 Assurance Standard (AS) 2008 — Interviews with the Company`s and audit of non-financial reporting management` representatives to ISAE 3000. clarify how the Company accounts for While working on the Report the key aspects of corporate social following problems were set and solved: responsibility in forming long-term business development strategy and 1. To assess compliance with the how these aspects are integrated principles of inclusivity in the Report, into the Company`s business materiality and responsiveness, processes system. described in AA1000 Accountability Principles Standard (APS) 2008. — Interviews with key personnel of the Company, involved in the preparation 2. To assess the level and quality of of various sections of the Report, to stakeholder`s engagement in the confirm the fairness of the preparation of the Report in accordance statements and information in the with AA1000 Stakeholder Engagement Report. Standard (SES) 2011. — Verification of the objectives` 3. To assess the degree of the implementation in the field of implementation of principles by the corporate social responsibility for Company to determine the content and 2012 set by the Company in quality of the Report on Global 2010-2011reports. Reporting Initiative Sustainability Reporting Guidelines, including the — Verification of documents context of sustainable development, the (regulations, guidelines, etc.) and complete coverage of material topics information (including the primary and indicators, balance, comparability sources of information), which and accuracy etc. characterize the results of responsible business practices in the
APPENDICES
field of corporate social — participation of a representative of The Basis for the Formation of diagrams, which have a positive responsibility. Bureau Veritas Certification Rus in our Opinion effect on the overall perception of the — Assessment of the effectiveness of the Company's dialogue with reporting information. stakeholders (April 5, 2013) and Work on the assurance of the Report economic, environmental and social was based on the analysis of supporting — The Company has effective aspects of managerial approaches public hearings on the Report (April management systems, which can 26, 2013); information provided by the Company`s applied by the Company. management and its structural identify material economic, social — Verification of the Company`s — visit of assurer the Company`s divisions, on data of the state statistical and environmental aspects of the communications with stakeholders in headquarters in May 2013, interviews reporting and on other information activities, plan, manage and improve the reporting period, including via with managers and specialists on from available sources using analytical related processes, define the the presence of the representatives environmental management, methods for confirmation. Assurance expectations of stakeholders on the of Bureau Veritas Certification Rus at occupational health and safety, social includes the Company`s size, role and material aspects, reflect them in its public events with stakeholders to and personnel policies and corporate place in the Russian energy sector and policy and timely respond to them in assess the criteria and procedures communications; entitative limitations of a confidential the course of operating activity. for selection of material economic, — visit of assurer the Company`s nature. Selective verification of — Systems of organization, social and environmental aspects to branch MES of the Center in May information in the Report carried out management and monitoring for the be included in the Report. 2013, interviews with managers and within the framework of the "moderate" process to prepare the public — Verification of the processes, used by specialists on issues of the branch`s level of assurance provides a lower level non-financial reporting on the part of the Company, of the collection, participation in the preparation of of guarantees of assurance than a full the Company's management are fully consolidation, processing, analysis information for the Report. audit of all information ("higher" level). complied with the Company`s and documentation of information In preparing assurance, in addition to With respect to numerical information mission, its policies, procedures and included in the Report. the Report`s information, the in the Report, the work performed resources. cannot be considered exhaustive to — Study of documents based on the information published on the corporate — Corporate social responsibility and website http://www.fsk-ees.ru/, as well identify all possible inaccurate sustainable development policy is an results of the Company and information. However, data collected by stakeholders dialogue (information as materials of mass media, including important part of the overall process news agencies ITAR-TASS, Interfax, RIA the assurer in the course of work is a to develop the Company`s materials, lists of participants, sufficient basis to form our conclusions minutes of meetings, changes and Novosti, RBC, Finam.Ru, federal development strategy, implement newspapers "Kommersant Ъ", with the accepted "moderate" level of planned measures, evaluate its additions made to the Report on the assurance as to the degree of the results of these events.) Komsomolskaya Pravda, corporate performance and develop key areas newspaper "Unified Grid" were used. Company`s compliance with the for improving business. — Analysis of data extract from mass principles of inclusivity, materiality and media and Internet resources with responsiveness of AA1000APS (2008) — The Company`s top management references to the Company's Scope of Assurance standard, as well as the quality of demonstrates its commitment to the information disclosure on performance principles of corporate social activities in the field of assurance, — Assurance was not conducted with indicators of sustainable development responsibility and sustainable and published statements of third respect to performance indicators, in accordance with AA1000AS (2008) development, and is directly involved parties which characterize the beyond the timeframe of the current standard and the GRI`s in the preparation of the Report. Company's commitment to the 2012 reporting cycle. values of corporate social recommendations. — Some inaccuracies, errors and responsibility as an evidential base to — Assurance was not conducted with discrepancies in figures identified on respect to financial performance, verify the feasibility of the statements Our Opinion on the Report as a a selective basis during the work on in the Report. verified by other independent audit the preliminary version of the Report organizations. Whole — Review of the preliminary version of are not critical. They generally do not the Report to identify possible — Assurance did not extend to the — The Report adequately reflects the distort the information contained in inaccuracies, contradictions and opinions, assumptions, suggestions Company`s performance in terms of the Report and have not significant unfounded statements. or intentions of the Company to take corporate non-financial public impact on stakeholders` ability to any actions in the future. reporting. draw corresponding conclusions in — Verification of the compliance of the terms of the results of the — Assurance did not include the — The structure of the Report is information published on the Company`s activity and are performance indicators of Global rational; it is presented in an Company`s corporate website with eliminated by the Company in the Reporting Initiative Sustainability understandable form, sufficiently standards AA1000APS (2008), final version of the Report. AA1000SES (2011) and the GRI`s Reporting Guidelines, recognized accurate, objective, informative and recommendations. irrelevant by the Company at the time balanced in content. The Report of preparing this Report. contains information in an amount Compliance of the Report with Verification of the adequacy of sufficient for stakeholders and, at the presented statements, applications and — The work on the assurance was AA1000APS (2008) Principles carried out prior to its official same time, avoids excessive details. information in the Report was carried Abbreviations and technical terms Stakeholders` Engagement out using the following procedures: publication on the Company`s corporate website. are explained. Text part of the Report — The information presented in the is accompanied by charts and Report and direct and indirect
172
evidences obtained by us suggest social and environmental aspects of development, which would have been prevention of industrial injuries and that in preparing the information to the Company`s activities for missed or wrongly excluded from occupational diseases, the be included in the Report the stakeholders. The Report provides a reporting, can be called. improvement of working conditions interests of key stakeholders were list of 2012 key events in the context — Sufficient information about the and occupational safety and health of taken into consideration. of its sustainable development. Company's compliance with employees. Ensuring safe work of — The Company provides a — In determining material aspects the regulatory acts of the Russian personnel is one of the Company`s comprehensive, coherent and Company took into account the key Federation is provided in the Report. key priorities. consistent approach to consideration internal and external factors of — Responsiveness to the regions of of all material aspects identified activities, as well as risks. presence` needs is accomplished during communications with the Responsiveness to through a wide range of economic — The Report discovers essential Stakeholders` Expectations stakeholders, as well as to identify — information on maintaining the and social programs and projects. ways to address them. Company's economic sustainability, — Currently we are not aware of such The Company is the largest taxpayer — The Company assesses the degree of priority areas of activities, the areas, which could be but were not at the federal, regional and local implementation of the identified implementation of its investment disclosed in the Report, in which the levels and contributes to the interests and proposals of program and innovative policy and Company would be unable to respond formation of industrial and stakeholders with its documentation gives self-esteem of the social to reasonable inquiries from socio-economic infrastructure in the in the Report. commitments` fulfillment for 2012. stakeholders. regions and involves in the preparation of the 2014 Olympic — The main channels of informing and — The degree of attention paid to the — The Report contains information on Games, as well as the 2018 FIFA communicating with stakeholders various topics in the Report is accounting proposals from World Cup. Cooperation agreements include: reports, including this proportional to their relative stakeholders made during the were signed with 25 constituent Report, meetings with the importance (materiality). dialogue and the public hearings on entities of the Russian Federation. Company`s top management, its the Report. — The Company demonstrates an — The right of the population to a subsidiaries and dependent understanding of the concept of — The Company fulfilled a significant companies with managerial and favorable environment is ensured by corporate social responsibility and part of the plans and commitments the Company`s planned operational personnel, news, press sustainable development, uses presented in the previous period releases, interviews, negotiations, environmental activities. The objective information in reflecting Reports. Some commitments are Company has developed a corporate conferences, forums, surveys, the different topics in its Report. The being fulfilled. Company`s website, publications in environmental policy and its Report contains the long-term — The Сompany is customer-oriented. implementation program and an mass media, audits and verifications, objectives of sustainable written appeals and complaints, as Requirements of consumers are environmental management system development for 2013-2014 and for provided with reliable and quality based on the ISO 14001:2004 well as other public access the long term for some areas of mechanisms. power supply and short terms of international standard is consistently activities (anti-corruption efforts, technological connection to power implemented. Environmental — The Company has a long-standing environmental policy and innovation grids. In forming the Company`s monitoring and environmental audits practice to prepare reports on social development). positive image as a reliable partner, are conducted. The Company`s responsibility and corporate — The format of the provision of the investment and innovation managerial and investment decisions sustainability with engagement of information and data in the Report activities which received provide for the consideration of stakeholders, while ensuring enables users to identify trends in considerable attention in the Report, environmental aspects. continuity and transparency of the the Company`s performance play a significant role. Over a period Environmentally friendly technologies reporting preparation process. indicators, its achievements and of several years, the Company of power transmission which reduce partially - unsolved problems in the surveys level of satisfaction with the the burden on the environment are The Materiality of the context of economic, environmental quality of services on technological introduced. The Company`s and social aspects. connection. Positive dynamics of technical policy provides for Information Provided satisfaction is achieved. measures to reduce the impact of — The provided information about the — The Company has implemented a power grid facilities on the species material aspects of corporate social — Opinions and expectations of the process to identify the material composition of animals. Register for responsibility and sustainable Company's shareholders are aspects of activity due to specificity specially protected natural development of the Company has recognized by implementing the of energy industry and the GRI reservations, where Federal Grid sufficient traceability of the corporate governance principles. guidelines with respect to the operates, is maintained. processes of gathering, processing, reporting principles. During the — Interests of employees are taken into Implementation of a wide range of transfer and presentation of reporting period, the process of account by accepting collective organizational and technical information. actualization of material aspects was agreements. measures resulted in the maintained on a continuous basis. — Based on an analysis of the Report`s — The Company has developed and achievement of positive dynamics on information and interviews, no key indicators of the environmental — The Report is a balanced and implemented a risk management material aspects of corporate social impact. reasonable presentation of system in the field of occupational responsibility and sustainable information on material economic, safety and health, aimed at
