Appene to te Annual Report 2016 Annual Report 2016 1 Appendix 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORT Contents APPENDIX 1. Additional Information on the The following Appendices are available on the official Company’s website at http://www.fsk-ees.ru/eng/investors/company_reports/ or in the electronic version of the Annual Report of PJSC FGC UES for 2016: Sections of the Annual Report Appendix 1. Additional Information on the Sections of the Annual Report 1 About the Company Appendix 2. Audit Commission’s Report 54 International Activity Appendix 3. Report on Compliance with the Russian Corporate Governance Code and 59 Federal Grid Company (PJSC FGC UES) is the transmission across the border of the Russian Report on Compliance with Main Principles of the UK Corporate Governance organization managing the Unified National Electric Federation and is a technical contractor of the export/ Code Grid (UNEG) under the Federal Law on 26 March 2003 import commercial contracts of the Wholesale Appendix 4. Information on Major Transactions and on Transactions by PJSC FGC UES in 80 No. 35-FZ On Electric Power. Starting from Electricity and Capacity Market (WECM) participants. 2016, Classified Under the laws of the Russian Federation as Related Party 1 January 2004 PJSC FGC UES performs the electricity Transactions Subject To Approval by the Company’s Authorised Governing Bodies Appendix 5. Information on Material Transactions made by PJSC FGC UES and Entities 113 Fnlan Controlled Thereby Appendix 6. Information on the Actual Execution of Instructions of the President and the 116 Government of the Russian Federation Estonia China Appendix 7. Information on the Participation of PJSC FGC UES in commercial and non- 123 commercial organizations in 2016 Appendix 8. Information on the Debt Recovery Claims in which PJSC FGC UES Participates 129 Lithuania Mongolia PJSC FGC UES Appendix 9. Information on Concluded Purchase Agreements of Shares, Stocks, Equity 134 Interest of Business Partnerships and Business Entities, including Information on Parties, Subject, Price, and Other Terms of the Agreements Rua Latvia Kazakhstan Appendix 10. Information on the Structure of the Property Portfolio of PJSC FGC UES 136 Appendix 11. Information on Land Plots of PJSC FGC UES 138 Belarus Azerbaijan Appendix 12. Information on the Disposal of Non-Core Assets in 2016 140 Appendix 13. Annual Financial Statements of PJSC FGC UES for 2016 Under RAS 144 Ukraine Georgia Consolidated Financial Statements of PJSC FGC UES for 2016 Under IFRS 166 Appendix 14. Export and Import of Electric Power as per PJSC Inter RAO contracts in 2012—2016. Actual export of electric power, million kWh No. Country 2012 2013 2014 2015 2016 1 Azerbaijan 55.770 57.422 53.054 54.848 59.560 2 Belarus 3,698.125 3,596.726 1,425.023 2,815.240 3,180.811 3 Georgia, South Ossetia 647.260 594.334 767.189 656.564 557.448 4 Kazakhstan 2,284.458 1,668.318 1,643.673 1,541.999 1,164.275 2 PJSC FGC UES Annual Report 2016 1 Appendix 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORT – arrangement and implementation of commercial In the framework of international exchange, PJSC FGC 5 China 2,630.173 3,495.300 3,375.632 3,299.350 3,319.908 metering of electricity transmitted along cross-border UES takes actions to enhance the relationship with the electricity transmission lines (CBETL); energy systems of the adjacent states in the field of 6 Latvia 0.000 0.000 0.000 0.000 0.000 electric power, including CIS Electric Power Council and – measurement of actual volumes of electricity its commissions, energy system committee of BRELL, transmitted across the State border. 7 Lithuania 4,780.170 3,567.969 3,215.539 2,994.516 3,018.544 work groups in Executive committee of CIS EEC and To determine amount of electricity transmitted via each Committee of BRELL energy systems. 8 Estonia 0.000 0.000 0.000 0.000 0.000 CBETL, PJSC FGC UES concluded the agreements with foreign electric power companies on metering of the 9 Mongolia 392.750 413.595 390.332 284.450 299.869 volume of power intercharge, according to which PJSC FGC UES exchanges commercial metering data with the 10 Ukraine 81.795 38.609 177.993 2,461.972 119.644 electricity systems of 11 foreign countries. 11 Finland 3,793.845 4,107.179 2,995.008 3,383.435 5,281.610 TOTAL: 18,364.346 17,539.452 14,043.443 17,492.374 17,001.669 Programmes existing in the Company in the framework Actual import of electricity, million kWh of implementation of the strategic development plans and No. Country 2012 2013 2014 2015 2016 Company's long term development programmes, Decision on approval 1 Azerbaijan 240.757 128.607 134.169 108.365 120.143 Long-term development The long-term development programme approved by a decision of the Board 2 Belarus 3.731 1.935 0.260 0.058 0.058 programme of Directors (minutes of 22 December, 2014 No. 243). 