Appendix 5 Annual report 2019 · 2020. 5. 19. · ANNUAL REPORT 2019 General Director PJSC Enel...
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APPROVED BY: General Shareholders’ Meeting PJSC Enel Russia June ___, 2020 Minutes No. _____ dated June __, 2020 PREAPPROVED BY: Board of Directors of PJSC Enel Russia April 21-22, 2020 Minutes No. 6/20 dated April 22, 2020 ANNUAL REPORT 2019 General Director PJSC Enel Russia _____ ___, 2020 ___________/___________________________ /
Transcript of Appendix 5 Annual report 2019 · 2020. 5. 19. · ANNUAL REPORT 2019 General Director PJSC Enel...
APPROVED BY: General Shareholders’ Meeting PJSC Enel Russia June ___, 2020 Minutes No. _____ dated June __, 2020 PREAPPROVED BY: Board of Directors of PJSC Enel Russia April 21-22, 2020 Minutes No. 6/20 dated April 22, 2020
ANNUAL REPORT 2019
General Director PJSC Enel Russia _____ ___, 2020 ___________/___________________________ /
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CONTENT
ADDRESS ..................................................................................................................................................... 6
ABOUT THE REPORT .................................................................................................................................. 7
Limitations of the Report ........................................................................................................................... 7
Definition of Material Topics ...................................................................................................................... 7
Material Topics of the Report .................................................................................................................... 8
Changes in Materiality Matrix .................................................................................................................... 9
Materiality Topics Boundaries ................................................................................................................. 10
Reporting Principles ................................................................................................................................ 11
Feedback ................................................................................................................................................. 12
COMPANY OVERVIEW .............................................................................................................................. 12
Events Calendar ...................................................................................................................................... 12
Company Overview ................................................................................................................................. 13
Mission and Values ................................................................................................................................. 14
Organizational Structure .......................................................................................................................... 15
Business Model ....................................................................................................................................... 16
Geography of Assets ............................................................................................................................... 17
Company Regulations in the Industry ..................................................................................................... 17
Main Markets where the Company Carries out its Activity .................................................................. 18
Heat Sales ........................................................................................................................................... 18
Competition ............................................................................................................................................. 18
Fuel Factor .............................................................................................................................................. 19
Grid Limitations and UES Modes ............................................................................................................ 20
COMPANY STRATEGY .............................................................................................................................. 21
Strategic Plan for 2020-2022 ................................................................................................................... 21
The Key Areas of the Company Activities, Prospects for Company Development ................................. 21
Sustainability Plan for 2020-2022............................................................................................................ 26
Transition to Renewable Energy Sources ............................................................................................... 29
Decarbonization of the Energy Mix ..................................................................................................... 29
Exit from Coal Generation ................................................................................................................... 30
Development of Renewable Energy Sources ..................................................................................... 32
FINANCIAL AND PERFORMANCE INDICATORS ..................................................................................... 34
Analysis of Performance Dynamics as Compared to the Plan and Previous Period .............................. 34
Main Production Indicators ...................................................................................................................... 37
Sales ........................................................................................................................................................ 40
Investment Activities ................................................................................................................................ 42
Main Investment Projects .................................................................................................................... 43
SUSTAINABILITY ....................................................................................................................................... 45
Sustainability Management ..................................................................................................................... 45
Structure of Management of Sustainability Aspects ............................................................................ 45
Our Contribution to SDGs ................................................................................................................... 47
Key Business Areas ............................................................................................................................ 48
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Development of Sustainability Plan ..................................................................................................... 49
Risks Associated with Sustainable Development ............................................................................... 49
Stakeholder Engagement ........................................................................................................................ 50
Results for 2019 .................................................................................................................................. 51
Direct Economic Value Generated and Distributed ............................................................................. 55
Membership in Associations and Awards ........................................................................................... 56
Integrated Management System .......................................................................................................... 57
Occupational Health and Safety .............................................................................................................. 59
Health and Safety Management .......................................................................................................... 59
Health and Safety Risk Assessment ................................................................................................... 61
Results for 2019 .................................................................................................................................. 63
Health Care of Employees .................................................................................................................. 65
Additional Support in Matters of Health & Safety During Maintenance Activities ............................... 66
Information and Training in Health&Safety ......................................................................................... 66
Selected Projects................................................................................................................................. 67
Policies, Management and Measures in Case of Emergencies .......................................................... 68
Responsible Attitude to the Environment ................................................................................................ 71
Environmental Strategy and Environmental Management .................................................................. 71
Compliance with the Environmental Laws and Environmental Reporting........................................... 74
Control of Air and Water Quality .......................................................................................................... 77
Resource Use ..................................................................................................................................... 82
Biodiversity and Natural Heritage Preservation ............................................................................. 85
Business and management ..................................................................................................................... 86
Operational Efficiency: New Technologies and Solutions ................................................................... 86
Operational Efficiency ......................................................................................................................... 88
Innovation and Digital Transformation................................................................................................. 89
Customer Focus .................................................................................................................................. 93
Anti-Corruption Policy and Business Ethics ........................................................................................ 93
Our Employees ........................................................................................................................................ 97
Approach to Employees Management, Development & Motivation .................................................... 97
Personnel Structure ............................................................................................................................. 98
Turnover ............................................................................................................................................ 100
Involvement of People We Work with................................................................................................ 100
Incentive and Remuneration ............................................................................................................. 101
Diversity and Inclusion ...................................................................................................................... 104
Young Employees ............................................................................................................................. 106
Training and Development of our Employees ................................................................................... 108
Social Policy ...................................................................................................................................... 109
Engaging Local Communities ................................................................................................................ 112
Management Approach ..................................................................................................................... 112
Created Shared Value ....................................................................................................................... 113
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Circular Economy .............................................................................................................................. 114
Evaluation of the Company Impact on the Local Communities ........................................................ 114
Program of Social Support and Development of Local Communities ............................................... 115
Selected Social Projects .................................................................................................................... 117
Contribution to the Development of the Regions of Presence .......................................................... 118
Human Rights ........................................................................................................................................ 121
Sustainable Supply Chain ..................................................................................................................... 124
Management Approach ..................................................................................................................... 124
Support for Local Suppliers ............................................................................................................... 125
Selected Projects of 2019 ................................................................................................................. 126
RISK GOVERNANCE ............................................................................................................................... 128
Risk governance and internal control system ....................................................................................... 128
Internal Control System ......................................................................................................................... 129
Organization Units and Corporate Bodies Related to Risk Governance System ................................. 130
Description of Main Risk Factors Associated with the Company's Activity ........................................... 131
CORPORATE GOVERNANCE ................................................................................................................. 135
Corporate Governance System ............................................................................................................. 135
Improvement of Corporate Governance ............................................................................................ 136
Management Bodies of the Company ................................................................................................... 138
General shareholders’ meeting ......................................................................................................... 138
Board of Directors of the Company ................................................................................................... 139
Report on the Work of the Board of Directors ................................................................................... 145
Committees of the Company’s Board of Directors ............................................................................ 148
Communication on the Board of Directors’ Self-Evaluation .............................................................. 154
Corporate Secretary .......................................................................................................................... 155
General Director and Executive Board .............................................................................................. 156
Remuneration ........................................................................................................................................ 158
Remuneration to the Board of Directors Members ............................................................................ 159
Remuneration to the Members of the Executive Board and Key Managers ..................................... 161
Internal Audit Commission .................................................................................................................... 166
Auditor ................................................................................................................................................... 167
Information about the Internal Audit ...................................................................................................... 167
Securities of the company and interaction with shareholders and investors ........................................ 169
Shares ............................................................................................................................................... 169
Exchange Information About the Shares of PJSC Enel Russia ........................................................ 171
Shareholders ..................................................................................................................................... 172
Dividends ........................................................................................................................................... 173
Depositary Receipts .......................................................................................................................... 174
Stock Exchange Bonds ..................................................................................................................... 175
Interaction with the Shareholders and Investors ............................................................................... 175
Controlled Companies and Participation in Other Organizations .......................................................... 177
ANNEXES ................................................................................................................................................. 178
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Annex 1. GRI content index ...................................................................................................................... 178
Annex 2. Financial statements and auditor's report .................................................................................. 183
Annex 3. Structure of generation facilities and structure of fuel consumption .......................................... 184
Annex 4. Information about observance of the Corporate Governance Code recommendations by the company .................................................................................................................................................... 187
Annex 5. Information about the most material transactions and related party transactions closed by the Company in 2019 ...................................................................................................................................... 206
Annex 6. Numerical and statistical information ......................................................................................... 212
Key Performance Indicators .................................................................................................................. 212
Environmental indicators ....................................................................................................................... 216
Social disclosure.................................................................................................................................... 226
Health and Safety .............................................................................................................................. 226
Human Resource and Social Policy .................................................................................................. 227
Sustainable supply chain ................................................................................................................... 235
CONTACTS ............................................................................................................................................... 235
GLOSSARY ............................................................................................................................................... 237
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ADDRESS
102-14
Dear shareholders! With great pleasure we are presenting Annual Report 2019 of PJSC Enel Russia.
Effective managerial decisions and favorable market prices allowed the company to outperform the financial goals set for 2019.
Net ordinary income in 2019 is 7.5 billion RUB and EBITDA reached the level of 15.3 billion RUB which is above the forecasted value.
Anticipating the period of strategic repositioning and earnings volatility in the medium term, the company introduces a fixed dividend to assure a guaranteed return for its shareholders. Upon 2019-2021 the company is targeting to distribute 3 billion RUB per year.
In 2019, the company kept pursuing its energy transition and sustainability strategy, which includes transformation and modernization of the asset portfolio, decarbonization and introduction of digital technologies. We keep paying special attention to cooperation with local communities and creation of shared value. We apply the best practices of Enel Group for the implementation of our strategy, including, the sector of renewables.
The deal between PJSC Enel Russia and JSC Kuzbassenergo concerning disposal of the largest national coal power plant - Reftinskaya GRES - was one of the most important strategic decisions. As per the results of the transition period, the total amount of the deal should amount to 20.7 billion RUB excluding VAT. Proceeds of the deal enable us to follow the energy transformation strategy while developing windfarms construction projects and gas power plants modernization projects.
In 2019, two Groundbreaking Ceremonies took place: one in the Rostov region for 90 MW Azov WPP and another in Murmansk region for 201 MW Kola WPP. At the same time, the Governmental tender for the selection of renewable energy projects resulted in awarding the company construction of a new 71 MW wind generation facility in the Stavropol region.
We are also active participants of the power plant equipment modernization program launched by the Government of the Russian Federation. Four of PJSC Enel Russia projects were selected in 2019: two projects of Sredneuralskaya GRES and two projects of Nevinnomysskaya GRES. Modernization should help us to increase the reliability of heat and electricity supply to the customers, to boost efficiency of the equipment and to decrease emissions to the atmosphere while ensuring positive economic implications for the company.
To improve the operational efficiency of the power plants PJSC Enel Russia is introducing modern digital technologies. One of the projects of this kind is predictive analytics which detects negative dynamics in the operation of equipment at the early stages and, therefore, reduces CCGT operational risks. All power plants are equipped with e-Planner tool which enables additional control of the preparation process to maintenance campaign and provides a visual representation of key milestones. EtaPRO System was successfully introduced as part of the Heat Rate Management digital project. Every unit of gas power plant main equipment now can be monitored using an individual model which allows to keep a record of reasons of heat rate deviations in the real-time mode, to analyze reasons of losses and to develop a more detailed maintenance program as well as to control the quality of the works performed after the maintenance is completed.
Health, Safety, Environment and Quality remains one of the main priorities of the company. We successfully implemented the SHE 365 project (Safety, Health, Environment 365 days) aimed to ensure everyday industrial safety and to incentivize employees to develop initiatives in operation, maintenance and interaction with contractors. A number of health and environment improvement plans have been implemented as part of the project. As far as the environment is concerned, the company focused mainly on decarbonization, reporting digitalization, water consumption optimization.
Another important aspect of the company’s activity is the sustainable development strategy and non-financial disclosure. In 2019, a new Strategic Committee was established within the Board of Directors, one of its key functions is to coordinate the relevant strategy. We have reviewed our risk assessment approach making focus also on ESG risks (environmental, social and corporate governance). In January 2019, the company received its first ever ESG Risk Rating – assessment of ESG risks management - from Sustainalytics, independent agency. Follow-up assessment which took place at the end of the year demonstrated improved results. We continue the implementation of the projects aimed to support and
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develop areas of presence, including new regions - Rostov and Murmansk regions. Sustainable development principles (circular economy, efficient use of resources, improved reliability and longer service life of equipment) and sustainable construction site principles during implementation of new wind farm construction projects underpin all our business processes.
The company also disclosed its non-financial results for the first time in its Annual Report according to the International GRI Standards providing a deeper understanding of its ESG performance. The report was recognized as the best in the Debut nomination of the XXII Annual Report Contest yearly organized by the Moscow Exchange. The company not only maintained, but further on improved the high level of compliance with the Corporate Governance Code guidelines: as per December 31, 2019, PJSC Enel Russia complied with 77 out of 79 recommendations vs 74 compliances in 2018.
It is worth mentioning that in 2019 PJSC Enel Russia demonstrated solid results regardless of complicated macroeconomic conditions. We have reached planned financial goals and on top of that we are actively developing new projects related to green power, thermal assets modernization and innovation. Sustainable development strategies help us to strike the balance between growth, financial stability of the business, local communities’ interests and shareholders’ remuneration.
Sincerely, Director General of PJSC Enel Russia Carlo Palasciano Villamagna Charmain of the Board of Directors of PJSC Enel Russia Stephane Zweguintzow
ABOUT THE REPORT
102-54
To provide the stakeholders with regular and quality information, we prepare an annual integrated report representing the strategic plans of the company, priorities and goals of development as well as the results of activities for 2019.
The company report is prepared in accordance with the following documents and standards:
• Corporate Governance Code recommended by the Bank of Russia;
• Regulation of the Bank of Russia No. 454-П dated 30.12.2014 “On Disclosure of Information About the Issuer of Equity Securities”;
• International financial reporting standards;
• GRI Standards (level of disclosure – “Core”);
• Regulation on Information Policy of PJSC Enel Russia.
Limitations of the Report
102-45 102-46 102-49 102-50 102-51 102-52 The annual report contains information about the results of financial and economic activity as well as sustainable development indicators for 2019. The report is issued on an annual basis. A report for the previous period was published on June 20, 2019.
The operating and financial indicators are represented on a consolidated basis and include the results of financial and economic activity of PJSC Enel Russia and its subsidiaries. In the rest of the sections the data are presented only for PJSC Enel Russia or an additional comment has been left on the approach used.
Due to the purchase and sale transaction of Reftinskaya GRES to JSС Kuzbassenergo, all indicators for this power plant are given for 9 months of 2019. An exception is indicators related to personnel of PJSC Enel Russia operating at Reftinskaya GRES, accidents involving personnel of PJSC Enel Russia and / or contractors of PJSC Enel Russia, and as well as fines not included in the expenses of PJSC Enel Russia under the lease agreement which are given for 2019. The details on the sale of the property of the Reftinskaya GRES are contained in the section “Exit from Coal Generation”.
Definition of Material Topics
The Materiality Matrix helps identifying and evaluating the needs and expectations of stakeholders, matching them with the priorities of the company and its business strategy, checking their consistency and identifying areas for improvement. The material topics of the annual report of the company are defined on its basis.
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Process for preparation of the Materiality Matrix
Collection, aggregation and processing of data are carried out through a special information system of Enel Group. This system is improved every year to ensure greater transparency and accountability. The Global Sustainability Unit of Enel Group coordinates the process and provides methodological support for the annual update of the matrix of materiality that is performed by the Sustainability Unit of PJSC Enel Russia with the participation of the company’s managers and managers who interact with one or another category of stakeholders in their daily activities. The results received at the country level are consolidated by Enel Group to prepare a Group Materiality Matrix and matrices of the countries.
Material Topics of the Report
102-47 In 2019, the following material topics were identified by the evaluation results:
• Occupational Health and Safety
• Economic and Financial Value Creation
• Environmental Management
• Sound Governance and Fair Corporate Conduct
• Engaging the Local Communities
• Employees Management, Development & Motivation
• Decarbonization of the Energy Mix
• Customer Engagement
• Innovation and Digital Transformation
• Sustainable Supply Chain
• Ecosystems and Platforms
• Energy distribution1
1 This material topic is not applicable since in Russia the company does not carry out electricity distribution activities.
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Materiality Matrix
The horizontal axis of the Matrix reflects the priorities of stakeholders, properly weighted based on their materiality. The right side of the Matrix contains topics the stakeholders come up with a request on them to strengthen existing practices, management systems, formalize commitments and create clearer regulatory documents. The vertical axis shows the topics the company plans to focus its efforts on regarding planned investments, liabilities, potential risks and opportunities as well as aspects included in the company's Strategic Plan. The top of the Matrix shows the issues with a high level of commitment for the coming years assumed at the level of the company's strategy.
Changes in Materiality Matrix
102-49 Comparing to 2018, the Materiality Matrix 2019 looks more balanced in terms of company priorities and stakeholders
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The topic “Environmental Management” became fundamental for stakeholders. We consider this change to be logical since the environmental agenda in 2019 gained significance in public discourse and received more extended media coverage. Occupational Health and Safety issues as well as issues of engagement of the local communities are still in the limelight of stakeholders. The importance of sound governance and human capital development increased too. This is confirmed by the feedback we received from the stakeholders during the year. (see the section “Stakeholder Engagement”).
Three key priorities in the company strategy, namely “Occupational Health and Safety”, “Economic and Financial Value Creation” and “Sound Governance and Fair Corporate Conduct” remained unchanged. The significance of management, development and motivation of employees increased, which meets the challenges that the company faced in 2019 (see the section “Employees Management, Development & Motivation”). The significance of the topic “Sustainable Supply Chain” increased in view of the forthcoming transformation of procurement and inclusion into the process of evaluation of social factors. Increased attention is paid to the issue of decarbonization of the energy mix. It represents the company’s decision to exit from coal generation and developing renewable energy sources. The growing significance of decarbonization represents also the international environmental agenda - the climate crisis and ever-growing attention of investors to response measures of businesses. A material topic of the previous reporting period, “Operational Efficiency”, was not included in the priority list, however, the management approach to this topic was fully disclosed in the annual report. In 2019, a new topic appeared – “Ecosystems and Platforms”. Since 2019, “New Technologies and Solutions” has been re-positioned in “Innovations and Digital Transformation”. (see the section “Materiality Topics Boundaries”).
Materiality Topics Boundaries
Material topics Materiality topics boundaries* Impact type*
Decarbonization of the Energy Mix
We share the vision of Enel Group and understand the importance of climate change, thus we intend to develop renewable energy sources. Decarbonization of the energy mix is a comprehensive topic relating to the reduction of the environmental impact of our business, development of RES and modernization of conventional generation to increase operational efficiency.
Direct
Engaging the Local Communities
We rely on the local communities we work for. We build long-term and comprehensive relations with them, support and contribute to their social and economic development.
Direct
Employees Management, Development & Motivation
We understand that our success depends on the people we work with. We make every effort to ensure a safe working environment and favorable working conditions. We train and develop personnel, maintain diversity and prohibit any form of discrimination.
Direct
Economic and Financial Value Creation
We create long-term shareholder value and opportunities for economic growth in the regions where we operate.
Direct
Occupational Health & Safety
The occupational health and safety of power plant personnel and contractors’ employees is our key priority. We make every effort to ensure a safe and comfortable working environment and are committed to achieving the "Zero Accidents” goal.
Direct
Sound Governance and Fair Corporate Conduct
We meet high standards of corporate governance and comply with the requirements for information disclosure stipulated by the Russian laws.
Direct
Environmental Management
We monitor regularly our impact on the environment, manage this impact, improve continuously the environmental performance, apply the principles of environmental safety and rational and sustainable use of natural resources.
Direct
Innovation and Digital Transformation (previously – New Technologies and Solutions)
We develop and implement new solutions that allow us to increase the operational efficiency of our business and expand the range of low-carbon technologies and services. We want to use our resources rationally and optimize business processes through the application of
Direct
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Material topics Materiality topics boundaries* Impact type*
new technologies and digitalization. We are committed to maximizing operational efficiency during operation.
Customer Focus
We undertake to guarantee the relevant quality standards of the products and services offered, to maintain them at the established level, as well as to carry out periodic monitoring of this area
Indirect
Sustainable Supply Chain
Our procurement procedures and contractual relationships are focused on transparency, responsibility and cooperation for more successful adaptation and effective management of the social, environmental and economic context and the associated risks and opportunities
Direct
Ecosystems and Platforms
We lead the transformation of the energy sector and use modern technologies to transform energy into new opportunities that will contribute to progress around the world. For this material topic, a management approach has not yet been developed. We plan to disclose it in the next reporting periods.
Indirect
* Impact area of all the listed material topics - PJSC Enel Russia. The type of impact means the type of impact from the company activities that it renders within a particular material topic.
Reporting Principles
We applied the following principles according to GRI standard to determine the report content. 102-46
To ensure quality disclosure of indicators we applied the following principles of report quality assurance:
102-46
Stakeholder inclusiveness
Sustainability context Materiality Completeness
We bring the stakeholders to dialogue regarding
preparation of this report (collecting feedback,
participation in surveys for formation of a Materiality Matrix). See the section
“Stakeholder Engagement”.
The company priority development areas and objectives are related to the global agenda for
Sustainable Development (see the section
“Sustainability Plan for
2020-2022”.)
The content of the report was determined in
accordance with is defined by essential topics (see the
section “List of Material Topics”).
The topics covered in the report reflect the impact of company's activities on the economy, environment and
society during the reporting period
Balance
Compatibility
Accuracy
Clarity
Reliability
Timeliness
The report contains information on both positive (implementation of plans, achievement of goals) and negative (for example, penalties) performance results
The results of operational and financial activity (except for information about dividend payments), non-financial indicators over three years including the reporting period.
The report was subject to internal verification for accuracy of quantitative indicators. If the indicators are calculated using a methodology other than that proposed by GRI Standard, a corresponding comment is left in the text of the report
The text of the report is written in easy to understand language with proper explanations of professional terms. Detailed specification of quantitative data is in the section “Additional Information”
All information given in the report passed internal verification. The company has necessary documents confirming its accuracy
The report includes information about the activities of PJSC Enel Russia for 2019.
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Feedback
Starting in 2019, we launched an online survey for our stakeholders to obtain feedback on the company's annual report. We plan to use the survey results to improve the quality and completeness of the annual report in future periods.
Enel Russia annual report 2019 feedback https://ru.surveymonkey.com/r/Y6J5KV9
COMPANY OVERVIEW
Events Calendar
102-10 102-12
29.01.2019 Publication of operating results for 2018
06.02.2019 Publication of the Strategic Plan for 2019-2021: focus on renewable energy sources and efficiency to meet the market challenges
05.03.2019 PJSC Enel Russia and Sberbank completed signing of documentation on financing of the project for 201 MW wind farm construction in the Murmansk region.
18.03.2019 Publication of audited consolidated financial statements for 2018 in accordance with the International Financial Reporting Standards
26.03.2019 PJSC Enel Russia, System Operator of Unified Energy System Joint Stock Company and Moscow School of Management SKOLKOVO signed Memorandum of Understanding intended to performance of joint research in price-promoted Demand Response in Russia.
10.04.2019 Within the scope of the Tatarstan International Forum of Energy Efficiency and Ecology, PJSC Enel Russia and the Ministry of Industry and Trade of Tatarstan signed a renewable energy agreement.
25.04.2019 Publication of unaudited consolidated financial statements by PJSC Enel Russia for the first quarter of 2019 in accordance with the International Financial Reporting Standards.
23.05.2019 Commencement of construction of Azovskaya WPS with installed capacity of 90 MW in the Rostov region. Azovskaya wind farm became not just the first renewable energy project of Enel Group in Russia but the first RES facility for its construction to be initiated in the region.
06.06.2019 At the St. Petersburg International Economic Forum PJSC Enel Russia signed two agreements: one in the sector of renewable energy source with AB InBev Efes, one of the key players at the Russian brewing market being a subsidiary of AB InBev, major brewing company in the world, another in the sector of innovations - with Russian Venture Company JSC.
07.06.2019 Within the scope of the St. Petersburg International Economic Forum PJSC Enel Russia signed a Memorandum of Understanding with VEB Ventures intended to development of innovations
07.06.2019 The project of PJSC Enel Russia for equipment modernization at Nevinnomysskaya GRES was chosen by the government within the scope of the program for modernization of the thermal power plants.
11.06.2019 The project of PJSC Enel Russia for construction of 71 MW wind farm in the Stavropol Territory won the tender for renewable energy sources.
18.06.2019 Annual General Shareholders’ Meeting of PJSC Enel Russia
20.06.2019 PJSC Enel Russia and Kuzbassenergo JSC signed an agreement for sales of Reftinskaya GRES
02.07.2019 Supplier’s Day in the Murmansk region
22.07.2019 The extraordinary General Shareholders' Meeting of PJSC Enel Russia approved the sale of Reftinskaya GRES
31.07.2019 Publication of financial results with audit review for the first half of 2019 in accordance with financial reporting standards
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Company Overview
102-1 102-2 102-3 102-4 102-5 102-7
Name Full company name: Public Joint-Stock Company Enel Russia Abbreviated company name: PJSC Enel Russia
Data on state registration
It was registered on October 27, 2004 by the Inspectorate of the Ministry of Taxation of Russia for Leninsky District, Yekaterinburg, Sverdlovsk Region under principal state registration number 1046604013257.
Brief History The company was established based on Executive Order of Board of directors of OJSC RAO UES of Russia No. 113р dated October 25, 2004. During reformation of the Russian electric power industry, the company was reorganized in the form of a merger of OJSC Konakovskaya GRES, OJSC Nevinnomysskaya GRES OJSC (2006), and OJSC OGK-5 Holding (2007). In 2007, Enel Investment Holding B.V. that is part of Enel S.p.A group becomes one of the company shareholders and since 2018 Enel S.p.A. is the company’s controlling entity holding 56.43% of the shares. One of the largest wholesale generation companies in the Russian Federation.
Main activities will be
Electric power and heat generation Activities on supply (sale) of electric and heat power Activities for acquisition (purchase) of electric power and heat from the wholesale electricity (capacity) market
Regions of activity
Russian Federation, First price zone of the WEM
Structure (branches)
Headquarters (Moscow) Konakovskaya GRES (Tver Region) Nevinnomysskaya GRES (Stavropol Territory) Reftinskaya GRES2 (Sverdlovsk Region) Sredneuralskaya GRES (Sverdlovsk Region)
2 In 2019, a sales transaction was completed for the property comprising Reftinskaya GRES. See details in the section “Exit from Coal Generation”
08.08.2020 Moody’s international rating agency removed the company rating from revision and confirmed it to be at Ва3 level with stable outlook
19.09.2019 Commencement of construction of 201 MW Kolskaya WPS, a major renewable energy project beyond the Polar Circle in Russia
01.10.2019 PJSC Enel Russia completed transfer of property of Reftinskaya GRES to Kuzbassenergo JSC
30.10.2019 Publication of unaudited financial results for the first 9 months of 2019 in accordance with the International Financial Reporting Standards
04.11.2019 The General Director of Enel Group Francesco Starace was awarded the Order of Friendship, personally presented to him by the President of the Russian Federation Vladimir Putin
11–15.11.2019
Within the scope of the Murmansk International Business Week, PJSC Enel Russia received an award for holding social campaign events to promote energy conservation and supporting the Russian national festival
20.11.2019 PJSC Enel Russia received the Certificate of readiness to operate for 2019-2020 autumn and winter period
06.12.2019 Fitch international rating agency removed the rating of PJSC Enel Russia from revision and confirmed it to be at BB+ level with stable outlook
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Mission and Values
102-16
Transparency is the key component of our development strategy. We follow the philosophy of Enel Group - Open Power - and aim at meeting the most acute challenges of modernity. The approach combining sustainable development and striving for innovations facilitates us to achieve this goal.
Our mission and values
Open Power to help address some of the world’s biggest challenges
MISSION
VISION
VALUES Responsibility
Each of us, at any level, is responsible for the Group's success. We devote our energy to serving people's needs, improving l ife
and making it more sustainable
Innovation
We live and work with curiosity, we strive to go beyond our customs, and we overcome our fears, in order to open energy to
new uses, technologies and people, learning from each other and taking to heart our failures as well as our successes.
Trust
We always act in a competent, honest and transparent manner, in order to gain the trust of our colleagues, customers and
partners, enhancing our personal differences. We return their trust through our confidence in their ability to create value that we can share.
Proactivity
We feel personally responsible for our work. We continuously interpret global scenarios and challenges in order to anticipate change, resetting our priorities if the context requires it.
Open energy to more people
Open energy to new technologies
Open up new ways of managing energy for people.
Open up energy to new uses
Open up to more partnerships
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Organizational Structure
102-18 102-19 102-20
* Schematic representation as of 31.12.2019
In order to implement the business goals and objectives set for the company, continuous sustainable development and efficient assurance of its viability in the environment including transparency of management model, the organizational structure of the company is formed in functional areas distinguished by three activities:
Business Functions: Staff Functions: Global Service Functions:
Energy Management Security Procurement
Thermal Generation Internal Audit Digital Solutions
Renewable Generation Innovation Hub
Communications
People and Organization
Legal and Corporate Affairs
Project Office
Regulatory and Institutional Affairs
Services
Sustainability
Administration, Finance and Control
These functional areas relate to the first line of reporting to the General Director and report directly to him.
The functional areas that ensure the safety, efficiency and continuity of the production process belong to the first reporting line of the Deputy General Director - Head of Thermal Generation. These functional areas are:
• Thermal Operation and Maintenance;
• Health, Safety, Environment and Quality;
• Operation and Maintenance Improvement;
Enel Russia
Administration, Finance and Control
Communications
People and Organization
Internal Audit
Services
Regulatory and Institutional Affairs
Security
Legal and Corporate Affairs
Procurement
Digital Solutions
Sustainability
Energy Management
Thermal Generation
Health, Safety, Environment and
Quality
Operation and Maintenance
Improvement
Project Management and
Execution
Technical Support
Thermal O&M
Renewable Generation
Reftinskaya GRES
Konakovskaya GRES
Nevinnomysskaya GRES
Sredneuralskaya GRES
Innovation Hub
Business Development Gas
Generation
Project Office
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• Project Management and Execution;
• Technical Support;
• Business Development Gas Generation.
The first reporting line of the Head of Thermal Operation and Maintenance includes the following power plants:
• Konakovskaya GRES;
• Nevinnomysskaya GRES;
• Reftinskaya GRES;
• Sredneuralskaya GRES.
The following organizational changes were implemented during 2019:
• Project Office and Renewable Generation were created;
• new organizational structures of the Communications, Thermal Operation and Maintenance, Operation and Maintenance Improvement, new unified structures for the process units of gas power plants were approved.
Within the framework of its core activities and competencies, each of the units contributes to formation of the agenda, decision-making and implementation of the programs on economic, environmental and social issues.