Compliance of the Report with identification of stakeholders on the Sustainability Reporting Guidelines The Statement of Bureau the GRI Guidelines basis of multi-criteria approach, using GRI G3.1 and industry-specific Veritas Certification Rus on the criteria of dependency, responsibility, application for the electric power The Report is prepared by using the degree of impact, etc. The process of industry. Independence, Impartiality and recommendations of the Global stakeholders` engagement in the Competence Reporting Initiative Sustainability — More detailed description of the preparation of corporate reporting is — Bureau Veritas is an independent Reporting Guidelines GRI G3.1. The Company`s risk management planned well in advance. Responsibility professional international company Report contains information on all directly in the reports of social and authorities of the Company`s which specializes for over 180 years standard reporting elements, as well as responsibility and corporate management and employees in the area in providing services in the field of the needed GRI key performance sustainability, including the risks` of communications with stakeholders accredited certification of various indicators. Table of the GRI Guideline’s register, risks` priority ranking, are identified, the necessary resources management systems (in particular, indicators in the Report objectively description of existing methods of are being allocated. Periodic monitoring quality management systems, reflects the actual level of information managing these risks, the measures and updating of key interests, needs occupational health and safety, disclosure. The principles to determine taken to mitigate the risks and to and expectations of stakeholders, on environmental protection, social the content and quality of the Report, assess their effectiveness. the basis of that priorities and best responsibility, etc.). including the context of sustainable practices for communications with — Increasing the scope of the development, timeliness, balance, them are determined. The results are implementation of infographics in the — CJSC Bureau Veritas Certification comparability, completeness, accuracy, documented and promptly sent to disclosure of the material aspects of Rus officially declares that this clarity, etc. are implemented. The stakeholders. Evaluation of the the Company`s activities. Assurance is an independent assessment of a third party auditor. Report complies with the declared level effectiveness of the communications — The development of the practice of CJSC Bureau Veritas Certification of accountability B+. The fact that the with stakeholders is carried out. As a public dialogues with stakeholders` Rus has no commercial interest in Report does not contain detailed result of the preparation of the Report, representatives on the most the Company`s activities except for information on certain GRI performance public assurance that confirms the substantive issues of the Company`s the assurance services rendered. indicators is due to the fact that materiality and completeness of the sustainable development, including currently the Company collects information disclosed and the in the regions where the Company — The auditors of CJSC Bureau Veritas statistical data to justify them. In Company's responsiveness to the operates. Certification Rus involved in the work addition, the Company believes that inquiries from stakeholders is carried on assurance have the necessary — Conducting social reporting process certain performance indicators are not out. level of competence in the assurance internal audit in the Company and material for stakeholders and their of public non-financial reporting in presenting materials in subsequent contribution to the reporting can be accordance with our internal reporting cycles. neglected. Recommendations to Prepare procedures and best practices. Corporate Public Non-Financial The Extent and Quality of Reporting in the Future Based Stakeholders Engagement in on Best Practices Accordance with AA1000SES — Disclosure of information in the (2011) Standard reports according to "completed tasks - plans for next year - the The process of public reporting is prospects for the next few years" generally follows the recommendations principles. of the AA1000SES (2011) standard. The Company has developed, implemented — Further disclosure of performance and maintained a methodology for the indicators in the reports provided by the Global Reporting Initiative Addressed to Open Joint Stock 4. To assess the degree of compliance Company "Federal Grid Company of of the Report with B+ level of the Global Unified Energy System" and its Reporting Initiative Sustainability stakeholders. Reporting Guidelines, declared by the Company. Introduction 5. To make recommendations on the preparation of corporate public This audit assurance refers to the non-financial reporting for future public report on social responsibility periods. and corporate sustainability of Federal Grid (hereinafter - the Report) based on 2012 FY results. The report prepared by Type and Level of the Assurance Federal Grid (hereinafter - the The assurance of the Report is based Company), which is responsible for the on the following provisions of АА preparation, compilation and 1000AS (2008) standard: presentation of all information in the Report. Within the agreed task CJSC — the type of assurance - 2 ("Type 2 - Bureau Veritas Certification Rus bears AccountAbility Principles and responsibility only to the Company for Performance Information"), which the results of work on limited provides for assessment of the assurance of the Report and does not degree of compliance of the above assume responsibility to any party for accountability principles in the decisions made, deferred or withdrawn aggregate with the assessment of on the basis of the assurance. the reliability of performance indicators (data, statements) included in the Report; Objectives and Criteria for — the level of assurance - "moderate". Assurance Work on the assurance of the Report is performed on the basis of a formalized Methodology and Scope of Work methodology of assurance standards Performed on the Assurance AA1000 Assurance Standard (AS) 2008 — Interviews with the Company`s and audit of non-financial reporting management` representatives to ISAE 3000. clarify how the Company accounts for While working on the Report the key aspects of corporate social following problems were set and solved: responsibility in forming long-term business development strategy and 1. To assess compliance with the how these aspects are integrated principles of inclusivity in the Report, into the Company`s business materiality and responsiveness, processes system. described in AA1000 Accountability Principles Standard (APS) 2008. — Interviews with key personnel of the Company, involved in the preparation 2. To assess the level and quality of of various sections of the Report, to stakeholder`s engagement in the confirm the fairness of the preparation of the Report in accordance statements and information in the with AA1000 Stakeholder Engagement Report. Standard (SES) 2011. — Verification of the objectives` 3. To assess the degree of the implementation in the field of implementation of principles by the corporate social responsibility for Company to determine the content and 2012 set by the Company in quality of the Report on Global 2010-2011reports. Reporting Initiative Sustainability Reporting Guidelines, including the — Verification of documents context of sustainable development, the (regulations, guidelines, etc.) and complete coverage of material topics information (including the primary and indicators, balance, comparability sources of information), which and accuracy etc. characterize the results of responsible business practices in the
field of corporate social — participation of a representative of The Basis for the Formation of diagrams, which have a positive responsibility. Bureau Veritas Certification Rus in our Opinion effect on the overall perception of the — Assessment of the effectiveness of the Company's dialogue with reporting information. stakeholders (April 5, 2013) and Work on the assurance of the Report economic, environmental and social was based on the analysis of supporting — The Company has effective aspects of managerial approaches public hearings on the Report (April management systems, which can 26, 2013); information provided by the Company`s applied by the Company. management and its structural identify material economic, social — Verification of the Company`s — visit of assurer the Company`s divisions, on data of the state statistical and environmental aspects of the communications with stakeholders in headquarters in May 2013, interviews reporting and on other information activities, plan, manage and improve the reporting period, including via with managers and specialists on from available sources using analytical related processes, define the the presence of the representatives environmental management, methods for confirmation. Assurance expectations of stakeholders on the of Bureau Veritas Certification Rus at occupational health and safety, social includes the Company`s size, role and material aspects, reflect them in its public events with stakeholders to and personnel policies and corporate place in the Russian energy sector and policy and timely respond to them in assess the criteria and procedures communications; entitative limitations of a confidential the course of operating activity. for selection of material economic, — visit of assurer the Company`s nature. Selective verification of — Systems of organization, social and environmental aspects to branch MES of the Center in May information in the Report carried out management and monitoring for the be included in the Report. 2013, interviews with managers and within the framework of the "moderate" process to prepare the public — Verification of the processes, used by specialists on issues of the branch`s level of assurance provides a lower level non-financial reporting on the part of the Company, of the collection, participation in the preparation of of guarantees of assurance than a full the Company's management are fully consolidation, processing, analysis information for the Report. audit of all information ("higher" level). complied with the Company`s and documentation of information In preparing assurance, in addition to With respect to numerical information mission, its policies, procedures and included in the Report. the Report`s information, the in the Report, the work performed resources. cannot be considered exhaustive to — Study of documents based on the information published on the corporate — Corporate social responsibility and website http://www.fsk-ees.ru/, as well identify all possible inaccurate sustainable development policy is an results of the Company and information. However, data collected by stakeholders dialogue (information as materials of mass media, including important part of the overall process news agencies ITAR-TASS, Interfax, RIA the assurer in the course of work is a to develop the Company`s materials, lists of participants, sufficient basis to form our conclusions minutes of meetings, changes and Novosti, RBC, Finam.Ru, federal development strategy, implement newspapers "Kommersant Ъ", with the accepted "moderate" level of planned measures, evaluate its additions made to the Report on the assurance as to the degree of the results of these events.) Komsomolskaya Pravda, corporate performance and develop key areas newspaper "Unified Grid" were used. Company`s compliance with the for improving business. — Analysis of data extract from mass principles of inclusivity, materiality and media and Internet resources with responsiveness of AA1000APS (2008) — The Company`s top management references to the Company's Scope of Assurance standard, as well as the quality of demonstrates its commitment to the information disclosure on performance principles of corporate social activities in the field of assurance, — Assurance was not conducted with indicators of sustainable development responsibility and sustainable and published statements of third respect to performance indicators, in accordance with AA1000AS (2008) development, and is directly involved parties which characterize the beyond the timeframe of the current standard and the GRI`s in the preparation of the Report. Company's commitment to the 2012 reporting cycle. values of corporate social recommendations. — Some inaccuracies, errors and responsibility as an evidential base to — Assurance was not conducted with discrepancies in figures identified on respect to financial performance, verify the feasibility of the statements Our Opinion on the Report as a a selective basis during the work on in the Report. verified by other independent audit the preliminary version of the Report organizations. Whole — Review of the preliminary version of are not critical. They generally do not the Report to identify possible — Assurance did not extend to the — The Report adequately reflects the distort the information contained in inaccuracies, contradictions and opinions, assumptions, suggestions Company`s performance in terms of the Report and have not significant unfounded statements. or intentions of the Company to take corporate non-financial public impact on stakeholders` ability to any actions in the future. reporting. draw corresponding conclusions in — Verification of the compliance of the terms of the results of the — Assurance did not include the — The structure of the Report is information published on the Company`s activity and are performance indicators of Global rational; it is presented in an Company`s corporate website with eliminated by the Company in the Reporting Initiative Sustainability understandable form, sufficiently standards AA1000APS (2008), final version of the Report. AA1000SES (2011) and the GRI`s Reporting Guidelines, recognized accurate, objective, informative and recommendations. irrelevant by the Company at the time balanced in content. The Report of preparing this Report. contains information in an amount Compliance of the Report with Verification of the adequacy of sufficient for stakeholders and, at the presented statements, applications and — The work on the assurance was AA1000APS (2008) Principles carried out prior to its official same time, avoids excessive details. information in the Report was carried Abbreviations and technical terms Stakeholders` Engagement out using the following procedures: publication on the Company`s corporate website. are explained. Text part of the Report — The information presented in the is accompanied by charts and Report and direct and indirect
evidences obtained by us suggest social and environmental aspects of development, which would have been prevention of industrial injuries and that in preparing the information to the Company`s activities for missed or wrongly excluded from occupational diseases, the be included in the Report the stakeholders. The Report provides a reporting, can be called. improvement of working conditions interests of key stakeholders were list of 2012 key events in the context — Sufficient information about the and occupational safety and health of taken into consideration. of its sustainable development. Company's compliance with employees. Ensuring safe work of — The Company provides a — In determining material aspects the regulatory acts of the Russian personnel is one of the Company`s comprehensive, coherent and Company took into account the key Federation is provided in the Report. key priorities. consistent approach to consideration internal and external factors of — Responsiveness to the regions of of all material aspects identified activities, as well as risks. presence` needs is accomplished during communications with the Responsiveness to through a wide range of economic — The Report discovers essential Stakeholders` Expectations stakeholders, as well as to identify — information on maintaining the and social programs and projects. ways to address them. Company's economic sustainability, — Currently we are not aware of such The Company is the largest taxpayer — The Company assesses the degree of priority areas of activities, the areas, which could be but were not at the federal, regional and local implementation of the identified implementation of its investment disclosed in the Report, in which the levels and contributes to the interests and proposals of program and innovative policy and Company would be unable to respond formation of industrial and stakeholders with its documentation gives self-esteem of the social to reasonable inquiries from socio-economic infrastructure in the in the Report. commitments` fulfillment for 2012. stakeholders. regions and involves in the preparation of the 2014 Olympic — The main channels of informing and — The degree of attention paid to the — The Report contains information on Games, as well as the 2018 FIFA communicating with stakeholders various topics in the Report is accounting proposals from World Cup. Cooperation agreements include: reports, including this proportional to their relative stakeholders made during the were signed with 25 constituent Report, meetings with the importance (materiality). dialogue and the public hearings on entities of the Russian Federation. Company`s top management, its the Report. — The Company demonstrates an — The right of the population to a subsidiaries and dependent understanding of the concept of — The Company fulfilled a significant companies with managerial and favorable environment is ensured by corporate social responsibility and part of the plans and commitments the Company`s planned operational personnel, news, press sustainable development, uses presented in the previous period releases, interviews, negotiations, environmental activities. The objective information in reflecting Reports. Some commitments are Company has developed a corporate conferences, forums, surveys, the different topics in its Report. The being fulfilled. Company`s website, publications in environmental policy and its Report contains the long-term — The Сompany is customer-oriented. implementation program and an mass media, audits and verifications, objectives of sustainable written appeals and complaints, as Requirements of consumers are environmental management system development for 2013-2014 and for provided with reliable and quality based on the ISO 14001:2004 well as other public access the long term for some areas of mechanisms. power supply and short terms of international standard is consistently activities (anti-corruption efforts, technological connection to power implemented. Environmental — The Company has a long-standing environmental policy and innovation grids. In forming the Company`s monitoring and environmental audits practice to prepare reports on social development). positive image as a reliable partner, are conducted. The Company`s responsibility and corporate — The format of the provision of the investment and innovation managerial and investment decisions sustainability with engagement of information and data in the Report activities which received provide for the consideration of stakeholders, while ensuring enables users to identify trends in considerable attention in the Report, environmental aspects. continuity and transparency of the the Company`s performance play a significant role. Over a period Environmentally friendly technologies reporting preparation process. indicators, its achievements and of several years, the Company of power transmission which reduce partially - unsolved problems in the surveys level of satisfaction with the the burden on the environment are The Materiality of the context of economic, environmental quality of services on technological introduced. The Company`s and social aspects. connection. Positive dynamics of technical policy provides for Information Provided satisfaction is achieved. measures to reduce the impact of — The provided information about the — The Company has implemented a power grid facilities on the species material aspects of corporate social — Opinions and expectations of the process to identify the material composition of animals. Register for responsibility and sustainable Company's shareholders are aspects of activity due to specificity specially protected natural development of the Company has recognized by implementing the of energy industry and the GRI reservations, where Federal Grid sufficient traceability of the corporate governance principles. guidelines with respect to the operates, is maintained. processes of gathering, processing, reporting principles. During the — Interests of employees are taken into Implementation of a wide range of transfer and presentation of reporting period, the process of account by accepting collective organizational and technical information. actualization of material aspects was agreements. measures resulted in the maintained on a continuous basis. — Based on an analysis of the Report`s — The Company has developed and achievement of positive dynamics on information and interviews, no key indicators of the environmental — The Report is a balanced and implemented a risk management material aspects of corporate social impact. reasonable presentation of system in the field of occupational responsibility and sustainable information on material economic, safety and health, aimed at
