Public Joint Stock Company ROSSETI 2020 ANNUAL FINANCIAL REPORT in compliance with the UK Disclosure and Transparency Rules April 2021 Moscow 1 Company review In accordance with Russian Federation Presidential Decree No. 1567 of November 22, 2012 "On Open Joint Stock Company Russian Grids" and the Electric Grid Sector Development Strategy No. 511-r of April 3, 2013, the following functions are assigned to ROSSETI: strategic functions; coordinating functions; supervising functions; addressing the institutional challenges facing the entire industry; participation in the consolidation of local grid operators (LGOs) in order to ensure the required level of reliability and quality of power supply to consumers. History 1992–2008 2003–2008 2008–2013 2014–… Establishment and Restructuring the energy Structuring of the ROSSETI Development and digital activities of RAO industry Group transformation of the UES of Russia JSC ROSSETI Group 1992 Based on the 2003 The Board of Directors of RAO 2012 The Decree of the President of 2017 Ordinary shares of Decree of the UES of Russia JSC developed and the Russian Federation sets out the PJSC ROSSETI were transferred to President of the adopted the strategy of RAO UES of main tasks for further restructuring Level 1 quotation list of the Moscow Russian Federation Russia JSC for 2003–2008 (5 + 5) of the sector, including the Exchange; PJSC ROSSETI's securities which was aimed at creating a RAO UES of Russia, a establishment of JSC ROSSETI to were included in the FTSE4Good competitive market in certain Russian energy improve the efficiency and Emerging Index calculation base segments of the industry, improving development of the electric grid grounded on sustainability criteria. company, was the efficiency of electric power sector of the Russian Federation, established in 1992 companies and setting the stage for coordinate the management of this 2018 The Company's Board of to preserve the the development of the industry sector, and restrain the growth of Directors approved the Digital integrity of the based on private investment. tariffs for end users of electrical Transformation 2030 Concept, domestic energy power. which meets the goals and 2004–2007 Eleven interregional system and objectives of the state program distribution grid companies were 2013 JSC IDGC Holding was Digital Economy of the Russian centralize the established, bringing together renamed JSC ROSSETI. The state- Federation. management of the distribution grids on a territorial owned stake in JSC FGC UES was electric power basis. included in the authorized capital of 2019–2020 The Company's Board of sector. The JSC ROSSETI. The consolidation of Directors approved the 2008 After the spinning out WGC 5 company launched the state-controlled power grid Development Strategy and the (wholesale generating companies), 6 assets within a single company was Long-Term Development Program its operations on TGC (territorial generating December 31, 1992. finalized. of PJSC ROSSETI and its subsidiaries companies), Inter RAO, SO UES and affiliates through 2030. (System Operator of the Unified Energy System), and JSC IDGC Holding 2020 The integration and efficiency (which owns stakes in IDGCs and of management at PJSC ROSSETI and distribution grid companies), RAO PJSC FGC UES was improved by UES of Russia merged with JSC FGC transferring the powers of the single UES and ceased to exist. executive body of PJSC FGC UES to the management company, PJSC ROSSETI. 2 Structure of the ROSSETI Group as of December 31, 2020 3 ROSSETI Group Industry: electric power Status: natural monopoly Controlling shareholder: 88.04 % of ROSSETI's authorized capital is owned by the state Geographic reach: 80 regions of the Russian Federation Services: - electric power transmission and distribution; - integration of consumers into power grids The largest systemic electric grid company Structure: - 26 grid companies; Group assets: - 9 retail companies; 2.4 mn km of transmission lines - 5 R&D, testing companies; 528 thsd substations - 27 service, maintenance, and repair companies; Average headcount of the Group: - 2 construction and procurement; 216,5 thsd employees - 15 other companies The ROSSETI Group is the monopolist in the electrical power transmission and distribution market. The market share controlled by the companies of the Group made 73.5 % in 2020. Consolidation of electric grid assets1 Acquisition of power grid facilities, MVA, Lease of power grid facilities, MVA, km km 64,101 22,991 56,683 49,441 12,351 24,726 21,406 24,813 5,618 3,093 1,986 570 2018 2019 2020 2018 2019 2020 Transformer capacity Power lines Transformer capacity Power lines Key performance indicators of the ROSSETI Group 2018 2019 2020 Length of transmission lines, mn km 2.35 2.37 2.4 1 During the relevant periods. 