Business Model
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Key indicators
Indicator 2018 2019
Installed electrical capacity 9.4 GW 5.6 GW
n° employees 2,496 pers. 2,404 pers.3
Power output 39.2 TWh 32.4 TWh
Revenues 73.3 bln rubles 65.8 bln rubles
EBITDA 17.2 bln rubles 15.3 bln rubles
Net profit 7.7 bln rubles 7.5 bln rubles
Dividend per share 0.141 RUB/share 0.085 RUB/share
Credit ratings
Rating agency Rating Outlook
Fitch Ratings BB+ "Stable"
Moody’s Ba3 "Stable"
RA Expert ruAA "Stable"
Geography of Assets
Company Regulations in the Industry
102-2, 102-4, 102-6
The company conducts its business operations at the wholesale power (capacity) market (WPCM) in the First price zone including the European part of the Russian Federation and the Urals.
The major wholesale power market players - are the following:
• wholesale generating and territorial generating companies formed as a result of the power industry reform, RusHydro PJSC, Rosenergoatom Concern JSC;
3 With regard to personnel data of Record keeping for 12 months of 2019. See details in the section “Exit from Coal Generation”
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• utility companies with the status of guaranteeing suppliers, large utility companies formed as a result of the power industry reform, as well as independent suppliers.
Main Markets where the Company Carries out its Activity
Enel Russia carries out its power and capacity sales activities in the following wholesale market segments:
Regulated contracts (RC)
Since 2011, regulated contracts have been signed to cover the volumes of electricity and capacity only intended for the supplies to residents equated to residents of the consumer groups, as well as guaranteeing suppliers. Prices (tariffs) for power and capacity supplies under regulated contracts are calculated by prices indexation formulae determined by the federal executive body of Russia in the area of public tariff regulation (Federal Antimonopoly Service). Scopes of power and capacity supply under RC are determined within the framework of the forecast summary balance of power generation and supply developed so that RC supplies would not exceed 35% of planned power (capacity) supply to the wholesale market, defined in the balance decision for the relevant regulation period for a power and capacity generator included into the summary balance.
Day ahead market (DAM)
At the “day ahead market”, the volumes of power exceeding the RC volume are traded at free (marginal) prices obtained as a result of a competitive tender of price bids from participants of the wholesale market for purchase/sale of power. Trade at the DAM (day-ahead market) is organized and held by the Joint Stock Company Trade System Administrator of the Wholesale Electricity Market (JSC ATS).
Balancing Market (BM)
Trade in deviations of the actual production schedule from the scheduled one is exercised at the balancing market at prices formed based on a competitive tender upon the marginal principle of bids of participants of the balancing market (suppliers and consumers with regulated load).
Capacity
Starting from 2011, only capacity in the volumes, necessary for supply to the households and consumer categories regarded as households is delivered under regulated contracts.
Trade in liberalized, “free capacity” will be effected through mechanisms of competitive capacity take-off, execution of free contracts (directly with the purchaser) and via exchange of power and capacity.
Newly built generation facilities capacity is sold by means of Capacity Sales Agreements (CSA) and ensure the return on investments into construction during 10 years for thermal generation facilities, 15 years for RES facilities and 20 years for NPP/HPP facilities.
Calculation of the cost of supplied capacity shall be carried out taking into account “capacity quality”. This market mechanism permits to stimulate suppliers to ensure availability of generating equipment.
Since September 2018, the capacity auctions have been performed for 6 years ahead. In 2019, the first sessions were held for selection of the projects for modernization of generation facilities of thermal power plants for 2022-2025.
Heat Sales
EU1 Heat sales are carried out at the regional market, at the place of power plant location, according to the tariffs, approved by the relevant regional power commissions of the Russian Federation.
Total installed heat capacity of the company amounts to 2770 MW.
The heat is supplied to:
• Konakovskaya GRES power plant (Tver Region, Konakovo);
• Nevinnomysskaya GRES power plant (Stavropol Territory, Nevinnomyssk);
• Reftinskaya GRES power plant (Sverdlovsk Region, Reftinskiy settlement);
• Sredneuralskaya GRES power plant (Sverdlovsk Region, Yekaterinburg, Verkhnyaya Pyshma, Sredneuralsk).
Competition
Since the power plants of PJSC Enel Russia together with other power plants are incorporated into the Unified Energy System of Russia (UES of Russia) with unified networks, processes of generation and
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consumption of power, we can say that competitors are all thermal generating companies as well as Rosenergoatom and RusHydro that are participants of the wholesale power market. However, while performing a more detailed analysis of the competition, it is necessary to note that the power plants of PJSC Enel Russia conduct their business operations at the wholesale power (capacity) market (WPCM) in the First price zone that includes the European part of Russia and the Urals. It is important to consider the distance between the energy supplier and the centers of demand. The influence of every competitor on the pricing in the region is also to be assessed.
Hydropower plants and nuclear power plants have lower power production costs as compared to thermal power plants. Due to particularities of operation of their generating equipment (safety, environmental protection measures, use of natural resources, modes of operation), these types of plants are more competitive at the power market.
Thermal power plants using gas, fuel oil and coal as fuels are in equal conditions from the point of view of competition. The main competitive advantages of the company are as follows:
• a leading position in the area of power sales;
• plants’ location;
• diversification of assets by technology;
• a high degree of personnel’s knowledge and skills.
Information about the company competitors
The main factors that have a negative impact on the production and, respectively, sales of power, are as follows:
• possible fuel related limitations;
• grid limitations and UES modes.
Fuel Factor
The main type of fuel used at Konakovskaya GRES, Nevinnomysskaya GRES and Sredneuralskaya GRES power plants is natural gas, while the backup fuel is fuel oil. The structure of fuel consumption at these plants is as follows: up to 99.9% falls on natural gas and 0.3 % falls on fuel oil. Natural gas is acquired at the prices, fixed in gas supply contracts concluded with independent contractors. The main factors, influencing the loading of power plants are both the existence of demand for power and the cost of fuel used for power generation.
Power Plant
Location of the competitors
Competitors
KGRES
UES of Centre (Central Federal District of the Russian Federation), UES of North-West
Kostromskaya GRES - 3,600 MW (OJSC INTER RAO - Electrogeneratsiya)
CHP No. 16, CHP No. 20, CHP No. 21, CHP No. 26, CHP No. 27 - 6,433 MW (Mosenergo PJSC) Smolenskaya NPP - 3,000 MW (Rosenergoatom Concern JSC)
Kalininskaya NPP - 4,000 MW (Rosenergoatom Concern JSC)
Leningradskaya NPP - 4,200 MW (Rosenergoatom Concern JSC) Kurskaya NPP - 4,000 MW (Rosenergoatom Concern JSC)
Zagorskaya GAES - 1200 MW (RusHydro PJSC)
NGRES UES of South
Stavropolskaya GRES - 2,423 MW (PJSC OGK-2)
Novocherkasskaya GRES - 2,258 MW (PJSC OGK-2)
Rostovskaya NPP - 4,030 MW (Rosenergoatom Concern JSC)
Hydro plants of the UES of South (RusHydro PJSC)
RGRES and SUGRES
UES of Ural
Beloyarskaya NPP - 1480 MW (Rosenergoatom Concern JSC)
Yuzhnouralskaya GRES-2 - 845 MW (OJSC INTER RAO - Electrogeneratsiya)
Nyaganskaya GRES - 1345 MW (Fortum PJSC)
Nizhnevartovskaya GRES - 2,031 MW (CJSC Nizhnevartovskaya GRES)
Permskaya GRES - 3,363 MW (OJSC INTER RAO - Electrogeneratsiya)
Surgutskaya GRES-1 - 3,333 MW (PJSC OGK-2)
Surgutskaya GRES-2 - 5 MW (Unipro PJSC)
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Grid Limitations and UES Modes
The volumes of power production and sale by Company’s power plants are influenced by operation modes being set in the Unified Energy System, namely:
• maintenance of grid equipment of electric power substations and outgoing overhead power transmission lines;
• maintenance, start-ups, shut downs and modes of operation of generating equipment of power plants.
Konakovskaya GRES
Taking into account the last tendencies for power demand in the UES of Centre, influence of generation capacities of competing companies on the mode of operation of Konakovskaya GRES is more significant during the heating period and is associated with the increase of operation of the combined heat and power plants, as well as with putting into operation of new CCGTs and NPP.
These are the main transmission lines and substations that impact on the operation of Konakovskaya GRES when they are maintained: Kalininskaya NPP HV line - Opytnaya, Kalininskaya NPP HV line - Vladimir, Konakovskaya GRES HV line - Cherepovets, Kalininskaya NPP HV line - Belozerskaya, Kalininskaya NPP HV line - Gribovo, Konakovskaya GRES HV line — Trubino, Konakovskaya GRES HV line - Bely Rast, Opytnaya HV line - Bely Rast and Belozerskaya substation, Opytnaya substation, Vladimir substation, Gribovo substation.
Nevinnomysskaya GRES
Nevinnomysskaya GRES is situated in a complicated power hub of the UES of South. To ensure operation reliability of this power hub, the ODU of the South plans to provide increased load of generation capacities of Nevinnomysskaya GRES, except for:
• operation of the power grid in maintenance schemes when limitation of load of the power plant is necessary;
• the flood period when limitation of the power plant’s load is caused by increased output of capacity from HPPs of the UES of South “locking” Nevinnomysskaya GRES due to grid peculiarities.
The advantage of Nevinnomysskaya GRES is its location in the power grid of South that ensures load and high coefficient of utilization of installed capacity, and the new high-efficient CCGT that due to low fuel consumption is always in demand.
Reftinskaya GRES and Sredneuralskaya GRES
Loading of capacities of Reftinskaya GRES is conditioned by total power intensity of the Urals Region and relatively low power generation cost and, as a consequence, by high competitiveness. Loading of capacities of Sredneuralskaya GRES, given the low production cost in cogeneration mode, is conditioned not only by the power demand of the UES of Urals, but also by the heat power demand by the following cities: Yekaterinburg, Verkhnyaya Pyshma, Sredneuralsk.
Change in shares of Generation of Power Plants of PJSC Enel Russia in 2018 and 2019
Power plant 2017 2018 2019 Change
KGRES share in UES of Centre 3,0% 2,9% 2,5% –0.4%
NGRES share in UES of South 8,1% 7,6% 6,9% –0.7%
RGRES share and SUGRES in UES of Ural4 10,2% 10,1% 8,0% –2.1%
Enel Russia share in PZ I*5 5,2% 5,0% 4,1% –0.9%
4 Data on the share of Reftinskaya GRES are provided for 9 months. 2019. See details on the sale of the property of Reftinskaya GRES in the section “Exit from Coal Generation” 5 PZ I * — the First Price Zone of the Wholesale Power (Capacity) Market (WPCM), including the European part of Russia and the Urals.
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Regulatory authorities in the electric power industry.
Regulatory authority Functions
Government of the Russian Federation, Ministry of Economic Development of Russia, Ministry of Industry and Trade of the Russian Federation, MINISTRY OF ENERGY OF THE RUSSIAN FEDERATION
They define the main areas for the development of the power sector of the Russian Federation
Federal Antimonopoly Service (FAS of Russia) Regulation and control of access to the electric grids and services for power transmission. Approval of tariffs and scope of purchase/sales of power and the capacity
Public Joint-Stock Company "Federal Grid Company of Unified Energy System” (“FGC UES”, PJSC)
It provides the services for power transmission through the unified national power grid to the WPCM entities
System Operator of Unified Energy System Joint Stock Company (SO UES JSC)
It implements a complex of measures aimed at centralized control of operating modes of power industry facilities and power receiving installations of consumers
Joint Stock Company Trade System Administrator of the Wholesale Electricity Market (JSC ATS).
Organization of wholesale power trade, verification of cross-obligations set-off between the trade market participants; organization of warranty and settlement system at the wholesale market, market regulations compliance control
Non-profit Partnership "Market Council for Organization of Efficient System for Wholesale and Retail Trade in Electric Energy and Capacity" (Association NP Market Council)
Provision of the WPCM commercial infrastructure functioning, provision of effective interconnection between the wholesale and retail markets, competitiveness in the wholesale and retail market, maintenance of the balance of interests of power and capacity generators and purchasers
COMPANY STRATEGY
Strategic Plan for 2020-2022
The Key Areas of the Company Activities, Prospects for Company Development
103-1 103-2 103-3
Our main objective is to create long-term value for shareholders, employees, partners and other stakeholders. The company's approach is to ensure balance between growth and development, solid financial position and remuneration to shareholders.
The main documents regulating creation of economic and financial value include:
Dividend Policy Regulation of PJSC Enel Russia https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Dividend%20policy1.pdf
Corporate Governance Code recommended by the Central Bank of the Russian Federation for use by joint-stock companies whose securities are admitted to on-exchange trading
The financial strategy is approved by the Board of Directors of the company while responsibility for implementation of financial strategy is within the General Director, as well as line directors in the relevant unit (see details in the section “Organizational Structure”).
The company publishes annually its key operational and financial objectives for the next three years, approved by the Board of Directors, as well as the results of the year for key strategic pillars. The company discloses quarterly the financial results for the past period with management comments and answers to questions from the financial community. See details in the section “Interaction with the Shareholders and Investors”.
The company's financial strategy is inextricably related to implementation of the strategic plan. The company's strategic plan for 2020-2022 confirms key strategic pillars:
22
The key elements of our strategy - “Diversification of technology profile” towards reduction of the carbon footprint, as well as “Focus on efficiency of gas power plants” are aimed at achieving the UN sustainable development goals (SDGs): SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action). PJSC Enel Russia confirms its commitment to other SDGs too by promoting a sustainable business model and applying sustainable development practices. See details in the section “Our Contribution to SDGs”.
Report on strategic pillars in 2019
Pillar Additional information Achieved result in 2019
Diversification of technology profile
During several years, the company has been gradually moving towards modification of the technology and financial profile in favor of cleaner energy sources, as well as reduction of the dependence of financial results on market volatility.
• Completion of the key stage of the coal power plant sale (see details in the section “Exit from Coal Generation”);
• The company obtained the right to construction of the third wind farm with the capacity of 71 MW by the tender results in 2019;
• Commencement of construction of Azovskaya WPS and Kolskaya WPS (see details in the section “Development of Renewable Energy Sources”)
Focus on efficiency of gas power plants
Along with construction of new RES facilities, the company improves continuously the available thermal facilities to increase the period and efficiency of their operation. One of the promising development areas indicated in the previous strategic plan for 2019-2021 was participation in the modernization program with commencement of project selection in 2019, that was confirmed in strategic plan for 2020-2022.
• Four projects of the company for a total capacity of 370 MW were selected based on the results of two project selections (for 2022-2024 and 2025) as part of TPP modernization program (see details in the section “Investment Activities”)
Operational efficiency
The company has established historically a goal of continuous comprehensive optimization of costs that ensures additional support during transformation of the company's business profile.
• Reduction of fixed costs as compared to 2018 (2019 exclusive of Reftinskaya GRES)
23
Pillar Additional information Achieved result in 2019
Debt structure optimization
Along with control of production costs, the company strives for constant optimization of the structure and cost of borrowed capital, as well as maintenance of strong relations with financial partners.
• Refinancing of the last euro-denominated loan into rubles;
• RUB 12 bln from proceeds from the sale of Reftinskaya GRES was used for debt redemption
Shareholder remuneration
The result of assumed strategy is envisioned by the company in creation of long-term value for the company shareholders including in the form of considerable dividends by the operating results.
• Dividend pay-out ratio was increased with 60% to 65% following results of 2018;
• The dividend policy is updated in accordance with the stage of transformation of the company's business profile
Other Results in 2019
In 2019, Moody’s and Fitch international credit rating agencies confirmed the company rating at Ba3/Stable outlook and BB+/Stable outlook, respectively. These rating actions were preceded by putting the company's rating for revision in June 2019 due to convening an Extraordinary General Shareholders’ Meeting regarding the sale of Reftinskaya GRES.
In addition, in 2019 international agency Sustainalytics performed annual update of the rating of ESG risk management (risks in the environmental, social and corporate governance areas, ESG Risk Rating) at the company having improved its indicators as compared to 2018. ESG-risk is estimated at an average level, the company received 24.5 out of 100 points (the lower the better). Risk management is estimated at 66.4 out of 100 points (the higher the better); this indicates a high quality of management.
Then, the long-term incentive program for the top management with 60% depending on the share price was extended in 2019 for the next three years planned period6. This program demonstrates the company’s commitment to the increase of its shareholders wealth and creation of long-term economic and financial value.
Forecast of Operating Results
The key changes in terms of installed capacity represented in the Plan for 2020-2022 include:
• As regards heat generation, 3.8 GW of coal generation were disposed from October 1, 2019 after the transfer of Reftinskaya GRES assets. All other generation facilities were selected either as part of capacity auction for 2020-2022 or modernization program. The selected modernization projects provide for a slight increase in installed capacity, but beyond the horizon of the planning period;
• As regards renewable energy sources, 291 MW facilities will be commissioned as two wind farms are gradually commissioned. Another 71 MW project will be launched beyond the horizon of the planning period.
6 More details and conditions about KPIs of top managers used for their motivation are described in Annex 6 to this
report
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During 2020-2022 the stable production results of gas units with some fluctuations in accordance with the annual investment plans as well as generation of the first megawatt hours from renewable energy sources from 2021 will ensure moderately positive trend of electric power supply.
Structure of net power output by the technology (TWh)
Forecast of Financial Results
The company follows mainly the scenario conditions of previous plan, against the background of current macroeconomic and market trends, such as moderate increase in electric power demand, containment of tariffs and fluctuations of electric power prices in some regions of presence.
Forecasts of financial results of the company up to 2022
EBITDA dynamics in 2020 in relation to 2019 is explained by the sale of Reftinskaya GRES in 2019. While decrease in 2021 is stipulated by the end of the ten-year period for return on investments in CCGT, at the same time the company will start receiving RES CSA for 90 MW wind farm in the Rostov region. EBITDA is restored starting from 2022 as the second wind farm is put into operation in the Murmansk region with capacity of 201 MW.
EBITDA of the company is expected to achieve RUB 13.8 bln in 2022, which is 3%7 lower than the actual figure of RUB 15.3 bln in 2019. On a comparable basis or by deducting Reftinskaya GRES in 2019, EBITDA is 10% higher than the figure of RUB 10.4 bln in 2019, the company follows the line of step changes in the structure of gross profit and EBITDA towards a more stable technology profile and risk reduction, which should generate higher value when assessed by the market.
7 In this section of the report compound annual growth rate is used when comparing financial data 2022 versus 2019
25
EBITDA forecast by technologies
Net ordinary income is explained by EBITDA trend, and will achieve RUB 4.5 bln in 2022 compared to RUB 7.5 bln in 2019. On a comparable basis or by deducting Reftinskaya GRES in 2019, the net profit in 2022 will be approximately at the level of 2019 of RUB 4.6 bln, the dynamics will be affected negatively by increase of financial costs since 2021 after putting into operation of projects based on renewable energy sources.
Net debt change forecast, bln rubles
Net debt is expected to grow to approximately RUB 33.5 bln at the end of 2022 compared to RUB 4.2 bln calculated as at the end of 2019, which is mainly due to increase in investments to ensure transformation of the business profile.
At the same time, as the wind power projects are gradually commissioned, the company expects to overcome the peak debt load (in 2021) with Net Debt/EBITDA ratio reaching 2.4 times in 2022, compared to 0.3 calculated in 2019, which is a low base due to repayment of RUB 12 bln debt from the proceeds from the sale of Reftinskaya GRES.
Creating Value for Shareholders
The plan of PJSC Enel Russia provides for a balance of growth opportunities, financial sustainability of business and predictable remuneration for shareholders. Given the period of change in the strategic positioning of the company and volatility of profit over the medium term, the company introduces a fixed dividend to ensure a guaranteed return for its shareholders.
By the results of 2019-2021, the company intends to distribute RUB 3 bln every year.
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Dividend policy
Dividend per share (RUB/share)
Sustainability Plan for 2020-2022
102-16
In the new Sustainability Plan for 2020-2022, Enel Russia confirms the underlying principles of its strategy
and focuses on environmental and social impact and management practices. Sustainability is inextricably
related to the company strategic business plan. See more information in the section “Sustainability
Management”
The Sustainability Plan was updated significantly to provide a visual representation of our business the
transformation. The Plan covers the majority of priority areas of activities, highlighted as material topics of
this report. To comply with the principle of comparability, for new goals, where possible, we indicated the
results of the previous reporting period and actual data for the current year.
3 bln rubles
3 bln rubles
3 bln rubles
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Sustainability Plan: results8 of 2019 and planned indicators for 2022
Pillars Actual for
2019 2022 Progress
People Focus: Engaging People We Work With
People Development
Digital skills training (% of involved) 28 70
Cross functional development (% high-potential young people)
10 30
Multiskilling (% of operations & maintenance personnel)
50 80
Training hours (per employee/year)
48 49
Internal mentors among managers (% of involved)
8 38
Diversity & Inclusion
Women recruitment (% in recruitment processes)
38 41
Women in top management (%)
17 21
Talent Retention
Climate survey (% of involved and % of participants)
100 -
96
100 -
96
8 All actual indicators for 2019 include data inclusive of RGRES until September 30, 2019.
20 28
70
2018 2019 2022
8 10
30
2018 2019 2022
45 50
80
2018 2019 2022
48 48
49
2018 2019 2022
8
38
2018 2019 2022
3038 41
2018 2019 2022
17 1721
2018 2019 2022
100 100
2019 2022
New
New
28
Pillars Actual for
2019 2022 Progress
Performance appraisal (% of involved and % of appraised)
100 -
99
100 -
99
High-potential employees in training programs (%)9
12 35
3-year individual career path for high potential employees (%)10
- 10
Engaging the Local Communities
SDG-linked community support and development projects (thousand beneficiaries)
86.811 85
Employees involved in corporate volunteering (%)
11.512 18
Sustainability knowledge dissemination (hours/year)
- 50
Decarbonization
Installed renewable capacity (MW)
0 291
Direct СО2 (g/kWh)
61613 399,1
Sustainable Supply Chain
9 Of the total number of participants of training programs 10 Of the total number of high-potential employees 11 77.9 ths beneficiaries without RGRES 12 16% without RGRES 13 420 g/kWh without RGRES
100 100 100
2018 2019 2022
10 12
35
2018 2019 2022
10
2018 2019 2022
63,7
86,8 85
2018 2019 2022
11 11,5
18
2018 2019 2022
50
2018 2019 2022
0 0
291
2018 2019 2022
655 616444
2018 2019 2022
New
New
New
New
29
Pillars Actual for
2019 2022 Progress
Introduction of sustainability criteria in tenders14
-
Environmental Product
Declaration (PED)
Other Works sustainability criteria (% of tenders)15 -
40
Environmental Sustainability
Waste water volume reduction (million m3/year)
8.9316 4.59
2018 - the goal is set only for RGRES, since 2019 it is set for all power plants
Fuel consumption reduction (g/kWh)
320.9817
296.6
Reuse & processing projects (projects / year)
3 6
Reduction of disposable plastic use (%) 18
-50 -75
Transition to Renewable Energy Sources
Decarbonization of the Energy Mix
103-1 103-2 103-3
Global macroeconomic trends, such as decarbonization, transform the world of electric power industry into a new ecosystem that transforms gradually the conventional business model of utility companies. Enel Russia follows the strategy of Enel Group that mainstreamed the development of environmentally friendly energy sources and recognizes the importance of climate change and the need to take urgent measures to combat the climate crisis. According to the Integrated Policy in quality, health, safety, environment and energy efficiency, the company supports the goal of the Enel Group to achieve a zero-carbon balance by 2050.
14 By 2022, an assessment of key suppliers based on key sustainability indicators 15 Procurement of services, auxiliary goods, purchases for small amounts 16 7.3 million m3/year without RGRES 17 299.3 g/kWh without RGRES 18 In 2019 - 2020, the focus is on reduction of disposable plastic use at the offices. Starting from 2021, reduction of plastic use at the power plants and in procurement.
40
2019 2022
13,2
8,93
4,59
2018 2019 2022
327320,98
296,6
2018 2019 2022
23
6
2018 2019 2022
-50
-75
2018 2019 2022
New
New
New
30
Decarbonization provides for the development of renewable energy, equipment modernization and implementation of low-carbon technologies. Decarbonization of the fuel mix is a relatively new topic so a management approach for it has not been fully developed yet. At this stage, responsibility for managing, achieving goals and evaluating performance in terms of this material topic is assigned to: General Director, Head of Generation, Head of Renewable Energy.
Development areas and key events of 2019
Exit from coal generation Transfer of property of the largest coal power plant in Russia - Reftinskaya GRES - to Kuzbassenergo JSC on October 1, 2019 (see details in the section “Exit from Coal Generation”).
Construction of wind energy facilities
Detailed information about current status of projects is given in the section “Transition to Renewable Energy Sources”).
Further business development in wind energy
Enel Russia obtained the right to the construction of a new wind generation facility for a total installed capacity of over 71 WM within the scope of the tender for selection of the projects in renewable energy sources. Rodnikovsky wind farm will be located in the Stavropol Territory. Concerning the Rodnikovsky wind farm, the installed capacity of the company's wind generation facilities selected during the tenders will be 362 MW. This tender winning underline once again our aim at diversification of the structure of generation facilities due to growth in RES.
Modernization of the equipment The projects of Enel Russia aimed at equipment modernization were selected by the System Operator in the competitive procedure for the projects as per equipment modernization program (see details in the section “Main Investment Projects”)
102-10
Exit from Coal Generation
Until October 2019, PJSC Enel Russia owned the largest coal power plant in Russia - Reftinskaya GRES. Reftinskaya GRES, with an installed capacity of 3800 MW, is located in the Reftinsky settlement, Sverdlovsk region. The power plant consists of six 300 MW power units and four 500 MW power units; the installed heat capacity is 350 Gcal/h. Reftinskaya GRES is able to ensure a supply of about 40% of the entire Sverdlovsk region.
From 2016 onwards Enel Russia has been performing a strategic analysis of the role of each power plant in the company’s portfolio and actively examining the possibility of an exit from coal generation. The basic motives prompting PJSC Enel Russia to perform such analysis were:
• absence of synergy with other components of the value chain;
• potential to reduce the company's negative environmental impact and, as a result, the possibility of increasing the investment attractiveness of the company among ESG investors;
• release of funds for reinvestment in more stable and dynamically developing segments of the Russian electric power industry
Sale Timeline
In 2016 and 2017-2018 the company completed two marketing rounds for Reftinskaya GRES among qualified participants in the energy sector in Russia and abroad to determine the market value of coal asset.
As a result of the competitive process, Kuzbassenergo JSC was selected as the buyer (a subsidiary of Siberian Generating Company LLC), one of the largest private operators of thermal power plants in the Siberian Federal District.
On April 5, 2019, PJSC Enel Russia received a binding offer from Kuzbassenergo JSC to purchase the property of Reftinskaya GRES.
In order to determine whether the remuneration payable to PJSC Enel Russia under the terms of the contemplated transaction is fair from a financial point of view, the Board of Directors of PJSC Enel Russia instructed to involve an independent consultant for assessment of the fairness of the terms of the transaction.
Furthermore, under the requirements of Federal Law No. 208-FZ dated December 26, 1995 On Joint-Stock Companies, adoption of the decision by the corporate governance bodies of a public joint-stock company on approval of a major transaction, whose subject is the sales of assets, shall be taken with due
31
account for fair value of such assets. In order to comply with specified requirements, PJSC Enel Russia engaged an independent qualified appraiser for an independent appraisal of Reftinskaya GRES property.
On June 20, 2019 PJSC Enel Russia and Kuzbassenergo JSC (a subsidiary of Siberian Generating Company LLC) signed a sale and purchase agreement in relation to the property of Reftinskaya GRES. The agreement took effect on July 31, 2019 after two conditions were met: authorization of the transaction by the Federal Antimonopoly Service and approval of the terms of the transaction by shareholders of PJSC Enel Russia at the Extraordinary General Shareholders' Meeting (held on July 22, 2019).
The total amount of the transaction by the transition period results should amount to RUB 20.7 bln exclusive of VAT. Moreover, in addition to the above transaction price, additional payments should be received as a result of purchase of certain categories of reserves at Reftinskaya GRES by JSC «Kuzbassenergo», including reserves of coal, fuel oil, chemicals and spare parts at the end of the transition period. In addition, the transaction provides also for additional payments for the total amount of up to RUB 3 bln within five years after closure of the transaction if certain conditions are met.
Project for the sale of Reftinskaya GRES
During the transition period, in order to ensure the continuity of the operational activities of Reftinskaya GRES, PJSC Enel Russia will continue operating the power plant under a lease agreement for up to one year.
Plant Personnel
Most of the employees of Reftinskaya GRES remain employed by PJSC Enel Russia for the entire transition period in order to fulfil the obligations of PJSC Enel Russia related to operation of the power plant. A limited number of employees of Reftinskaya GRES were transferred to Kuzbassenergo JSC or employed at Kuzbassenergo JSC on a part-time basis to provide Kuzbassenergo JSC with personnel having qualifications required to obtain licenses and permits in relation to Reftinskaya GRES.
STAGE 2 August-October 2019
STAGE 3 October 2019-till
present
• Inventory of the power plant property jointly with Kuzbassenergo JSC
• State registration of transfer of title to real estate of Reftinskaya GRES from PJSC Enel Russia in favor of Kuzbassenergo JSC
TRNSITION PERIOD
• Leaseback of the power plant
• Obtaining of licenses and permits by Kuzbassenergo for independent operation of the power plant
STAGE 1 June-July 2019
• Agreement signing
• Approval of the terms of the transaction by shareholders of PJSC Enel Russia at the Extraordinary General Shareholders' Meeting, on July 22, 2019.
• Authorization of the transaction by the Federal Antimonopoly Service of the Russian Federation, July 31, 2019.
Sale of Reftinskaya GRES
Marketing of Reftinskaya GRES and determination of market value for 2016, 2017-
2018
Sales agreement signing June 2019
Receipt of binding offer April 2019
Assessment of fairness of transaction terms
April 2019
TRANSITION PERIOD: Enel Russia operates the power plant under lease agreement October 2019 - till present
Commencement of independent operation of the power plant by Kuzbassenergo Upon completion of the transition period, but no later than October 1, 2020
Legend:
Processes ongoing after 31.12.2019 Completed processes
32
The Parties to the Agreement foresaw the preservation of the terms and conditions of employment agreements with the power plant employees during the Transition Period, as well as absence of possibilities to organize transfer of employees of Reftinskaya GRES to other power plants of PJSC Enel Russia.
PJSC Enel Russia and Kuzbassenergo JSC will make reasonable efforts to ensure the entry of Reftinskaya GRES personnel into labor relations with Kuzbassenergo JSC by the end of the Transitional Period by means of replacing the employer in the employment agreements with RGRES personnel in accordance with Article 75 of the Labor Code of the Russian Federation. Kuzbassenergo JSC undertakes to ensure the work of Reftinskaya GRES personnel under the same conditions.
At the same time, Kuzbassenergo JSC undertakes not to terminate employment agreements with the personnel of Reftinskaya GRES within 18 months after the transaction completion date, unless such termination occurs upon request of the employee or upon Kuzbassenergo JSC’s initiative of as a result of breach of relevant provisions of the Labor Code of the Russian Federation by the employee.
Environmental Impact
Due to the sale of Reftinskaya GRES and transfer of title to the power plant’s property to another organization, PJSC Enel Russia submitted a notification to the Government of Sverdlovsk Region on termination of Agreement No. 191 dated 14.07.2011 “On interaction in the field of environmental protection between the Government of Sverdlovsk Region and PJSC Enel Russia” as the Agreement concerned exclusively the activities of Reftinskaya GRES.