Compliance of the Report with identification of stakeholders on the Sustainability Reporting Guidelines The Statement of Bureau the GRI Guidelines basis of multi-criteria approach, using GRI G3.1 and industry-specific Veritas Certification Rus on the criteria of dependency, responsibility, application for the electric power The Report is prepared by using the degree of impact, etc. The process of industry. Independence, Impartiality and recommendations of the Global stakeholders` engagement in the Competence Reporting Initiative Sustainability — More detailed description of the preparation of corporate reporting is — Bureau Veritas is an independent Reporting Guidelines GRI G3.1. The Company`s risk management planned well in advance. Responsibility professional international company Report contains information on all directly in the reports of social and authorities of the Company`s which specializes for over 180 years standard reporting elements, as well as responsibility and corporate management and employees in the area in providing services in the field of the needed GRI key performance sustainability, including the risks` of communications with stakeholders accredited certification of various indicators. Table of the GRI Guideline’s register, risks` priority ranking, are identified, the necessary resources management systems (in particular, indicators in the Report objectively description of existing methods of are being allocated. Periodic monitoring quality management systems, reflects the actual level of information managing these risks, the measures and updating of key interests, needs occupational health and safety, disclosure. The principles to determine taken to mitigate the risks and to and expectations of stakeholders, on environmental protection, social the content and quality of the Report, assess their effectiveness. the basis of that priorities and best responsibility, etc.). including the context of sustainable practices for communications with — Increasing the scope of the development, timeliness, balance, them are determined. The results are implementation of infographics in the — CJSC Bureau Veritas Certification comparability, completeness, accuracy, documented and promptly sent to disclosure of the material aspects of Rus officially declares that this clarity, etc. are implemented. The stakeholders. Evaluation of the the Company`s activities. Assurance is an independent assessment of a third party auditor. Report complies with the declared level effectiveness of the communications — The development of the practice of CJSC Bureau Veritas Certification of accountability B+. The fact that the with stakeholders is carried out. As a public dialogues with stakeholders` Rus has no commercial interest in Report does not contain detailed result of the preparation of the Report, representatives on the most the Company`s activities except for information on certain GRI performance public assurance that confirms the substantive issues of the Company`s the assurance services rendered. indicators is due to the fact that materiality and completeness of the sustainable development, including currently the Company collects information disclosed and the in the regions where the Company — The auditors of CJSC Bureau Veritas statistical data to justify them. In Company's responsiveness to the operates. Certification Rus involved in the work addition, the Company believes that inquiries from stakeholders is carried on assurance have the necessary — Conducting social reporting process certain performance indicators are not out. level of competence in the assurance internal audit in the Company and material for stakeholders and their of public non-financial reporting in presenting materials in subsequent contribution to the reporting can be accordance with our internal reporting cycles. neglected. Recommendations to Prepare procedures and best practices. Corporate Public Non-Financial The Extent and Quality of Reporting in the Future Based Stakeholders Engagement in on Best Practices Accordance with AA1000SES — Disclosure of information in the (2011) Standard reports according to "completed tasks - plans for next year - the The process of public reporting is prospects for the next few years" generally follows the recommendations principles. of the AA1000SES (2011) standard. The Company has developed, implemented — Further disclosure of performance and maintained a methodology for the indicators in the reports provided by the Global Reporting Initiative Addressed to Open Joint Stock 4. To assess the degree of compliance Company "Federal Grid Company of of the Report with B+ level of the Global Unified Energy System" and its Reporting Initiative Sustainability stakeholders. Reporting Guidelines, declared by the Company. Introduction 5. To make recommendations on the preparation of corporate public This audit assurance refers to the non-financial reporting for future public report on social responsibility periods. and corporate sustainability of Federal Grid (hereinafter - the Report) based on 2012 FY results. The report prepared by Type and Level of the Assurance Federal Grid (hereinafter - the The assurance of the Report is based Company), which is responsible for the on the following provisions of АА preparation, compilation and 1000AS (2008) standard: presentation of all information in the Report. Within the agreed task CJSC — the type of assurance - 2 ("Type 2 - Bureau Veritas Certification Rus bears AccountAbility Principles and responsibility only to the Company for Performance Information"), which the results of work on limited provides for assessment of the assurance of the Report and does not degree of compliance of the above assume responsibility to any party for accountability principles in the decisions made, deferred or withdrawn aggregate with the assessment of on the basis of the assurance. the reliability of performance indicators (data, statements) included in the Report; Objectives and Criteria for — the level of assurance - "moderate". Assurance Work on the assurance of the Report is performed on the basis of a formalized Methodology and Scope of Work methodology of assurance standards Performed on the Assurance AA1000 Assurance Standard (AS) 2008 — Interviews with the Company`s and audit of non-financial reporting management` representatives to ISAE 3000. clarify how the Company accounts for While working on the Report the key aspects of corporate social following problems were set and solved: responsibility in forming long-term business development strategy and 1. To assess compliance with the how these aspects are integrated principles of inclusivity in the Report, into the Company`s business materiality and responsiveness, processes system. described in AA1000 Accountability Principles Standard (APS) 2008. — Interviews with key personnel of the Company, involved in the preparation 2. To assess the level and quality of of various sections of the Report, to stakeholder`s engagement in the confirm the fairness of the preparation of the Report in accordance statements and information in the with AA1000 Stakeholder Engagement Report. Standard (SES) 2011. — Verification of the objectives` 3. To assess the degree of the implementation in the field of implementation of principles by the corporate social responsibility for Company to determine the content and 2012 set by the Company in quality of the Report on Global 2010-2011reports. Reporting Initiative Sustainability Reporting Guidelines, including the — Verification of documents context of sustainable development, the (regulations, guidelines, etc.) and complete coverage of material topics information (including the primary and indicators, balance, comparability sources of information), which and accuracy etc. characterize the results of responsible business practices in the
field of corporate social — participation of a representative of The Basis for the Formation of diagrams, which have a positive responsibility. Bureau Veritas Certification Rus in our Opinion effect on the overall perception of the — Assessment of the effectiveness of the Company's dialogue with reporting information. stakeholders (April 5, 2013) and Work on the assurance of the Report economic, environmental and social was based on the analysis of supporting — The Company has effective aspects of managerial approaches public hearings on the Report (April management systems, which can 26, 2013); information provided by the Company`s applied by the Company. management and its structural identify material economic, social — Verification of the Company`s — visit of assurer the Company`s divisions, on data of the state statistical and environmental aspects of the communications with stakeholders in headquarters in May 2013, interviews reporting and on other information activities, plan, manage and improve the reporting period, including via with managers and specialists on from available sources using analytical related processes, define the the presence of the representatives environmental management, methods for confirmation. Assurance expectations of stakeholders on the of Bureau Veritas Certification Rus at occupational health and safety, social includes the Company`s size, role and material aspects, reflect them in its public events with stakeholders to and personnel policies and corporate place in the Russian energy sector and policy and timely respond to them in assess the criteria and procedures communications; entitative limitations of a confidential the course of operating activity. for selection of material economic, — visit of assurer the Company`s nature. Selective verification of — Systems of organization, social and environmental aspects to branch MES of the Center in May information in the Report carried out management and monitoring for the be included in the Report. 2013, interviews with managers and within the framework of the "moderate" process to prepare the public — Verification of the processes, used by specialists on issues of the branch`s level of assurance provides a lower level non-financial reporting on the part of the Company, of the collection, participation in the preparation of of guarantees of assurance than a full the Company's management are fully consolidation, processing, analysis information for the Report. audit of all information ("higher" level). complied with the Company`s and documentation of information In preparing assurance, in addition to With respect to numerical information mission, its policies, procedures and included in the Report. the Report`s information, the in the Report, the work performed resources. cannot be considered exhaustive to — Study of documents based on the information published on the corporate — Corporate social responsibility and website http://www.fsk-ees.ru/, as well identify all possible inaccurate sustainable development policy is an results of the Company and information. However, data collected by stakeholders dialogue (information as materials of mass media, including important part of the overall process news agencies ITAR-TASS, Interfax, RIA the assurer in the course of work is a to develop the Company`s materials, lists of participants, sufficient basis to form our conclusions minutes of meetings, changes and Novosti, RBC, Finam.Ru, federal development strategy, implement newspapers "Kommersant Ъ", with the accepted "moderate" level of planned measures, evaluate its additions made to the Report on the assurance as to the degree of the results of these events.) Komsomolskaya Pravda, corporate performance and develop key areas newspaper "Unified Grid" were used. Company`s compliance with the for improving business. — Analysis of data extract from mass principles of inclusivity, materiality and media and Internet resources with responsiveness of AA1000APS (2008) — The Company`s top management references to the Company's Scope of Assurance standard, as well as the quality of demonstrates its commitment to the information disclosure on performance principles of corporate social activities in the field of assurance, — Assurance was not conducted with indicators of sustainable development responsibility and sustainable and published statements of third respect to performance indicators, in accordance with AA1000AS (2008) development, and is directly involved parties which characterize the beyond the timeframe of the current standard and the GRI`s in the preparation of the Report. Company's commitment to the 2012 reporting cycle. values of corporate social recommendations. — Some inaccuracies, errors and responsibility as an evidential base to — Assurance was not conducted with discrepancies in figures identified on respect to financial performance, verify the feasibility of the statements Our Opinion on the Report as a a selective basis during the work on in the Report. verified by other independent audit the preliminary version of the Report organizations. Whole — Review of the preliminary version of are not critical. They generally do not the Report to identify possible — Assurance did not extend to the — The Report adequately reflects the distort the information contained in inaccuracies, contradictions and opinions, assumptions, suggestions Company`s performance in terms of the Report and have not significant unfounded statements. or intentions of the Company to take corporate non-financial public impact on stakeholders` ability to any actions in the future. reporting. draw corresponding conclusions in — Verification of the compliance of the terms of the results of the — Assurance did not include the — The structure of the Report is information published on the Company`s activity and are performance indicators of Global rational; it is presented in an Company`s corporate website with eliminated by the Company in the Reporting Initiative Sustainability understandable form, sufficiently standards AA1000APS (2008), final version of the Report. AA1000SES (2011) and the GRI`s Reporting Guidelines, recognized accurate, objective, informative and recommendations. irrelevant by the Company at the time balanced in content. The Report of preparing this Report. contains information in an amount Compliance of the Report with Verification of the adequacy of sufficient for stakeholders and, at the presented statements, applications and — The work on the assurance was AA1000APS (2008) Principles carried out prior to its official same time, avoids excessive details. information in the Report was carried Abbreviations and technical terms Stakeholders` Engagement out using the following procedures: publication on the Company`s corporate website. are explained. Text part of the Report — The information presented in the is accompanied by charts and Report and direct and indirect