4 Number of SS and TS, thsd pcs 507 517 528 Capacity of SS and TS, GVA 792 802 809 Amount of connected capacity of power receivers of 13,905 11,945 10,485 consumers, MW Average headcount of power grid subsidiaries and 217.3 217.5 212.2 affiliates, thsd people Key events in 2020 Finances International rating agencies Standard & Poor’s and Moody’s maintained the credit ratings of PJSC FGC UES at a sovereign level of the Russian Federation (BBB-, outlook stable and Baa3, outlook stable, respectively). The ACRA rating agency affirmed the Company's AAA (RU) credit rating with a stable outlook. This is the highest ranking on the agency's rating scale. ROSSETI was awarded Cbonds’ Best Primary Placement Deal in the Energy Sector for bond issue of BO-001R-02 series. At the time of the placement, ROSSETI reached a historically minimum coupon rate for a market issue for a comparable period among corporate borrowers over the entire existence of the debt capital market of the Russian Federation. The Company's shareholders approved the all-time record dividend payment at the end of 2019. Taking into account the interim dividends for the first quarter of 2019 ROSSETI paid dividends in the amount of 23 billion RUB. The ROSSETI Group has been improving its reliability performance for the last three years: the ROSSETI Group has consistently achieved growth in the reliability and safety of the electricity supply it provides to consumers even in the face of weather hazards. Operating and The construction of Kamenka new highly automated substation with digital data investment exchange rated 110/10 kV in St. Petersburg has been completed. It will become the activities power source for four residential complexes with a population of more than 80,000 people and a special economic zone where innovative and knowledge-intensive production are concentrated. It will give power to new applicants and improve the quality and reliability of the energy supply for existing consumers. Gorod first highly automated substation with digital data exchange of the NCFD rated 110 kV was launched In Grozny. The new fully digital facility with a capacity of 80 MVA will become Grozny's main power center, providing reliable power to more than 300,000 residents of the city. Strategy and The ROSSETI Group Long-Term Development Program until 2030, aimed at achieving Long-Term the goals and objectives defined in the Development Strategy, was approved. LTDP Development 2020-2030 includes a program of key events in all areas of the Group's activities, including digital transformation, innovative development, development of new types of business, personnel policy, etc. International PJSC ROSSETI and JSC National Power Grid of Uzbekistan signed an agreement on the activities possibility of joint projects in the field of construction and modernization of the power grid infrastructure of the Republic of Uzbekistan. It would entail cooperation in 5 the development of schemes and programs for the development of electric systems of the Republic of Uzbekistan and neighboring countries. ROSSETI and the Eurasian Development Bank signed an agreement on strategic cooperation. The agreement is aimed at strengthening international cooperation and the development of foreign economic activity in the EDB member states — Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan. GlobalDSO's permanent platform has been launched to maintain a constant dialog at the level of the executives of the largest international electric distribution companies. Specialists of the ROSSETI Group took part in global research by the World Energy Council (Issues Monitor 2020; World Energy Trilemma Index 2020; The role of power grid companies in the energy transition; Scenarios of post-development). Corporate ROSSETI was granted the powers of the sole executive body of FGC UES on the basis governance of a contract with FGC UES. The Russian Institute of Directors confirmed the national corporate governance rating of ROSSETI at 7++. The society confirms its National Corporate Governance Rating for the fifth consecutive year. On June 1, 2020, the Annual General Meeting of Shareholders of the Company was held in the form of absentee voting. A number of important decisions were made, including the election of members of the Board of Directors, the payment of dividends at the end of 2019, and the approval of a new edition of the Company's Articles of Association. Sustainable AK&M rating agency assigned the Company a sustainability rating of A++ on the development national scale. This rating means that ROSSETI belongs to the class of Russian companies with the highest degree of sustainability. There is no risk of harming the opportunities of future generations. ROSSETI Group has fully restored the world's only hyperboloidal multi-sectional power transmission line pylon, made in the form of a load-bearing mesh shell, designed by the outstanding Russian engineer V. Shukhov. This design is a unique monument of the Russian architectural avant-garde, recommended for inclusion in the UNESCO World Heritage List. Digital The ROSSETI Group has introduced four highly automated substations with digital transformation data exchange into operation. The facilities were launched in KhMAO (deep modernization with the introduction of a complex of digital technologies), Krasnodar Krai, Vologda and Leningrad regions (new facilities).