Local Community
Enel Russia is in close dialogue with new owner of Reftinskaya GRES, not only on the issues of power plant operation. For its part, the company makes every possible effort to transfer expertise, knowledge and experience in interacting with the local community, in order to ensure continuity of community support projects and further development of the territory by the new owner - Kuzbassenergo JSC, a large contribution to implementing which was made by PJSC Enel Russia during its presence in the territory.
Supply Chain
October-December 2019, PJSC Enel Russia re-assigned to Kuzbassenergo JSC the contracts required for overhauls and medium maintenance at Reftinskaya GRES, while the agreements related to current maintenance and operation of the power plant are retained by PJSC Enel Russia until the end of the transition period. Development of Renewable Energy Sources
103-1 103-2 103-3
Enel Russia follows the strategy of Enel Group that mainstreamed the development of environmentally friendly energy sources and recognizes the importance of the climate change and the need to take urgent measures to combat climate crisis (see details in the section “Decarbonization of the Fuel Mix”). PJSC Enel Russia increases the share of use of renewable energy sources and supports environmental and social goals set by the Group while using sustainable development as an important vector during selection of investments and production strategies.
In 2013 the Government of the Russian Federation launched a program for incentivize the development of energy assets based on RES and adopted the required regulatory legal acts. Due to this favorable regulatory frame PJSC Enel Russia decided to invest into the projects for construction of renewable energy generation facilities.
Being an active member of major business and trade associations in the country PJSC Enel Russia elaborates proposals for improving regulatory acts regulating functioning of green generation as well as further encouragement of long-term development of RES generation.
We are developing own portfolio of RES projects and constructing wind farms in different regions of Russia. Enel Russia is considering to participate in the upcoming renewable tenders for next years and strongly focuses on developing its RES project pipeline.
Renewable energy projects of Enel Russia
Title Capacity Generation/year Location Commencement of
construction Date entered into service
Investments Project status
362 MW - total installed capacity 1.3 TWh - electric power generation per year
Azovskaya WPP
90 MW 320 GWh Rostov Region May 2019 December
2020 132 million
EUR during
construction
Kolskaya WPP
201 MW 750 GWh Murmansk
Region September 2019
December 2021
273 million EUR
during construction
33
Rodnikovsky WPP
71 MW 220 GWh Stavropol Territory
The information will be given in the next
reporting period H1 2024 90 million EUR
Under development
1040 kilotons - reduction of the volume of CO2 emissions per year
We implement the projects in the sector of renewable energy sources in full compliance with internal procedures and policies adopted at PJSC Enel Russia namely:
Integrated Policy for Quality, Health, Safety, Environment and Energy Efficiency https://www.enelrussia.ru/content/dam/enel-ru/documents/en/%D0%98%D0%BD%D1%82%D0%B5%D0%B3%D1%80%D0%B8%D1%80%D0%BE%D0%B2%D0%B0%D0%BD%D0%BD%D0%B0%D1%8F%20%D0%BF%D0%BE%D0%BB%D0%B8%D1%82%D0%B8%D0%BA%D0%B0%20%D0%9A%D0%9E%D0%A2%D0%AD%D0%B8%D0%AD_2019_eng.pdf
Charter of PJSC Enel Russia https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Charter.pdf
Code of Ethics https://www.enelrussia.ru/content/dam/enel-ru/documents/ru/CODE%20OF%20ETHICS-2017-2.pdf
Zero Tolerance to Corruption Plan Regulation https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Zero%20Tolerance%20to%20Corruption%20Plan.pdf
Global Compliance Program on corporate criminal liability https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Enel%20Global%20Compliance%20Program.pdf
The team working on the projects for development of renewable energy sources consists of ~ 50 persons that coming from engineering & construction, business development, procurement, finance, legal service, health and safety, digital solutions. Not only Russian specialists participate in it but colleagues from Enel Group throughout the world too, which allows establishing continuous sharing of expertise and best practices.
Structure of wind generation development management
Infrastructure Development
Azovskaya WPP consists of 26 wind generators (WTG), and Kolskaya WPP consists of 57 WTGs.
The supplier of WTGs for both projects is LLC Siemens Gamesa Renewable Energy. The percentage of localization of equipment and works must be at least 65% for each project. It means that more than a half of the wind turbine equipment and works related to wind plants construction should be produced in the territory of the Russian Federation by local factories and specialized companies.
For delivery of every WTG to its position on the construction site, the internal roads must be constructed. For Azov project the length of the internal roads is 16 km, for Kola project - 60 km. in addition with regards to Azov project we reconstruct the external access road with the length of about 5 km from the wind farm
LLC Enel Rus Wind Azov
LLC Enel Rus Wind Kola
LLC Enel Rus Wind Generation
Implementation of investment for construction of projects on wind farms
Head of Renewable Energy
Development of projects based on renewable energy sources at the = region of presence level
100% subsidiaries
PJSC Enel Russia
Azovskaya WPP Kolskaya WPP Rodnikovsky WPP
* EPCM (Engineering, Procurement, Construction, Management) – engineering services, procurement, construction, project management
EPCM Contractor of PJSC Enel Russia
LLC Enel Green Power Rus
Management of construction and operation of RES portfolio
34
territory to the boundary with Krasnodar Territory. Upon completion of construction this road will be used by the local community.
For grid connection of both projects to the Unified Energy System of Russian Federation, Enel Russia is going to construct high-voltage power transmission lines: for Azov project, construction of 110 kV power transmission line is started with the length of ~ 50 km; for Kola project, 150 kV power transmission line with the length of ~ 70 km is currently at the preliminary construction phase. Construction of high-voltage power transmission lines along with wind farms will increase the flow of electricity within and outside the regions, ensuring high reliability of power supply for the consumers.
Sustainable Construction Site
At the stage of construction of generation facilities all processes are strictly regulated also by global procedures of the company included in Enel Group - Enel Green Power. PJSC Enel Russia organizes the work at the construction site with regard to the principles of sustainable construction site.
Principles of sustainable construction site
Regarding current practices, we make uncompromising requirements for health and safety at the construction sites, applied equally to both company employees and employees of contractors and subcontractors. The wheel washing stations with 100% closed cycle of water usage are installed at our construction sites. We adhere to the principle of “zero ground balance” – this means that the ground left from excavation of foundation is used for construction of internal roads and other construction purposes within the territory of the construction site. We arranged separate waste collection at the construction site of Azovskaya WPP.
We involve actively the local authorities and local community in projects for improvements and development of the territories of our presence (see details in the sections “Engaging the Local Community” and “Calendar of Events”).
FINANCIAL AND PERFORMANCE INDICATORS
Analysis of Performance Dynamics as Compared to the Plan and Previous Period
102-7
In 2019, despite the absence of financial result of Reftinskaya GRES from October 1, 2019, the company achieved annual financial targets, namely: EBITDA amounted to RUB 15.3 bln (versus planned RUB 15.1 bln), net ordinary income amounted to RUB 7.5 bln (versus planned RUB 7.4 bln). This was due to favorable pricing conditions at the electricity market in some regions, as well as greater savings in fixed costs.
Revenues, bln rubles
MINIMIZATION OF NEGATIVE IMPACT
RESOURCES
EFFICIENT USE OF WATER, POWER AND OTHER RESOURCES
WASTE
USE OF SUSTAINABLE MATERIALS
MAXIMUM REUSE OF SOLID WASTE, INCLUSING SOIL AND STONES
REUSE AND TRANSFER OF EQUIPMENT
SEPARATE COLLECTION OF WASTE AND TRANSFER OF THE MAXIMUM POSSIBLE VOLUME FOR RECYCLING
OUR PEOPLE
IMPROVEMENT OF INFRASTRUCTURE
RECRUITMENT AND TRAINING OF LOCAL WORKFORCE
CREATION OF INFRASTRUCTURE AND SERVICES FOR WORKFORCE AT SITE
LOCAL COMMUNITY
CONTROL OF NOISY AND DUSRY WORKS
CONTROL OVER CLEANLINESS OF VEHICLE LEAVING THE SITE
TRANSFER OF EQUIPMENT AND MATERIALS TO LOCAL COMMUNITY
PARTNERSHIP AND LONG-TERM COOPERATION
35
In 2019, revenue decreased by 10% vs 2018, on lower power and capacity sales due to Reftinskaya power plant exit starting from 4Q 2019, and the decline in conventional gas units’ production that was mostly driven by lower loading by the System Operator due to overcapacity in the system, as well as lower electricity demand in European Russia and Urals due to higher average temperatures in 2019 versus 2018
EBITDA, bln rubles
In 2019, EBITDA decreased by 11% vs 2018 mainly following the revenues. It offset a positive effect coming from a 13% fixed cost decline that was mainly attributable to lower non-manageable operation and maintenance costs due to elimination of property tax on movable assets from 2019, and lower manageable operation and maintenance costs and personnel costs on the change in assets perimeter. Personnel costs additionally benefited from personnel liabilities recalculation related to Reftinskaya GRES, as well as lower headcount more than offsetting the impact on salaries of the Consumer Price Index (CPI)
36
Ordinary EBIT, bln rubles
Ordinary EBIT, or net of Reftinskaya GRES sale related effects, decreased by 12% mainly reflecting lower EBITDA. Lower amount of depreciation due to its elimination for Reftinskaya GRES starting from July 1st, 2019, as well as lower accruals for bad debts partially offset the abovementioned negative effect
Net ordinary income, bln rubles
Net ordinary income, or net of Reftinskaya GRES sale related effects, decreased by 3% as compared to 2018 in line with ordinary EBIT, however, supported by around a 36% decrease in net financial charges which was mainly attributable to managerial action, that resulted in the optimization of debt currency and cost structure, as well as to lower average level of debt due to its partial repayment from Reftinskaya sale proceeds
Net debt, bln rubles
37
Net debt of the company by the end of 2019 decreased considerably as compared to the end of 2018, mainly reflecting the receipt of Reftinskaya sale proceeds that were used afterwards for partial debt repayment
Dividend per share, rubles
Upon 2019 result, the company plans a dividend per share of RUB 0.085 per share, which is lower than the value for 2018 and reflects an updated dividend approach according to which the company plans to distribute fixed amount of 3 bln rubles per year upon 2019 – 2021 results
Main Production Indicators19
EU1 Installed heat and electric capacity of the company power plants
Power Plant Type of capacity,
unit of measurement
2019 2018
Konakovskaya GRES Electrical, MW 2 520 2 520
19 Within the scope of this section, data on Reftinskaya GRES, unless otherwise specified, are given for 9 months of 2019. See details on the sale of the property of Reftinskaya GRES in the section “Exit from Coal Generation”
38
Heat, Gcal/hour (MW)
120 (140) 120 (140)
Nevinnomysskaya GRES
Electrical, MW 1530,2 1530,2
Heat, Gcal/hour (MW)
585 (680) 585 (680)
Reftinskaya GRES
Electrical, MW As on 30/09/2019 3 800
3 800 As on 31/12/2019 0
Heat, Gcal/hour (MW)
As on 31/09/2019 350 (407) 350 (407)
As on 31/12/2019 0
Sredneuralskaya GRES
Electrical, MW 1578,5 1578,5
Heat, Gcal/hour (MW)
1327 (1543) 1327(1543)
Total for Enel Russia
Electrical, MW As on 31/09/2019 9 428,7
9 428,7 As on 31/12/2019 5 628,7
Heat, Gcal/hour (MW)
As on 31/09/2019 2 382 (2 770) 2 382 (2 770)
As on 31/12/2019 2 032 (2363)
100%
Структура установленной мощности Энел Россия по виду топлива на 31.12.2019*
Газ
Gas Coal
The structure of installed capacity of Enel Russia by type of fuel as on 01/10/2019 *
The structure of installed capacity of Enel Russia by type of fuel as on 31/12/2019 *
Gas
39
* Despite the fact that fuel oil is also included in the structure of the fuel types used, it is not indicated in the structure of installed capacity for two reasons:
− its current share is up to 0.3% of the total volume of consumed fuel;
− fuel oil is used as a starting fuel that is not used for the generation of electricity or heat.
In 2019, PJSC Enel Russia generated 32,433 ths MWh of net power output, 17.2% less than in 2018.
Net power output by company’s power plants in 2017-2019
EU2
Power plant Unit of
measurement
2017 2018 2019 2019 vs
2018 Reasons of changes 2019 vs
2018
Konakovskaya GRES
GWh 6,950 6,462 5,698 -11.8%
Less load of equipment from the System Operator due to excess capacity in the UES of Center
Nevinnomysskaya GRES
GWh 7,741 7,534 6,750 -10.4%
Reduction of generation of conventional gas units due to more loading of NPP in the south of Russia was not compensated by the stable results of CCGT
Reftinskaya GRES GWh 18,565 18,572 13,333 -28.2% Transfer of property to the new owner from October 1
Sredneuralskaya GRES
GWh 6,575 6,614 6,652 0.6%
Minor growth due to higher generation of CCGT. This growth compensated lower generation of conventional gas units caused mainly by capacity surplus in the system
Total for Enel Russia
GWh 39,830 39,182 32,433 -17.2%
17,6%
20,8%
41,1%
20,5%
Структура полезного отпуска электроэнергии филиалов Энел Россия в 2019 году
КГРЭС НГРЭС РГРЭС СуГРЭСKGRES
The structure of net power output of Enel Russia power plants in 2019
NGRES RGRES SUGRES
40
Sales
102-7
Power sales by the company in 2017-2019
Sales Unit of measurement 2017 2018 2019 2019 vs
2018
Regulated GWh 8,395 9,218 7,725 -16.2%
Non-regulated GWh 37,180 35,854 29,560 -17.6%
Total GWh 45,575 45,072 37,285 -17.3%
Capacity sales by the company in 2017-2019
Sales Unit of measurement 2017 2018 2019 2019 vs
2018
Regulated GW 30,369 30,500 27,956 -8.3%
Non-regulated GW 74,026 72,534 64,351 -11.3%
Including CSA GW 9,267 9,196 9,185 -0.1%
Total GW 104,395 103,034 92,307 -10.4%
Reduction in the volume of capacity sales by the power plants of PJSC Enel Russia in 2019 is related mainly to the sale of the property of Reftinskaya GRES (see details in the section “Exit from Coal Generation”). The data on Reftinskaya GRES are given for 9 months of 2019.
Dynamics of net power output, GWh
KGRES NGRES RGRES SUGRES Enel Russia
Coal Gas
The structure of net power output of Enel Russia by type of fuel in 2019
41
Heat Power
In 2019, heat output by the power plants of PJSC Enel Russia was 4,599 ths Gcal or 5,349 MW, which is 6.2% less than in 2018, mainly due to the sale of Reftinskaya GRES as well as reduction of heat generation at all power plants due to higher mean air temperature as compared to 2018.
Net heat output by the company power plants in 2017-2019
Power plant Unit of
measurement
2017 2018 2019 2019 vs
2018
Konakovskaya GRES ths Gcal / MW
195/227 187/218 174/203 -6.6%
Nevinnomysskaya GRES
ths Gcal / MW
1637/1904 1504/1749 1440/1674 -4.3%
Reftinskaya GRES ths Gcal / MW
459/534 489/569 305/355 -37.7%
Sredneuralskaya GRES ths Gcal / MW
2913/3388 2722/3166 2680/3117 -1.5%
Total for Enel Russia
ths Gcal / MW
5204/6053 4903/5702 4599/5349 -6.2%
3,8%
31,3%
6,6%
58,3%
Структура отпуска тепла по филиалам Энел Россия в 2019 году
КГРЭС НГРЭС РГРЭС СуГРЭС
Dynamics of net electric power output, ths. Gcal
KGRES NGRES RGRES SUGRES Enel Russia
The structure of heat output by Enel Russia power plants in 2019
KGRES NGRES RGRES SUGRES
42
Investment Activities
Capex (bln rubles)20
The total CAPEX for 2020-2022 amount to RUB 39.4 bln, which is 2% higher compared to the previous plan (38.7 bln rubles. for 2019-2021 exclusive of Reftinskaya GRES). The Strategic Plan for 2020-2022 is based on the projects with guaranteed return on investment, the growth is stipulated mainly due to new modernization and renewable energy projects selected in 2019 and allows using the attractive investment opportunities that are available at the market.
20 Capital expenditures for construction by accrual method; Growth is indicated as compared to the old plan exclusive
of Reftinskaya GRES
Asset management Asset development
Areas of investment projects
• Implementation of construction projects for wind generation facilities
• Implementation of thermal generation modernization program
• Maintenance of the proper condition of the
current gas generation fleet
43
Capex by categories
Main Investment Projects
Program for Modernization of Thermal Generation
During 2019, four investment projects at Sredneuralskaya GRES and Nevinnomysskaya GRES were selected to participate in the first (putting into operation of projects in 2022-2024) and second (putting into operation of projects in 2025) stages of TPP modernization program.
The mechanism for return on investments into the projects is an analogue of CSA mechanism, the payment for which takes place within 16 years after putting into operation and provides for a base rate of return of 14% with a base value of return on government bonds of 8.5%.
After implementation of modernization projects, increase in reliability of heat supply and power supply, as well as increase in equipment efficiency is expected. Besides, reduction of emissions into the atmosphere is assumed. The upcoming works will also provide new jobs for citizens.
The company's planned investments in modernization program with putting into operation in 2022-2025 amount to RUB 11.3 bln
Nevinnomysskaya GRES
The first modernization project includes modernization of boiler No. 5 with the capacity of 480 t/h that is technologically connected to turbine No. 4 with the capacity of 50 MW. Putting into operation after modernization is planned for quarter one of 2022. The capital expenditures for the project approved by the commission will amount to RUB 13,023.7 per kW.
The second modernization project includes replacement of boiler No. 4 with the capacity of 480 t/h that is technologically connected to turbine No. 3 with the capacity of 80 MW. Putting into operation after modernization is planned for quarter one of 2025. The capital expenditures approved for the project amounted to RUB 17,790.4 per kW.
Sredneuralskaya GRES
The first modernization project provides for replacement of 100 MW turbine No. 7 with a new 120 MW turbine. Commencement of operation of modernized unit is planned for quarter one of 2025. The capital expenditures approved for the project amounted to RUB 9,254.9 per kW.
44
The second project includes replacement of 100 MW turbine No. 6 with a new 120 MW turbine, as well as refurbishment of boiler No. 9 with the capacity of 480 t/h. Putting into operation after modernization is planned for quarter four of 2025. The capital expenditures approved for the project amounted to RUB 11,661.7 per kW.
Other Projects of Thermal Generation
Modernization of CCGT of Nevinnomysskaya GRES
Project implementation in 2019-2020 will increase reliability of operation of the combined-cycle gas turbine, improve performance and reduce specific fuel consumption. As a result, increase is expected in economic efficiency of equipment operation due to growth of revenues from the electricity market, reduction is expected in fuel expenses and costs for planned inspections in the medium and long term.
Technical refurbishment of the industrial discharge treatment system at Sredneuralskaya GRES
Implementation of this project will allow significant reduction of discharge of pollutants into the environment in accordance with established environmental requirements, improve the ecological state of the Isetsk reservoir, as well as reduce penalties for negative environmental impact.
Besides, project implementation will allow reducing consumption and disposal of water used for technical needs of Sredneuralskaya GRES, ensure disposal of wastes generated during water treatment and waste water treatment, as well as save on operating expenditures due to the use of more efficient equipment.
Digitalization projects
The company will keep on implementing various digitalization initiatives both in health and safety, training of employees and for improvement of the quality of planning and performance of maintenance. (see details in the section “Innovation and Digital Transformation”).
Other projects
Other investment projects of the company for 2020-2022 include stage-by-stage replacement of the outdoor switch gear obsolete circuit breakers at Sredneuralskaya GRES as well as technical refurbishment and service life extension of the main equipment of gas power plants.
Structure of capital investments by areas in 201921
million RUB Operational improvements
Modernization Environment Safety and other
New construction
and business
development
Total
Konakovskaya GRES 461 4 465
Nevinnomysskaya GRES
567 268 0.2 3
838
Reftinskaya GRES 1,717 290 2,007
Sredneuralskaya GRES
1,550 480 81
2,111
Headquarters 274 274
New construction and business development
4,076
4,076
Total 4,569 268 770 88 4,076 9,771
21 On financing
45
Structure of capital investments by areas in 2019
SUSTAINABILITY
Sustainability Management
102-16
For us, sustainability of the company is first of all ensuring the quality growth of our business and creation
of long-term value for all stakeholders. We envision the key objectives in implementation of the sustainability
principles in the core of all our business processes, formation of the sustainability culture both among
internal and external stakeholders. We build a management system in such a way as to ensure integration
of the sustainability principles in decision-making and planning of all business functions at all levels.
Structure of Management of Sustainability Aspects
Commitment of senior management to sustainability principles is our advantage on the way towards
sustainable business. Thus, the sustainable development issues are addressed at the strategic level
directly by the Board of Directors and the Strategy Committee. The Strategy Committee was established in
mid-2019 and the first meeting was held in November of the same year to consider the company's approach
to management of environmental and social aspects and development priorities. The range of committee’s
authorities includes also assisting the Board of Directors in evaluation and decision-making on strategic
issues.
At the managerial level, the directors of functional areas set sustainability goals for their organization units
and support implementation of the best practices of responsible business.
The employees of units are responsible for achievement of target indicators. Their competencies,
professionalism and proactive stance comprise the basis for formation of sustainability culture at our
company.
Environment
Operational improvements
Safety and other
Modernization
New construction and business development
46
Structure of management of sustainability issues
*The functions of Sustainability Manager in the reporting period were fulfilled by the Deputy General Director - Head of People and
Organization.
The key performance indicators that define the variable part of the annual remuneration of key company
directors include sustainability indicators. (see Appendix 6. Numerical and statistical information, Key
performance indicators).
The company has adopted a number of internal documents that refer to the aspects of sustainable
development and regulate business processes on material topics.
Board of Directors
Strategy Committee
General Director/Executive Board
Head of HSEQ
Head of People and
Organization
Head of Legal and Corporate
Affairs
Head of Sustainability
Head of Procurement
Health, Safety,
Environment and Quality
People and Organization
Legal and Corporate
Affairs
Sustainability Unit Procurement
STRATEGIC LEVEL
MANAGERIAL LEVEL
OPERATIONAL LEVEL
Head of Internal Audit
Head of Operational Performance Optimization
Internal Audit Operational Performance Optimization
47
The system of sustainability documents
Our Contribution to SDGs
As representatives of large business, we are responsible for our duties in social and economic development
of the territories of our presence and in fulfilling environmental obligations. This is how our contribution to
achievement of UN Sustainable Development Goals (SDGs) is manifested.
While being aware of the scale of global challenges, with the SDGs targeted at their resolution, we
recognize the need for cooperation for the welfare of the entire world community. In 2019, we identified key
SDGs that are in line with our business strategy. We intend to focus on the chosen goals, a measurable
contribution to which achievement we are already making and which volume we plan to increase.
• Policy for remuneration and reimbursement of expenses (compensation) of the members of executive bodies and other key executives
• Provision for rewards and incentives to the employees of PJSC Enel Russia associated with holidays and anniversaries
• Collective agreements of the company’s branches
• Trade union policy
• Regulation "On Types of Personnel Education and Training, as well as Responsibility for Their Arrangement"
Sound Governance and Fair Corporate Conduct
Occupational Health and Safety Environmental Management
Sustainable Supply Chain
• Procedure “Vendor Rating” • Procedure “Supplier Qualification” • Procedure "Tender management" • Policy "Purchase Request Management" • Policy “Procurement Planning” • Operating Instruction "Procurement planning" • Contractual Work Policy • Policy "Authorization of procurement of advisory services" • Operating Instruction “Delegated procurement”
The documents are published at the company web site; www.enelrussia.ru
• Code of Ethics*
• Regulation of Dividend Policy*
• Zero Tolerance to Corruption Plan*
• Human Rights Policy on global criminal liability *Regulation on Corporate Secretary*
• Global Compliance Program on *
• Regulation on the Board of Directors’ Committees*
Employees Management, Development & Motivation
• Integrated Quality, Occupational Health & Safety and Environment Policy*
• Stop Work Policy
• Procedure for Interaction with Contractors in Health, Safety, Environment and Quality
• Policy on use of asbestos
• Policy of Zero Tolerance to Consumption of Alcohol, Drugs or Other Intoxicants and Limitations of Smoking at Workplace.
• Safe works in the Confined Space
• Operating instruction on safe performance of works on chimney stacks
• Operating instruction on safe performance of works at height • Regulation on Industrial Safety Management System
• Operating instruction on the alcohol testing system
• Operating instruction on the personal protection equipment management • LOTO Lockout/Tagout System Operating Instruction
• Provision "On application of permit to work system at the power plants • Regulation on risk assessment in the field of Health and Safety for employees during the
performance of works
• Policy on the prevention of stress and promotion of well-being in the workplace
• Regulation on the organization of inspections in the field of Occupational Heath & Safety, Environment and Quality
• Policy on “Critical Event Management”
Engaging the local communities
• Operating Instruction "On charitable assistance and implementation of social events" • Operating Instruction “University Relations” • Procedure “CSV Process Definition and Management”
48
Commitment to SDGs
We recognize the importance to consider the needs of stakeholders in the territories of our company
presence. For that reason, within the scope of the “Program for Social Support and Development of Local
Communities” we do not confine ourselves to only three confirmed goals but analyze the potential
contribution to the achievement of all SDGs (see the section “Development of Local Communities”).
Key Business Areas
To determine the growth path for our business, we rely on our internal expertise, opinion of stakeholders
and take into account global trends. Based on the materiality analysis results for 2019, we identified
strategic pillars of development and identified key priorities as well as our backbones.
49
The strategic areas in the field of sustainable development
The identified strategic pillars and key priorities comprise the basis for planning our activities for the next
five years. We are aware that external factors and changing expectations of stakeholders may influence
the approved line, therefore we aim to analyze the selected strategic areas on annual basis and adjust
them in accordance with the context.
Development of Sustainability Plan
Achievement of success in sustainable development, just as in operational activities, depends on setting
specific and measurable goals. The company approves annually a sustainable development plan and sets
targets for the short and long term. We disclose the target indicators for three years in public (see the
section “Sustainability Plan for 2020-2022”). Planning for a 5-year horizon is used by the companies for
internal planning and determination of the development pathway for sustainable development areas.
Development of sustainability plan
Risks Associated with Sustainable Development
In the reporting year, the Risk Management Team and Sustainability unit integrated ESG risks
(environmental, social risks and corporate governance risks) into the risk map of Enel Russia. Taking into
account the specifics of the company’s industry and territory of activity, we identified and assessed the key
risks, identified their owners. We plan to continue work associated with assessment and development of
mitigating measures in the next reporting period.
Internal analysis and discussion of key priorities with
units’ heads
Setting KPI
Evaluation of potential
contribution to the SDGs
Update of sustainability plan
Authorization and approval of the
plan by the General Director
and Strategy Committee
Presentation of sustainability plan
on the Capital Markets Day
50
The risk owners are responsible for risk management. A complete map of the company's risks and more
detailed information about risks in the field of sustainability is given in the section “Risk Management”.
Stakeholder Engagement
102-40 102-42 102-43 102-44 102-45
We maintain continuous and open dialogue with the stakeholders. By a stakeholder we mean the persons
or a group of persons, organizations that are subject to company impact and can in turn influence the
company activities.
Engaging stakeholders helps to identify the key priorities and expectations, track the level of their
satisfaction, determine the key risks and therefore adjust the sustainability strategy.
The annual procedure takes place at the company for assessment of stakeholders and their significance
for various business functions. The Sustainability Unit and managers of relevant units that carry out
interaction with a particular category of stakeholders is responsible for it.
Project/Investment
Technical, industrial and environmental
Regulatory
New category of risks: Social
New category of risks: Climate
Risk category Sustainable development risks
Land use
Resources use and waste
management
License to operate
Localization requirements
Human rights
Stakeholder engagement
with a focus on local
community
External impacts from
operating activities for
local
Compliance with
sustainability principles in supply chain
Economic risks associated with climate crisis
Regulatory risks
associated with climate crisis
Risk of disinvestment
associated with climate crisis
51
The process of annual assessment of stakeholders
By the assessment results, we update the Stakeholder Engagement Plan and evaluate the set of
communication channels that are activated when engaging with a particular stakeholder (see table
“Stakeholder Engagement”). Based on evaluation results we form the matrix of material topics (see the
section “About the Report).
When engaging with stakeholders we are guided by such internal documents as Code of Ethics and Human
Rights Policy. In the next reporting period, we plan to develop a separate policy for engaging with
stakeholders.
Enel Russia has successfully established and maintains a constructive, open dialogue with the federal and
regional authorities, regulatory authorities and key business and industry associations in order to monitor
and improve the regulatory framework of the Russian electric power industry. The representatives of PJSC
Enel Russia management acted as principal speakers on the issues of market regulation at the following
key conferences and exhibitions: Russian Investment Forum Tatarstan International Forum for Energy
Resource Efficiency, St. Petersburg International Economic Forum, Russian Energy Week.
We aim at being open in terms of information, following the summons in media field, interact actively with
mass media representatives. The company press service is open to media inquiries and provide the most
accurate and unbiased information in a prompt manner. Besides, the company is represented in social
media where we post news related to business and life of our company.
Results for 2019
In the reporting period we held an online survey of stakeholders within the scope of annual materiality
assessment (see the section “About the Report”) for improvement of quality, objectivity and transparency
of the analysis.
The anonymous survey was carried out on independent online platform. Over 950 representatives of all
groups of stakeholders participated in it. The respondents rendered full support to the company on its way
of decarbonization of generation mix and development of renewable energy sources. In the field of
environment, the respondents recommended paying attention to improvement of the waste management
system.
The survey participants expect great efforts from the company in development and involvement of local
communities. The respondents commented on the priority areas of the community development program.
According to them, the list of three main priorities includes access to medical care, support to education,
and assistance to economic development of local communities. In addition, they appealed for greater
awareness of the company's initiatives in development of local communities.
The employees raised the need to strengthen the corporate incentive system. They draw attention to the
need for preventive measures to avoid any cases of potential social inequality between company
employees in terms of the compensation package. The rightsizing issue was recognized as paramount and
Annual update of the list of all major
categories of stakeholders
Preparation Stakeholders Map
based on the assessment results
Preparation of the Stakeholder
Engagement Plan
Assessment of stakeholders by
three factors:
Dependence Importance of
relations for the stakeholder
Impact
Importance of relations for the
company
Tension
Risk in relations with a stakeholder
Interaction with the stakeholder through
activation of a particular
communication channel
52
deserving individual attention in terms of workload distribution. The proposals were also articulated for
changing the mentoring system in the technical unit.
We are determined to continue developing this initiative for it to become a regular and highly effective tool
for stakeholders’ engagement.
We invite readers of the annual report to take a survey to identify material topics for a future reporting
period. The survey will take no more than 7-9 minutes.
Materiality Assessment of PJSC Enel Russia in 2020 https://www.surveymonkey.com/r/MaterialityEnelRussiaENG
53
The main groups of stakeholders and their expectations, our approach to interaction and relevant communication channels are listed in the table below. The
relevance of most categories of stakeholders in 2019 remained unchanged.