APPENDICES
evidences obtained by us suggest social and environmental aspects of development, which would have been prevention of industrial injuries and that in preparing the information to the Company`s activities for missed or wrongly excluded from occupational diseases, the be included in the Report the stakeholders. The Report provides a reporting, can be called. improvement of working conditions interests of key stakeholders were list of 2012 key events in the context — Sufficient information about the and occupational safety and health of taken into consideration. of its sustainable development. Company's compliance with employees. Ensuring safe work of — The Company provides a — In determining material aspects the regulatory acts of the Russian personnel is one of the Company`s comprehensive, coherent and Company took into account the key Federation is provided in the Report. key priorities. consistent approach to consideration internal and external factors of — Responsiveness to the regions of of all material aspects identified activities, as well as risks. presence` needs is accomplished during communications with the Responsiveness to through a wide range of economic — The Report discovers essential Stakeholders` Expectations stakeholders, as well as to identify — information on maintaining the and social programs and projects. ways to address them. Company's economic sustainability, — Currently we are not aware of such The Company is the largest taxpayer — The Company assesses the degree of priority areas of activities, the areas, which could be but were not at the federal, regional and local implementation of the identified implementation of its investment disclosed in the Report, in which the levels and contributes to the interests and proposals of program and innovative policy and Company would be unable to respond formation of industrial and stakeholders with its documentation gives self-esteem of the social to reasonable inquiries from socio-economic infrastructure in the in the Report. commitments` fulfillment for 2012. stakeholders. regions and involves in the preparation of the 2014 Olympic — The main channels of informing and — The degree of attention paid to the — The Report contains information on Games, as well as the 2018 FIFA communicating with stakeholders various topics in the Report is accounting proposals from World Cup. Cooperation agreements include: reports, including this proportional to their relative stakeholders made during the were signed with 25 constituent Report, meetings with the importance (materiality). dialogue and the public hearings on entities of the Russian Federation. Company`s top management, its the Report. — The Company demonstrates an — The right of the population to a subsidiaries and dependent understanding of the concept of — The Company fulfilled a significant companies with managerial and favorable environment is ensured by corporate social responsibility and part of the plans and commitments the Company`s planned operational personnel, news, press sustainable development, uses presented in the previous period releases, interviews, negotiations, environmental activities. The objective information in reflecting Reports. Some commitments are Company has developed a corporate conferences, forums, surveys, the different topics in its Report. The being fulfilled. Company`s website, publications in environmental policy and its Report contains the long-term — The Сompany is customer-oriented. implementation program and an mass media, audits and verifications, objectives of sustainable written appeals and complaints, as Requirements of consumers are environmental management system development for 2013-2014 and for provided with reliable and quality based on the ISO 14001:2004 well as other public access the long term for some areas of mechanisms. power supply and short terms of international standard is consistently activities (anti-corruption efforts, technological connection to power implemented. Environmental — The Company has a long-standing environmental policy and innovation grids. In forming the Company`s monitoring and environmental audits practice to prepare reports on social development). positive image as a reliable partner, are conducted. The Company`s responsibility and corporate — The format of the provision of the investment and innovation managerial and investment decisions sustainability with engagement of information and data in the Report activities which received provide for the consideration of stakeholders, while ensuring enables users to identify trends in considerable attention in the Report, environmental aspects. continuity and transparency of the the Company`s performance play a significant role. Over a period Environmentally friendly technologies reporting preparation process. indicators, its achievements and of several years, the Company of power transmission which reduce partially - unsolved problems in the surveys level of satisfaction with the the burden on the environment are The Materiality of the context of economic, environmental quality of services on technological introduced. The Company`s and social aspects. connection. Positive dynamics of technical policy provides for Information Provided satisfaction is achieved. measures to reduce the impact of — The provided information about the — The Company has implemented a power grid facilities on the species material aspects of corporate social — Opinions and expectations of the process to identify the material composition of animals. Register for responsibility and sustainable Company's shareholders are aspects of activity due to specificity specially protected natural development of the Company has recognized by implementing the of energy industry and the GRI reservations, where Federal Grid sufficient traceability of the corporate governance principles. guidelines with respect to the operates, is maintained. processes of gathering, processing, reporting principles. During the — Interests of employees are taken into Implementation of a wide range of transfer and presentation of reporting period, the process of account by accepting collective organizational and technical information. actualization of material aspects was agreements. measures resulted in the maintained on a continuous basis. — Based on an analysis of the Report`s — The Company has developed and achievement of positive dynamics on information and interviews, no key indicators of the environmental — The Report is a balanced and implemented a risk management material aspects of corporate social impact. reasonable presentation of system in the field of occupational responsibility and sustainable information on material economic, safety and health, aimed at
174
Compliance of the Report with identification of stakeholders on the Sustainability Reporting Guidelines The Statement of Bureau the GRI Guidelines basis of multi-criteria approach, using GRI G3.1 and industry-specific Veritas Certification Rus on the criteria of dependency, responsibility, application for the electric power The Report is prepared by using the degree of impact, etc. The process of industry. Independence, Impartiality and recommendations of the Global stakeholders` engagement in the Competence Reporting Initiative Sustainability — More detailed description of the preparation of corporate reporting is — Bureau Veritas is an independent Reporting Guidelines GRI G3.1. The Company`s risk management planned well in advance. Responsibility professional international company Report contains information on all directly in the reports of social and authorities of the Company`s which specializes for over 180 years standard reporting elements, as well as responsibility and corporate management and employees in the area in providing services in the field of the needed GRI key performance sustainability, including the risks` of communications with stakeholders accredited certification of various indicators. Table of the GRI Guideline’s register, risks` priority ranking, are identified, the necessary resources management systems (in particular, indicators in the Report objectively description of existing methods of are being allocated. Periodic monitoring quality management systems, reflects the actual level of information managing these risks, the measures and updating of key interests, needs occupational health and safety, disclosure. The principles to determine taken to mitigate the risks and to and expectations of stakeholders, on environmental protection, social the content and quality of the Report, assess their effectiveness. the basis of that priorities and best responsibility, etc.). including the context of sustainable practices for communications with — Increasing the scope of the development, timeliness, balance, them are determined. The results are implementation of infographics in the — CJSC Bureau Veritas Certification comparability, completeness, accuracy, documented and promptly sent to disclosure of the material aspects of Rus officially declares that this clarity, etc. are implemented. The stakeholders. Evaluation of the the Company`s activities. Assurance is an independent assessment of a third party auditor. Report complies with the declared level effectiveness of the communications — The development of the practice of CJSC Bureau Veritas Certification of accountability B+. The fact that the with stakeholders is carried out. As a public dialogues with stakeholders` Rus has no commercial interest in Report does not contain detailed result of the preparation of the Report, representatives on the most the Company`s activities except for information on certain GRI performance public assurance that confirms the substantive issues of the Company`s the assurance services rendered. indicators is due to the fact that materiality and completeness of the sustainable development, including currently the Company collects information disclosed and the in the regions where the Company — The auditors of CJSC Bureau Veritas statistical data to justify them. In Company's responsiveness to the operates. Certification Rus involved in the work addition, the Company believes that inquiries from stakeholders is carried on assurance have the necessary — Conducting social reporting process certain performance indicators are not out. level of competence in the assurance internal audit in the Company and material for stakeholders and their of public non-financial reporting in presenting materials in subsequent contribution to the reporting can be accordance with our internal reporting cycles. neglected. Recommendations to Prepare procedures and best practices. Corporate Public Non-Financial The Extent and Quality of Reporting in the Future Based Stakeholders Engagement in on Best Practices Accordance with AA1000SES — Disclosure of information in the (2011) Standard reports according to "completed tasks - plans for next year - the The process of public reporting is prospects for the next few years" generally follows the recommendations principles. of the AA1000SES (2011) standard. The Company has developed, implemented — Further disclosure of performance and maintained a methodology for the indicators in the reports provided by the Global Reporting Initiative Addressed to Open Joint Stock 4. To assess the degree of compliance Company "Federal Grid Company of of the Report with B+ level of the Global Unified Energy System" and its Reporting Initiative Sustainability stakeholders. Reporting Guidelines, declared by the Company. Introduction 5. To make recommendations on the preparation of corporate public This audit assurance refers to the non-financial reporting for future public report on social responsibility periods. and corporate sustainability of Federal Grid (hereinafter - the Report) based on 2012 FY results. The report prepared by Type and Level of the Assurance Federal Grid (hereinafter - the The assurance of the Report is based Company), which is responsible for the on the following provisions of АА preparation, compilation and 1000AS (2008) standard: presentation of all information in the Report. Within the agreed task CJSC — the type of assurance - 2 ("Type 2 - Bureau Veritas Certification Rus bears AccountAbility Principles and responsibility only to the Company for Performance Information"), which the results of work on limited provides for assessment of the assurance of the Report and does not degree of compliance of the above assume responsibility to any party for accountability principles in the decisions made, deferred or withdrawn aggregate with the assessment of on the basis of the assurance. the reliability of performance indicators (data, statements) included in the Report; Objectives and Criteria for — the level of assurance - "moderate". Assurance Work on the assurance of the Report is performed on the basis of a formalized Methodology and Scope of Work methodology of assurance standards Performed on the Assurance AA1000 Assurance Standard (AS) 2008 — Interviews with the Company`s and audit of non-financial reporting management` representatives to ISAE 3000. clarify how the Company accounts for While working on the Report the key aspects of corporate social following problems were set and solved: responsibility in forming long-term business development strategy and 1. To assess compliance with the how these aspects are integrated principles of inclusivity in the Report, into the Company`s business materiality and responsiveness, processes system. described in AA1000 Accountability Principles Standard (APS) 2008. — Interviews with key personnel of the Company, involved in the preparation 2. To assess the level and quality of of various sections of the Report, to stakeholder`s engagement in the confirm the fairness of the preparation of the Report in accordance statements and information in the with AA1000 Stakeholder Engagement Report. Standard (SES) 2011. — Verification of the objectives` 3. To assess the degree of the implementation in the field of implementation of principles by the corporate social responsibility for Company to determine the content and 2012 set by the Company in quality of the Report on Global 2010-2011reports. Reporting Initiative Sustainability Reporting Guidelines, including the — Verification of documents context of sustainable development, the (regulations, guidelines, etc.) and complete coverage of material topics information (including the primary and indicators, balance, comparability sources of information), which and accuracy etc. characterize the results of responsible business practices in the