3 Georgia, South Ossetia 369.438 370.608 160.078 169.575 147.590 Investment programme Approved by the decision of the Board of Directors On approval of the Long- 4 Kazakhstan 1,973.181 3,930.689 3,084.440 989.666 2,725.996 term Investment Programme of PJSC FGC UES for 2016–2020, (minutes No. 310 on 29 February 2016, date of drafting of the minutes: 3 March 2016). 5 China 0.000 0.000 0.000 0.000 0.000 6 Latvia 0.000 0.000 0.000 0.000 0.000 Innovative development The PJSC FGC UES innovative development programme for 2016–2020, with programme a view to 2025, approved by the decision of the Board of Directors of the 7 Lithuania 0.000 99.253 43.161 114.561 115.575 PJSC FGC UES (minutes on 28 June 2016 No. 328). 8 Estonia 0.000 0.000 0.000 0.000 0.000 Unified Technical Policy Regulation on Unified Technical Policy in the electric power system 9 Mongolia 21.006 23.291 30.368 54.178 33.867 approved by the Board of Directors of PJSC Rosseti (minutes on 23 October 2013 No. 138) and enacted as the PJSC FGC UES internal document by 10 Ukraine 0.093 6.400 0.000 3.756 0.000 a decision of the Board of Directors of PJSC FGC UES (minutes on 12 December 2013 No. 208). 11 Finland 0.000 2.758 0.234 23.400 0.000 Programme of import substitution Approved by the Order of JSC FGC UES on 10 October 2014 No. 455. The of equipment, technologies, programme is not subject to the Board of Directors approval. TOTAL: 2,608.206 4,563.541 3,452.710 1,463.559 3,143.229 materials and systems There are currently several agreements in force, In accordance with the Agreement of 15 March 2011 Energy saving and energy Approved by the Company’s Board (extract on 4 August 2015 No. 1326/2). stipulating parallel operation of the Russian UES with the between the Government of the Russian Federation and efficiency programme for the Energy saving and energy efficiency programme of PJSC FGC UES for the electric power systems of foreign countries. The parties the Government of the Republic of Belarus on certain period of 2015–2019. period of 2015–2019 (hereinafter – Energy saving and energy efficiency to these agreements are measures ensuring parallel operations of the unified programme) was up of in accordance with the new requirements of the energy systems of the Russian Federation and the Order of FTS of Russia on 26 March 2015 No. 525-e and Ministry of Energy PJSC FGC UES and economic entities of the following Republic of Belarus there is an electricity transit contract of Russia on 30 June 2014 No. 398. countries: Georgia, Azerbaijan, Kazakhstan, the Baltic signed, in accordance with which PJSC FGC UES pays States and the Republic of Belarus. In addition, there are An operating efficiency To be approved by the Board of Directors as a part of the Business Plan for for the electricity transit throughout the territory of agreements on technical support of parallel operations improvement programme was 2017–2021. Belarus. signed with Ukraine, the Republic of Belarus, as well as developed and approved in the Mongolia. The Company also signed an Inter-system In accordance with the Protocol on access provisiv on to framework of the PJSC FGC UES Contract with Finland and an Inter-system Agreement the services of natural monopolies in the field of electric Business Plan for 2015–2019. with the People’s Republic of China. power, including the pricing and tariff policy, which Programme for the Approved by the Order of PJSC FGC UES on 31 March 2015 No. 150. The is an Appendix No. 21 to the Agreement on Eurasian In accordance with the Agreement of 20 November 2009 implementation of environmental programme was developed in order to implement the provisions of the Economic Union, the inter-state transmission of the between the Government of the Russian Federation policy for 2015–2019. Company's environmental policy, approved by the PJSC FGC UES Board of electricity between the countries-participants is possible, and the Government of the Republic of Kazakhstan on Directors (minutes No. 230 of 30 September 2014) including the grids of UES of Russia. measures ensuring parallel operations of the unified energy systems of the Russian Federation and the As the organization managing UNEG, including the inter- Republic of Kazakhstan there is an electricity transit state power transmission lines, PJSC FGC UES performs: contract signed, in accordance with which PJSC FGC – coordination and engineering support of the UES pays for the electric power transit throughout commercial contracts for the import-export of the territory of Kazakhstan in order to provide reliable electricity; electricity supply of the Russian customers.