102-43
Stakeholder Engagement
Expectations of stakeholders Our approach
Main channels of communication
Additional channels of communication
Responsible for interaction
Detailed information
Ele
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ma
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Gri
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SHAREHOLDERS AND INVESTORS
• Growth of remuneration for shareholders in the long term in the form of growth in capitalization and dividend payment
• Stable and predictable financial results
• Ensuring stable and predictable economic results
• Timely and complete information
• Taking into account the interests of shareholders in making decisions
• Dividend payment
Х Х Х Х Х Х Х Х Х Х Х
Annual General Shareholders' Meeting
Investor Relations Group Corporate Affairs Group
Economic and Financial Value Creation Investment Activities
FINANCIAL COMMUNITY
• Stable and predictable financial results
• Transparency and accessibility of financial and non-financial information about the company
• Ensuring stable and predictable economic results
• Timely and complete information Х Х Х Х Х Х Х Х Х Х Х
Capital Markets Day Road show
Administration, Finance and Control
Economic and Financial Value Creation
BUSINESS COMMUNITY (INDUSTRY REPRESENTATIVES, POTENTIAL PARTNERS)
• Openness to dialogue and cooperation
• Participation in industry development initiatives
• Transparency and accessibility of financial and non-financial information about the company
• Willingness to cooperation
• Ensuring quality disclosure of financial and non-financial information
• Participation in work groups related to industry development
Х Х Х Х Х Х Х Х Х Х Х
Energy Management Company Strategy Business and Management Responsible Attitude to The Environment Social Impact
SUPPLIERS AND CONTRACTORS
• Cooperation and supply and contractor agreements
• Responsible fulfillment of financial obligations
• Ensuring safe working conditions for the contractors’ personnel
• Information security and confidentiality
• Willingness to cooperate
• Responsible fulfillment of all contractual obligations
• Highest ethical standards
• Priority of health and safety for the contractors as for own employees
Х Х Х Х Х Х Х Х Х Х Х
Tenders Contractual relationship Measures for suppliers Official portal for suppliers globalprocurement.enel.com
Procurement Sustainable Supply Chain
LOCAL COMMUNITY • Transparent informing about company
activities • Measurement and Management of
company environmental impact
• Timely and complete information
Х Х Х Х Х Х Х
Public hearings, General public activities ("Open Plant")
Sustainability Unit Communications
Social Impact
54
Expectations of stakeholders Our approach
Main channels of communication
Additional channels of communication
Responsible for interaction
Detailed information
Ele
ctr
on
ic a
nd
pri
nte
d n
ew
sle
tters
Ind
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Dir
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by e
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Ind
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• Existing and potential environmental impact
• Creation of workplaces
• Development of social infrastructure, support to healthcare and education
• Accounting of the needs and priorities of local community
• Status of major employer in the regions of presence
• Program “Social Support and Development of Local Communities” and other social initiatives
EMPLOYEES
• Stable employment
• Fair working conditions
• Fair salary, benefits and extended social package
• Safe working conditions
• Growth and development opportunities
• Ensuring comfort working conditions
• Health and safety priority
• Openness and willingness to maintain dialogue
• Training and human resource development
• Social initiatives and volunteering projects
• Diversity and inclusion policy
Х Х Х Х Х Х Х
Corporate newsletters Intranet Video terminals Meetings with management Corporate sports and cultural events
People and Organization Communications Sustainability Unit
Employees Management, Development & Motivation Occupational Health & Safety
PUBLIC AUTHORITIES
• Compliance with law
• Social activities
• Environmental compliance and voluntary environmental projects
• Fair payment of taxes
• Strict legal compliance
• Program “Social Support and Development of Local Communities” and socio-economic partnership agreements
• Status of major taxpayer in the regions of presence
Х Х Х Х Х Х Х Х Х Х
Work groups Regulatory and Institutional Affairs
Company Strategy Business and Management Responsible Attitude to The Environment Social Impact
MEDIA
• Transparency and accessibility of financial and non-financial information about the company
• Exclusive information
• The range of topics covering the interests of all stakeholders
• Timely and complete information
• Openness to dialogue
• Ensuring quality disclosure of financial and non-financial information
Х Х Х Х Х Х Х Х Х Х
Press release Media events
Communications
Company Strategy Business and Management Responsible Attitude to The Environment Social Impact
Direct Economic Value Generated and Distributed
201-1
Enel Russia strives for open and transparent informing of shareholders, employees, partners and other stakeholders about the process and results of economic value creation. Disclosure of this indicator allows us to show to our stakeholders how companies create and distribute the created value for the reporting period.
Retained economic value in 2019 amounted to 24.9 billion rubles. A significant increase in this indicator compared to 2018 is associated with the sale of the Reftinskaya GRES (for more details, see the section “Exit from Coal Generation”). We used part of the proceeds from the sale of RGRES to pay off debt obligations in 2019. We plan to use the other part to finance capital expenditures in future periods.
Our direct economic value generated and distributed, ths. rubles.
Stakeholders 2017 2018 2019
Direct economic value generated 75 283 359 74 201 171 84 193 994
Revenue from core business activities
Broad group of stakeholders
74 399 944 73 264 973 65 834 843
Other operating income 489 635 603 598 379 400
Revenue from financial investments 393 780 332 600 1 279 720
Proceeds from the sale of assets - - 16 700 031
Economic value distributed (63 020 041) (64 683 039) (59 283 794)
Operating expenses Suppliers and contractors (50 335 772) (50 017 556) (45 257 967)
Wages and other payments to employees Our employees (4 257 000) (3 789 029) (3 448 630)
Payments to providers of capital
Shareholders and investors, financial community
(4 856 731) (7 260 279) (7 213 425)
payments to shareholders (2 413 071) (5 126 449) (5 004 098)
payments to creditors (2 443 660) (2 133 830) (2 209 327)
Tax payments, fines and penalties**
Public authorities
(3 527 038) (3 572 675) (3 320 272)
including income tax (974 498) (987 585) (1 516 942)
Direct economic value generated
Economic value distributed
Economic value retained
Revenue that we generate from the company core activities is the sale of electric power and heat, income from investments in financial instruments and sale of assets
Our main cost and payment items that are related to our main stakeholders: employees, investors, shareholders and creditors, representatives of banks and contractors, public authorities, local community
Difference between created and distributed value that we allocate to further business development
56
Stakeholders 2017 2018 2019
Local community investments*** Local community (43 500) (43 500) (43 500)
Economic value retained 12 263 318 9 518 132 24 910 200
*In accordance with GRI recommendations for disclosure of indicator 201-1, the company used only the data from the audited IFRS financial statements.
**Excluding VAT
***Include only investments in the program “Social support and development of local communities”
Membership in Associations and Awards
102-13
We are open to interaction and active cooperation with industry and non-profit organizations as one of the
representatives of our main stakeholders. Enel Russia is a member of the following non-profit organizations:
• All-Russia Trade Association of Employers in the Power Industry “Energy Sector Employer
Association of Russia”;
• Non-profit Partnership “Market Council for Organization of Efficient System for Wholesale and Retail
Trade in Electric Energy and Capacity”;
• Non-profit Partnership “Council of Energy Producers and Power Industry Strategic Investors”;
• Russian Association of Employers “The Russian Union of Industrialists & Entrepreneurs”;
• Foreign Investment Advisory Council;
• Non-profit Partnership "Association of European Businesses";
• Association of Italian Enterprises in Russia “GIM-Unimpresa”;
• Non-profit partnership "Russian Heat Supply";
• Non-profit Partnership “Renewable Energy Development Association”.
In 2019, Stephane Zweguintzow, Chairman of the Board of Directors of the company, became a member of
the Expert Council on Sustainability of the Ministry of Economic Development of Russia.
In the reporting year, we took part in various external events, contests and ratings, and our employees were
awarded with professional awards and badges of honor.
57
Results of participation in ratings and contests in 2019
Integrated Management System
The company undertakes additional obligations to comply with internationally recognized standards and practices, along with strict compliance with legal requirements of the Russian Federation in health, safety, environment, quality and energy efficiency.
Since 2011, PJSC Enel Russia started implementation and certification of HSE Integrated Management System. The system efficiency is proven annually. A certified quality management system was included in the perimeter of the integrated management system in 2017, and an energy management system was included in 2019.
RBC Media Holding “500 largest foreign companies in
Russia” 180th place
WWF Russia Third place
Rating of transparency in the environmental responsibility of fuel
electric and heat generating companies in Russia
Contest/rating Our result Organizers
Moscow Exchange The 22nd Annual Contest of Annual Reports Winner in the “Best Debut” nomination
Moscow Exchange and Institutional Investor
magazine
An independent survey of international investors on the results
of operation of the Russian companies in the field of investor
relations
The second place in the nomination of the “Best IR practice in a small-cap company” among the Russian
companies
RAEX rating agency “Russian Business Leaders in Environmental Spending” 10th place
Centre for Development of Communications of the Fuel and Energy Complex
(FEC)
Contest of the best communication practices of energy companies
“KonTEKst” Grand prix for Dynasty project deployed in social media
The Ministry of Energy of the Russian Federation
and Moscow Government
CASE-IN International Engineering Championship as part of
#TogetherBrighter Youth Day at the Russian Energy Week International
Forum 13th place
All-Russian electrical trade union
Badge of honor “For Development of Social Partnership” Awarded Carlo Palasciano, General Director of the
company
Institutional Investor magazine
Institutional Investor Research 2019 annual survey of emerging markets in
Europe, Middle East and Africa (Emerging EMEA)
Winner in the nomination of the Most Honored Company
Third place in the nomination "Best Investor Relations Program"
The company employees received the following awards in the
energy sector category: • Carlo Palasciano– “The Best General Director”
• Yulia Matyushova– “The Best Chief Financial Officer”
• Ekaterina Dubovitskaya– third place in the investor
relations rating
Expert rating agency “600 largest companies in Russia” 192th place
Nevinnomysskaya GRES – first place in the nomination of the “Efficient Collective Agreement”
Government of Stavropol Territory
Territorial contest “An efficient collective agreement is the basis for alignment of interests of the Social
Partnership parties”
Forbes magazine “500 largest companies in Russia” 34th place
58
The main benefits of integrated management approach are: systematization and streamlining the internal processes of the company; achieving transparency and uniformity of problem-solving methods; improving and increasing the manageability of processes within the company. Such an approach allows ensuring compliance with stakeholders' requirements and all applicable regulatory requirements and best practices.
Integrated management system
In 2019, we launched the process of certification of power plants according to the international standard ISO 50 001 “Energy Management System”. Konakovskaya GRES was certified in 2019 according to 2011 standard version, certification of Nevinnomysskaya and Sredneuralskaya GRES is planned for 2020 and 2021 correspondently, it will be carried out according to the new version of ISO 50 001 standard.
In 2020, certification is planned for all power plants of PJSC Enel Russia according to the international standard ISO 37001: 2016 “Antibribery management system”. See details on the company’s anti-corruption approaches in the section “Anti-Corruption Policy and Business Ethics”.
The integrated processes at the company include the following:
• Development of common policies*, regulations and other system-forming procedures in health, safety,
environment, quality and energy efficiency.
• Planning and conducting internal audits of integrated management system, managing identified non-
conformities, corrective and preventive actions;
• Formulation of uniform format of requirements in health and safety, environment, quality and energy
efficiency, imposed on contractors and suppliers during performance of works, provision of services
and making deliveries to the power plants of PJSC Enel Russia**.
• Communication and reporting on significant events in health, safety, environment, quality and energy
efficiency.
• Management of risks and opportunities for improvement.
• Conducting Health, Safety, Environment and Quality Days at the power plants with participation of
employees of PJSC Enel Russia and contractors.
INTEGRATED MANAGEMENT SYSTEM
Projects initiated in 2019
Quality Management ISO 9001:2015
Corruption control ISO 37001:2016
Energy management ISO 50001:2018
Environmental management
ISO 14001:2015
Health and Safety OHSAS 18001:2007 (ISO 45001:2018)
59
*Integrated Policy of PJSC Enel Russia in quality, health, environment and energy efficiency» (see details in the section “Occupational Health, Safety, Environment and Quality” on the official website of Enel Russia).
**Operational Procedure of PJSC Enel Russia No. 522 dated 19.04.2018 “Interaction with suppliers and contractors in HSEQ” (see details in the section “Occupational Health, Safety, Environment and Quality” on the official website of Enel Russia).
Key components of integrated management system
Occupational Health and Safety
103-1 103-2 403-1
Enel Russia is aware of its responsibility to ensure safe working conditions for all participants in the production activities – both our employees and contractors that we involve to carry out maintenance of equipment, buildings, and facilities of the power plants. Safety is of our highest priority, so we suspend any work that can jeopardize the health and safety of employees and contractors.
The company complies with all mandatory regulatory requirements in the field of health and safety following the article 211 “State health and safety regulatory requirements” of the Labor Code of the Russian Federation and assumes also voluntarily additional obligations in the field of occupational health and safety under the international standard OHSAS 18001, which is invariably confirmed by the accredited international certification agencies during certification and supervisory audits.
The company raises awareness of occupational risks, encourages and supports responsible and safe behavior. Preservation of life and health, care for the psycho-physiological state during working and non-working hours comprise our health and safety activities.
Health and Safety Management
103-2 103-3 403-1 403-8
The health and safety management system cover all activities of the company, all branches and all employees of the company and contractors. It is based on the Integrated policy on Health, Safety, Environment, Quality
• Adjustment of the management system for transition to ISO 45001:2018 standard. Risk assessment. Conducting inspections of compliance with occupational health, fire and industrial safety requirements.
• Preparation of statistical reports on dangerous occurrences and workplace accidents. • Development and implementation of measures/projects aimed at improving health and safety
indicators at the company. • Development and implementation of measures/projects aimed at improving health and safety
indicators at the company
• Development and continuous improvement of the integrated management system, process approach. Methodological support of company organization units.
• Ensuring quality control during overhauls and medium maintenance at the power plants; • Conducting qualification inspections at the production sites of the companies involved in the
procurement procedures of the company to reduce risks
• Management of the environmental issues.
• Obtaining the required permitting documentation. • Management of environmental aspects and risks.
• Management of optimization and monitoring of Company equipment performance for improvement of efficiency in resource use (fuel, water, electric power) for balance-of-plant needs.
• Application of new technologies and equipment for reduction of production losses. • Implementation of new digital projects and solutions for improvement of indicators. • Shift to risk-based approach.
• Implementation of anti-corruption management system. • Risk-based approach. • Raising awareness of all Company personnel about current procedures for management of risks of
corruption and bribery, as well as about common channel for informing about opportunity of such cases appearing at the company.
Quality Management System
ISO 9001:2015
Occupational Health and Safety management
system OHSAS 18001:2007 (ISO 45001:2018)
Environmental Management System ISO
14001:2015
Energy management system ISO 50001:2018
Anti-bribery management system
ISO 37001:2016
60
and Energy Efficiency of PJSC Enel Russia and is aimed at continuous reduction of the risk of injuries and accidents.
The policy establishes the following fundamental principles:
Health and safety principles
The company has implemented and employs the following documents that apply to employees and all contractors:
Integrated Policy on Quality, Health, Safety, Environment and Energy Efficiency https://www.enelrussia.ru/content/dam/enel-ru/documents/en/%D0%98%D0%BD%D1%82%D0%B5%D0%B3%D1%80%D0%B8%D1%80%D0%BE%D0%B2%D0%B0%D0%BD%D0%BD%D0%B0%D1%8F%20%D0%BF%D0%BE%D0%BB%D0%B8%D1%82%D0%B8%D0%BA%D0%B0%20%D0%9A%D0%9E%D0%A2%D0%AD%D0%B8%D0%AD_2019_eng.pdf
Stop Work Policy https://www.enelrussia.ru/content/dam/enel-ru/documents/en/Stop%20Work%20Policy.pdf
Organizational procedure of interaction with suppliers and contractors https://www.enelrussia.ru/content/dam/enel-ru/documents/en/Org%20Procedure%20522%20dd%2019%20of%20April.pdf
• Policy of zero tolerance to consumption of alcohol, drugs or other intoxicants and limitations of smoking at workplace;
• Procedure for Interaction with Contractors and Suppliers in Health, Safety, Environment and Quality;
• Policy on use of asbestos;
• Safe works in the Confined Space;
• Operating instruction on safe performance of works on chimney stacks;
• Operating instruction on safe performance of works at height;
• Regulation on Industrial Safety Management System;
• Operating instruction on the alcohol testing system;
• Operating instruction on the personal protection equipment management;
• LOTO Lockout/Tagout System Operating Instruction;
• Provision "On application of permit to work system at the power plants of PJSC Enel Russia;
Compliance with the requirements of
health and safety laws of the Russian
Federation
Compliance with the health and safety
requirements of Enel Group
Annual certification under the standard OHSAS 18001 and maintenance of the health and safety
integrated management system
Striving for "Zero Accidents" goal
through control, root causes analysis of all
injury cases and significant near
misses
Risk assessment of injuries and accidents
at work and use of systematic approach
to reduce and eliminate their
probability in full
Control of knowledge, improvement of competence and
constant education
Involvement of employees and
contractors in health, safety and
environment issues
Using the best available technology
and practices in combination with
operational processes update and optimization
Maintenance and development of an open dialogue with stakeholders in the
field of health, safety and environment
Integration of all processes for
increased efficiency of the process and creation of added
value
61
• Procedure for risk assessment in the field of health and safety for employees during the performance of works;
• Policy on the prevention of stress and promotion of well-being at the workplace;
• Procedure for the organization of inspections in the field of Health, Safety, Environment and Quality in PJSC Enel Russia.
Enel Russia has a single vertically integrated health and safety management system that provides a single strategic approach and control at all levels.
Health and safety management
Although specialists in occupational safety are placed in a single function, all company employees, regardless of their position, pay special attention to occupational health issues and maintain the company principles. Health and safety issues are of priority for each manager and are always number one on the agenda of each meeting, whether it is a weekly action meeting of the director, a meeting of the Board of Directors or general shareholders' meeting. Also, the occupational health indicators of Enel Russia comprise the key performance indicators of managers and employees of the company.
Evaluation of management approach in health and safety is performed within the scope of the annual meeting of management on the analysis of HSEQ Integrated Management System. Evaluation of the results for 2019 is planned for March 2020. We expect the management approach in health and safety to be recognized as effective.
Health and Safety Risk Assessment
403-2
Systematic identification of the sources of hazards, risk assessment, and adoption of relevant measures for their prevention and reduction allows us to reduce significantly the likelihood of industrial accidents, occupational illnesses, accidents and other incidents.
Risk assessment is carried out following the Procedure No. 665 “Assessment of health and safety risks during the performance of works” and is based on the following documents:
• Labor Code of the Russian Federation
• Order of the Ministry of Labor and Social Protection of the Russian Federation dated 19.08.2016 No. 438н “On approval of model provision on the health and safety management system”
• GOST R 54934-2012/OHSAS 18001:2007 "Russian National Standard.
• Occupational health and safety management system. Requirements" (approved and enacted by Order of Rosstandart (Federal Agency on Technical Regulating and Metrology) No. 154-ст dated 06.07.2012.
General Director
Deputy General Director - Head of Generation
Head of HSEQ Power Plant Manager
Health and Safety Health and safety services at the
power plants
Head of Operation and Maintenance
62
• GOST R 51898-2002 “State standard of the Russian Federation. Safety aspects. Guidelines for their inclusion in standards" (adopted and enacted by Decree of the State Committee of the Russian Federation for Standardization and Metrology No. 228-ст dated 05.06.2002)
• GOST 12.0.003-2015 "Interstate standard. Occupational safety standards system. Dangerous and hazardous production factors (put into effect by Order of the Federal Agency on Technical Regulating and Metrology No.602-ст dated 09.06.2016)
• Procedure of PJSC Enel Russia "HSEQ Integrated Management System Manual"
• Operating Instruction of PJSC Enel Russia "HSEQ event management"
The risk assessment is carried out at the power plants of PJSC Enel Russia, including with the involvement of contractors.
The risk assessment contains a register of all operations performed at the plant, information about hazardous factors and hazards inherent to each type of work, risk matrix and measures to eliminate or reduce the hazardous factors. The latter may include technical measures for elimination of hazardous factors, requirements for the use of collective and individual protection equipment, preparation of workplace and implementation of production control, information, training, delivery of inductions and training sessions.
The process of risk assessment includes hazard identification, risk management and assessment, and consists of the following stages:
After hazard identification, the risk assessment team must determine standard management measures for each work and relevant hazards and, if necessary, develop additional risk management measures that improve the safety and thus reduce the risk level to “low” or “average”.
Determination of the scope and type (types) of work
Initial analysis (collection of
information about work)
Hazards Identification
Identification of standard risk management
measures
Determination of the probability of an
event
Determination of the severity of
consequences of an event
Determination or risk level
Identification of additional risk management
measures
Determination of residual risk level
Determination of risk level acceptance
Authorization and approval of risk
assessment resultsDocumentation
Communication and sharing experience
Checking of the relevance of risk
assessment
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Procedure for application of control measures during risk identification
Each time when issuing a production assignment for the performance of works, the manager issuing the assignment must check for risk assessment for that work and its veracity. The results of risk assessment must be revised periodically by the risk assessment team for compliance with current conditions. If the conditions change, previously conducted risk assessments must be verified for accuracy and applicability to ensure their sufficiency. The risk assessment must be carried out before the changes are introduced. If it is found that the executed results of risk assessment do not correspond to the working conditions prevailing at that moment, then the risk assessment must be revised.
Our company revises risk assessments once every five years or as may be necessary, for example, in case of accidents or other events that may affect the level of risk. Risk assessment is carried out in organization units by the specially created team that consists of employees who have sufficient knowledge in the performance of work, which the assessment will be carried out for, the risk assessment team is headed by a leader having experience in conducting such assessments or directly responsible for organization and performance of evaluated work. The results of risk assessment are authorized obligatory with the health and safety unit.
The company has a Stop Work Policy, according to it any employee of PJSC Enel Russia or contractor’s employee, regardless of his position, status or role has the right and must demand termination of any work that, in their opinion, poses threat to their life and safety and/or other people, and also create a risk of damage to the environment, or to the country's archaeological or cultural heritage, while notifying the detected violation of health and safety requirements to a responsible person authorized to terminate the works.
All health and safety policies are translated into English. Risk assessment for employees with disabilities includes their specific features.
Results for 2019
403-2 403-9 We aim at constant improvement of the frequency and severity indices - main statistical indicator for the evaluation of the efficiency of the company management approach in occupational health but our main goal is to achieve "Zero accidents” among our employees and contractors.
Eliminate the risk by addressing the hazard 1
Isolate employees from hazard through efficient control measures, such as: isolation of hazard, removal of the employee from hazardous area or reduction of time spent in the hazardous area 3
Risk mitigation as a result of replacement of a process, activity or substance with a less hazardous 2
Install protective devices; fences, emergency switches, breakers, etc. 4
Implement work permits, special rules and procedures for close monitoring of hazards 5
Ensure proper supervision supplemented by training, instruction and relevant information 6
Ensure availability of personal protection equipment only as a “last resort” and in addition to the above control measures 7
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These combined indices correspond to common indices of frequency and severity. In the calculation of the indices, accidents involving both employees of the company and employees of contractors performing work in the territory of power plants are taken into account.
Compared to 2018, the company's indicators in the reporting period in the field of Health and Safety have decreased to some extent. Thus, the combined frequency rate in 2019 increased to 0.57, however the combined severity rate is still 0. For comparison, in 2017, the indices were 0.51 and 0.09, respectively. (based on 1,000,000 man-hours). The combined frequency rate in 2018 was 0.15, and the combined severity rate dropped to 0.
Frequency and severity of the accidents*
*Frequency index calculation formula: The number of all accidents with employees and contractors associated with production) * 1,000,000 / the number of hours worked by employees and contractors. Severity rate calculation formula: number of severe and fatality accidents; (employees and contractors) * 1,000,000 / The number of hours worked by the employees and contractors
In 2019 seven work accidents occurred including three with contractors and four with employees of Enel
Russia. For comparison, there were two work industrial accidents with contractors in 2018, and in 2017, six injured people were recorded, including cases with contractors.
Number of accidents
0.09
0 0
0.51
0.15
0.57
2017 2018 2019
Коэффицент тяжести Индекс частоты
2
4
4
2
3
2017
2018
2019
Сотрудники Подрядчики
In 2017 – 2019, not a single case of fatal injuries was recorded at the company either among the company's employees or among the contractors’ employees.
Severity rate Frequency rate
Employees Contractors
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Work accidents
All accidents are referred to “minor” category under the uniform classification of Enel Group. All injured company employees and contractor employees received qualified medical care under the direct supervision of Enel Russia. The accidents were duly investigated; according to the root cause analysis of accidents of incidents, the relevant remedial actions were formed and then implemented or acquired the status of projects aimed at preventing similar situations in future.
The investigation of occupational hazard incidents is carried out following the operating instructions: “HSEQ Event management” and “HSEQ Reporting”.
Depending on the severity and type of event, the incident investigation may differ. The Analysis Team (AT) is created that analyses each significant event that has occurred. The operating instruction defines the period for creation of AT and its composition. AT analyses the causes of the incident and generates a report with remedial actions to prevent similar incidents in future. According to the analysis results, an action plan is created with responsible persons and deadlines and communicated to all power plants.
To prevent the recurrence of accidents, the company performs continuous monitoring of dangerous situations and other hazardous situations that could result into an accident.
Health Care of Employees
403-3 403-10
According to Order of the Ministry of Health and Social Development of the Russian Federation dated 12.04.2011 No. 302н, medical examinations of personnel are conducted regularly to monitor the health of employees.
It should be clarified that there is no separate statistics on the occurrence of occupational diseases among the representatives of contracting organizations, hence the impossibility to determine for certain whether a certain disease was caused precisely by the influence of factors at the company's production branches, or was a combination of all factors as a result of the works of the contractor’s representative at various production sites. Representatives of contractors did not notify the company about any cases of occupational diseases of their employees caused by the influence of production factors of Enel Russia.
If necessary, each employee of the company and contractor has an opportunity to contact the around-the-clock medical center organized at each power plant for qualified medical assistance for the employees and contractors. If the employees of the medical center deem it necessary to perform an additional examination, they will send the person who has applied for a consultation to a hospital or in-patient facility. In emergencies, an ambulance crew is called to the power plant, its arrival time under the state regulations is 20 minutes.
All company employees are provided with voluntary medical and accident insurance.
In case of near-miss or any violation of health and safety rules, each employee or worker of the contractor is required to report thereon to the “hotline” (call, SMS, mail), where they will be given feedback and reported on the measures taken. All employees and contractors are aware of this action procedure.
Type Description Employees/Contractors
Minor Injury related to handling of tools (angle grinder) Contractor
Minor Injury related to handling of tools (disc saw) Contractor
Minor Slipping on ice Employee
Minor Falling on a flat surface Employee
Minor Injury related to handling of tools (angle grinder) Contractor
Minor Fall in an unclosed hatch Employee
Minor Injury related to cylinder operation Employee
In 2017-2019, there were no cases of occupational illnesses with the company and contractors’ employees caused by production factors as well as fatal cases due to diseases associated with production.
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Additional Support in Matters of Health & Safety During Maintenance Activities
To support the organization and control of the safe, environmentally friendly and high-quality performance of works during overhauls, lengthy secondary, current and emergency maintenance, special projects related to the involvement of a large number of maintenance personnel, local additional support teams (SMP) are used as an additional measure. These local teams were organized at all power plants within the scope of the Safety Moving Pool global project.
The main task of SMP is to stimulate professional growth in occupational health and safety, fire safety, environment, quality and improvement of the safety culture among the employees of Enel Russia and the personnel of contractors performing maintenance operations at the power plants of Enel Russia. SMP provides additional consultations and performs regular monitoring of compliance with legislative and local requirements during the performance of maintenance and other special projects that were determined by the company’s management.
In 2019, more than 50 employees of PJSC Enel Russia were involved with periodic rotation in order to increase the involvement of personnel of the operations and maintenance units in occupational health and safety, fire safety and environmental issues. In 2019, about 6,500 inspections were conducted including 4,500 with favorable opinions and about 2,000 with unfavorable opinions, as violations and deviations from the legislative and local requirements of Enel Russia were identified. These violations were either quickly eliminated directly at the site of the violation, or SMP employees stopped working until the identified weaknesses were eliminated, thereby improving the overall safety culture at the maintenance sites.
In 2019, about 300 workshops were held with contractors, where the results of the work of SMP were presented. The positive aspects and system violations during maintenance operations were indicated.
Information and Training in Health&Safety
403-4 403-5
The company organizes obligatory training and examines the health and safety knowledge under article 225 of the Labor Code of the Russian Federation. In 2019 the number of hours for health and safety training amounted to 57,996.9.
The scope and sequence of training depends on the position and functions fulfilled by the employee. The scope of training includes regular consideration of such issues as basics of occupational health, fire safety or industrial safety, works at height, works in closed space, etc. The entire training is delivered in a language that is understandable for all employees. If training is conducted in a foreign language (English or Italian), an interpreter is invited. Training is conducted either by a certified internal trainer or employees who are trained at an external accredited organization, for example, in Rostekhnadzor. Training can be also extramural, using software, followed by knowledge assessment. There are special commissions for the examination of knowledge at the plants to issue a confirming certificate by the results. The efficiency of training is assessed using feedback form filled out by the employees. Compulsory education is free for employees.
The company involves contractors for training sessions and training on additional topics that can lead to a reduction in the number of injuries and industrial incidents (root cause analysis of accidents, use of personal protection equipment, proper use and assembly of scaffolding).
This year, we keep on our way to digitalization and optimization of the process of internal training of employees. A special IT system is implemented for the work of the commissions of knowledge examination at the power plants. The obligatory training using the system is delivered in occupational health and safety, fire safety, civil defense and emergency situations for both working personnel and office personnel. The new software product allows delivering personalized training as per available training courses, as well as creating own courses. The available training courses are updated on a regular basis. The employees receive self-training, pass exams in the form of testing, by its results the commission decides on the exam need. The self-training for exams can be carried out not only using a personal computer but also using mobile devices and mobile application that makes the process of preparing for exams more convenient, affordable and up-to-date.
Using new software allows controlling the training process, managing the schedules of knowledge examination for each employee. The plans for 2020 include the creation of special courses for the employees of vocational professions and further implementation in the commissions of organization units of PJSC Enel Russia.
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We use all existing internal communication channels to inform about the importance of compliance with health and safety requirements (see details in the section “Stakeholder Engagement”).
Selected Projects
SHE2019: Evaluation of the Contractor's Health and Safety System
In the previous reporting period, we implemented successfully the SHE 365 project (Safety, Health, Environment) - a global initiative of Enel Group focused on employees’ health care, health, safety and environment. Within the scope of this project, the company's managers and employees held a series of meetings where they discussed ideas and formed a list of measures for improvement of existing practices at the company and implementation of new ones. In continuation of this project and for implementation of the planned activities, in 2019 we introduced a project for evaluation and improvement of the health and safety system of the contractors. The project essence consists of sharing own H&S model with partner companies. Within the scope of the project, the main efforts are aimed at increasing involvement and responsibility of contractors, application of preventive measures for mitigation of health and safety risks.
Enel Russia developed indicators used to evaluate the contractors’ H&S system.
Evaluation of Health&Safety system for the contractors
This tool provides a visible effect in the improvement of safety standards at the partner companies therefore in 2020 we will keep on developing the project.