field of corporate social — participation of a representative of The Basis for the Formation of diagrams, which have a positive responsibility. Bureau Veritas Certification Rus in our Opinion effect on the overall perception of the — Assessment of the effectiveness of the Company's dialogue with reporting information. stakeholders (April 5, 2013) and Work on the assurance of the Report economic, environmental and social was based on the analysis of supporting — The Company has effective aspects of managerial approaches public hearings on the Report (April management systems, which can 26, 2013); information provided by the Company`s applied by the Company. management and its structural identify material economic, social — Verification of the Company`s — visit of assurer the Company`s divisions, on data of the state statistical and environmental aspects of the communications with stakeholders in headquarters in May 2013, interviews reporting and on other information activities, plan, manage and improve the reporting period, including via with managers and specialists on from available sources using analytical related processes, define the the presence of the representatives environmental management, methods for confirmation. Assurance expectations of stakeholders on the of Bureau Veritas Certification Rus at occupational health and safety, social includes the Company`s size, role and material aspects, reflect them in its public events with stakeholders to and personnel policies and corporate place in the Russian energy sector and policy and timely respond to them in assess the criteria and procedures communications; entitative limitations of a confidential the course of operating activity. for selection of material economic, — visit of assurer the Company`s nature. Selective verification of — Systems of organization, social and environmental aspects to branch MES of the Center in May information in the Report carried out management and monitoring for the be included in the Report. 2013, interviews with managers and within the framework of the "moderate" process to prepare the public — Verification of the processes, used by specialists on issues of the branch`s level of assurance provides a lower level non-financial reporting on the part of the Company, of the collection, participation in the preparation of of guarantees of assurance than a full the Company's management are fully consolidation, processing, analysis information for the Report. audit of all information ("higher" level). complied with the Company`s and documentation of information In preparing assurance, in addition to With respect to numerical information mission, its policies, procedures and included in the Report. the Report`s information, the in the Report, the work performed resources. cannot be considered exhaustive to — Study of documents based on the information published on the corporate — Corporate social responsibility and website http://www.fsk-ees.ru/, as well identify all possible inaccurate sustainable development policy is an results of the Company and information. However, data collected by stakeholders dialogue (information as materials of mass media, including important part of the overall process news agencies ITAR-TASS, Interfax, RIA the assurer in the course of work is a to develop the Company`s materials, lists of participants, sufficient basis to form our conclusions minutes of meetings, changes and Novosti, RBC, Finam.Ru, federal development strategy, implement newspapers "Kommersant Ъ", with the accepted "moderate" level of planned measures, evaluate its additions made to the Report on the assurance as to the degree of the results of these events.) Komsomolskaya Pravda, corporate performance and develop key areas newspaper "Unified Grid" were used. Company`s compliance with the for improving business. — Analysis of data extract from mass principles of inclusivity, materiality and media and Internet resources with responsiveness of AA1000APS (2008) — The Company`s top management references to the Company's Scope of Assurance standard, as well as the quality of demonstrates its commitment to the information disclosure on performance principles of corporate social activities in the field of assurance, — Assurance was not conducted with indicators of sustainable development responsibility and sustainable and published statements of third respect to performance indicators, in accordance with AA1000AS (2008) development, and is directly involved parties which characterize the beyond the timeframe of the current standard and the GRI`s in the preparation of the Report. Company's commitment to the 2012 reporting cycle. values of corporate social recommendations. — Some inaccuracies, errors and responsibility as an evidential base to — Assurance was not conducted with discrepancies in figures identified on respect to financial performance, verify the feasibility of the statements Our Opinion on the Report as a a selective basis during the work on in the Report. verified by other independent audit the preliminary version of the Report organizations. Whole — Review of the preliminary version of are not critical. They generally do not the Report to identify possible — Assurance did not extend to the — The Report adequately reflects the distort the information contained in inaccuracies, contradictions and opinions, assumptions, suggestions Company`s performance in terms of the Report and have not significant unfounded statements. or intentions of the Company to take corporate non-financial public impact on stakeholders` ability to any actions in the future. reporting. draw corresponding conclusions in — Verification of the compliance of the terms of the results of the — Assurance did not include the — The structure of the Report is information published on the Company`s activity and are performance indicators of Global rational; it is presented in an Company`s corporate website with eliminated by the Company in the Reporting Initiative Sustainability understandable form, sufficiently standards AA1000APS (2008), final version of the Report. AA1000SES (2011) and the GRI`s Reporting Guidelines, recognized accurate, objective, informative and recommendations. irrelevant by the Company at the time balanced in content. The Report of preparing this Report. contains information in an amount Compliance of the Report with Verification of the adequacy of sufficient for stakeholders and, at the presented statements, applications and — The work on the assurance was AA1000APS (2008) Principles carried out prior to its official same time, avoids excessive details. information in the Report was carried Abbreviations and technical terms Stakeholders` Engagement out using the following procedures: publication on the Company`s corporate website. are explained. Text part of the Report — The information presented in the is accompanied by charts and Report and direct and indirect
evidences obtained by us suggest social and environmental aspects of development, which would have been prevention of industrial injuries and that in preparing the information to the Company`s activities for missed or wrongly excluded from occupational diseases, the be included in the Report the stakeholders. The Report provides a reporting, can be called. improvement of working conditions interests of key stakeholders were list of 2012 key events in the context — Sufficient information about the and occupational safety and health of taken into consideration. of its sustainable development. Company's compliance with employees. Ensuring safe work of — The Company provides a — In determining material aspects the regulatory acts of the Russian personnel is one of the Company`s comprehensive, coherent and Company took into account the key Federation is provided in the Report. key priorities. consistent approach to consideration internal and external factors of — Responsiveness to the regions of of all material aspects identified activities, as well as risks. presence` needs is accomplished during communications with the Responsiveness to through a wide range of economic — The Report discovers essential Stakeholders` Expectations stakeholders, as well as to identify — information on maintaining the and social programs and projects. ways to address them. Company's economic sustainability, — Currently we are not aware of such The Company is the largest taxpayer — The Company assesses the degree of priority areas of activities, the areas, which could be but were not at the federal, regional and local implementation of the identified implementation of its investment disclosed in the Report, in which the levels and contributes to the interests and proposals of program and innovative policy and Company would be unable to respond formation of industrial and stakeholders with its documentation gives self-esteem of the social to reasonable inquiries from socio-economic infrastructure in the in the Report. commitments` fulfillment for 2012. stakeholders. regions and involves in the preparation of the 2014 Olympic — The main channels of informing and — The degree of attention paid to the — The Report contains information on Games, as well as the 2018 FIFA communicating with stakeholders various topics in the Report is accounting proposals from World Cup. Cooperation agreements include: reports, including this proportional to their relative stakeholders made during the were signed with 25 constituent Report, meetings with the importance (materiality). dialogue and the public hearings on entities of the Russian Federation. Company`s top management, its the Report. — The Company demonstrates an — The right of the population to a subsidiaries and dependent understanding of the concept of — The Company fulfilled a significant companies with managerial and favorable environment is ensured by corporate social responsibility and part of the plans and commitments the Company`s planned operational personnel, news, press sustainable development, uses presented in the previous period releases, interviews, negotiations, environmental activities. The objective information in reflecting Reports. Some commitments are Company has developed a corporate conferences, forums, surveys, the different topics in its Report. The being fulfilled. Company`s website, publications in environmental policy and its Report contains the long-term — The Сompany is customer-oriented. implementation program and an mass media, audits and verifications, objectives of sustainable written appeals and complaints, as Requirements of consumers are environmental management system development for 2013-2014 and for provided with reliable and quality based on the ISO 14001:2004 well as other public access the long term for some areas of mechanisms. power supply and short terms of international standard is consistently activities (anti-corruption efforts, technological connection to power implemented. Environmental — The Company has a long-standing environmental policy and innovation grids. In forming the Company`s monitoring and environmental audits practice to prepare reports on social development). positive image as a reliable partner, are conducted. The Company`s responsibility and corporate — The format of the provision of the investment and innovation managerial and investment decisions sustainability with engagement of information and data in the Report activities which received provide for the consideration of stakeholders, while ensuring enables users to identify trends in considerable attention in the Report, environmental aspects. continuity and transparency of the the Company`s performance play a significant role. Over a period Environmentally friendly technologies reporting preparation process. indicators, its achievements and of several years, the Company of power transmission which reduce partially - unsolved problems in the surveys level of satisfaction with the the burden on the environment are The Materiality of the context of economic, environmental quality of services on technological introduced. The Company`s and social aspects. connection. Positive dynamics of technical policy provides for Information Provided satisfaction is achieved. measures to reduce the impact of — The provided information about the — The Company has implemented a power grid facilities on the species material aspects of corporate social — Opinions and expectations of the process to identify the material composition of animals. Register for responsibility and sustainable Company's shareholders are aspects of activity due to specificity specially protected natural development of the Company has recognized by implementing the of energy industry and the GRI reservations, where Federal Grid sufficient traceability of the corporate governance principles. guidelines with respect to the operates, is maintained. processes of gathering, processing, reporting principles. During the — Interests of employees are taken into Implementation of a wide range of transfer and presentation of reporting period, the process of account by accepting collective organizational and technical information. actualization of material aspects was agreements. measures resulted in the maintained on a continuous basis. — Based on an analysis of the Report`s — The Company has developed and achievement of positive dynamics on information and interviews, no key indicators of the environmental — The Report is a balanced and implemented a risk management material aspects of corporate social impact. reasonable presentation of system in the field of occupational responsibility and sustainable information on material economic, safety and health, aimed at
Compliance of the Report with identification of stakeholders on the Sustainability Reporting Guidelines The Statement of Bureau the GRI Guidelines basis of multi-criteria approach, using GRI G3.1 and industry-specific Veritas Certification Rus on the criteria of dependency, responsibility, application for the electric power The Report is prepared by using the degree of impact, etc. The process of industry. Independence, Impartiality and recommendations of the Global stakeholders` engagement in the Competence Reporting Initiative Sustainability — More detailed description of the preparation of corporate reporting is — Bureau Veritas is an independent Reporting Guidelines GRI G3.1. The Company`s risk management planned well in advance. Responsibility professional international company Report contains information on all directly in the reports of social and authorities of the Company`s which specializes for over 180 years standard reporting elements, as well as responsibility and corporate management and employees in the area in providing services in the field of the needed GRI key performance sustainability, including the risks` of communications with stakeholders accredited certification of various indicators. Table of the GRI Guideline’s register, risks` priority ranking, are identified, the necessary resources management systems (in particular, indicators in the Report objectively description of existing methods of are being allocated. Periodic monitoring quality management systems, reflects the actual level of information managing these risks, the measures and updating of key interests, needs occupational health and safety, disclosure. The principles to determine taken to mitigate the risks and to and expectations of stakeholders, on environmental protection, social the content and quality of the Report, assess their effectiveness. the basis of that priorities and best responsibility, etc.). including the context of sustainable practices for communications with — Increasing the scope of the development, timeliness, balance, them are determined. The results are implementation of infographics in the — CJSC Bureau Veritas Certification comparability, completeness, accuracy, documented and promptly sent to disclosure of the material aspects of Rus officially declares that this clarity, etc. are implemented. The stakeholders. Evaluation of the the Company`s activities. Assurance is an independent assessment of a third party auditor. Report complies with the declared level effectiveness of the communications — The development of the practice of CJSC Bureau Veritas Certification of accountability B+. The fact that the with stakeholders is carried out. As a public dialogues with stakeholders` Rus has no commercial interest in Report does not contain detailed result of the preparation of the Report, representatives on the most the Company`s activities except for information on certain GRI performance public assurance that confirms the substantive issues of the Company`s the assurance services rendered. indicators is due to the fact that materiality and completeness of the sustainable development, including currently the Company collects information disclosed and the in the regions where the Company — The auditors of CJSC Bureau Veritas statistical data to justify them. In Company's responsiveness to the operates. Certification Rus involved in the work addition, the Company believes that inquiries from stakeholders is carried on assurance have the necessary — Conducting social reporting process certain performance indicators are not out. level of competence in the assurance internal audit in the Company and material for stakeholders and their of public non-financial reporting in presenting materials in subsequent contribution to the reporting can be accordance with our internal reporting cycles. neglected. Recommendations to Prepare procedures and best practices. Corporate Public Non-Financial The Extent and Quality of Reporting in the Future Based Stakeholders Engagement in on Best Practices Accordance with AA1000SES — Disclosure of information in the (2011) Standard reports according to "completed tasks - plans for next year - the The process of public reporting is prospects for the next few years" generally follows the recommendations principles. of the AA1000SES (2011) standard. The Company has developed, implemented — Further disclosure of performance and maintained a methodology for the indicators in the reports provided by the Global Reporting Initiative Addressed to Open Joint Stock 4. To assess the degree of compliance Company "Federal Grid Company of of the Report with B+ level of the Global Unified Energy System" and its Reporting Initiative Sustainability stakeholders. Reporting Guidelines, declared by the Company. Introduction 5. To make recommendations on the preparation of corporate public This audit assurance refers to the non-financial reporting for future public report on social responsibility periods. and corporate sustainability of Federal Grid (hereinafter - the Report) based on 2012 FY results. The report prepared by Type and Level of the Assurance Federal Grid (hereinafter - the The assurance of the Report is based Company), which is responsible for the on the following provisions of АА preparation, compilation and 1000AS (2008) standard: presentation of all information in the Report. Within the agreed task CJSC — the type of assurance - 2 ("Type 2 - Bureau Veritas Certification Rus bears AccountAbility Principles and responsibility only to the Company for Performance Information"), which the results of work on limited provides for assessment of the assurance of the Report and does not degree of compliance of the above assume responsibility to any party for accountability principles in the decisions made, deferred or withdrawn aggregate with the assessment of on the basis of the assurance. the reliability of performance indicators (data, statements) included in the Report; Objectives and Criteria for — the level of assurance - "moderate". Assurance Work on the assurance of the Report is performed on the basis of a formalized Methodology and Scope of Work methodology of assurance standards Performed on the Assurance AA1000 Assurance Standard (AS) 2008 — Interviews with the Company`s and audit of non-financial reporting management` representatives to ISAE 3000. clarify how the Company accounts for While working on the Report the key aspects of corporate social following problems were set and solved: responsibility in forming long-term business development strategy and 1. To assess compliance with the how these aspects are integrated principles of inclusivity in the Report, into the Company`s business materiality and responsiveness, processes system. described in AA1000 Accountability Principles Standard (APS) 2008. — Interviews with key personnel of the Company, involved in the preparation 2. To assess the level and quality of of various sections of the Report, to stakeholder`s engagement in the confirm the fairness of the preparation of the Report in accordance statements and information in the with AA1000 Stakeholder Engagement Report. Standard (SES) 2011. — Verification of the objectives` 3. To assess the degree of the implementation in the field of implementation of principles by the corporate social responsibility for Company to determine the content and 2012 set by the Company in quality of the Report on Global 2010-2011reports. Reporting Initiative Sustainability Reporting Guidelines, including the — Verification of documents context of sustainable development, the (regulations, guidelines, etc.) and complete coverage of material topics information (including the primary and indicators, balance, comparability sources of information), which and accuracy etc. characterize the results of responsible business practices in the