Peer Review Project
In 2019 within the scope of Enel Group implementation of Safety Peer Review project started in all countries – health and safety verification by the colleagues. The project provides for cross-visits to the power plants by the top management of the company represented by the power plant director, chief engineer and head of health and safety service. During the visits, safety walks and inspections are conducted focusing on health and safety issues. Despite close interconnection and joint work of all our employees at all power plants, as well as the cross-checks and cross-audits that we conduct annually, there are always the best practices that one power plant can adopt from another. During the cross-visit of employees of Sredneuralskaya GRES to Reftinskaya GRES (the first stage of the project) and Konakovskaya GRES to Nevinnomysskaya GRES and vice versa (the second stage of the project), about 15 best practices were identified that colleagues decided to implement at
Evaluation of processes Identification of
weaknesses Communication of evaluation results
Training
Planning
Internal audits
Information sharing about accidents
Analysis of remedial actions
Fulfillment of instructions by personnel
Management of subcontractors’ activities
Management of subcontractors’ activities
Development of improvement plans by
contractors
In 2019: 24 assessments of the health and safety
system 13 plans of improvement
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the power plants. The next stage in the project development will be cross-visits to our new renewable energy projects, sharing practices between business lines, as well as between other countries of Enel Group.
Industrial Safety Management Automation
In 2019, the implementation of an automated cloud management system for health, safety, environment and quality was initiated. The new software allows automating the management of industrial safety, as well as the processes of occupational health, environment and quality. The system allows taking into account such aspects as event and audit planning, infrastructure and personnel management, technical audit management by checklists and compliance orders. The system facilitates monitoring of deadlines, as well as the process of reports generation.
Policies, Management and Measures in Case of Emergencies
Approach of the Company to Emergency Management and Response Measures
EU21
We are aware that the operation of power plants, like any production facility, is at risk of emergencies. To ensure readiness for such situations, the company implemented a critical event management system. It is based on unconditional compliance with emergency management laws and the implementation of the best international practices.
Emergency management activities, as well as development and application of prompt response measures, are conducted based on the following laws:
• Federal Law of Russian Federation No. 256-FZ On Safety of Fuel and Energy Complex Enterprises dated 21.07.2011;
• Federal Law of the Russian Federation No.116-FZ On Industrial Safety of Hazardous Production Facilities dated 21.07.1997
• Federal law No. 68-FZ On Population and Territories Protection against Natural and Man-Caused Emergency Situations dated 21.12.1994.
• Federal Law of the Russian Federation No. 117-FZ On Safety of Hydraulic Structures dated 21.07.1997.
At the managerial level, responsibility for managing issues related to critical events lies with the General Director and crisis management and crisis evaluation committees. At the operational level - Critical Events Control Group At the power plant level, the referents are identified who are available around-the-clock to help informing, preventing and eliminating emergencies.
Management of emergencies
According to the requirements of Federal Law of the Russian Federation dated 21.12.1994 No. 68-FZ On Population and Territories Protection against Natural and Man-caused Emergency Situations, Decree of the Government of the Russian Federation dated 30.12.2003 No. 794 “On the unified state system for prevention
General Director
Crisis Evaluation Committee
Crisis Management Committee
Referents from business lines (responsible persons available
24/7) Critical Events Control Group
Territorial referents (responsible persons available
24/7
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and elimination of emergencies”, the commissions were set up at the power plants to prevent emergencies and ensure fire safety, they are part of the facility of the unified state system for prevention and elimination of emergencies.
A critical event is an event of a natural, accidental or criminal nature that may have an actual or potential negative impact on the safety of people, continuity of work, the reputation of the company, interests of stakeholders. The nature of these events may vary; therefore, the company takes into account various opportunities and available resources in the process to prevent such events or eliminate their consequences.
In 2019 we localized the global policy of Enel Group “Critical Event Management”. This is the main internal document that defines approaches to emergencies. The document regulates the processes and procedures for efficient crisis management, defines existing impact matrix as well as reports and plans that ensure training, education, drills, coordinated communication and interaction with local stakeholders.
In accordance with this policy, the company has a Group created to control critical events. Its task is to collect data that help to identify the events that could potentially develop into a crisis situation. If the Critical Events Control Group identifies the problem based on the information collected, its status is assessed with regard to potential impact as well as the possible consequences of its publicity in the media and likelihood of pre-crisis situation, in accordance with the recommendations of the Communication Planning Group, real-time response and performance maintenance.
According to the policy the degree of impact is classified using special codes, while the assigned status codes depend on estimated impact and severity of emergency:
Code color Level Description
Green Code Regional
a critical event that has a slight impact on PJSC Enel Russia and can be eliminated using specially pre-scheduled actions (according to the Procedure/Operating Instructions of the line/supporting organization unit)
Yellow code Regional Critical event that has an average degree of impact on PJSC Enel Russia and can be eliminated at the company level using special action plans in crisis situations
Red code Regional Critical event that can affect PJSC Enel Russia significantly and that requires development of special strategy at the level of the company
The assignment of code is carried out based on the impact matrix. A decision is made by the Crisis Evaluation Committee and approved by the General Director.
A notification of pre-crisis situation is carried out through an informational message sent to:
• General Director • Crisis Evaluation Committee, • Territorial Referents and Referents from the business line of the company on crisis
management.
The procedure and plan for responding to critical events or emergencies are communicated regularly to the employees of the power plants and contractors’ employees during the delivery of scheduled classes, briefings and drills.
Accident Management Approach
Since our power plants are classified as hazardous production facilities, according to Decree of the Government of the Russian Federation No. 730 dated 26.08.2013. PJSC Enel Russia has to develop an accident localization and management plan (ALMP) to ensure the readiness of organizations to the actions for localization and elimination of the consequences of accidents. The plans developed by the company are authorized by professional emergency rescue teams the company has agreements with for the maintenance of hazardous production facilities. ALMP is subject to revision in the following cases:
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Procedure for revision of ALMP
In accordance with order of Rostekhnadzor dated December 26.12.2012 No. 781 “On Approval of Recommendations for development of the plans for localization and response to accidents at explosive and chemically hazardous production facilities” during the year, it is planned to conduct training sessions in the organization units for possible accidents mentioned in ALMP.
At the power plants of the company in accordance with Decree of the Government of the Russian Federation No. 613 dated 21.08.2000 to prevent and eliminate the consequences of oil spills and to protect population and environment from their harmful effects, the oil spill response plan (OSRP) are developed. They are developed in accordance with applicable regulatory legal acts with regard to the maximum possible amount of spilled oil and petrochemicals, authorized by Rostekhnadzor and approved by the territorial body of EMERCOM of Russia.
In order to work out OSRP, comprehensive training or drills are held at the federal and regional levels at least every 2 years.
Training and orientation of the company employees as well as representatives of contractors and subcontractors takes place during crisis management drills. The procedure for organizing preparation and conduct of drills is set out in Operating Instruction No. 0188-OI-SEC dated 28.07.2015 "Organization of drills at the power plants".
In case of emergency situations that entail a complete termination of generation of electric power and heat power, the power plants of Enel Russia being the facilities of the operating and dispatch control management of the grid act on the principles of the standard GOST R 58085-2018 "Unified power system and isolated power systems. Operating and dispatch control Rules for Preventing the Development and Elimination of Violations in the Normal Mode of the Electrical Part at Power Systems. Regulations and requirements".
The new standard was approved by Order of Rosstandart (Federal Agency on Technical Regulating and Metrology) No. 129 dated 13.03.2018. This document was developed by the “System Operator of the Unified Energy System” under the National Standardization Program as part of activities of the Subcommittee SC 1 “Electric Power Systems” of the Technical Committee for Standardization TC 016».
GOST R 58085 2018 establishes the basic principles, norms and rules regulating organization and procedure for prevention of development and elimination of violations of the normal mode of the electrical part of the UES of Russia and technologically isolated territorial electric power systems as well as process disturbances in operation of electric mains and electric power facilities. In addition, the document regulates the procedure for dispatching and operating personnel to prevent the development and eliminate violations of the normal mode of the electrical part of the power systems.
At least 15 calendar days prior to expiration of the previous action plan
No later than one month after the following events:
• Reconstruction, technical refurbishment of the facility or introduction of changes in production technology
• Introduction of amendments in methods of measurement or types of measuring instruments used during production control over compliance with industrial safety requirements at the facility
• Introduction of amendments in the process control systems at the facility
• Introduction of new or closing abandoned mine workings, introducing amendments to ventilation schemes for them as well as after changing the exit ways of workers in case of accident
In accordance with technical investigation report on accident causes at the facility
Under an order from a federal executive authority in the area of industrial safety or of its territorial
unit
• If there are inconsistencies between information in the action plan and information obtained during federal state supervision in industrial safety
• If new risk factors are found following technical investigations of the reasons of accidents at similar facilities.
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Inclusion in the network and restoration of power supply is carried out within the shortest possible period as agreed with “System Operator of Unified Energy System”. Minimization of time spent for emergency maintenance due to the need to reduce the losses incurred by the company in the capacity payment (according to the Procedure for determination of volumes of capacity actually supplied to the wholesale capacity market No. 13).
Local and federal executive authorities are involved (by agreement) in preparation and conduct of drills.
Ensuring readiness of power plants during heating season
On November 15, 2019 the company received the Certificate of readiness to operate during 2019 - 2020 heating season. We performed comprehensive assessment of the power plants of the company in accordance with the new Procedure for calculation of the Index of readiness of power plants for operation during heating season, approved by the Ministry of Energy of the Russian Federation. According to this Procedure, each power plant of PJSC Enel Russia was subject to evaluation based on the company’s data within the scope of industry reporting, as well as data provided by the System Operator and Rostekhnadzor.
Components for preparation of the power plants for the heating season
The company's power plants developed and implemented a package of measures aimed at ensuring system reliability and process safety during peak loads and at low outdoor temperatures. Scheduled maintenance, maintenance of buildings and structures are performed, the package of works on check and adjustment of heating systems of buildings, insulation and repair of glazing is performed, the reserve of main, backup and ignition fuel is formed, the emergency reserve of spare parts and materials is completed.
During preparation for the heating season we delivered additional training and performed examination of knowledge in terms of compliance with occupational health, safety and fire safety. In the course of special emergency training with involvement of EMERCOM specialists and medical personnel the actions for correct response in emergency situations and at low temperatures were practiced on a quarterly basis. Provision of personnel with special clothing, special footwear and required personal protection equipment was checked at all power plants.
Responsible Attitude to the Environment
Environmental Strategy and Environmental Management
Corporate Environmental Strategy
103-1 103-2 103-3
Ensuring compliance with environmental regulations and requirements of laws, environmental protection, taking urgent actions in response to climate crisis comprise the most important priorities of Enel Russia. We strive to reduce our negative impact on environment and on biological diversity and to rationally use natural resources. The proper level of compliance with environmental regulations and responsible environmental management allow reducing the risks and maximizing operational efficiency. We invest in new technologies, cooperate with start-ups and look for innovative solutions to improve environmental sustainability and safety.
The Managers of power plants are responsible for implementation of the environmental strategy and environmental management. Monitoring and ensuring compliance with environmental standards is within the responsibility of the Environmental Safety Group and Environmental Groups of power plants. The head of the Environmental Safety Group defines the action plan of the Environmental Safety Group and the Environmental Groups of power plants are responsible for achieving environmental goals.
Head of HSEQ is responsible for the following key areas:
Implementation of maintenance
program
Inspection of technical condition
of equipment
Ensuring system and operating
reliability
Ensuring readiness of personnel
Checking of fuel reserves
Planning of accident prevention activities
Components for preparation of the power plants for the heating season
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• compliance with environmental laws;
• greenhouse gas emissions;
• control of air and water quality;
• waste management;
• biodiversity preservation.
The area of responsibility of the Environmental Safety Group includes preparation of corporate and state environmental reports, consulting support during revision of environmental permitting documentation, participation in improvement of integrated management system and implementation of projects for key environmental areas. The Environmental Safety Group maintains comprehensive cooperation with all organization units of the company as well as professional organizations and associations to mitigate the negative environmental impacts, ensure compliance with environmental legal requirements and maintain a culture of environmental safety.
Environmental management
Evaluation of management approach in environment is performed within the scope of annual meeting of management on the analysis of integrated management system in health, safety, environment, quality and energy efficiency. Evaluation of the results for 2019 is planned for March 2020. We expect the management approach in environmental protection will be recognized efficient.
We adhere to the Integrated Policy on Quality, Health, Safety, Environment and Energy Efficiency. It establishes our commitments to continuous improvement of environmental performance, mitigation of negative environmental impact and compliance with the requirements of Russian and international standards.
The main documents regulating the environmental strategy and environmental management are:
Integrated Policy on Quality, Health, Safety, Environment and Energy Efficiency https://www.enelrussia.ru/content/dam/enel-ru/documents/en/%D0%98%D0%BD%D1%82%D0%B5%D0%B3%D1%80%D0%B
Stop Work Policy https://www.enelrussia.ru/content/dam/enel-ru/documents/en/Stop%20Work%20Policy.pdf
Organizational procedure of interaction with suppliers and contractors https://www.enelrussia.ru/content/dam/enel-ru/documents/en/Org%20Procedure%20522%20dd%2019%20of%20April.pdf
General Director
Deputy General Director - Head of Generation
Head of HSEQ Power Plant Manager
Environmental Safety Group Environmental Group
Strategy Committee at the Board of Directors of the
company
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8%D1%80%D0%BE%D0%B2%D0%B0%D0%BD%D0%BD%D0%B0%D1%8F%20%D0%BF%D0%BE%D0%BB%D0%B8%D1%82%D0%B8%D0%BA%D0%B0%20%D0%9A%D0%9E%D0%A2%D0%AD%D0%B8%D0%AD_2019_eng.pdf
• HSEQ Integrated Management System Manual that describes the main elements of integrated management system including environmental management;
• Operating Instruction “Environmental aspects, assessment of impact and risks”;
• Operating Instruction "Waste management";
• Operating Instruction “Monitoring and maintenance of water temperature in the control locations of
water bodies”;
• Operating Instruction “Control of atmospheric emissions during the period of adverse meteorological
conditions”;
At the end of 2019, we updated our environmental policy to expand the range of topics that it covers, as well as represent the company's attention to climate crisis. Besides, we developed a policy to reduce the use of disposable plastic. We plan to approve and publish both policies in the first half of 2020.
Enel Russia strives for maintaining positive and constructive relations with stakeholders: with government agencies, relevant organizations and members of public. Written and verbal complaints from stakeholders regarding environmental issues are subject to registration and internal investigation. For each complaint, feedback is provided mandatory to the person that lodged complaint. In 2019, no complaints were received from stakeholders.
Environmental KPIs
The company environmental strategy is closely related to the Sustainability Plan and business strategy of the company.
Goals of environmental strategy
Objectives Indicator Actual values Target indicators Projects
KGRES, NGRES, SUGRES: Reduction of
the volume of water consumption/
water disposal (%)
Specific water consumption (m3/MWh)
KGRES – 129.09; NGRES –67.42;
SUGRES – 70.54.
The target indicators will be developed in
2020
See the section “Optimization of Water
Consumption and Water Disposal”
Circular economy projects: increased volume of industrial
waste sent to reuse (%)
Volume of industrial waste sent to recycling and to processing (t)
9,149.14 t* * including data on RGRES for 9 months
of 2019.
By 2022 reduction by: 6%;
See the section “Resource Use”
Waste water volume reduction* (million m3/year) *Partially clean water (without purification)
8.93* * including data on RGRES for 9 months
of 2019.
4.59
See the section “Optimization of Water
Consumption and Water Disposal”
Reduction of disposable plastic use (%) -50 -75 See the section “Resource
Use”
In 2019, the operating expenditures and expenditures for environmental projects amounted to RUB 922.17
million.The main volume of costs for environmental projects falls within construction of wastewater collection
and treatment system of Sredneuralskaya GRES.
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Environmental costs for 2019, million RUB
Breakdown of operating expenditures by power plants
Breakdown of costs for environmental projects by power plants
Compliance with the Environmental Laws and Environmental Reporting
307-1
We perform evaluation of compliance with environmental standards and legal requirements in the field of environment annually, as well as whenever new legislative requirements come into force. The following tools are used for acquisition of input data: checklists, data collected during regular internal audits, results of inspections by government agencies, external and internal environmental audits. Periodic inspections for compliance with environmental laws are carried out by the Internal Audit Department of the company. The analysis of current situation and elaboration of solutions for the issues requiring improvements are conducted on weekly basis at teleconferences of environmental group of power plants and Environmental Safety Group.
192,53
729,63
Operational costs
Costs of environmental projects
12%
18%
60%
10% KGRES
NGRES
RGRES
SUGRES
7%
2%
12%
80%
KGRES
NGRES
RGRES
SUGRES
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The company pays special attention to timely preparation and submission of state and corporate environmental reports. In 2019, we prepared more than 70 obligatory environmental reports. All reports were submitted in full and on time.
In 2019, an initiative was started for digitization of environmental reporting. For the preparation of corporate reporting, a special global platform was developed that allows consolidating environmental performance information and generating reports. Besides, using another IT platform, we automated the calculation of pollutant emissions at Reftinskaya and Nevinnomysskaya GRES. Every month, we calculate and aggregate emission data using it for each unit, power plant. In 2020, we plan to digitalize calculation of pollutant emissions from Konakovskaya and Sredneuralskaya GRES. The platform capabilities allow also consolidating and analysis of data on waste generation, water consumption, water disposal and others.
Conducting of environmental audits
The company is subject to annual internal and external audits of the environmental management system, environmental audits conducted by the Internal Audit Department, inspections performed by the Environmental Safety Group of Headquarters. Besides, regular inspections are conducted at the company as part of environmental supervisory activities of the state authorities. Thus, in 2019, six scheduled inspections were performed by the representatives of state bodies. See detailed information in the Annex, the section “Environmental Indicators”
In order to comply with the requirements of environmental laws and organization of rational use of natural resources, we update the list of priority projects for implementation at the power plants, monitor progress on them and adjust goals on annual basis.
Projects for improvement of compliance with environmental laws
413-1
Power Plant Project Terms Progress in 2019 Plans for future periods
Konakovskaya GRES
Sludge pond liquidation 2019-2020
The documents for state expert review of design documentation are prepared and submitted. A favorable opinion is obtained from Glavgosexpertiza. Bidding was held for performance of works, the contractor was determined.
Implementation of the first stage of the schedule for sludge pond liquidation
Monitoring of water temperature in the control location of the discharge canal
Continuously, during
summer season
Temperature monitoring at discharge. The temperature of discharge waters during the reporting period conformed to the standard.
Performance of regular monitoring of water temperature in accordance with Operating Instruction “Guidelines for monitoring and maintenance of water temperature in the control location of the discharge canal”
Monitoring of cases of oil products ingress in the soil and groundwater
2019 Comprehensive survey of oil emergency drain tanks from transformers was performed
Monitoring according to schedule of industrial site safety walks
Technical refurbishment of the fuel oil facility: monitoring of cases of fuel oil spill in the territory of fuel oil handling facilities
2019-2021
Design documentation for the restoration of receiving tanks No. 1 and No. 2 was developed and submitted for industrial safety expert review. The works for dismantling of the valve chamber, floor slabs and cleaning of tank No. 1 were performed.
Adjustment of the project due to identified defects as a result of inspection of tank No. 1. Continuation of works.
Monitoring of daily abstraction volume of potable underground water
2019-2020 Replacement of industrial water conduits No. 1,2
Road building from reinforced concrete slabs to artesian wells.
Nevinnomysskaya GRES
Implementation of fish protection facility at water intake
2019-2021 Tender is being held
Development and authorization of the project with a government agency, performance of construction and installation works
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Power Plant Project Terms Progress in 2019 Plans for future periods
Installation of silencers on exhaust pipelines of gas condensate heater (GCH) of boiler ТГМ-96
2019-2020
Design documentation is authorized. Installation of silencers is performed on boilers 4.5
Installation of silencers on boiler 5A
Monitoring of water temperature in the control location of the discharge canal during summer
Continuously, during
summer season
Redistribution of water along discharge canals of the power plant, increase in the cooling water flow through the condensers of equipment in operation, to the maximum level, passage of water through the equipment in reserve
Performance of daily monitoring of water temperature in accordance with Operating Instruction “Guidelines for monitoring and maintenance of water temperature in the control location of the discharge canal”
Technical refurbishment of storm sewer
2019
Complete replacement of the header by rehabilitation method (laying of plastic pipe inside the header)
The project is completed
Sredneuralskaya GRES
Construction of wastewater collection and treatment systems
2019-2022
Supply of equipment, hydrogeological surveys were carried out, construction and installation works were performed to eliminate water discharge into the Isetsky reservoir, excavations were completed, installation of pumping stations and equipment are in progress, electrical equipment was installed
Performance of works for construction of treatment facilities
Monitoring of standard value of equivalent sound level at the boundary of sanitary protection zone at control point No. 3
2019-2020
Noise level monitoring at the boundary of the designed sanitary protection zone of the power plant by an accredited laboratory. No excess of the standards in the daytime and at night were identified
Continuation of monitoring
Monitoring of water temperature in the control location of the discharge canal during summer
Continuously, during
summer season
Two cases of standard excess were registered. The remedial actions were performed
Performance of daily monitoring of water temperature in accordance with Operating Instruction “Guidelines for monitoring and maintenance of water temperature in the control location of the discharge canal”
Reftinskaya GRES
Liquidation of wash water pit
2019
The Technical Specification was developed for provision of project adjustment services and negotiations and procurement procedures were conducted
Since October 2019 – outside the perimeter of PJSC Enel Russia. Plans for transfer of the power plant to a new owner. See details in the section “Exit from Coal Generation”
Reduction of irretrievable filtration losses of ash
lagoon No. 2 2019
The maintenance works were performed on filtrate water catchment pump stations No. 2,3,4, due to which regular collection of the filtration water and their transfer to ash lagoon is performed. The non-commercial water metering instruments are installed. A Plan was prepared and is being implemented to maintain the operational condition of equipment of the filtrate water catchment pump stations.
Establishment of the sanitary protection zone
2020-2021
Completed. Decision of Rospotrebnadzor (The Russian Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing) No. 85 РСЗЗ dated 23.04.2019
Update of the standards for permissible discharges
of pollutants 2019
The standards for permissible discharges of outlet No. 7 are developed and under authorization
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Power Plant Project Terms Progress in 2019 Plans for future periods
Obtaining of integrated environmental permit
2019 The deadline was extended
Control of Air and Water Quality
We are aware that our production activities have direct impact on the quality of air and water resources in the
territory of presence of power plants. In order to manage our impact and mitigate adverse factors, impact on
the air and water is regularly controlled at all power plants of Enel Russia, data on accounting of greenhouse
gases, emissions and discharges of pollutants are collected and processed on a regular basis.
Greenhouse Gas Emissions
305-1 305-4
We perform regular collection of data on greenhouse gas (GHG) emissions for monitoring and planning of measures for reduction of these emissions. We realize the importance of voluntary public disclosure of information about GHG emissions resulting from the company's operating activities, due to increased attention of stakeholders to this topic.
Total volume of GHG emissions (scope 1) amounted in 2019 to 23.27 million tons of СО2-equivalent. Compared
to 2018, direct GHG emissions in the reporting year decreased by 21% (6,19 million tons СО2-equivalent).
Direct emissions of greenhouse gases (scope 1), million tons СО2-equivalent
*Direct emissions of greenhouse gases are calculated based on Enel Group methodology. The following types of GPG is included to
calculation: CO2.
In 2019 we have included the indicator of greenhouse gases specific emissions to the Sustainability plan. The indicator of greenhouse gases specific emissions is being calculated as volume of greenhouse gases divided by cumulative electricity and heat net generation, as equivalent of electrical energy. For the purposes of planning we use the internal methodology of Enel Group for calculation of greenhouse gases volume (for details see Annex, Environmental indicators). During the calculation of planned indicator of specific emissions, we took into account the planned electricity output from wind generation.
In 2019 the indicator of greenhouse gases specific emissions was amounted to 616 grams of СО2-equivalent/kWh. We are intended on staged decreasing of this indicator and on reaching of 399,9 g СО2-equivalent/kWh by 2022.
3,72 3,49 3,044,16 3,97 3,49
18,64 18,37
13,14
3,64 3,62 3,60
30,16 29,45
23,27
2017 2018 2019
Konakovskaya GRES
Nevinnomysskaya GRES
Reftinskaya GRES
Sredneuralskaya GRES
Total
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Intensity of GHG emissions, g СО2-equivalent/kW·h
*Indicator of greenhouse gases specific emissions is calculated based on Enel Group methodology. The following types of GPG is
included to calculation: CO2.
Pollutant Emissions into the Atmosphere
305-7
We carry out regular air quality monitoring and air pollution emissions control to gradually reduce them.
In 2019 compared to 2018, gross emissions, total gross emissions of pollutants into the atmosphere throughout
the company, including but not limited to NOx, SOx, persistent organic pollutants (POPs), volatile organic
compounds (VOCs), hazardous atmospheric pollutants, particulate matter (PM), carbon oxide decreased by
25%.
Emissions of pollutants by power plants, ths. tons
519,07 523,14 514,69431,48 427,68 414,35
975,70 959,55 951,91
365,66 370,14 368,37
657,43
656,17 615,72
2017 2018 2019
Konakovskaya GRES Nevinnomysskaya GRES Reftinskaya GRES Sredneuralskaya GRES Total
7,05 6,02 5,338,688,62 7,72
284,67251,18
184,50
5,06 4,67 4,54
305,45
270,49
202,08
2017 2018 2019
Konakovskaya GRES
Nevinnomysskaya GRES
Reftinskaya GRES
Sredneuralskaya GRES
Total
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Emissions of pollutants by type, thousand tons
2017 2018 2019
Gross emissions, including: 305.45 270.49 202.08
NOx 91.76 89.95 67.33
SOx 141.62 133.34 99.37
organic pollutants (POP) 0.00 0.00 0.00
Volatile organic compounds (VOC) 0.06 0.07 0.06
hazardous air pollutants* 0.0003 0.0003 0.0002
particulate matters (PM) 66.72 41.60 30.53
carbon oxide 4.17 4.43 3.93
other pollutants 1.13 1.11 0.86
*Manganese, mercury, gasoline
There was no excess of established standards by maximum permissible emissions at all power plants for the
reporting period. The calculations of gross emissions of pollutants into the atmosphere are made based on
methods provided for in the relevant draft standards of maximum permissible emissions developed for each
power plant in accordance with legislative requirements. The calculations are based on the standard
RD34.02.305-98 "Estimating gross emissions of pollutants into the atmosphere by the boiler installations of
thermal power plants”. Nevinnomysskaya GRES has installed systems for online monitoring of emissions on
the equipment of units 6, 7, 8 and 410 MW CCGT. The gross emissions for such sources are calculated based
on online monitoring data in terms of pollutant concentration and volume of flue gases.
The detailed data on emissions of pollutants by type and by power plants are given in the Annex (see the
section “Environmental Indicators").
Responsible use of water resources
303-1 303-3 303-5
Enel Russia adheres to the principle of rational water use and pays close attention to responsible compliance
with water use conditions and control of impact on water resources.
Water Consumption
Due to the vast territory in terms of fresh water reserves, Russia is among the top ten countries in the world.
Despite this, there are seven regions in the country where local water shortages are recorded22. Such regions
include Sverdlovsk Region and Stavropol Territory, where two power plants of the company are located -
Nevinnomysskaya and Sredneuralskaya GRES.
The main type of water intake for the process of electric power generation is water intake from surface water
bodies. The company carries out also water intake from underground sources.
22 To determine whether there is a shortage of water resources in the region, we used both local sources and international tool recommended GRI “Aqueduct Water Risk Atlas” (https://www.wri.org/aqueduct)
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The irretrievable water consumption, million m3
In the reporting year, the total volume of water taken decreased by 13.9%. This is due to decrease in electric power generation and with regard to data on RGRES for only 9 months of 2019.
First of all, attention of the company is focused on not exceeding the water consumption rates established in
the relevant permitting documents of the power plants. We perform regular monitoring at all water intake points
for the volume of water consumption and comparison of actual water consumption with established limits. Most
water intakes are equipped with commercial meters of water resources. At the water intake points that are not
equipped with water meters, water consumption volumes are determined by calculation based on water
consumption standards.
The water consumption in the reporting period at all power plants of the company was within the established
limits.
Water Discharge
303-2, 303-4, 306-1
The power plants of the company discharge waste waters in accordance with applicable laws and timely
obtained permitting documentation. We use currently only state standards and regulations of the Russian
Federation regarding the quality of waste water discharge:
• Order of the Ministry of Agriculture of Russia No. 552 dated 13.12.2016 “On approval of
standards of quality water for the water bodies of commercial fishing importance including
the standards of maximum permissible concentrations in the waters of water bodies of
commercial fishing importance”;
• SanPiN 2.1.5.980-00 "Hygienic Requirements to Surface Water Protection".
The main volume of water discharged by the power plants is considered clean according to the standard (99.3%). Wastewaters to be treated is purified by mechanical and physicochemical methods before discharge. Used water is carried through the discharge channels into the water bodies. Sanitary wastewaters are sent for treatment to external organizations, mainly to water-pumping enterprises.
Total volume of wastewaters broken by treatment method, million m3
2017 2018 2019
Partially clean water (without purification) 1,631.40 1,424.63 1,207.55
Polluted insufficiently treated water 12.45 8.48 4.39
87,01
85,19
94,82
1 648,22
1 437,91
1 216,54
1 735,22
1 523,10
1 311,36
2017
2018
2019
Total irrevocable water consumption Total water discharge Total water withdrawal
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Waters treated to standard quality (mechanical and physical-chemical treatment)
4.36 4.80 4.59
Disinfection 0,003 0,002 0,002
Total 1,648.22 1,437.91 1,216.54
Complete description of the methods of water intake, a list of water intake points, types of water consumption
and methods for waste water discharge as well as quantitative data on the total water intake for the company
needs are given in Annex (see the section “Environmental Indicators").
The Selected Projects and Initiatives of PJSC Enel Russia in Water Consumption and Discharge
In 2019, we began implementation of large-scale projects for optimization of water consumption and water discharge. The project is intended to reduce the fresh water flow for the process needs of power plants and, as a result, reduce the volume of polluted wastewaters.
We formed the work groups at each power plant to update the balance flow-sheets for process water supply, domestic water supply and fire water lines. Based on the analysis, plans were developed to eliminate defects in the equipment for process and domestic water supply. In addition, the installation sites were identified for additional water meters in order to switch from indirect to direct method of water metering within internal cycle of the power plants. A communication campaign was also launched within the project scope to raise staff awareness of the need for rational use of process and drinking water.
Implementation of Sovetchik Program
Sovetchik is a special program that is designed to provide information support to machine operators of power unit drivers to ensure reliable operation of equipment and rational use of water (see also the section “Increase in Operating Efficiency”). Owing to Sovetchik program the machine operators of power units can determine whether correct fuel-water ratio was used to generate electric power. Thus, they can adjust the operating mode of equipment with minimum deviation of actual vacuum in the steam turbine condenser from optimum vacuum, which maintenance is a prerequisite for ensuring the operating efficiency of equipment. A pilot project was implemented successfully at Nevinnomysskaya GRES at Power unit No. 7. The project will be extended in the next reporting period to other units of Nevinnomysskaya GRES and launched at units No. 1 and No. 8 of Konakovskaya GRES.
Water Reuse
A project for water reuse was implemented at Nevinnomysskaya GRES (unit No. 9). We use discharge waters from the drain of condensers to cool down auxiliary mechanisms (pumps, gas coolers, etc.). The pilot project is planned in the next reporting period at Konakovskaya GRES.
Installation of a commercial metering unit for recirculated water is planned at Konakovskaya GRES, which will allow metering reused water. The units for advanced treatment of technical water of 300 MW and 500 MW units at Reftinskaya GRES were repaired, additional pipelines were installed, which made it possible to carry out hydro cleaning of the fuel transport and chemical shops with reuse of washed off clarified water (returned from the ash lagoon).
Renovation of Water Conduit from the Volchikhinskoye Reservoir
In 2019, the works continued on renovating the source water conduit from the Volchikhinskoye reservoir of Sredneuralskaya GRES. The design capacity of the source water conduit and water treatment plant is 6000 t/h. The water conduit supplies the source water to the power plant for preparation of make-up water used for heating and hot water supply in the cities of Yekaterinburg, Verkhnyaya Pyshma, Berezovsk and Sredneuralsk. Owing to implementation of the above work package, it became possible to provide more reliable and uninterrupted supply of heat and hot potable quality water to the region.
Construction of Water Treatment Facilities
A large-scale project is implemented at Sredneuralskaya GRES for construction of the system for the collection and treatment of waste waters. In 2019, the storage vessels, five sewage pumping stations, and pressure headers for supply of industrial rainwater were built under the project. At the end of 2019, commissioning of
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wastewater collection system was carried out. In addition, seven outlets were combined into one. According to further project activities the treatment facilities will be installed under the project with the subsequent supply of treated wastewater to the recycling system for the process needs of Sredneuralskaya GRES The new wastewater collection and treatment system will allow improving the quality of demineralized water for feeding boilers of Sredneuralskaya GRES, will return purified water to the production cycle of the power plant and reduce consumption of fresh water for the needs of water treatment plants.
Resource Use
Energy Margin Information
Fuel consumption structure of the company
Type of fuel, unit of measurement
2017 2018 2019 2019 vs
2018
Gas, ths m3 6,233,664 5,982,214 5,496,685 -8%
Coal, tons 11,586,811 11,475,102 8,217,757 -28%
Fuel oil, tons 31,692 26,582 20,912 -28% * The share of fuel oil in the fuel mix for the period of 2018 - 2019 decreased from 0.267% to 0.264%. ** Reftinskaya GRES for 9 months
The structure of fuel consumption of each power plant is given in the Annex “Structure of generation facilities
and structure of fuel consumption”.
Change of fuel volume burned in 2019 vs. 2018
Power Plant Change of fuel volume burned (fuel type)
Konakovskaya GRES ̶ 13.3% (gas)
Nevinnomysskaya GRES ̶ 10.2% (gas)
Reftinskaya GRES ̶ 28.4% (coal)
Sredneuralskaya GRES ̶ 0.9% (gas)
In 2019, the volume of electric power consumed by the company for BOP needs amounted to 1,766.4 GWh,
production cost amounting to 3.423. The costs for natural gas and coal — 39.1% and 15.5% respectively, fuel
oil - 0.4%.
In 2019, the volume of diesel fuel used by the company amounted to 2,268.3 ths liters (or 1882.7 tons),
automobile gasoline - 23.1 ths liters, cost value was 0.09% and 0.002%, respectively
Energy Consumption, Energy Efficiency Indicators
302-1 302-3
The specific consumption of fuel equivalent (SCFE) for electric power generation amounted in 2019 to 321.7
g/kWh. When calculating this indicator, the generated power is taken into account without regard to BOP needs.
SCFE for electric power and heat generation (non-renewable sources)
Indicator Unit of
measurement 2017 2018 2019
Specific fuel equivalent consumption for
electric power (gas + coal) g/kWh 329.93 326.97 320.98
Specific fuel equivalent consumption for heat
power (gas + coal) kg/Gcal 160.34 161.48 159.4
23 According to RAS results (Russian Accounting Standards)
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*We recalculated the quantitative indicators for SCFE in the reporting period. For that reason, we updated the data for previous reporting
periods.
The volumes of electrical power and heat power of BOP consumption
Indicator Unit of
measurement 2017* 2018* 2019
The volume of electric power for BOP
needs for the production of electrical and
thermal energy, in % of the total volume of
electrical energy
% 5.2 5.0 5.2
Electric power for BOP needs bln Kwh 2.201 2.122 1.766
Heat power for BOP needs ths Gcal 10.5 11.0 8.2
*We recalculated the quantitative indicators for consumption of electric power and heat in the reporting period. For that reason, we updated
the data for previous reporting periods.
In 2019, implementation of a number of initiatives was continued to reduce balance-of-plant needs for each
power plant, namely this is an initiative for technical refurbishment of the lighting system that involves a partial
replacement of lighting lamps with LED ones. In addition, to reduce fuel consumption, we implement the
measures within the scope of activities for improvement of operational efficiency (see details in the section
“Increase in Operating Efficiency”).
302-4
Initiatives for reduction of energy consumption in 2019
Description of initiative Energy type Power Plant
Consumption
reduction in tons
of fuel equivalent
Reconstruction of the lighting network of the power
plant with replacement of lamps with LED ones Electric power
Konakovskaya GRES 37.0
Nevinnomysskaya GRES 65.2
Reftinskaya GRES 179.3
Insulation and setting works of boilers 5,5А,10.
Overhaul of power units No. 6.9, replacement of
fabric expansion joints, spirals of HP-6,7,8 HP
preheaters, tube bundle of LP-3,4 LP preheaters,
and replacement of TO-6.
Gas Nevinnomysskaya GRES 1,876.0
Overhaul of turbines of power units No. 2,3,6 to
eliminate capacity losses, maintenance of the
vacuum system, replacement of heating surfaces
and elimination of inflows in boiler units of No.
2,3,6
Coal, fuel oil Reftinskaya GRES 6,959.0
The condenser and built-in bundles were cleaned
on turbine unit No. 6, БГ-1,2 and HP preheater, LP
preheater were repaired. Condenser, БГ-1, БВ-1,2
were repaired on turbine unit No. 7. ПНД-4 LP
preheater was replaced, DH system was repaired,
and the condenser was cleaned on power unit No.
11.
Gas Sredneuralskaya GRES 619.0
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Total amount of energy saved 9,735.5
Secondary Resources Consumption
301-1
At different levels of production process, we consume secondary resources. A significant portion of such resources consists of chemicals necessary both for demineralized water treatment for make-up of boilers and heating systems, and for operation of auxiliary equipment.
Consumption of consumables in 2019 compared to 2018 decreased by 15% with regard to data on Reftinskaya GRES for 9 months.
Secondary resources consumption
Power Plant Comment
Konakovskaya GRES Reduction of consumption of chemicals for water treatment due to improvement of the quality of the source natural water.
Nevinnomysskaya GRES Reduction in consumption of such materials as quick lime, trivalent sodium phosphate, ammonia and sodium hypochlorite.
Consumption of sulphuric acid increased by 30%. Sulphuric acid was used to restore filtration properties on water treatment device.
Sredneuralskaya GRES Reduction of consumption of chemicals for water treatment due to improvement of the quality of the source natural water.
20-40% increase in consumption of such materials as trivalent sodium phosphate, resins, ammonia and sodium hypochlorite. That is related to the maintenance operations on several acid storage tanks, as well as unsatisfactory water chemistry mode at some generation facilities of the power plant during spring and summer period.
9% decrease in consumption of caustic soda, which is associated with improvement in the quality of Isetskoye water in terms of average total value of anions.
Increase in consumption of sulphuric and hydrochloric acids by 13% is stipulated by increase in consumption of chlorine dioxide in the disinfection circuit of make-up water in the heating system. Increase in consumption of sulphuric acid is also associated with increase in the volume of demineralized water treatment. Its production in 2019 increased by 3% compared to 2018.
Reftinskaya GRES Deviations in consumables at Reftinskaya GRES cannot be detected due to difference in the compared periods (2018 - 12 months, 2019 - 9 months, see the section “Exit from Coal Generation”).
Detailed information about auxiliary resources consumed in 2019 is given in the Annex, the section “Environmental Indicators”.
Waste Management
306-2
We take care of waste management. Internal accounting in the field of waste management is conducted in accordance with the classification system of waste coming from production and consumption, and valid in the Russian Federation. This system provides for the separate waste collection divided into 5 hazard classes depending on the degree of negative impact on the environment. Hazardous waste includes hazard class 1-4 waste; fifth class waste is almost non-hazardous.
In 2019, 34% less non-hazardous waste was generated at the power plants of our company than in 2018, and 50% less hazardous waste. This decrease is associated with a decrease in the scope of maintenance operations, works for dismantling of decommissioned equipment completed in 2018. Due to overall decrease in waste generation in 2019, the portion of waste transfer to disposal and recycling decreased by 20% too. See detailed information about wastes in the Annex, the section “Environmental Indicators”
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Initiatives in Waste Management
Much attention is paid in the field of production waste management to increasing the portion of generated waste sent for recycling and disposal. The company has a goal set to increase the portion of waste transferred for recycling (reuse) and disposal by 2% on annual basis.
In view of this, we perform regular monitoring of the register of facilities of the main process equipment for waste management on the portal of the Unified State Information System for Accounting for Waste from the Use of Goods. Such an approach allows expanding the list of third parties, third-party enterprises with relevant licenses that the company transfers its waste for reuse.
With the support of Enel Group, we implement a new digital accounting system for generation, storage and transfer of waste. Such a system will allow ensuring both their accurate accounting and monitoring of their accumulation sites. The system is currently under testing and personnel training for platform operations is in progress.
We consider that the portion of waste sent for disposal and recycling will increase due to the project for digitalization of waste management and careful cooperation with equipment suppliers intended to decrease in the scope of containers supplied with equipment and switching to the containers from natural easy-to-process materials.
In addition, we launched a project in 2019 to abandon disposable plastic, which will also lead to a decrease in waste generation. We plan to phase out plastic consumption for administrative and production needs (see details in the section “Sustainability Plan for 2020-2022”).
Radioactive Waste Management
We improve our non-financial statements and aim at greater transparency. For that purpose, we disclosed the management approach and quantitative information regarding radioactive waste (RAW) in the current reporting period.
RAW is generated at the company during treatment (purification) of artesian water at Konakovskaya GRES. Natural radionuclides contained in artesian water, namely radium-226 and its daughter products, accumulate on the filter material.
PJSC Enel Russia has a license to operate a radiation source, complies with radiation safety requirements and submits reports on radioactive waste to regulatory authorities on regular basis. Radioactive waste management is carried out on a contractual basis with the organizations licensed to provide radioactive waste management services.
RAW generation and disposal
Year RAW generated and disposed Initiatives
2017 23.0 m3 (21.17 current maintenance)
Replacement of sulfonated carbon on mechanical and ion-exchange filters
2018 12.5 m3 (12.11 current
maintenance) Replacement of filter material on ion-exchange filters
2019 14.5 m3 (15.79 current
maintenance) Replacement of filter material on ion-exchange filters
Biodiversity and Natural Heritage Preservation
304-1 304-3 304-4
Preservation of ecosystems and protection of biodiversity are key principles for sustainable development. We take measures to prevent negative impact on biodiversity and compensate consequences of negative impact. We are committed to considering the peculiarities of the biodiversity of our territories during design, construction, operation and maintenance phases. For each new project, we conduct a study of potential environmental impact as well as impact on animal and plant species. We are open to dialogue and cooperation with local communities and environmental associations in biodiversity conservation.
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The power plants of PJSC Enel Russia are not located in the protected natural area and territory with appreciated value of biodiversity that is outside the boundaries of protected natural territories. The production site of Sredneuralskaya GRES power plant is located near the specially protected natural area “Isetskoye Lake with the surrounding forests”. The size of the production site is 0.73 km2. Sredneuralskaya GRES is located near the Isetskoye reservoir of lake type in Verkhnepyshminsky district northwards of the city of Yekaterinburg. In order to preserve the picturesque natural reservoir, a typical landscape for the southern taiga Transurals, Decree of the Government of Sverdlovsk Region No. 41-ПП dated 17.01.2001 the Isetskoye lake with surrounding forests was declared a landscape reserve. The area of specially protected natural territory is 4738 ha. Since 1936, during construction of Sredneuralskaya GRES on the bank of the Isetskoye reservoir, it became a cooling reservoir for Sredneuralskaya GRES. The Isetskoye reservoir is fishy; perch, rudd, bream, tench, ruff, perch and pike are found here. Fish species such as grass carp, white silver carp and mirror carp are naturalized.
At the plants of PJSC Enel Russia, water intakes are equipped with effective fish protection facilities (FPF) that allows preserving biodiversity of surface water bodies. From 2013 to 2017, fish stocking at the Isetskoye reservoir was carried out within the scope of compensatory measures to replenish the biological balance of the reservoir during the construction and operation of the cooling water intake facility of 410 MW CCGT of Sredneuralskaya GRES. The company stocked young grass carp and silver carp to the Isetskoye reservoir for five years. Water intake from the Isetskoye reservoir for the production needs of the plant is carried out by three water intake facilities and all of them are equipped with fish protection facilities that are designed to reduce the impact of the power plant production cycle on the reservoir ichthyofauna by preventing water bioresources from entering the water intake of Sredneuralskaya GRES.
It must be recognized that there is a potential habitat for species included in the IUCN red list and types put onto the National List of Protected Species (Red Book of the Russian Federation) in the area affected by the company activities, since the habitats of such species may coincide with the regions where our power plants are located.
The company recognizes that no qualitative assessment of biological diversity in the territory under the influence of its activities was carried out until 2019. For that purpose, Enel Russia develops an action plan for the period of 2020–2024, it is the basis for management of this area with outline of the main principles and procedures that are currently recognized as the best practices for management of impact of activities on biological diversity.
The main goals and objectives of the company in conservation of biodiversity in the near future:
• Determination of the value of biological diversity and the risk for biological diversity on a scale of the entire company.
• Compliance with hierarchy impact minimization. It refers to the sequence of actions for forecasting and preventing impact on biological diversity and ecosystem in those cases when such impact cannot be prevented: development of measures for minimization of such impact – reclamation, recovery, and in the cases with significant residual impact – compensation.
• Performance of chronological analysis for collection of information about all environmental legal proceedings or fines, all activities for protection of biological diversity that were completed before or are currently under implementation.
Thus, the company implements initiatives aimed at restoring a natural landmark of regional significance “Karacharovo Park” (the Tver Region). Even though the activities of PJSC Enel Russia do not have a negative impact on the territory, we have been implementing an annual environmental task force in this park for four years while involving local people, employees of Konakovskaya GRES and the Headquarters for participation in it. This project is being implemented with the support of the Ministry of Natural Resources and Environment of Tver Region.
Business and management
Operational Efficiency: New Technologies and Solutions
Management of Generation Equipment Fleet
The Thermal Generation Unit is responsible at Enel Russia for management of generation equipment fleet. It is responsible at the managerial level for coordination of operation and maintenance of equipment as well as
87
for optimization of its operation. At the operational level, the unit is responsible for operation of generation equipment at the power plants and its maintenance in technically sound condition and timely maintenance of equipment in accordance with production plans, policies and health, safety and environment rules and improvement of operational efficiency.
Organizational structure of the Thermal Generation Unit
Functions of the directorate comprising the Thermal Generation Unit
Business Development It facilitates to identification of medium- and long-term strategies for management of generation assets in terms of potential modernization projects and new construction initiatives.
Engineering and Construction It ensures development of new construction, modernization and technical refurbishment projects, while managing all engineering activities at the stage of preliminary development of the project.
Project Execution Department It deals with coordination of civil engineering and design activities during implementation of new construction projects, modernization and technical refurbishment.
Operation & Maintenance It coordinates the operation process and ensures planning of maintenance and operational needs of the equipment. It evaluates also the efficiency of performed works. It develops a plan for improvement of equipment operation efficiency.
Technical Support It is responsible for analysis of material technical issues and faults of equipment and provides recommendations for their correction.
Operation & Maintenance Improvement
It analyses the Operation and Maintenance indicators, defines the measures for improvement of equipment operation efficiency (availability, specific fuel consumption and load factor). See details in the section “Operational Efficiency”.
Deputy General Director –Head of Generation
Head of Operation and Maintenance
Head of HSEQ
Technical Support
Head of Operational Performance Optimization
Business Development Manager
Head of Project Execution
Power Plant Manager
ADMINISTRATIVE LEVEL
OPERATIONAL LEVEL
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Health, Safety, Environment and Quality
It is responsible for achievement of health, safety, environment and quality goals. See details in the section “Occupational Health & Safety”.
Power plants They are responsible for operation and maintenance of generation equipment in accordance with production plans, health, safety and environment requirements while increasing the production efficiency to the maximum extent.
Since 2018, on the initiative of Enel Group, the company approved an official strategic asset management plan. Such factors as the macroeconomic context, electricity market trends, and legislative changes are considered for analysis and development of potential areas for asset development. The planning horizons for strategic plan of facility development are 2025 and 2030. Until 2025, the plan includes detailed information about development of Enel Russia generation assets with detailed analysis for each power unit.
This plan was developed by Enel Russia and approved by the General Director. The strategic asset management plan is updated annually to meet the company's business plan. There are also official annual plans for major maintenance operations for each electric power plant that are formed by the Head of Generation and approved by the Head of Energy Management. The final versions of plans are submitted to the System Operator. Another tool for planning of electric power generation and asset management is long-term plan of major maintenance operations that is formed for each power plant of the company for 10 years.
Operational Efficiency
103-1 103-2 103-3
We develop energy business in Russia using the best international practices. We want to use our resources rationally and optimize business processes through application of new technologies and digitalization. We are committed to maximize operational efficiency during operation, capital construction and technical refurbishment of assets.
The operational efficiency combines the aspects related to the efficient use of the company's internal resources. We increase availability of generation equipment, reduce specific fuel consumption for supply of electric power and heat, decrease the cooling water flow, increase compliance with health, safety, environment and quality requirements.
The main documents we use to manage operational efficiency:
• “Management of specific fuel consumption” – regulates activity for analysis of actual fuel consumption indicators, formation of control actions, development of an action plan for reduction of consumption during operation and maintenance of equipment.
• “Informing and analyzing equipment unavailability events” – determines the measures that the units and the center of monitoring and diagnostics must take to analyze and verify the actual efficiency of the decision taken after the unavailability event on generation equipment.
• “Energy planning and audit” – it regulates analysis and planning activities for improvement of energy efficiency of power plants.
Deputy General Director – Head of Generation is responsible for operational efficiency. There are several main roles in generation – they all collaborate to improve processes, increase operational efficiency and mandatory compliance with health, safety, environment and quality standards (see the section “Management of Generation Equipment Fleet”).
One of the key indicators of operational efficiency – specific consumption of fuel equivalent. Our objective is to reduce consumption in 2020 to 301.4 g/kWh and bring it to 296.6 g/kWh in 2022 (see the section “Sustainability Plan for 2020-2022”).
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Increase in Operating Efficiency
Since 2016, the integrated excellence system has been applied at the company. It allows any employee to submit a proposal for improvement of the power plant operation and optimization of the processes. For evaluation and selection of proposals, a cross-functional technical committee has been formed at each power plant. It includes experts in equipment operation, maintenance, health and safety, information technology, etc. Due to high involvement of staff (55%), about 550 ideas for were collected in 2019 for improvements and about 35% of them were implemented. The best proposals were submitted to the annual competition of Enel Group - Gxcellence.
We created a database of best practices and encourage experience sharing among employees of the power plants.
We implement state-of-the-art methods for processing large array of information, industrial machine learning technology. For example, the main stage of implementation of information system “Management of specific fuel consumption” was completed. The purpose of this system is to automate on-going analysis of equipment operation mode.
Due to mathematical model of the power unit that we created and that underlays the system, we optimized equipment load, improved technical and economic indicators and managed to identify defects affecting fuel consumption at the power unit in timely manner. The results of this analysis are used both operating personnel for optimum maintenance of operation mode and by Performance Control Group and Maintenance Planning Service for maintenance activities.
In 2019 we performed analysis of the action plan to improve efficiency of equipment operation implemented in the previous reporting period. An improvement in key performance indicators of the equipment was recorded. It evidences of the efficiency of the approach.
In 2019, we launched also a project for visualization of key performance indicators for operation and maintenance processes, as well as visualization of key indicators to reduce cooling water flow. The water indicators will be available on the monitors of operating personnel along with performance indicators. They will help in real time monitoring and optimum reduction of water consumption with regard to the cost of fuel. Completion of this project is planned for 2020.
In 2019, an external audit was conducted at Konakovskaya GRES for compliance with the requirements of the international standard ISO 50001 “Energy Management Systems”. Based on the results of this audit, Konakovskaya GRES received a certificate of conformity. In 2020, an external audit is planned at Nevinnomysskaya GRES.
Innovation and Digital Transformation
Innovation Approach in Technologies
103-1 103-2 103-3 One of success factors of the companies consists currently in development of innovations and establishment of innovative culture. Such an approach allows flexible modification of business model under impact of external and internal factors.
Modification of the company's business processes is based on the use of digital technologies and data-driven management. Under the conditions of the technology profile diversification, we continue to focus on digitalization and strengthen our position as a data-driven company. We are changing following the changes in our business strategy to maintain our competitive advantage and meet the challenges of the modern world. Implementation of digital technologies complies also with the principles of the Digital Transformation vision of the Fuel and Energy Complex within the scope of the national project “Digital Economy of the Russian Federation”.
The need for digital support for the company’s areas of activity begins with the basic foundations of automation and is supplemented by the use of modern digital technologies, change of IT platforms and cloud solutions to increase performance and efficiency, and ensure information security. Our commitment to open innovations (see details in the section “Mission and Values”) is based on the integration of business processes and technologies that help us creating sustainable long-term value.
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The company develops actively the process architecture based on micro services and application programming interfaces (API), testing and implementation of innovative process designs using Big Data technologies, the Internet of Things and Virtual Reality (Big Data, IoT, VR). The opportunities associated with company assets and employees encourage us creating and developing a network of ecosystem technologies that must be open, dynamic and accessible in real time.
Implementation of the digital strategy program and digital technologies at PJSC Enel Russia is responsibility of the Digital Solutions, headed by the Head of Digital Solutions. The following goals were set and achieved by the company to the Digital Solutions for 2019: ensuring cyber security of critical information infrastructure, development of systems and applications.
Management of implementation of new solutions and digitization
The work of Digital Solutions is regulated by the following documents:
• IT technical policy;
• Procedure “On user support during provision of IT services”;
• Procedure “Ensuring information security” and policy “On ensuring security of information”;
• Operating Instruction "IT systems logical access management";
• Procedure “Monitoring and control of personal data processing at PJSC Enel Russia”;
• Operating Instruction “Control of access to critical information infrastructure facilities (CII)”.
In 2019, the company monitored regularly compliance with legislative requirements according to Federal Law on Personal Data No. 152-ФЗ, Federal Law on Security of Critical Russian Federation Information Infrastructure No. 187-ФЗ, fulfillment of the requirements of internal controls. To ensure efficient operation and modernization of the systems, platforms and services, the best practices are used, internal and external audits are performed. An action plan is prepared by their results.
Areas for implementation of new solutions and digitization
Key activities in 2019
Unit Activities
Trading Digital Hub
A solution has been developed and implemented that ensures continuous monitoring of the quality indicators of the participation of power units in normalized primary regulation of frequency. The solution for monitoring of indicators allowed ensuring timely response to emerging disturbances in the power system and minimizing possible losses.
A digital process was developed for preparation and filing of applications for selection of composition of generating equipment in operation. The solution
Platforms Employees Cloud solutions Cybersecurity Company assets
Head of Digital Solutions
General Director
Trading Digital Hub Finance Digital Hub Information Security Incidents Response
Teams IT Operation Group IT Development and
Management Unit
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Unit Activities
allows the trading group not to depend on the hardware platform, the client part is available from mobile devices and on web resources.
Finance Digital Hub
SAP WISE corporate system has timely changes that were made in terms of the set VAT rate of 20%, settings that were made for correct representation and issue of primary documents.
On April 1, 2019, the commercial operation of updated financial electronic documents circulation system began, being integrated with the system of Legally Important Document Management System. A part of primary financial documents with counterparties are signed by electronic digital signature and transmitted electronically through a specialized system.
Generation Digital Hub24
Within the scope of the Digital Plant project, predictive diagnostic systems of CCGT were implemented, which will allow reducing production risks at Nevinnomysskaya GRES and Sredneuralskaya GRES.
At all power plants, the functionality of the Collaborative Planning solution (e-Planner) was implemented, thus, the opportunities appeared through information visualization for additional control of preparation for commencement of maintenance campaign.
Within the scope of “Heat Rate Management” digital project, a special solution was implemented that improves efficiency of specific fuel consumption control by visualizing the causes of deviations in real time.
The development of global solutions for improvement of operational efficiency and reporting continued. Such projects include implementation of the systems integrated with local and global platforms and providing support for operation of the main equipment, as well as a comprehensive reporting system using artificial intelligence algorithms and voice control. The systems will be implemented in 2020.
The practical results were produced for the digital project of using IoT (Internet of Things) on the basis of a data collection and transfer system from remote and inaccessible facilities. The scaling of pilot solutions allowed distribution of pilot projects at minimal cost. The use of the solution contributes to better equipment management, minimizes the risks associated with health, safety and environmental aspects, allows obtaining the process measurements, collecting data from remote facilities that were impossible to obtain before.
Digital projects of HR Hub 25
Creation of a single ecosystem with various platforms and services for employees continued with the goal of increasing transparency and efficiency, improving the quality of work and services provided using digital tools.
In 2019, within the scope of implementation of the national project of “Digital Economy of the Russian Federation”, the company applied for participation in the experiment under the auspices of the Ministry of Labor and Social Protection of the Russian Federation for the use of electronic signatures in labor relations.
24 Reorganized at the end of 2019. 25 It is a part of People and Organization
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Unit Activities
Infrastructure Technologies Group
At the beginning of 2019, switching to a new operating system were held. It was the basis to mitigate the risks in the field of information security and ensure availability of new functions.
The services are implemented for the possibility of joint work of users, possibility to work on various mobile devices and platforms. Along with classic MS Office 365 applications, cloud services were launched, including: service for fast creation of tests and surveys, a collaboration tool for remote and dispersed teamwork, a platform for online broadcasting, etc.
Cyber Security
In accordance with the requirements of Federal Law dated 26.07.2017 No. 187-ФЗ “On Security of Critical Russian Federation Information Infrastructure”, PJSC Enel Russia works actively to comply with the requirements of laws on protection of critical information infrastructure (CII) and interaction with the state regulator.
During 2019, the work was performed to design a security system for CII facilities and develop documentation to ensure the required level of information protection. In accordance with new documentation, the company defines new roles and duties of participants of the process of operation and maintenance of CII facilities.
Implementation of the technical action plan will be carried out during 2020-2021 and be authorized with plans for maintenance of main equipment.
In 2019, under the conditions of special attention to ensuring cyber security of systems, services and data, the projects were completed at the company for protection of web applications, a project was performed for update of personal data segment, a new password lifecycle management software product was implemented, etc. In 2019, within the scope of monitoring of the Enel Global Compliance Program (see details in the section “Anti-Corruption Policy and Business Ethics”), the controls of IT-procedures were tested to prevent violations such as cybercrime and copyright infringement.
Innovation Hub
The company has adopted the Open Innovation and Sustainability approach. Enel Innovation Centre cooperates actively with all participants of the Russian Innovation Ecosystem, startups, small and medium enterprises, universities, corporations, accelerators, venture funds, technology parks, scientists, talented and creative people. It offers experience and expertise, piloting sites and resources required for quick development of the best solutions.
Enel Innovation Centre has existed in Russia since 2017. It is a part of the international network of Enel Innovation Centers (Italy, Europe, Russia, Israel, Boston, Silicon Valley, Brazil, Chile) aimed at finding opportunities for cooperation with specialists in the best innovative ecosystems. The center is located in the Skolkovo technopark and contributes to active promotion of innovative technologies of the Russian startups and small and medium enterprises in the electric power industry of Russia, as well as the further export of the Russian innovations to the countries of presence of Enel. The Centre is engaged in the search for new technologies, assistance in testing and implementation of technologies in business processes both at the local level and at the Group level. The Enel Innovation Centre brings together talented people, ideas, experience, technology and resources to create the energy of future.
The Enel Innovation Centre looks for startups and small/medium enterprises with high level of technology development in order to test the solution within a short period of time and scale as may be necessary. Main search areas: artificial intelligence, machine training, energy efficiency, new coatings and materials, big data, robotics, etc. In 2019, video analytics technologies came also to focus to increase production safety and reduce risks for our personnel. The Enel Innovation Centre performed selection of startups focused on video analytics, jointly with energy-efficient Skolkovo cluster. 10 startups were evaluated by the experts from Enel, Global Digital Solutions unit. Testing of the technology of one of the selected startups is planned for 2020 at Konakovskaya GRES.
The company pays attention to development of innovation culture among employees, both at the power plants and at the headquarters. The employees pass sessions on development of creativity, search for solutions to
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sophisticated problems. In 2019, the company launched a global project for development of internal entrepreneurship for the employees of the entire Enel Group, where any employee can submit an idea to improve the existing process or an idea for a new business of the company.
Customer Focus
Main Approaches to Customer Relations
103-1 103-2 103-3 102-43 At this stage, customer focus for PJSC Enel Russia consists primarily in ensuring safe, uninterrupted and trouble-free operation of their electric power plants to meet the demand for electrical power from consumers. In addition, it is manifested in proper fulfillment of obligations by us to entities of electric power industry, namely, in compliance with the rules of the Wholesale Electricity and Capacity Market (WECM).
PJSC Enel Russia operates at the wholesale electricity and capacity market and interacts with electric power suppliers (generation companies) and electric power consumers (utility organizations, large consumers of electric power, guaranteeing suppliers) who received the status of wholesale market entities, WECM infrastructure organizations and other organizations. This is governed by the following public documents:
• Federal Law No. 35-FZ dated 26.03.2003 On Power Industry
• Decree of the Government of the Russian Federation dated 27.12.2010 No. 1172 “On approval of the
Rules of the WECM and on introduction of amendments into some acts of the Government of the
Russian Federation regarding organization of the WECM functioning”
• The agreement on joining the trading system of the wholesale market in accordance with the standard form posted on the official website of the Association NP Market Council.
Responsible authorities during the process of interaction with the customers at the wholesale electricity and power market are the Energy Management headed by the Head of Energy Management and Head of Back Office.
Customer focus is manifested also in the intention to consider the expectations and requests of customers and other stakeholders. In response to them, we explore new ways of engagement, develop new processes that meet the needs of stakeholders. PJSC Enel Russia sees in the implementation of new solutions and digitalization of business processes a potential for further development and improvement of the customer-oriented approach.
PJSC Enel Russia seeks to establish customer relationships based on mutual respect showing competence and professionalism and client-oriented approach. In all its business practices, PJSC Enel Russia complies with the Code of Ethics and the Zero Tolerance to Corruption Plan. Communication with customers must be transparent, accurate and comprehensive, and comply with applicable laws.
PJSC Enel Russia undertakes to always consider proposals and respond to complaints from consumers or their associations through an appropriate operational communication system (e.g. direct contacts, phone and e-mail). In customer interactions, the company guarantees a high level of personal data security. The company timely informs about its activities by publishing information on its official website. The company promptly informs the customers about any changes regarding the implementation of agreements by sending formal letters in electronic form and by mail.