field of corporate social — participation of a representative of The Basis for the Formation of diagrams, which have a positive responsibility. Bureau Veritas Certification Rus in our Opinion effect on the overall perception of the — Assessment of the effectiveness of the Company's dialogue with reporting information. stakeholders (April 5, 2013) and Work on the assurance of the Report economic, environmental and social was based on the analysis of supporting — The Company has effective aspects of managerial approaches public hearings on the Report (April management systems, which can 26, 2013); information provided by the Company`s applied by the Company. management and its structural identify material economic, social — Verification of the Company`s — visit of assurer the Company`s divisions, on data of the state statistical and environmental aspects of the communications with stakeholders in headquarters in May 2013, interviews reporting and on other information activities, plan, manage and improve the reporting period, including via with managers and specialists on from available sources using analytical related processes, define the the presence of the representatives environmental management, methods for confirmation. Assurance expectations of stakeholders on the of Bureau Veritas Certification Rus at occupational health and safety, social includes the Company`s size, role and material aspects, reflect them in its public events with stakeholders to and personnel policies and corporate place in the Russian energy sector and policy and timely respond to them in assess the criteria and procedures communications; entitative limitations of a confidential the course of operating activity. for selection of material economic, — visit of assurer the Company`s nature. Selective verification of — Systems of organization, social and environmental aspects to branch MES of the Center in May information in the Report carried out management and monitoring for the be included in the Report. 2013, interviews with managers and within the framework of the "moderate" process to prepare the public — Verification of the processes, used by specialists on issues of the branch`s level of assurance provides a lower level non-financial reporting on the part of the Company, of the collection, participation in the preparation of of guarantees of assurance than a full the Company's management are fully consolidation, processing, analysis information for the Report. audit of all information ("higher" level). complied with the Company`s and documentation of information In preparing assurance, in addition to With respect to numerical information mission, its policies, procedures and included in the Report. the Report`s information, the in the Report, the work performed resources. cannot be considered exhaustive to — Study of documents based on the information published on the corporate — Corporate social responsibility and website http://www.fsk-ees.ru/, as well identify all possible inaccurate sustainable development policy is an results of the Company and information. However, data collected by stakeholders dialogue (information as materials of mass media, including important part of the overall process news agencies ITAR-TASS, Interfax, RIA the assurer in the course of work is a to develop the Company`s materials, lists of participants, sufficient basis to form our conclusions minutes of meetings, changes and Novosti, RBC, Finam.Ru, federal development strategy, implement newspapers "Kommersant Ъ", with the accepted "moderate" level of planned measures, evaluate its additions made to the Report on the assurance as to the degree of the results of these events.) Komsomolskaya Pravda, corporate performance and develop key areas newspaper "Unified Grid" were used. Company`s compliance with the for improving business. — Analysis of data extract from mass principles of inclusivity, materiality and media and Internet resources with responsiveness of AA1000APS (2008) — The Company`s top management references to the Company's Scope of Assurance standard, as well as the quality of demonstrates its commitment to the information disclosure on performance principles of corporate social activities in the field of assurance, — Assurance was not conducted with indicators of sustainable development responsibility and sustainable and published statements of third respect to performance indicators, in accordance with AA1000AS (2008) development, and is directly involved parties which characterize the beyond the timeframe of the current standard and the GRI`s in the preparation of the Report. Company's commitment to the 2012 reporting cycle. values of corporate social recommendations. — Some inaccuracies, errors and responsibility as an evidential base to — Assurance was not conducted with discrepancies in figures identified on respect to financial performance, verify the feasibility of the statements Our Opinion on the Report as a a selective basis during the work on in the Report. verified by other independent audit the preliminary version of the Report organizations. Whole — Review of the preliminary version of are not critical. They generally do not the Report to identify possible — Assurance did not extend to the — The Report adequately reflects the distort the information contained in inaccuracies, contradictions and opinions, assumptions, suggestions Company`s performance in terms of the Report and have not significant unfounded statements. or intentions of the Company to take corporate non-financial public impact on stakeholders` ability to any actions in the future. reporting. draw corresponding conclusions in — Verification of the compliance of the terms of the results of the — Assurance did not include the — The structure of the Report is information published on the Company`s activity and are performance indicators of Global rational; it is presented in an Company`s corporate website with eliminated by the Company in the Reporting Initiative Sustainability understandable form, sufficiently standards AA1000APS (2008), final version of the Report. AA1000SES (2011) and the GRI`s Reporting Guidelines, recognized accurate, objective, informative and recommendations. irrelevant by the Company at the time balanced in content. The Report of preparing this Report. contains information in an amount Compliance of the Report with Verification of the adequacy of sufficient for stakeholders and, at the presented statements, applications and — The work on the assurance was AA1000APS (2008) Principles carried out prior to its official same time, avoids excessive details. information in the Report was carried Abbreviations and technical terms Stakeholders` Engagement out using the following procedures: publication on the Company`s corporate website. are explained. Text part of the Report — The information presented in the is accompanied by charts and Report and direct and indirect
evidences obtained by us suggest social and environmental aspects of development, which would have been prevention of industrial injuries and that in preparing the information to the Company`s activities for missed or wrongly excluded from occupational diseases, the be included in the Report the stakeholders. The Report provides a reporting, can be called. improvement of working conditions interests of key stakeholders were list of 2012 key events in the context — Sufficient information about the and occupational safety and health of taken into consideration. of its sustainable development. Company's compliance with employees. Ensuring safe work of — The Company provides a — In determining material aspects the regulatory acts of the Russian personnel is one of the Company`s comprehensive, coherent and Company took into account the key Federation is provided in the Report. key priorities. consistent approach to consideration internal and external factors of — Responsiveness to the regions of of all material aspects identified activities, as well as risks. presence` needs is accomplished during communications with the Responsiveness to through a wide range of economic — The Report discovers essential Stakeholders` Expectations stakeholders, as well as to identify — information on maintaining the and social programs and projects. ways to address them. Company's economic sustainability, — Currently we are not aware of such The Company is the largest taxpayer — The Company assesses the degree of priority areas of activities, the areas, which could be but were not at the federal, regional and local implementation of the identified implementation of its investment disclosed in the Report, in which the levels and contributes to the interests and proposals of program and innovative policy and Company would be unable to respond formation of industrial and stakeholders with its documentation gives self-esteem of the social to reasonable inquiries from socio-economic infrastructure in the in the Report. commitments` fulfillment for 2012. stakeholders. regions and involves in the preparation of the 2014 Olympic — The main channels of informing and — The degree of attention paid to the — The Report contains information on Games, as well as the 2018 FIFA communicating with stakeholders various topics in the Report is accounting proposals from World Cup. Cooperation agreements include: reports, including this proportional to their relative stakeholders made during the were signed with 25 constituent Report, meetings with the importance (materiality). dialogue and the public hearings on entities of the Russian Federation. Company`s top management, its the Report. — The Company demonstrates an — The right of the population to a subsidiaries and dependent understanding of the concept of — The Company fulfilled a significant companies with managerial and favorable environment is ensured by corporate social responsibility and part of the plans and commitments the Company`s planned operational personnel, news, press sustainable development, uses presented in the previous period releases, interviews, negotiations, environmental activities. The objective information in reflecting Reports. Some commitments are Company has developed a corporate conferences, forums, surveys, the different topics in its Report. The being fulfilled. Company`s website, publications in environmental policy and its Report contains the long-term — The Сompany is customer-oriented. implementation program and an mass media, audits and verifications, objectives of sustainable written appeals and complaints, as Requirements of consumers are environmental management system development for 2013-2014 and for provided with reliable and quality based on the ISO 14001:2004 well as other public access the long term for some areas of mechanisms. power supply and short terms of international standard is consistently activities (anti-corruption efforts, technological connection to power implemented. Environmental — The Company has a long-standing environmental policy and innovation grids. In forming the Company`s monitoring and environmental audits practice to prepare reports on social development). positive image as a reliable partner, are conducted. The Company`s responsibility and corporate — The format of the provision of the investment and innovation managerial and investment decisions sustainability with engagement of information and data in the Report activities which received provide for the consideration of stakeholders, while ensuring enables users to identify trends in considerable attention in the Report, environmental aspects. continuity and transparency of the the Company`s performance play a significant role. Over a period Environmentally friendly technologies reporting preparation process. indicators, its achievements and of several years, the Company of power transmission which reduce partially - unsolved problems in the surveys level of satisfaction with the the burden on the environment are The Materiality of the context of economic, environmental quality of services on technological introduced. The Company`s and social aspects. connection. Positive dynamics of technical policy provides for Information Provided satisfaction is achieved. measures to reduce the impact of — The provided information about the — The Company has implemented a power grid facilities on the species material aspects of corporate social — Opinions and expectations of the process to identify the material composition of animals. Register for responsibility and sustainable Company's shareholders are aspects of activity due to specificity specially protected natural development of the Company has recognized by implementing the of energy industry and the GRI reservations, where Federal Grid sufficient traceability of the corporate governance principles. guidelines with respect to the operates, is maintained. processes of gathering, processing, reporting principles. During the — Interests of employees are taken into Implementation of a wide range of transfer and presentation of reporting period, the process of account by accepting collective organizational and technical information. actualization of material aspects was agreements. measures resulted in the maintained on a continuous basis. — Based on an analysis of the Report`s — The Company has developed and achievement of positive dynamics on information and interviews, no key indicators of the environmental — The Report is a balanced and implemented a risk management material aspects of corporate social impact. reasonable presentation of system in the field of occupational responsibility and sustainable information on material economic, safety and health, aimed at
APPENDICES
Compliance of the Report with identification of stakeholders on the Sustainability Reporting Guidelines The Statement of Bureau the GRI Guidelines basis of multi-criteria approach, using GRI G3.1 and industry-specific Veritas Certification Rus on the criteria of dependency, responsibility, application for the electric power The Report is prepared by using the degree of impact, etc. The process of industry. Independence, Impartiality and recommendations of the Global stakeholders` engagement in the Competence Reporting Initiative Sustainability — More detailed description of the preparation of corporate reporting is — Bureau Veritas is an independent Reporting Guidelines GRI G3.1. The Company`s risk management planned well in advance. Responsibility professional international company Report contains information on all directly in the reports of social and authorities of the Company`s which specializes for over 180 years standard reporting elements, as well as responsibility and corporate management and employees in the area in providing services in the field of the needed GRI key performance sustainability, including the risks` of communications with stakeholders accredited certification of various indicators. Table of the GRI Guideline’s register, risks` priority ranking, are identified, the necessary resources management systems (in particular, indicators in the Report objectively description of existing methods of are being allocated. Periodic monitoring quality management systems, reflects the actual level of information managing these risks, the measures and updating of key interests, needs occupational health and safety, disclosure. The principles to determine taken to mitigate the risks and to and expectations of stakeholders, on environmental protection, social the content and quality of the Report, assess their effectiveness. the basis of that priorities and best responsibility, etc.). including the context of sustainable practices for communications with — Increasing the scope of the development, timeliness, balance, them are determined. The results are implementation of infographics in the — CJSC Bureau Veritas Certification comparability, completeness, accuracy, documented and promptly sent to disclosure of the material aspects of Rus officially declares that this clarity, etc. are implemented. The stakeholders. Evaluation of the the Company`s activities. Assurance is an independent assessment of a third party auditor. Report complies with the declared level effectiveness of the communications — The development of the practice of CJSC Bureau Veritas Certification of accountability B+. The fact that the with stakeholders is carried out. As a public dialogues with stakeholders` Rus has no commercial interest in Report does not contain detailed result of the preparation of the Report, representatives on the most the Company`s activities except for information on certain GRI performance public assurance that confirms the substantive issues of the Company`s the assurance services rendered. indicators is due to the fact that materiality and completeness of the sustainable development, including currently the Company collects information disclosed and the in the regions where the Company — The auditors of CJSC Bureau Veritas statistical data to justify them. In Company's responsiveness to the operates. Certification Rus involved in the work addition, the Company believes that inquiries from stakeholders is carried on assurance have the necessary — Conducting social reporting process certain performance indicators are not out. level of competence in the assurance internal audit in the Company and material for stakeholders and their of public non-financial reporting in presenting materials in subsequent contribution to the reporting can be accordance with our internal reporting cycles. neglected. Recommendations to Prepare procedures and best practices. Corporate Public Non-Financial The Extent and Quality of Reporting in the Future Based Stakeholders Engagement in on Best Practices Accordance with AA1000SES — Disclosure of information in the (2011) Standard reports according to "completed tasks - plans for next year - the The process of public reporting is prospects for the next few years" generally follows the recommendations principles. of the AA1000SES (2011) standard. The Company has developed, implemented — Further disclosure of performance and maintained a methodology for the indicators in the reports provided by the Global Reporting Initiative
176 Addressed to Open Joint Stock 4. To assess the degree of compliance Company "Federal Grid Company of of the Report with B+ level of the Global Unified Energy System" and its Reporting Initiative Sustainability stakeholders. Reporting Guidelines, declared by the Company. Introduction 5. To make recommendations on the preparation of corporate public This audit assurance refers to the non-financial reporting for future public report on social responsibility periods. and corporate sustainability of Federal Grid (hereinafter - the Report) based on 2012 FY results. The report prepared by Type and Level of the Assurance Federal Grid (hereinafter - the The assurance of the Report is based Company), which is responsible for the on the following provisions of АА preparation, compilation and 1000AS (2008) standard: presentation of all information in the Report. Within the agreed task CJSC — the type of assurance - 2 ("Type 2 - Bureau Veritas Certification Rus bears AccountAbility Principles and responsibility only to the Company for Performance Information"), which the results of work on limited provides for assessment of the assurance of the Report and does not degree of compliance of the above assume responsibility to any party for accountability principles in the decisions made, deferred or withdrawn aggregate with the assessment of on the basis of the assurance. the reliability of performance indicators (data, statements) included in the Report; Objectives and Criteria for — the level of assurance - "moderate". Assurance Work on the assurance of the Report is performed on the basis of a formalized Methodology and Scope of Work methodology of assurance standards Performed on the Assurance AA1000 Assurance Standard (AS) 2008 — Interviews with the Company`s and audit of non-financial reporting management` representatives to ISAE 3000. clarify how the Company accounts for While working on the Report the key aspects of corporate social following problems were set and solved: responsibility in forming long-term business development strategy and 1. To assess compliance with the how these aspects are integrated principles of inclusivity in the Report, into the Company`s business materiality and responsiveness, processes system. described in AA1000 Accountability Principles Standard (APS) 2008. — Interviews with key personnel of the Company, involved in the preparation 2. To assess the level and quality of of various sections of the Report, to stakeholder`s engagement in the confirm the fairness of the preparation of the Report in accordance statements and information in the with AA1000 Stakeholder Engagement Report. Standard (SES) 2011. — Verification of the objectives` 3. To assess the degree of the implementation in the field of implementation of principles by the corporate social responsibility for Company to determine the content and 2012 set by the Company in quality of the Report on Global 2010-2011reports. Reporting Initiative Sustainability Reporting Guidelines, including the — Verification of documents context of sustainable development, the (regulations, guidelines, etc.) and complete coverage of material topics information (including the primary and indicators, balance, comparability sources of information), which and accuracy etc. characterize the results of responsible business practices in the
field of corporate social — participation of a representative of The Basis for the Formation of diagrams, which have a positive responsibility. Bureau Veritas Certification Rus in our Opinion effect on the overall perception of the — Assessment of the effectiveness of the Company's dialogue with reporting information. stakeholders (April 5, 2013) and Work on the assurance of the Report economic, environmental and social was based on the analysis of supporting — The Company has effective aspects of managerial approaches public hearings on the Report (April management systems, which can 26, 2013); information provided by the Company`s applied by the Company. management and its structural identify material economic, social — Verification of the Company`s — visit of assurer the Company`s divisions, on data of the state statistical and environmental aspects of the communications with stakeholders in headquarters in May 2013, interviews reporting and on other information activities, plan, manage and improve the reporting period, including via with managers and specialists on from available sources using analytical related processes, define the the presence of the representatives environmental management, methods for confirmation. Assurance expectations of stakeholders on the of Bureau Veritas Certification Rus at occupational health and safety, social includes the Company`s size, role and material aspects, reflect them in its public events with stakeholders to and personnel policies and corporate place in the Russian energy sector and policy and timely respond to them in assess the criteria and procedures communications; entitative limitations of a confidential the course of operating activity. for selection of material economic, — visit of assurer the Company`s nature. Selective verification of — Systems of organization, social and environmental aspects to branch MES of the Center in May information in the Report carried out management and monitoring for the be included in the Report. 2013, interviews with managers and within the framework of the "moderate" process to prepare the public — Verification of the processes, used by specialists on issues of the branch`s level of assurance provides a lower level non-financial reporting on the part of the Company, of the collection, participation in the preparation of of guarantees of assurance than a full the Company's management are fully consolidation, processing, analysis information for the Report. audit of all information ("higher" level). complied with the Company`s and documentation of information In preparing assurance, in addition to With respect to numerical information mission, its policies, procedures and included in the Report. the Report`s information, the in the Report, the work performed resources. cannot be considered exhaustive to — Study of documents based on the information published on the corporate — Corporate social responsibility and website http://www.fsk-ees.ru/, as well identify all possible inaccurate sustainable development policy is an results of the Company and information. However, data collected by stakeholders dialogue (information as materials of mass media, including important part of the overall process news agencies ITAR-TASS, Interfax, RIA the assurer in the course of work is a to develop the Company`s materials, lists of participants, sufficient basis to form our conclusions minutes of meetings, changes and Novosti, RBC, Finam.Ru, federal development strategy, implement newspapers "Kommersant Ъ", with the accepted "moderate" level of planned measures, evaluate its additions made to the Report on the assurance as to the degree of the results of these events.) Komsomolskaya Pravda, corporate performance and develop key areas newspaper "Unified Grid" were used. Company`s compliance with the for improving business. — Analysis of data extract from mass principles of inclusivity, materiality and media and Internet resources with responsiveness of AA1000APS (2008) — The Company`s top management references to the Company's Scope of Assurance standard, as well as the quality of demonstrates its commitment to the information disclosure on performance principles of corporate social activities in the field of assurance, — Assurance was not conducted with indicators of sustainable development responsibility and sustainable and published statements of third respect to performance indicators, in accordance with AA1000AS (2008) development, and is directly involved parties which characterize the beyond the timeframe of the current standard and the GRI`s in the preparation of the Report. Company's commitment to the 2012 reporting cycle. values of corporate social recommendations. — Some inaccuracies, errors and responsibility as an evidential base to — Assurance was not conducted with discrepancies in figures identified on respect to financial performance, verify the feasibility of the statements Our Opinion on the Report as a a selective basis during the work on in the Report. verified by other independent audit the preliminary version of the Report organizations. Whole — Review of the preliminary version of are not critical. They generally do not the Report to identify possible — Assurance did not extend to the — The Report adequately reflects the distort the information contained in inaccuracies, contradictions and opinions, assumptions, suggestions Company`s performance in terms of the Report and have not significant unfounded statements. or intentions of the Company to take corporate non-financial public impact on stakeholders` ability to any actions in the future. reporting. draw corresponding conclusions in — Verification of the compliance of the terms of the results of the — Assurance did not include the — The structure of the Report is information published on the Company`s activity and are performance indicators of Global rational; it is presented in an Company`s corporate website with eliminated by the Company in the Reporting Initiative Sustainability understandable form, sufficiently standards AA1000APS (2008), final version of the Report. AA1000SES (2011) and the GRI`s Reporting Guidelines, recognized accurate, objective, informative and recommendations. irrelevant by the Company at the time balanced in content. The Report of preparing this Report. contains information in an amount Compliance of the Report with Verification of the adequacy of sufficient for stakeholders and, at the presented statements, applications and — The work on the assurance was AA1000APS (2008) Principles carried out prior to its official same time, avoids excessive details. information in the Report was carried Abbreviations and technical terms Stakeholders` Engagement out using the following procedures: publication on the Company`s corporate website. are explained. Text part of the Report — The information presented in the is accompanied by charts and Report and direct and indirect
evidences obtained by us suggest social and environmental aspects of development, which would have been prevention of industrial injuries and that in preparing the information to the Company`s activities for missed or wrongly excluded from occupational diseases, the be included in the Report the stakeholders. The Report provides a reporting, can be called. improvement of working conditions interests of key stakeholders were list of 2012 key events in the context — Sufficient information about the and occupational safety and health of taken into consideration. of its sustainable development. Company's compliance with employees. Ensuring safe work of — The Company provides a — In determining material aspects the regulatory acts of the Russian personnel is one of the Company`s comprehensive, coherent and Company took into account the key Federation is provided in the Report. key priorities. consistent approach to consideration internal and external factors of — Responsiveness to the regions of of all material aspects identified activities, as well as risks. presence` needs is accomplished during communications with the Responsiveness to through a wide range of economic — The Report discovers essential Stakeholders` Expectations stakeholders, as well as to identify — information on maintaining the and social programs and projects. ways to address them. Company's economic sustainability, — Currently we are not aware of such The Company is the largest taxpayer — The Company assesses the degree of priority areas of activities, the areas, which could be but were not at the federal, regional and local implementation of the identified implementation of its investment disclosed in the Report, in which the levels and contributes to the interests and proposals of program and innovative policy and Company would be unable to respond formation of industrial and stakeholders with its documentation gives self-esteem of the social to reasonable inquiries from socio-economic infrastructure in the in the Report. commitments` fulfillment for 2012. stakeholders. regions and involves in the preparation of the 2014 Olympic — The main channels of informing and — The degree of attention paid to the — The Report contains information on Games, as well as the 2018 FIFA communicating with stakeholders various topics in the Report is accounting proposals from World Cup. Cooperation agreements include: reports, including this proportional to their relative stakeholders made during the were signed with 25 constituent Report, meetings with the importance (materiality). dialogue and the public hearings on entities of the Russian Federation. Company`s top management, its the Report. — The Company demonstrates an — The right of the population to a subsidiaries and dependent understanding of the concept of — The Company fulfilled a significant companies with managerial and favorable environment is ensured by corporate social responsibility and part of the plans and commitments the Company`s planned operational personnel, news, press sustainable development, uses presented in the previous period releases, interviews, negotiations, environmental activities. The objective information in reflecting Reports. Some commitments are Company has developed a corporate conferences, forums, surveys, the different topics in its Report. The being fulfilled. Company`s website, publications in environmental policy and its Report contains the long-term — The Сompany is customer-oriented. implementation program and an mass media, audits and verifications, objectives of sustainable written appeals and complaints, as Requirements of consumers are environmental management system development for 2013-2014 and for provided with reliable and quality based on the ISO 14001:2004 well as other public access the long term for some areas