Anti-Corruption Policy and Business Ethics
103-1 103-2 205-1 205-2 205-3 The company pays great attention to the issues of ethics in relation to internal and external stakeholders. The Internal Audit Department controls compliance of the Code of Ethics, a basic document containing description of ethical standards and responsibility of employees. It is obligatory for review and compliance by all employees of the company. The core values are given in the Code of Ethics.
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Our ethical values
PJSC Enel Russia rejects all forms of corruption and to the satisfaction of legal requirements, as well as constructive obligations, conducts active development and implementation of anti-corruption measures related to all business relations with external and internal stakeholders. Main Documents
Code of Ethics https://www.enelrussia.ru/content/dam/enel-ru/documents/ru/CODE%20OF%20ETHICS-2017-2.pdf
Zero Tolerance to Corruption Plan Regulation https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Zero%20Tolerance%20to%20Corruption%20Plan.pdf
Global Compliance Program on corporate criminal liability https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Enel%20Global%20Compliance%20Program.pdf
Regulation of Internal Audit Department https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Regulation%20on%20Internal%20Audit%20Commission%20of%20PJSC%20Enel%20Russia.pdf
The requirement when carrying out activities to follow the main documents is a prerequisite for all agreements with business partners of the company. Since 2019, the “Anti-Corruption Policy” has been added to the list of documents. Anti-Corruption Policy is the basis for implementation and improvement of the company’s anti-corruption management system. The company’s internal audit department is responsible for maintenance of internal control system to identify corruption.
Risk Assessment
Corruption risk assessment is conducted annually for all company divisions. These risks are monitored by planning and conducting internal audits. During the risk analysis process, the following risk categories are evaluated:
• conflicts of interest, including purchasing and sales schemes and other conflicts of interest;
• bribery, including bid rigging and other nonfinancial benefits;
• illegal gratuities;
• economic extortion.
Based on the results of annual risk assessment, an audit plan for the next year is formed, and processes that require special attention during continuous monitoring are determined.
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Training and Informing
The company has the following ways to inform employees about the basic principles of countering corruption:
• mandatory introductory induction for all newly hired employees. In 2019, 100% of newly hired
employees went through this induction (101 pers., or 4.12% of the total number of employees);
• opportunity for repeated review of principles, using the corporate electronic document management
system and e-Ducation corporate educational platform. In 2019, 405 employees (17.78% of the total
number of employees) reviewed the principles;
• a quarterly internal communication campaign to raise awareness of ethical business issues and
channels for communication on ethical concerns;
• periodic informational meetings with employees of the Internal Audit Department that were attended in
2019 by about 300 persons.
• The number of employees trained in 2019 is significantly lower than in 2018. This is explained by the fact that in 2018 we launched a mass repeated review of the anti-corruption policy for employees whose work experience at the company is more than 3 years. We decided to conduct the review once every three years, for this reason, the figure for 2019 is lower.
Number of employees trained in anti-corruption principles
The Members of the Board of Directors of PJSC Enel Russia are not employees, therefore information sessions in ethics and anti-corruption are not provided for them. However, once a year, the Head of Internal Audit reports to the Board of Directors on the results of audits conducted during the year to comply with the requirements of the Enel Global Compliance Program, the global program of Enel Group that includes compliance with all anti-corruption policies and methods.
Communication Channels
102-17
The company has established and is constantly operating communication channels, through which any person, either an employee or a representative of other stakeholders, can send complaints about violations or alleged violations of the Code of Ethics to the Internal Audit Group of Enel Russia.
Workers Specialists Middle managers Top managers
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By email [email protected]
By mail Internal Audit Department Enel Russia, 7 Pavlovskaya Street, building 1, Moscow 115093, Russia
In accordance with the Regulation on Internal Audit Department its employees are authorized to provide internal ethical counseling services to the company’s employees as well as carry out investigations into alleged violations of the Code of Ethics. All addresses are considered in due manner.
Investigation of the cases of alleged violation of the Code of Ethics
The Internal Audit Department investigates possible violations, takes measures to ensure that reporting persons are not subjected to any acts of retaliation, i.e. actions that may entail even suspicion of discrimination or punishment (in case of suppliers, e.g., termination of business relationships or, in case of employees, impossibility of promotion, etc.). In addition, the person sending the appeal is guaranteed confidentiality unless otherwise required by law.
During the reporting year, no complaints of any ethical violations were recorded.
Results for 2019
In 2019, we implemented a large-scale project for improvement of anti-corruption management. The company initiated the process of certification according to International Standard ISO 37001:2016 “Antibribery management system”. An Anti-Corruption Committee was created consisting of the heads of Health, Safety, Environment and Quality, Internal Audit Department, Legal & Corporate and Security.
We issued the Anti-Corruption Policy and Guidelines for Anti-Corruption Management System. According to ISO 37001 standard, approximately 300 employees of the company were trained and information sessions for contractors and subsidiary companies were held. The company conducted internal audits at the power plants and at the headquarters. Based on the audit results, the ways were identified to improve the anti-corruption process and corrective actions were planned. An external audit to obtain a certificate is planned for 2020.
Identification of facts
Notification of the violation of
the Code of Ethics
Performance of investigation
Preparation of the report on the
investigation results
Informing stakeholders and taking necessary
measures
Not confirmed
Confirmed
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Political Contributions
415-1
In accordance with cl. 3.26 of Chapter IV of the current Code of Ethics, PJSC Enel Russia does not finance political parties, their candidates or representatives either in Russia or abroad, and also does not sponsor events or holidays held only for the purpose of political propaganda. PJSC Enel Russia refrains from exerting any direct or indirect pressure on politicians.
Our Employees
Approach to Employees Management, Development & Motivation
103-1 103-2 103-3
Human resources are the main and most valuable asset of the company. We ensure equal conditions in employment for all, we are committed to attracting the most talented specialists and motivating them to grow and develop in their personal and professional perspectives.
An efficient personnel training system was built at Enel Russia, its main objective is the professional development of employees, increasing the level of their expertise, as well as further promotion at the company. We offer a competitive compensation package to our employees that is comparable to the rate of remuneration in the industry and exceeding significantly the average values in the regions of the presence of the company’s power plants (see Annex, the section “Social Indicators”). We comply with labor laws, principles of corporate and professional ethics.
Responsibility for management, development and motivation of employees is on the Deputy General Director – Head of People and Organization. People and Organization includes the following organization units:
People and Organization structure
The main documents regulating management, development and motivation of employees are:
Code of Ethics https://www.enelrussia.ru/content/dam/enel-ru/documents/ru/CODE%20OF%20ETHICS-2017-2.pdf
Human Rights Policy https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Human%20Rights%20Policy.pdf
Policy on Remuneration and Reimbursement of Expenses (Compensations) of the members of the Executive Bodies and Other Key Managers of Public Joint Stock Company Enel Russia https://www.enelrussia.ru/content/dam/enel-ru/documents/ru/basic/Remuneration%20Policy2019.pdf
• Collective agreements of the company’s branches;
• Trade Union policy;
Planning and Organization Group
Head of People and Organization
People Operations People Development Change Management
and Products Adoption
People Business Partner
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• Regulation "On Types of Personnel Education and Training, as well as Responsibility for Their
Arrangement";
• Global Policy “On Diversity and Inclusion” establishes guidelines for equal opportunities, inclusion and
non-discrimination. We follow the principles of policy and plan to localize the policy in the near future;
• The provision “Rewards and Incentives to the Employees of PJSC Enel Russia Associated with
Holidays and Anniversaries” establishes a system of rewards and incentives for the employees who
made a great personal contribution to development of the industry and the company – to improving
production efficiency, to mastering advanced technologies, resolving social and economic
development issues.
One of our main principles underlying People and Organization is non-discrimination in any of its manifestations. All forms of political, religious, national, ethical, racial, linguistic, gender and age discrimination are prohibited, as are all forms of discrimination in all procedures and practices: from recruiting to assessment and promotion procedures. All our employees are considered exclusively in terms of their abilities and professional skills for all decisions that affect labor relationships.
The objectives for the management and development of personnel are set out in the Sustainability Plan (see details in the section “Sustainability Plan for 2020-2022”).
To improve the management efficiency the employees of People and Organization participate in internal and external information and training sessions, professional conferences while acquiring additional skills and adopting the best practices. The efficiency of People and Organization processes is also analyzed by internal audit.
Personnel Structure
102-8
The number of personnel at the end of 2019 considering Reftinskaya GRES amounted to 2,404 persons, excluding Reftinskaya GRES – 1,419 persons. Most of the personnel are employees of Reftinskaya GRES (41%), 11% of employees work at the headquarters of the company. Most of the employees are employed under a permanent employment agreement (99%).
OUR KEY AREAS IN HUMAN RESOURCES
Development of decent incentive and
remuneration system
Personnel training in relevant knowledge and
skills
Engaging employees in corporate culture
Promotion of diversity and inclusion
Rendering comprehensive and
reliable social support
Formation of favorable internal climate
Ensuring continuity of talent management
process
Involvement and retention of talented
employees
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Employees by power plants (including Reftinskaya GRES)
Employees by power plants (without Reftinskaya GRES)
Employees by categories (including Reftinskaya GRES)
41%
17%
15%
16%
11%
Reftinskaya GRES
Nevinnomysskaya GRES
Konakovskaya GRES
Sredneuralskaya GRES
Headquarters
28%
26%
28%
18%
Nevinnomysskaya GRES
Konakovskaya GRES
Sredneuralskaya GRES
Headquarters
1%
17%
36%
45%
Managers
Heads
Specialists
Workers
100
Employees by categories (without Reftinskaya GRES)
Turnover
401-1
The headcount of PJSC Enel Russia decreased by 3.7% in the reporting year. This is mainly due to the sale of Reftinskaya GRES. We paid special attention to the management of the issues related to the transfer of our employees to a company that will be the new owner of RGRES (see details in the section “Exit from Coal Generation”). The decrease in headcount is associated also with the transfer of employees of PJSC Enel Russia to work at our subsidiaries (see the section “Development of Renewable Energy Sources”).
Headcount dynamics, pers.
Turnover dynamics
Involvement of People We Work with
401-1
We understand the importance of the involvement of experienced and talented employees. When recruiting personnel, the company is guided by the principles of equal opportunities. The company guarantees that it avoids any type of discrimination at the selection stage. In 2019, 120 persons were hired including 23% women.
2%
18%
44%
36%Managers
Heads
Specialists
Workers
101
Newly hired employees by sex
Newly hired employees by age
Incentive and Remuneration
202-1 401-2
Building and constantly improving the incentive and remuneration system for our employees is one of the key areas in the field of People and Organization. The remuneration rate, as well as the proposed compensation package, remain among the most attractive ones for many years in the industry and regions where the company's power plants operate. We pay a competitive salary that is indexed by changes in the consumer price index (CPI) and perform an annual revision of salary based on reviews of the remuneration rate in the industry and general trends on the labor market.
Ratio of the company average salary to the salary in the regions of presence
Power Plant Average monthly salary * (ths rubles)
Ratio to the average salary in the regions of presence
Konakovskaya GRES
2.84
Nevinnomysskaya GRES
2.67
78%23%
Men
Women
52%
40%
8%
Up to 30 years old 30 - 50 years old Over 50 years old
92,28
32,53
Company Region
82,50
30,86
Company Region
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Power Plant Average monthly salary * (ths rubles)
Ratio to the average salary in the regions of presence
Reftinskaya GRES
2.10
Sredneuralskaya GRES
2.38
Headquarters
2.55
*The data is given according to the report of the Federal State Statistics Service "Average Monthly Nominal Accrued Salary of Employees by the Full Range of Organizations by Subjects of the Russian Federation In 2013–2019"
Over the past few years, the company has revised the incentive and remuneration system. We aimed at making it as transparent as possible, consistent with the company policies and goals, as well as attractive for both current employees and highly qualified experts on the labor market.
System for remuneration of employees of Enel Russia
The remuneration rate is determined on the basis of job evaluation (grading) system applicable at the company, in accordance with the market data obtained as a result of reviews of the remuneration rates provided by consulting companies. The remuneration system is regulated by collective agreements and local regulations. Under the Code of Ethics, we do not tolerate any form of discrimination based on age, gender, sexual orientation, race, health, nationality, political opinion, religious belief, etc., including during determination of the size and composition of remuneration of employees of the company as well as benefits and social guarantees.
84,07
39,98
Company Region
94,97
39,98
Company Region
229,92
90,09
Company Region
System for remuneration of employees of Enel Russia
Fixed part Variable part
Bonus by the results of work for a month
Bonus subject to performance for the
year Bonus by the results of work
for 3 years Additional bonuses for special
achievements
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Level of salary of the employees of PJSC Enel Russia in 2019
Indicator Value
The actual ratio of employees with a salary higher than the median to the number of employees with a salary lower than the median at PJSC Enel Russia
31% / 69%
Percentage of employees with the salary at the rate equal or below the minimum size of labor remuneration
0%
Percentage of employees with the salary of above average in the territory of the Russian Federation (Rosstat, Federal Service for State Statistics)
71%
Percentage of employees with the salary of above median in the territory of the Russian Federation (Rosstat)
95%
The salary inequality among employees of PJSC Enel Russia is 7 times, that is, the average salary of 10% of the highest-paid employees of PJSC Enel Russia is 7 times higher than the average salary of 10% of the lowest-paid employees of PJSC Enel Russia. Moreover, this indicator on average in Russia in various industries ranges from 7 to 29 according to Rosstat.
The Ratio of Women's Income to Men's Income
405-1 405-2
Over the past few years, we pay special attention to the analysis of the ratio of remuneration of women and men. Due to industrial specifics of the electric power industry that requires often physical labor and night shifts, most employees are men. However, we do not tolerate any form of discrimination with respect to recruitment, determination of remuneration, evaluation of performance and promotion of women. We are also committed to the development and promotion of the industry popularity among women studying at the educational institutions (see the section “Diversity and Inclusion”).
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To calculate the ratio of women's income to men's income, we used the average annual remuneration of employees by category at each power plant and at the headquarters26. The ratio equal to one means no difference between the remuneration of men and women. The value of less than one means a downward deviation in the amount of remuneration of women in relation to men.
The most significant downward deviation of women's income in relation to men's income can be observed in the category of workers at the power plants (less than 0.79). This is due to the shift schedule and degree of complexity and responsibility of the work performed. Moreover, the ratio of payment at managerial positions tends to one both at the power plants and at the headquarters of the company (see the detailed graphical analysis of the ratio in dynamics and breakdown by power plants in the Annex “Numerical and Statistical Information”).
Diversity and Inclusion
102-8 405-1 405-2
The Diversity and Inclusion policy is an integral part of a successful socially responsible business. At the basis of the fundamental values of Enel Russia lies respect for the diversity of cultures. The issues related to diversity and inclusion management in all areas of the company activities are within the competence of employees of People and Organization. Deputy General Director – Head of People and Organization is responsible for diversity and inclusion issues.
We are guided by the Diversity policy of Enel Group. According to Enel Group diversity means people from different countries, cultures, various professional experiences, different ages, gender, able to work anywhere in the world and to make a contribution by having different points of view to ensure the best decisions and most efficient implementation of innovations.
The Group stands for diversity to rationalize, improve the life, growth and development of the Group as a whole. Enel is committed to the work-life balance and working conditions, providing opportunities for both professional and personal growth. Enel is a company that employs many generations of people, committed to creating jobs where the age aspect plays a key role in the exchange of knowledge and training. Enel focuses on development and implementation of special programs, which purpose is to create conditions where the employees are treated solely based on their abilities and professional skills in all decisions that affect working relationships.
Gender structure of personnel
26 The amount of annual remuneration consists of the following actually paid items in accordance with RAS reporting: salary, hardship-duty pay, payment of night and evening hours, payment for shift acceptance, overtime, payment for work on days-off and holidays, leave allowance, bonuses, financial assistance for a leave at the power plants, compensation for the vouchers to children summer camps.
73% 74% 74%
27% 26% 26%
2017 2018 2019
Women
Men
105
Age structure of personnel
Gender structure of personnel at managerial positions*
*This category includes senior employees of the first line reporting to the General Director of the company
Thus in 2019, we continued to implement the global Diversity and Inclusion program that consists of a series of special events in key areas set out in the global policy.
9% 8% 8%
72% 73% 72%
19% 19% 20%
2017 2018 2019
Over 50 years old
30 - 50 years old
Up to 30 years old
4 4 5
1820 20
22%
20%
25%
0%
5%
10%
15%
20%
25%
30%
0
5
10
15
20
25
2017 2018 2019
Women, pers. Men. pers. Share of women at managerial positions
106
Areas for support of diversity and inclusion
The company has a practice of holding Diversity and Inclusion Days that covers such important topics as support for employees with disabilities, success stories of women managers, sharing experience between junior and senior employees, and master classes for parents. In 2020, PJSC Enel Russia plans to ensure and promote diversity and equal opportunities through inclusion of women, young employees in succession plans.
Young Employees
We are committed to the development and implementation of the smart, professional and creative potential of young employees.
Gender
• Enel Russia complies with the gender non-discrimination principle when determining the size of a salary • We support the international STEM program (Science, Technology, Engineering and Mathematics) • We hold meetings with pupils of secondary schools to promote technical and engineering professions
among girls • We are committed to stereo rupture regarding gender • We hold information meetings with the participation of top management
Age • We develop a mentoring program, regular initiatives for exchanging experiences between employees of
different generations • We involve young employees in development and training programs • Employees younger than 35 years old and over 50 years old are appointed to the internal trainers
Nationality and culture
• We consider it important to support a person’s individuality, as well as an atmosphere of respect for honor and dignity of the individual
• We deliver lectures and seminars on the history, development and characteristics of world civilizations and cultures
Disability • We create an inclusive work environment and aim at providing a comfortable environment for
employees with disabilities. • We cooperate with inclusive centers • We hold information meetings for employees
Work-life balance • The employees can work remotely one day a week (excluding operating personnel) • Within the scope of “parenthood” program, we provide an additional possibility of remote work and
flexible hours
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Objectives of the youth policy in 2019
To involve young professionals, the company provides an opportunity to undertake internships for the students of secondary specialized and higher educational institutions. During the calendar year, more than 100 people undergo internships at the company, including internships at the power plants. Following the results of 2019, 171 people completed internships at the company, including 50 girls (29.2%). The students who completed their internship successfully and excelled can be considered as potential candidates for vacancies available at the company.
Number of interns by gender
We aim to maintain the balanced gender composition of the energy industry. Therefore, we implement a career guidance program for youth outreach. The objective of this program is to increase the motivation of girls to education and their further promotion in engineering occupations. The work on the program is carried out via a special digital platform where students are trained in four disciplines – STEM, Science, Technology, Engineering, and Mathematics.
11392
121
39
35
50
2017 2018 2019
Girls
Boys
Development of talent pool in the technical
unit
In 2019, we continued the implementation of “Your chance” training program for young employees under the age of 35 years. 13 participants developed managerial communication skills while working on the implementation of their qualification project. According to the results of the program that was completed in July by the critical design review, the best participants are included in the list of successors for key management positions in the technical unit in the long term (five or more years).
Promotion of innovations
We actively attract young employees to participate in scientific and technological development, inventive activities and implementation of innovative projects. In 2019 young specialists of the company participated in the International Youth Energy Forum, as well as in Skolkovo Summer Energy Camp. In the reporting year, two teams from our company took part in the League of Young Professional of the Case-In Engineering Championship within the scope of the youth day of the Russian Energy Week.
Increase of the level of engagement and
incentive
Our new tradition is to hold the Youth Day. In 2019, junior employees acted as experts and shared their knowledge with senior colleagues. They told and demonstrated how to use various applications about new technologies, travels, healthy nutrition, waste sorting, music, etc.
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Training and Development of our Employees
404-1 404-2
The development and training of personnel are aimed at improving the level of professional and business competencies and comprise an important part of People and Organization management.
The objective of personnel development is to create a qualified and creative pool for the development of new ideas necessary for the implementation of the company’s strategy focused on the introduction of innovations, application of digital technologies, prompt response to economic challenges, as well as the development of individual employees' potentials.
We consider the development of internal training to be a great achievement of the past year: training by company management efforts, training by internal trainers, training by mentors, training at the workplace, amounted to half of all training hours, namely 49%. Training and development programs cover the entire staff of the company, the average number of training hours per employee was 63.7 hours in 2019. (48.2 in the previous reporting period). The total number of hours amounted to 153,111.7.
One of the most important priorities in the training of employees for the coming period is training for digital knowledge and technologies. By 2022, 100% of employees will receive at least one type of training in this area (see "Sustainability Plan for 2020-2022"). Over the past 2 years, 55.3% of employees were trained on this topic at least once (this indicator was 28% in 2018).
Training disciplines (hours, %)
Knowledge Management, Preservation and Transfer of Experience
As before, the company pays great attention to the system of staff succession to preserve traditions, continuity of technologies, processes, corporate culture, retain the most talented and promising professionals. The system includes analysis of current staffing for key management positions, a compilation of individual short- and long-term plans for training and development. Simplifies management positions, the system provides the company with trained personnel and helps to simplify the on-boarding process of employees.
Digitalization training
Human rights training
Health & Safety training Technical training Language training
Other trainings
Environmental training
Training for anti-corruption practices
Skills training
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The company has a mentoring system applied to increase the expertise and competencies of employees. Mentoring is part of our corporate culture. Mentoring is focused on specialists and workers of power plants. Enel Russia implemented also E-Cross, the practice of cross-functional exchange. There are several formats for cross-functional immersion: short and general informational meetings, interactive masterclasses for the subject-related immersion in the activities of a particular function. Also, we deliver internal internships that allow studying the activity of related functions in real-time in practice.
Job Shadowing program became a new form of successor training in the reporting year: training through observation. Such a form of training implies that the successor becomes a “shadow” of their mentor (manager) and observes their work for one week while learning new working tools, participating in all working meetings. During training, the successor and their mentor exchange feedback on a regular basis. Thus, the employee gets the opportunity to expand his or her professional horizons and expertise. During 2019, 11 successors to key managerial positions (14%) participated in this program.
Open Feedback
404-3
Open Feedback is the key component in development of employees and the company. Providing structural feedback to others and helping employees to develop is a powerful tool for improvement of the efficiency of business processes that we try to take into account in every aspect of our business. Sharing feedback is possible at PJSC Enel Russia, both between the manager and employee, and between colleagues – regardless of hierarchy. The evaluation criteria are based on four Open Power values: innovations, responsibility, trust and proactivity (see details in the section “Mission and Values”). Developing or positive feedback can be given at any time for a specific situation, when a particular behavior is manifested, it is not pegged to a specific reporting period.
Feedback can be given on a special internal online resource or via phone application. In 2019 93%27of employees received feedback, as well as confirmed compliance with the corporate model of behavior (see details in the Annex, the section “Social Indicators”).
Social Policy
102-41
Description and Approach to Social Policy
Defining implementation of the principle of alignment of interests of employees and the employer as the strategic direction of social partnership development, the company leverages the opportunities of social partnership when making decisions on issues of regulation of social and labor relations. Primary trade union organizations of all five branches of the company are the members of the All-Russian Electric Trade Union (ARETU), a public organization uniting about 90% of the company's employees, are the company's partner. Collective agreements of power plants based on the long-term practice of effective social partnership have been recognized as the best among branch and regional trade unions for several years.
Social Partnership
The year 2019 was marked by collective bargaining to sign collective agreements of company power plants for a new term. As a result, a decision was made to extend the terms of existing collective agreements for 2020–2021 for gas generation power plants (KGRES, NGRES, SUGRES) and the headquarters and 2020 for Reftinskaya GRES.
The decision was reached as a result of the discussion of detailed analysis of the current system of remuneration and labor markets, comparison of the average salary at PJSC Enel Russia and other enterprises of the energy industry in the regions of presence.
27 The process does not involve employees on maternity leave, parental leave, employees on long-term sick leave, or employees who have worked for less than three months during the campaign period.
110
The collective agreements of PJSC Enel Russia are among the best in the industry and provide a high level of salary, as well as a comprehensive package of benefits, guarantees and compensations, as well as guarantee a further increase of salary. The collective agreements apply to the employees.
The number of employees covered by the collective agreement
Well-being of Our Employees
401-2 402-1 401-3
The company pays great attention to the well-being of its employees. We aim at helping our employees in maintaining work-life balance and reducing stress. We create a comfortable working environment, provide quality medical insurance, provide additional guarantees and benefits that ensure high social security of our employees, all these initiatives are aimed at improving the quality of life of employees.
Existing Mandatory and Voluntary Social Programs
The company has created favorable conditions for keeping and improving the health of employees, and the current insurance system is among the best in the industry.
The company’s insurance policy provides 100% coverage, which allows applying the same insurance conditions not only to employees in the company’s staff but also to employees provided under outstaffing contracts (outstaffers).
Since the level of safety and security of our employees is of particular importance to us, we have expanded the existing insurance system since June 2019 to include a cancer risk insurance program.
66%
34%
Центральный офис
23%
77%
Конаковская ГРЭС
100%
Невинномысская ГРЭС
17%
83%
Рефтинская ГРЭС
10%
90%
Среднеуральская ГРЭСReftinskaya GRES Sredneuralskaya GRES
Nevinnomysskaya GRES Konakovskaya GRES Headquarters
% of non-members of trade union
% of members of trade union
111
Employees insurance system
In the event of temporary disability of an employee related to illness, the company assumes the cost of additional financial support for the employee above the standards established by law to minimize employee’s possible losses related to a temporary suspension of work activities in this period.
All employees of our company have the right to parental leave in accordance with the laws of the Russian Federation. The company attaches great importance to family values and provides substantial financial support to employees whose child was born or adopted. We make additional payment above the statutory standards for maternity benefits. Also, we hold annually the family celebrations the employees' children are invited to.
The company has a program of non-state pension coverage for employees, aimed at developing corporate culture and motivating employees, retaining qualified specialists and attracting employees in scarce specialties. The right to receive a non-state corporate pension is received by those employees who, at the time of the onset of pension bases, have been working in the company for more than 10 years.
When establishing the variable working hours, the company’s employees are provided with additional paid leave under the Labor Code of the Russian Federation. The number of days of leave varies depending on the position but is not less than the statutory standard.
Promotion of Healthy Lifestyle
403-6
Within the scope of improvement of inclusion rate and corporate climate level at Enel Russia, we put the focus on the development of health and sports culture as well as the promotion of healthy lifestyles. That is also an
Life and health insurance policy
It allows an employee or a member of their family to receive insurance compensation upon occurrence of an insured event*
Voluntary medical insurance policy
It allows the employees to promptly receive qualified medical assistance in the most popular and sought-after medical institutions in the region where the employee lives. This policy covers: outpatient care, doctor home visit, planned and emergency hospitalization, dental care.
Vaccination Annual free field vaccination against FLU. Vaccination against tick-borne encephalitis to employees working in the regions that are endemic to tick-borne viral encephalitis, whose nature of work contains the risks of a tick bite.
Insurance policy for those traveling
abroad Provided for the entire insurance period. The employees can use it both on business trips and during personal trips.
Oncology risk insurance policy
Since 2019
The insurance program covers the treatment of all types of cancer using all available types of treatment in the best-specialized clinics in Russia (surgery, radiation therapy, chemo, immune, hormone therapy, including coverage of the cost of expensive medicines). This insurance program includes organization and cost of the flight to the place of treatment and accommodation of the sick employee and accompanying person.
System for insurance of
our employees
* The insured event is a primary diagnosing of critical illness in the employee (life-threatening illness), injury or disability as well as fatal accident due to industrial incident.
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integral part of the overall corporate culture of responsible companies that care for their employees including PJSC Enel Russia too. The programs are implemented in close cooperation with People and Organization, Health, Safety, Environment and Quality, and Sustainability teams.
Initiatives for promotions of healthy lifestyles
Every year the company holds a general corporate sports tournament that is very popular among employees. Thus, over 40 applications for participation in the tournament were submitted in 2019. The event was held in the form of a fitness festival: race with an obstacle course.
In the reporting year, we launched Enel Runs Round-the-World virtual team race about the countries of Enel Group’s presence. The teams of employees were registered in a special mobile application, where they recorded the distances covered. The progress is made up of all kilometers those team members covered. According to the recent reports, the team covered a distance equal to that from Moscow to Argentina, following through Europe, Canada, and North America.
Since autumn 2019, the employees have been participating in the Enel Group international cycling project “Enel Running and Cycling Challenge” (Enel Cycling and Running Competition). As in the Enel Runs Round-the-World project, employees tracked cycle rides and running distance in a mobile application: the longer the cycle ride or running distance, the smaller the environmental footprint of the contestant is.
In the reporting year, the number of employees regularly participating in marathon races and sports festivals increased significantly by 44% and 47%, respectively.
Engaging Local Communities
103-1 103-2 103-3
Management Approach
We rely on the local communities we work in and recognize responsibility for their well-being. We build long-term and comprehensive relationships with them, show our support and contribute to their social and economic development.
Constant dialogue, engaging small and medium-sized businesses, NGOs and other local organizations allows us to create projects that promote the social and economic development of the regions of our presence. We aim at initiating changes, looking for new opportunities in solving social and environmental problems, by combining efforts, developing new projects that contribute to the creation of shared value.
PJSC Enel Russia spreads among the local communities a commitment to well-being that is based on a healthy lifestyle, development and education, environmental education, the culture of energy-saving and rational consumption. Together with our partners from the public and non-profit sectors, we form the basis for an affordable, safe, environmentally friendly urban environment.
We set the following objectives in the field of the local communities’ development:
Informing about importance of healthy lifestyles Organization of sports events Assistance to participation in
external sports events
• Regular sports for employees
• Fitness сlub compensation
• Enel Runs Running Club • Annual corporate tournament
• Running and cycling marathons
• Sports and athletic contests of workers' associations
• Industry-based tournaments
• Regular information campaigns
• Thematic lectures on health and disease prevention
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The following documents regulate the company’s activities for the development and involvement of local communities:
• Operating instruction "On charitable assistance and implementation of social events";
• Operating instruction "Interaction with educational institutions";
• Procedure “Creating Shared Value (CSV) Process Definition and Management”.
Since 2019, the Strategy Committee has been operating at the Board of Directors that among other things contributes to formation of a strategic vision on ESG issues, including social aspects (engaging the local communities).
The Head of Sustainability is responsible for the implementation of the strategy, approval and control of the implementation of programs and initiatives, whose functions were fulfilled in the reporting year by the Deputy General Director – Head of People and Organization, Chairman of the Board of Directors of PJSC Enel Russia.
At the operational level, the Sustainability team is responsible for engaging the local communities, implementation and evaluation of programs and projects, with support of regional representatives for engaging with government authorities. The key performance indicators of the Sustainability team employees include the indicators related to the implementation and evaluation of social projects.
Created Shared Value
We integrated social and environmental factors into all business processes and apply the Creating Shared Value (CSV) model.
The CSV model underlays the company's sustainability practices. This is an important aspect of business that encourages applying innovative approaches and searching for opportunities for creating shared value for the company and its stakeholders. Thus, we can effectively combine increased competitiveness with improved quality of life of local communities. CSV helps us to integrate the needs of the local community and business objectives, to focus on solving primary problems of the local community for the benefit of all parties involved.
In 2017, the company localized procedure No. 211 “CSV Process Definition and Management", thereby formalizing the obligation to implement the CSV model at both the cultural and managerial levels. The model is applied across the entire value chain including business development, engineering and construction as well as operation and maintenance.