of mechanisms. power supply and short terms of international standard is consistently activities (anti-corruption efforts, technological connection to power implemented. Environmental — The Company has a long-standing environmental policy and innovation grids. In forming the Company`s monitoring and environmental audits practice to prepare reports on social development). positive image as a reliable partner, are conducted. The Company`s responsibility and corporate — The format of the provision of the investment and innovation managerial and investment decisions sustainability with engagement of information and data in the Report activities which received provide for the consideration of stakeholders, while ensuring enables users to identify trends in considerable attention in the Report, environmental aspects. continuity and transparency of the the Company`s performance play a significant role. Over a period Environmentally friendly technologies reporting preparation process. indicators, its achievements and of several years, the Company of power transmission which reduce partially - unsolved problems in the surveys level of satisfaction with the the burden on the environment are The Materiality of the context of economic, environmental quality of services on technological introduced. The Company`s and social aspects. connection. Positive dynamics of technical policy provides for Information Provided satisfaction is achieved. measures to reduce the impact of — The provided information about the — The Company has implemented a power grid facilities on the species material aspects of corporate social — Opinions and expectations of the process to identify the material composition of animals. Register for responsibility and sustainable Company's shareholders are aspects of activity due to specificity specially protected natural development of the Company has recognized by implementing the of energy industry and the GRI reservations, where Federal Grid sufficient traceability of the corporate governance principles. guidelines with respect to the operates, is maintained. processes of gathering, processing, reporting principles. During the — Interests of employees are taken into Implementation of a wide range of transfer and presentation of reporting period, the process of account by accepting collective organizational and technical information. actualization of material aspects was agreements. measures resulted in the maintained on a continuous basis. — Based on an analysis of the Report`s — The Company has developed and achievement of positive dynamics on information and interviews, no key indicators of the environmental — The Report is a balanced and implemented a risk management material aspects of corporate social impact. reasonable presentation of system in the field of occupational responsibility and sustainable information on material economic, safety and health, aimed at
Compliance of the Report with identification of stakeholders on the Sustainability Reporting Guidelines The Statement of Bureau the GRI Guidelines basis of multi-criteria approach, using GRI G3.1 and industry-specific Veritas Certification Rus on the criteria of dependency, responsibility, application for the electric power The Report is prepared by using the degree of impact, etc. The process of industry. Independence, Impartiality and recommendations of the Global stakeholders` engagement in the Competence Reporting Initiative Sustainability — More detailed description of the preparation of corporate reporting is — Bureau Veritas is an independent Reporting Guidelines GRI G3.1. The Company`s risk management planned well in advance. Responsibility professional international company Report contains information on all directly in the reports of social and authorities of the Company`s which specializes for over 180 years standard reporting elements, as well as responsibility and corporate management and employees in the area in providing services in the field of the needed GRI key performance sustainability, including the risks` of communications with stakeholders accredited certification of various indicators. Table of the GRI Guideline’s register, risks` priority ranking, are identified, the necessary resources management systems (in particular, indicators in the Report objectively description of existing methods of are being allocated. Periodic monitoring quality management systems, reflects the actual level of information managing these risks, the measures and updating of key interests, needs occupational health and safety, disclosure. The principles to determine taken to mitigate the risks and to and expectations of stakeholders, on environmental protection, social the content and quality of the Report, assess their effectiveness. the basis of that priorities and best responsibility, etc.). including the context of sustainable practices for communications with — Increasing the scope of the development, timeliness, balance, them are determined. The results are implementation of infographics in the — CJSC Bureau Veritas Certification comparability, completeness, accuracy, documented and promptly sent to disclosure of the material aspects of Rus officially declares that this clarity, etc. are implemented. The stakeholders. Evaluation of the the Company`s activities. Assurance is an independent assessment of a third party auditor. Report complies with the declared level effectiveness of the communications — The development of the practice of CJSC Bureau Veritas Certification of accountability B+. The fact that the with stakeholders is carried out. As a public dialogues with stakeholders` Rus has no commercial interest in Report does not contain detailed result of the preparation of the Report, representatives on the most the Company`s activities except for information on certain GRI performance public assurance that confirms the substantive issues of the Company`s the assurance services rendered. indicators is due to the fact that materiality and completeness of the sustainable development, including currently the Company collects information disclosed and the in the regions where the Company — The auditors of CJSC Bureau Veritas statistical data to justify them. In Company's responsiveness to the operates. Certification Rus involved in the work addition, the Company believes that inquiries from stakeholders is carried on assurance have the necessary — Conducting social reporting process certain performance indicators are not out. level of competence in the assurance internal audit in the Company and material for stakeholders and their of public non-financial reporting in presenting materials in subsequent contribution to the reporting can be accordance with our internal reporting cycles. neglected. Recommendations to Prepare procedures and best practices. Corporate Public Non-Financial The Extent and Quality of Reporting in the Future Based Stakeholders Engagement in on Best Practices Assurer Accordance with AA1000SES — Disclosure of information in the (2011) Standard reports according to "completed CJSC Bureau Veritas Certification Rus tasks - plans for next year - the The process of public reporting is Vladimir Mityashin - Leading Auditor, prospects for the next few years" Ph.D. in Economics generally follows the recommendations principles. of the AA1000SES (2011) standard. The Company has developed, implemented — Further disclosure of performance IRCA №01191213 and maintained a methodology for the indicators in the reports provided by May 28, 2013 the Global Reporting Initiative Moscow Glossary and Abbreviations
Anticorruption monitoring Anticorruption monitoring consists in controlling the Company’s actions pertaining to fighting against corruption. The monitoring is performed to provide for the efficiency assessment of said actions by way of monitoring the results of actions involving the prevention of corruption factors and corruption events. The monitoring includes the analysis and assessment of data obtained, and the development of forecasts for future conditions and development trends.
Stakeholders relations Stakeholders relations is a process that helps the Company to understand the stakeholders’ expectations and concerns, involving them in the Company activities and decision-making procedures, taking into account their concerns. Dialogue with stakeholders A dialogue with stakeholders is an organized interactive interaction of the Company with its stakeholders, performed voluntary in order to update the interests and the motives of the parties involved. The Unified Energy System of Russia (UES of Russia) The UES of Russia is an aggregate of production and other energy facilities unified by the production (including combined generation of electric and heat energy) and transmission of electric power in conditions of centralized operating control.
The Unified National (all-Russian) Electric Grid (UNEG) The UNEG is the main part of the Russian UES, comprising a set of electric grids and other electric power facilities that provide for the stable supply of electric power to consumers and for the functioning of wholesale electric power market, and for the parallel operation of the Russian UES with the power systems of other countries. A stakeholder In a broad sense, a stakeholder is a group of physical or legal persons capable of exercising influence on the Company operations, while being dependent on said operations. In a strict sense, stakeholders are the federal and local authorities, commercial companies, public and non-government organizations, whose positions and actions in respect of the Company are expressed publicly, being intended to protect socially-significant and group interests.
Innovative development The innovative development consists in improving the reliability, quality and efficiency of consumer power supply by way of modernization of electric grids of the Russian UES based on innovative technologies, transforming them into the smart (active-adaptive) nucleus of the industry’s infrastructure. Intellectual (smart) grids The intellectual grids form a set of electric power transmission lines, switchgear equipment, protection and automation devices and information, process and control systems that provide for the adaptive real-time response of the generation and the grids to different violations of preset parameters, and for the forecasting and prevention of bottlenecks and critical conditions.
Key Performance Indicator (KPI) A Key Performance Indicator (KPI) is an integrated indicator of performance of a company, a company department, or a company official, reflecting the goals for the period set for a company, a company department or an official.
178 Glossary and Abbreviations
The Company Federal Grid Company Sustainability Context A company’s understanding of sustainable development, its characteristics and goals at the industry, local, regional and/or global scale and the company’s impact in corresponding geographical contexts, as well as the influence of the main sustainability issues on the company’s long-term strategy, risks and opportunities. Corporate social responsibility, (CSR) A periodically updated sum of a company obligations lying in line with the company’s operation specifics, which are developed voluntary in a joint effort with the key stakeholders, said obligations being intended to implement the internal and external social programs assisting the company’s development (production growth, service quality improvement, corporate brands development), and the improvement of the company’s standing and image, establishing the corporate identity and widening the constructive relations with the stakeholders.
Corporate social policy A policy implemented on the territory of the Company operations in the interests of the Company employees and of local communities. Corporate stability An approach to the Company’s business based on social responsibility values, and taking into account and preventing non-financial risks. Corruption Bribery, powers abuse, corrupt business practices, or any other illegal use by the employees of their position contrary to the Company interests and for the purpose of obtaining profit in the form of money, values, property or other property-related services, or other property rights for themselves or for any third parties, or any illegal provision of such profit to an employee by other physical persons, and the performance of the above actions on behalf or in the interests of a legal person.
A conflict of interests A situation where a personal interest (direct or indirect) of the Company employee affects or is likely to affect a proper performance by the employee of his/her employment duties, with the situation resulting or probably resulting in a conflict between the personal interests of the Company employee and the lawful interests of the Company, with such conflict likely resulting in causing damage to the Company interests Reliability of power supply An uninterrupted supply of power to all electric power consumers in volumes and of the quality required. Autumn and Winter Period (AWP) of Maximal Loads A period of maximal consumption of electric and thermal power at low temperature of atmospheric air. JSC FGC UES An open joint-stock company Federal Grid Company of the Unified Energy System
JSC GSS UNEG An open joint-stock Glavsetservis UNEG, a subsidiary of Federal Grid Company JSC ESS UNEG An open joint-stock company Elektrosetservis UNEG, a subsidiary of Federal Grid Company
JSC MGTES An open joint-stock company Mobile Gas-Turbine Electric Stations, a subsidiary of FGC UES
JSC UES CMEC An open joint-stock company UES Construction Management and Engineering Center, a subsidiary of Federal Grid Company Sustainable Development Agenda A list of issues, contexts and topics recognized by the Company and the stakeholders as pressing in the long run. Last Mile Mechanism A lease agreement, concluded by and between Federal Grid Company and a distribution grid company operating on the territory of a subject of the Russian Federation (with the agreement subject being a short length of 220 kV grid). Social or non-financial reporting Identification, assessment, control and publication of information the actual contribution of the Company in the development of the society, the country, or the region, prepared using the international standards of non-financial reporting and the best practices. Power supply reliability control A set of control actions and mechanisms pertaining to the organization, control and improvement of the processes of operation, on-line control, repair and renovation of the UNEG facilities, and the training of employees on the above. Sustainable development A sustainable development is a development that corresponds to the needs of today without sacrificing the future generations’ abilities to satisfy their needs. APPENDICES
ERW – emergency and recovery works; MPTLF – main power transmission lines facility; JSC-energo – an open joint-stock energy and SS - substation; electrification company; RPEA – Relay Protection and Emergency ASCMEE – automated system of commercial Automatics; metering of electric energy; SO UES – a joint-stock company System Operator AOCS – automatic operations control system; of the Unified Energy System; APEC – Asia-Pacific Economic Cooperation; RPSC – reactive power static capacitor; CB – capacitor bank; STC – static thyristor capacitor; HVL – high voltage line; SaNPiN – sanitary norms and regulations ESPO – Eastern Siberia – Pacific Ocean Oil SSHHPP – Sayano-Shushenskaya HPP; Pipeline; TGC – territorial generating company; SDC – subsidiary dependent company; TM - telemechanics; ACID – Anticorruption Action Implementation PSD – power system disturbance; Directorate; SESR TP – Smart Energy System of Russia FGC EB – Executive Body of Federal Grid Company; Technological Platform; IEAAGS – Intellectual Electric Active-Adaptive Grid MR – maintenance and repair; System TCHD – trichlordiphenyl; CSTC – Coordinating Scientific and Technical Council; CTC – Central Tender Commission; EETL – electric energy transmission line; TP – target program; IDGC – Interregional Distribution Grid Company; GCC – Grids Control Center; BGC – a bulk grid company; EMF – Electromagnetic Field MPTL – main power transmission networks; RAB - (Regulatory asset base) – return on investment. RAD – research and advanced development; WGC – wholesale generating company; OS – outdoor switchgear; WMEPC – a wholesale market for electric power and capacity; OPC – operations process control; ECA – emergency control automatics;
180 Contact Details
Address: 5A, Akademika Chelomeya Street, Moscow, 117630 Call center: 8-800-200-18-81 For international calls: +7 (495) 710-93-33 Fax: +7 (495) 710-96-55 Е-mail: [email protected] Website: www.fsk-ees.ru
Chairman of the Management Board — Oleg Budargin Reception office telephone: +7 (495) 710-90-01
Head of the Strategic Communications Department — Oleg Mikhailov Telephone: +7 (495) 710-93-39 E-mail: [email protected]
Leading Expert, Strategic Communications Department — Natalia Luks Telephone: +7 (495) 710-89-40 2 E-mail: [email protected] 3