According to the local procedure “Creating Shared Value (CSV) Process Definition and Management”, the Sustainability team guarantees early involvement of the community through special involvement initiatives (complaints mechanisms, public hearings, formal consultations, negotiations).
Tasks in the development of local communities
Context analysis Identification of key factors relating to the social, economic and environmental aspects for the communities
Identification of stakeholders Mapping and weighting of the main stakeholders and recording their needs (see the section “Stakeholder Engagement")
Analysis of priorities and potential risks/ opportunities
Identification of priority issues for stakeholders and for the company. Identification of potential risks and opportunities.
Definition of the CSV plan Definition of an action plan for the creation of shared value (CSV) in line with the priority issues which emerged and the priority analyses
Transparent informing about
company activities and plans
Control of social projects'
implementation and evaluation of their
efficiency
Maintenance of on-going open dialogue
Continuous social and environmental impact assessment
Development of the projects aimed at creating shared value under UN
SDGs
114
Execution of the CSV plan Implementation of actions defined in the CSV plan. If necessary, with collaboration of strategic partners
Monitoring, evaluation and reporting Monitoring of the process, measuring of the impacts and reporting of the key indicators
Process of the CSV principle application
Circular Economy
We implement circular economy principles. They are aimed at closing the cycle of using resources by the introduction of measures that cover the entire life cycle of products and materials, from consumption to waste management and their reuse as secondary raw materials. The main challenge that the company plans to meet in the coming years is to reduce the consumption of disposable plastic for administrative and industrial needs (see the section “Resource Use”) through the implementation of the best practices and most importantly through the formation of responsible consumption culture among employees and contractors. Besides we plan to provide ways for reuse or disposal of materials already during their purchase.
In 2019, we continued the project on the transfer of used IT equipment and furniture to educational and social institutions. The key feature of this year is that we have expanded the participation of business functions in the search for alternative solutions for conventional disposal. Thus, in the reporting year, with the support of the Environmental Safety Group of Konakovskaya GRES, we studied the ways for reuse of decommissioned personal protection equipment (overalls and protective plastic helmets) and small wood waste.
Evaluation of the Company Impact on the Local Communities
102-29 203-2 413-1 413-2
The activity of Enel Russia as an employer, consumer of local products and services, as well as a taxpayer in the respective regions, supports local economic development. Enel Russia increases directly and indirectly the standard of living of the population while creating added value. The business principles of Enel Russia apply to all power plants throughout Russia. The company provides regular remuneration of labor for its employees and offers a compensation package, its level remains one of the most attractive in the industry and regions of presence. Enel Russia makes regular tax payments in full. The indirect impact of our business is a contribution
115
to the economic development of suppliers and contractors of the company (see details in the section “Sustainable Supply Chain”).
Our activities have an environmental impact in the regions of presence. We aim at minimizing the negative environmental impact as well as developing voluntary environmental initiatives of the company. The company conducts continuous monitoring and reduces the existing noise load by installing new noise-absorbing equipment at the power units. In 2019, the silencers were installed at Nevinnomysskaya GRES on the main safety valves on steam gas boilers No. 4,5 (ТГМ-96). No excess noise levels were recorded at the boundary of the sanitary protection zone of Nevinnomysskaya GRES. At the boundaries of the sanitary protection zone of Konakovskaya GRES and Sredneuralskaya GRES, no excesses were recorded either. In addition, we reduce emissions of pollutants and greenhouse gases into the atmosphere (see the section “Control of Air and Water Quality”). In 2019, we performed technical refurbishment of one power unit of Reftinskaya GRES by replacing the old electrostatic precipitators with more modern and efficient ones. This allowed reducing emissions of solid fuel ash in the reporting period in general for Reftinskaya GRES by 14%.
Enel Russia implemented programs for engaging the local communities in all territories of the company’s presence. We do not focus on individual projects but are committed to improving the well-being of the local communities where we operate. In 2019, 49 projects were implemented that covered almost 50 thousand beneficiaries within the scope of the program of “Social Support and Development of Local Communities”. However, we are not confined to this program and implement many other targeted projects and initiatives to engage the local communities including volunteer initiatives, in-kind giving of equipment and materials, and others. The types of social investments are shown on the chart as a percentage of the costs for all projects for engaging the local communities. Total amount of all the types of social investments is more than 55 RUB million.
Social investments*
*The data were analyzed using the London Benchmarking Group (LBG) methodology. The charitable purposes mean one-time support in response to the needs of stakeholders or response to external events. London Benchmarking Group (LBG) considers them to be traditional charity but we mean by this category the program “Social Support and Development of Local Communities” and other initiatives for engaging the local communities. See details on our approach in the section “Creating Shared Value”. By infrastructure social investments we mean long-term strategic participation and partnership for solving social challenges in the territory of presence. In future reporting periods, we aim at increasing the share of such projects. The social initiatives for brand promotion comprise social events related to strengthening of the company's reputation as a reliable community partner. By “Open Power” we mean dissemination of knowledge about electric power generation and energy efficiency (see details in the section “Mission and Values”).
Program of Social Support and Development of Local Communities
The program of “Social Support and Development of Local Communities” is the main tool for the social and economic development of the regions of the presence and involvement of the local communities.
116
The process of the program implementation
The program of “Social Support and Development of Local Communities” is formed concerning the needs and stakeholders’ priorities as well as the company's plans for the reporting period. The social investments are planned through dialogue and close cooperation with local administrations, which ensures a better understanding of the social and economic context of the regions and develops efficient and relevant joint projects, encouraging the development of the local communities and creating sustainable long-term shared value through a combination of efforts.
The main directions of projects
Operating Instruction “On Charity and Social Activities” determines the principles for the formation of the program and directions of assistance. Also, the content of the program is related to the UN Sustainable Development Goals. We prioritize and identify the relevant SDGs following the Sustainability Plan. Preference
Formation or update of the approach for the
reporting period
Collection and analysis of requests
Program formation
Approval of the program by the Board
of Directors
Implementation of programs
Collection of reporting documents and
preparation of reports
Performance evaluation
Health: Purchase of medical and sports equipment, refurbishment of sports infrastructure SDG 3
SDG 4 Education: Repair and purchase of equipment for educational institutions, scholarships to the best students and teachers
SDG 7 Energy efficiency: replacement of lighting equipment in social institutions to improve energy efficiency and compliance with international standards
SDG 8 Economic inclusion: promoting the inclusion of people with disabilities in the workplace
Development of cities and settlements: implementation of infrastructure projects in the territories of the company’s presence SDG 11
117
is given to integrated and long-term cooperation and projects with potential for the development of urban ecosystems.
The Energetik, corporate charity fund, that acts as a legal intermediary between the company and social partners is responsible for the direct implementation of the program.
The analysis of project performance comprises an important stage in the implementation of the program. To do this, we use a special IT platform, which is common to all Enel Group companies. We evaluate each completed project according to the following criteria:
Criteria for the evaluation of projects
For the selected projects, we use the procedure for evaluation of the economic efficiency of social investments developed by Enel Group. Based on the evaluation, we can analyze the projects from an economic perspective within the medium-term. We calculate the total created value for the company and local communities in monetary terms. Moreover, we consider several additional factors affecting the project performance: equipment life, depreciation, administrative expenses and alternative costs, inflation, etc. In the future, we intend to expand the use of this calculation.
The final stage of the program implementation is a documentary audit of our partners. We collect and analyze the reporting documents to ensure transparency, validity and reliability of the program results.
A regular evaluation of the program efficiency allows us to monitor its compliance with the company's strategy, measure its contribution to the social and economic development of the regions and, if necessary, adjust the approach promptly. The evaluation results are taken into account when planning the activities on social support and development of local communities for the next reporting period.
The full version of the program for 2019 https://www.enelrussia.ru/content/dam/enel-ru/documents/en/Community%20support%20program%202019.pdf
Selected Social Projects
102-12
Open Plant “So Different as We Are”
“Open Plant” is a project of Enel Group that has existed in Russia since 2008. Every summer Enel Russia power plants, Sredneuralskaya, Konakovskaya, Nevinnomysskaya and Reftinskaya GRES, are open for everyone for one day. The visitors of “Open Plant” can visit educational and entertainment events, tours about the power plant including production shops and a museum, get familiar with the history of the plant construction and learn how electric power and heat power appears. This year the topic of the event was diversity and inclusion. The motto “So Different as We Are” combines such important things as respect and love to ourselves
Project budget DeadlinesPotential and actual
benefits for the stakeholders
Potential and actual benefits for the
company
Involved stakeholders Contribution to SDGNumber of direct
beneficiariesExpected results
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and our family, our history and traditions as well as the whole multifaceted world. In 2019, the Open Plant event was visited by more than twelve thousand people.
“Energy Workers Help Children!”
Traditionally, on the occasion of the International Children's Day, celebrated on June 1, we hold a volunteer campaign to collect clothes and funds “Energy Workers Help Children!”. This year, Konakovskaya GRES was focused on both the general program for support and development of the territory and in this project on the villages and rural settlements of Konakovo district, therefore the power plant employees rendered support to a pre-primary training group of Pervogo Maya settlement. There is no separate kindergarten in this village, and children attend a specially formed group at the local school. The employees of Reftinskaya GRES helped again to our long-standing partner, the Integrated Social Service Centre of the Reftinsky urban district. The Centre provides a wide range of social services to the population including rehabilitation of disabled people, assistance to poor people, psychological and pedagogical counseling, and abode. The employees of Sredneuralskaya GRES decided to help the oncology department of the Children's Regional Clinical Hospital, the power plant volunteers have been visiting for a long time. Over 80 people participated in the campaign in total.
Charity Fair
On New Year’s Eve, we have been organizing a charity fair for five consecutive years in the Pavlovsky business center, where our headquarters is located. We invite our social partners from Konakovo, Moscow and Ekaterinburg to participate in the fair. In 2019, Novaya Korcheva Children's and Youth Centre, Konakovo District Branch of the All-Russian Society of Disabled People, Aistenok interregional non-governmental organization as well as Krug creative association that joined our initiative for the first time, participated in the fair. The goal of the event is to provide social partners with a platform to sell their products and receive additional income, and to provide the company employees, residents and guests of the business center with the opportunity to purchase unique products and New Year's gifts for themselves, their friends and relatives.
Contribution to the Development of the Regions of Presence
As a large employer, we have a direct impact on the economic and social development of the regions where we operate.
Regions of presence of company power plants
Regions of presence of wind generation facilities under construction
Tver Region
One of the largest thermal power plants in the Central part of Russia - Konakovskaya GRES - is located in the Tver Region, in Konakovo town, where about 38.5 thousand people live. There are 27 pre-primary, 31 general
Murmansk Region Kolsky District
40.5 ths pers
Kolskaya WPP
201 MW Under construction
Rostov Region
97.0 ths pers
Azovskaya WPP
90 MW Under construction
Stavropol Territory
75.5 ths pers
Rodnikovsky WPP
71 MW Under design
Tver Region Konakovo
38.5 ths pers
Konakovskaya GRES
2,520 MW 372 employees
Sverdlovsk Region Reftinsky settlement
15.8 ths pers.
Reftinskaya GRES
3.800 MW 983 employees
Sverdlovsk Region Sredneuralsk
23.6 ths per.
Sredneuralskaya GRES
1,578.5 MW 389 employees
Stavropol Territory
116.8 ths pers
Nevinnomysskaya GRES
1,530.2 MW 389 employees
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education and 7 institutions of additional education and 2 medical institutions in the territory of Konakovo town and Konakovo district.
Enel Russia has operated the power plant since 2007. During this time, establishment of strong partnerships was possible with the local administration, educational and healthcare institutions of the town. For example, the company has cooperated for more than 8 years with Konakovo Energy College (a branch of the Moscow Power Engineering Institute in the town of Konakovo).
We implemented 20 projects in total in 2019 in the Tver region. They were intended to improvement of the quality and efficiency of educational and medical services, promotion of healthy lifestyles and inclusion of people with disabilities in the economic activity. The projects covered more than 19 thousand direct beneficiaries.
Projects implemented in the Tver region
Selected project of the Tver region in 2019: Equipment of the playground in the school, Yuryevo-Devichye village
The company equipped a full-scale street sports facility with exercise equipment, volleyball court, and
acquired sports equipment for table tennis in the only school of Yuryevo-Devichye village.
Stavropol Territory
Nevinnomysskaya GRES, a federal power plant located in Nevinnomyssk, Stavropol Territory, North Caucasian Federal District, has been a power plant of Enel Russia for 13 years.
More than 116.8 thousand people live in Nevinnomyssk. The system of pre-primary, general and additional education of the town is represented by more than 50 educational institutions, including 32 pre-primary educational institutions, 18 general educational institutions, 7 additional education establishments. There are 11 medical institutions in the territory of the urban district of the town of Nevinnomyssk.
We completed 10 projects in various areas during the reporting period including participation in the reconstruction of sports facilities for children and mass sports and the purchase of medical equipment for healthcare institutions. About 1.7 thousand people became beneficiaries of the projects in the Stavropol Territory.
2 projects SDG 3 Health
SDG 4 Education 13 projects
SDG 7 Energy efficiency 2 projects
SDG 8 Economic inclusion 1 project
Development of cities and settlements
2 projects SDG 11
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Projects implemented on the Stavropol Territory
Selected project of the Stavropol Territory in 2019: 3D interactive simulator for Nevinnomyssk Energy College, Nevinnomyssk
We purchased a virtual interactive 3D simulator “Virtual 110kV substation model” for our long-standing
social partner to deliver visual, safe and effective skills training on 110kV open switchgear.
Sverdlovsk Region
There are two power plants in the Sverdlovsk region near Ekaterinburg: Sredneuralskaya GRES and Reftinskaya GRES (the property of Reftinskaya GRES was transferred to Kuzbassenergo OJSC in October 2019, see details in the section “Exit from Coal Generation”). The power plants generate more than half of the total electric power in the power system of the Sverdlovsk region. More than 38 thousand people live in the cities where our production facilities are located. The system of pre-primary, general and additional education of the town of Sredneuralsk, urban settlements of Reftinsky and Asbest (located in close vicinity of Reftinskaya GRES, where the power plant personnel live as well) comprises 56 pre-primary educational institutions, 28 general educational institutions and 11 additional education establishments. There are more than 5 medical institutions operating in the territory.
The company cooperates actively with the Government of the Sverdlovsk Region and administrations of urban districts. 12 projects were completed as part of the program for social support and development of local communities in the Sverdlovsk region. The projects covered more than 29 thousand people.
Projects implemented in the Sverdlovsk region
Selected projects in the Sverdlovsk Region in 2019:
Arrangement of the stadium of Municipal State-Owned Educational Institution General Secondary School No. 31, Sredneuralsk
Based on the school, we created a state-of-the-art sports facility with athletics tracks and exercise machines for the best sports results and development of mass amateur sports as well as to engage children in sports and active lifestyle.
Lighting of city skiing run, Reftinsky settlement
5 projects SDG 3 Health
SDG 4 Education 3 projects
Development of cities and settlements
2 projects SDG 11
3 projects SDG 3 Health
SDG 4 Education 4 projects
SDG 7 Energy efficiency 1 project
Development of cities and settlements
4 projects SDG 11
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We installed powerful lighting fixtures that allow achieving full illumination of the downslopes and ascents on the skiing run in the Reftinsky settlement for safer skiing for pupils of the Olimp Children's and Youth Sports School in the dark.
New Regions
The company strives for establishing strong and reliable partnerships with stakeholders in the Azov district (Rostov region) and the Kola district (Murmansk region). We assume effective cooperation with local authorities, local NGOs and social institutions of the regions where Enel Russia develops renewable energy projects.
In 2019, the program of “Social Support and Development of Local Communities” was authorized with the Heads of Kugey, Margaritovo and Aleksandrovo rural settlements of Azov district that to be implemented in 2020. In the next reporting period, we plan to arrange comfortable and green public spaces for the local community.
In 2019, the program of “Social support and development of local communities” was also developed for the Kola district of the Murmansk region. It will focus on the partnership for the benefits of education and enhancement of tourism appeal of the region. In 2019, we supported two city festivals: the Russian national festival of energy efficiency “Together Brighter” in Murmansk and Teriberka Fifth Arctic Festival (former name – “Teriberka. New Life”).
As of the end of the reporting period, we implemented a project for transfer computer equipment to the administration of Murmansk region (Tumanniy Settlement).
In 2019, as a result of the tender procedure, the company obtained the right to build Rodnikovsky WPP in Stavropol Territory. At the stage of business development, a fundamental social, environmental and economic context analysis was carried out for this territory and a preliminary CSV plan was defined. We look forward to expanding effective cooperation with social partners of Stavropol Territory, where the company implemented already many projects for support of the local community in Nevinnomyssk, the territory of Nevinnomysskaya GRES.
Human Rights
103-1 103-2 103-3
We recognize our responsibility for respecting human rights in all aspects of our work. One of the most important challenges for the company is to keep pace with a constantly changing world marked by profound social, economic, and cultural gaps and differences.
The Deputy General Director – Head of People and Organizational, Head of Internal Audit and Head of Sustainability is responsible for managing the human rights issues (see details in the section “Sustainability Management”).
The company’s corporate practices are based on recognized international standards in human rights, such as:
• The Universal Declaration of Human Rights and International Covenant on Civil and Political Rights;
• International Covenant on Economic, Social and Cultural Rights;
• main conventions of International Labor Organization (ILO) including conventions on the rights of indigenous and other tribal and semi-tribal populations in independent countries;
• Declaration on fundamental principles and rights at the work place;
• The United Nations Convention on the Rights of the Child,
• the European Convention on Human Rights.
Enel Russia takes into account the fundamental principles of international and European agreements in the field of human rights.
Enel Group implemented the Human Rights Policy to integrate the UN-proposed Guiding Principles on Business and Human Rights into the company procedures. Since Enel Russia shares the belief that respect for human rights is an integral part of the sustainable business, we have localized this policy. On September
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25, 2013, the fundamental document in human rights was approved by the Board of Directors of PJSC Enel Russia.
The policy sets out the basic principles of the company in the field of human rights and approaches to addressing this topic.
Human Rights Policy https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Human%20Rights%20Policy.pdf
Our human rights principles
412-2
We distributed information about the importance of respecting human rights, and we develop and promote a high level of legal culture and ethics among our employees. Human rights training is required for all new employees of the company. 482 employees (or 20% of the total headcount) were trained for the reporting period, which is 159.1 hours.
HR management and occupational health
We do not tolerate forced or involuntary labour
We strongly oppose the use of child labour
We shall respect cultural diversity and avoid discrimination in any form
We recognize the right of our employees to form and participate in organizations aimed at protecting and supporting their interests, and do not affect their decisions
We comply unconditionally with health and safety requirements
We provide fair and favorable working conditions
We take measures to protect physical and moral integrity of employees and guarantee them the right to the working conditions that protect the dignity of individual
Interaction with local community
We respect the rights of the local population, including indigenous and small peoples.
We do not tolerate corruption in any form
We respect the confidentiality and privacy rights of our stakeholders and adhere to the principles of proper use of information and data provided by them
We recognize the human right to education and promote development of educational institutions in the regions of our presence
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Number of training hours on human rights
Share of the employees in the total headcount trained on human rights
We expect all business partners to respect human rights and be open to cooperation and joint initiatives in this
area.
The company has several communication channels (including anonymous ones), through them any
stakeholder can apply with information about alleged human rights violations.
By email [email protected]
By mail Internal Audit Department Enel Russia, 7 Pavlovskaya Street, building 1, Moscow 115093, Russia
The Internal Audit Department is responsible for conducting a relevant investigation of the cases of human
rights violations while guaranteeing protection against any type of discrimination and confidentiality of the
applicant unless otherwise provided by law.
11,84%
15,53%
16,13%
61,48%
9,13%
37,9%
30,2%
10,5%
11,7%
28,24%
Konakovskaya GRES
Nevinnomysskaya GRES
Reftinskaya GRES
Sredneuralskaya GRES
Headquaters
2019 2018
11,84%
15,53%
16,13%
61,48%
9,13%
37,9%
30,2%
10,5%
11,7%
28,24%
Konakovskaya GRES
Nevinnomysskaya GRES
Reftinskaya GRES
Sredneuralskaya GRES
Headquaters
2019 2018
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Enel Group performs the regular assessment of adherence to human rights in the countries of presence
including Russia. The assessment allows for identifying potential risks in respecting the human rights. Based
on the assessment results, an action plan is developed for the mitigation of risks and improvement of
managerial approaches. The performance of the assessment is planned for the next reporting period. A
previous similar assessment was carried out in 2017.
Sustainable Supply Chain
102-9 102-10 103-1 103-2 103-3 308-1 308-2 The supply chain management system of Enel Russia aims to maintain a balance between the savings resulting from the tendering process and guaranteed reliable level of work quality of our selected suppliers.
Our goal is to create sustainable value through reliable supply chains. Improvement of the efficiency of work with suppliers through their involvement in the procurement process as the need arises, development of joint innovative solutions, effective cooperation, and long-term partnerships are our fundamental objectives.
We are focused on transparency of procurement activities, ensuring fair competition, fair partnership, compliance with relevant standards and requirements for health, safety, environment and quality by all parties. We arrange the work with potential contractors by the principles of trust, openness and involvement, and support communication channels that provide continuous two-way communication.
Management Approach
Structure of procurement process management
The Procurement Department seeks to maximize the creation of business value in various forms: quality, punctuality, safety, capacity, risk reduction. For that purpose, we expand constantly the professional competencies of procurement specialists and apply new process designs.
The following main internal documents regulate procurement activities:
• The Procurement policy with the roles, duties and methods for management of the procurement of materials, works and services defined in it. This policy is applied in order to ensure the transparency of procurement activities as well as to achieve economically justified procurement costs.
• The procedure “Vendor Rating” that defines the roles, responsibilities and criteria for Vendor Rating process in order to apply a uniform methodology within evaluation of the supplier’ activities when Enel Group takes the required recovery measures and encourages the improvement of suppliers;
• The procedure "Supplier Qualification” that defines the criteria and methods for qualifying selection of
suppliers;
• The procedure “Procurement and Management of Consulting Services” and procedure “Procurement
and management of consulting and professional services in relations with government agencies,
Head of Procurement
Procurement Department
Operational Support, Procurement of Supporting
and Service Functions
Development and Management of Suppliers
Procurement of Operation and Maintenance
Procurement of Engineering and Construction
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business development and mergers and acquisitions” that describe authorization process for
procurement of consulting and professional services;
• The procedure “Delegated Procurement” that defines the roles and responsibilities of all organization units of the company involved in the process of delegated procurement.
Key players in the supply chain are manufacturing contractors, distributors, suppliers, retailers. Delivery of metal products, piping details, fittings, heating surfaces is a priority to meet the production needs. These purchases account for about half of the budget. The share of Russian companies among our suppliers is 97%. Offices, production sites of our contractors are located not only in the regions of the presence of Enel Russia but also in other regions of the Russian Federation.
The process of goods, materials and services procurement
During the year, we meet with the company’s organizational units and analyze new emerging needs of internal customers, aggregate them, on its which we formulate and update the procurement plan, compile a list of priority and critical procurement for Thermal Generation (see details in the section “Management of Generation Equipment Fleet”). We pay special attention to procurement related to the involvement of the contractor’s personnel to carry out especially hazardous operations at our power plants, requiring more thorough verification and preparation of the contractor in terms of health and safety rules and compliance with all requirements and standards for safe work.
The reliability of our suppliers is an important component of the success and sustainability of the supply chain, therefore authorization of subcontractors is a mandatory procedure for us aimed at strengthening of the monitoring and control of the activities of our suppliers in order to improve the quality, safety and efficiency of contractual obligations and reduce the risks of improper performance of contracts.
We aim at the mitigation of potential risks in procurement activities and try to establish long-term reliable relations with our suppliers by the introduction of the vendor rating system within the scope of signed agreements.
The vendor rating system allows using a single methodology as well as provides the ability to obtain data on the vendor ratings over time, based on such sustainability criteria as safety, quality, timeliness, environmental and social responsibility (including respect for human rights) as well as innovation.
Based on the rating and performance of suppliers, we form a pool of reliable counterparties, which affects significantly the procurement process in terms of procurement timing as well as the quality of the performed services and works, with regard to the accumulated experience of interaction between our parties.
Support for Local Suppliers
204-1
We are aware of the economic impact that we have directly on the regions of the presence of power plants, by purchasing goods and services from local suppliers, thereby developing their business. We aim at supporting local manufacturers within the scope of our procurement activities. The number of local suppliers in the regions of the presence of the power plants was 115, which is 30.1% of the total number of suppliers at the power plants and 26.2% of the total number of company suppliers. The share of costs for local suppliers of the total scope of procurement of the company amounted to 24.8%.
Creation of a needs plan
Formation of the Procurement Plan
Determination of procurement strategy
and preparation of procurement
documentation
Search for contractors Technical and
commercial expertise
Analysis of the participants’ bids
Selection of the best contractor and
agreement signing
Management of agreement
implementation Evaluation
Amendments to the agreement
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The number of local suppliers in the regions of the presence* of the company’s power plants, 2019
*Tver Region – Konakovskaya GRES, Stavropol Territory – Nevinnomysskaya GRES, Sverdlovsk Region – Reftinskaya GRES,
Sredneuralskaya GRES
Share of costs on local suppliers by regions of the presence of power plants*
*The share of costs on local suppliers in the total procurement costs of the company
Selected Projects of 2019
Supplier's Day In 2019, 52 companies interested in cooperating in the field of conventional and renewable generation participated in the Supplier’s Day in the Murmansk region. One of the fundamental principles of creating sustainable supply chains is to involve as many local entrepreneurs as possible, especially representatives of small and medium businesses, in our projects to encourage economic growth and develop the regions of our presence. The event has also a Q&A session, where participants ask questions of their interest and share best practices in procurement.
90
15
10
230
73
79
Sverdlovsk region
Stavropol Territory
Tver region
Total number of suppliers Number of local suppliers
1,97% 1,28%
18,13%
4,67% 3,76%
26,27%
4,34%
1,49%
19,00%
Tver region Stavropol Territory Sverdlovsk region
2017 2018 2019
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Key issues discussed at the Supplier’s Day
Implementation of Track & Rate This is an innovative digital application for evaluation of supplier performance. It works on the devices of any type (smartphone, tablet, PC) and allows recording all events (both negative and positive) associated with supply of materials and (or) provision of services by contractors to evaluate the quality of work of suppliers. The information collected through application is used as input data for the Supplier Performance Management process. In 2019, the Procurement was also included in the vendor rating; earlier, only internal customers representing various business functions were involved in the vendor rating process.
Implementation of WeBuy Platform
At the end of 2019, transition started to a new platform for tendering, collecting reports, vendor rating and qualification. This system is being implemented in all countries of the Group and is aimed at simplifying, standardizing and unifying the procurement process, allowing tenders to be conducted structurally and efficiently, making the process more open and transparent.
Exit from coal generation
Exit from coal generation in the reporting period caused changes in the supply chain (see the section “Exit from Coal Generation”). Due to the sale of Reftinskaya GRES, the changes occurred in our portfolio of suppliers. As regards the suppliers of products and related installation supervision services, then after the sale of the power plant, the business will not have the need to supply the main equipment for dry ash and sludge removal system, main equipment of the fuel supply system, bag filters. The scope of supplies of the parts of boiler units, smoke exhausters, and other elements that are subject to more intensive wear due to burned fuel will be reduced significantly. As regards the contractors, most of them are local organizations. Cooperation of Enel Russia with them at Reftinskaya GRES will stop due to objective causes, but at the same time we remain open to work with such contractors at our other power plants.
Sustainability in Procurement
Enel Russia pays special attention to the issues of occupational health, safety, environment and quality, and requires the contractor and its subcontractors to ensure the highest HSEQ standards by incorporating relevant requirements into agreements with contractors. The key priorities of Enel Russia include health and safety of the power plant personnel and employees of our contractors. Enel Russia was certified for compliance with the international environmental safety standard ISO 14001: 2015 and the standard of occupational health and safety OHSAS 18001: 2007. We confirm this compliance during the supervisory and recertification audits on annual basis. Thus, we involve company employees and contractors in the process of creating a culture of safe behavior, while at the same time we aim at encouragement of our suppliers to undergo the certification process too.
Enel Russia makes efforts to minimize the negative environmental impact and takes constantly important steps in this area. Specifically, the company organizes the contractor’s personnel training in significant environmental aspects related to its activities, and communicates the company’s Integrated Policy on Quality, Health, Safety, Environment and Energy Efficiency that is publicly available to external stakeholders. This training is delivered not only for contractors whose activities can potentially have a negative environmental impact but also for contractors involved in works/services/supplies without having a negative environmental impact. Therefore, if the contractor’s activity is related to any kind of environmental impact, we evaluate it and take into account at
Processes of supplier qualification and vendor
rating
Health, Safety, Environment and Quality
Ensuring compliance with the Code of Ethics and
zero tolerance to corruption regulation
Maximum transparency during performance of
works by suppliers
Sustainability, including human rights
Growth goals within the perimeter of renewable
energy sources Certification
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the stage of technical specification authorization and include a list of our requirements in the subsequent agreement.
The recycling and disposal services may potentially have a negative environmental impact. Enel Russia cooperates with the companies that have specialized licenses in accordance with applicable laws of the Russian Federation for carrying out such activities.
The contractors shall inform Enel Russia about all environmental incidents, emergency situations, environmental near misses and violations of the rules related to their activity and take immediate measures for their elimination. This is an essential condition of the agreement. Based on the results of 2019, none of the above cases was identified.
RISK GOVERNANCE
Risk governance and internal control system
Risk governance and internal control are important components of corporate governance and are considered as one of the important elements of strategic and operational management.
The internal control and risk governance system is aimed at identifying, assessing, managing, monitoring and controlling the main corporate risks of the company. It comprises an integral part of overall organizational and corporate governance structure adopted by the company and is based on the best international practices including international standard ISO 31000 Risk Management – Guidelines and the principles of the Corporate Governance Code recommended by the Bank of Russia.
The risk governance processes are integrated into the company's key business processes. The risk governance and internal control system provides for control actions at each level of the operations and clearly defines duties and responsibilities. It avoids duplication of tasks and ensures coordination among the key persons of risk governance process. The system ensures necessary separation of operations and control to prevent or limit possible conflicts of interest as much as possible, also allows distinguishing and then tracking the tasks of identification, assessment, management and monitoring of risks. Such an approach allows determining the sources of information and ensures necessary communication required to complete the above tasks.
The risk governance and internal control system is divided into three protection levels:
• Protection level 1: Risk management process within a business unit that contains control procedures properly implement the business processes.
• Protection level 2: It is represented by the organization unit for control of risks, intended to management and monitoring of risks typical for the company.
• Protection level 3: Control of the structure and general functionality of the system including by monitoring of protection level 1 and 2.
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Risk governance and internal control system
In accordance with the Risk Governance and Internal Control Policy, responsibility for the processes of identification, assessment, management, monitoring and control is allocated as follows:
Allocation of responsibility in risk governance and internal control
Unit in charge Area of responsibility
Business units (risk owners) − Risk identification and assessment
− Identification, development and implementation of risk pooling strategies and risk reduction measures
Risk control unit − Monitoring and control of key risk indicators;
− Proposals for the measures to reduce their impact at business units and corporate executive bodies, monitoring their implementation;
− Organization of the Risk Committee whose activities are aimed at supporting and improving the risk governance and internal control system.
Internal Audit Unit − Providing a valid risk management concept;
− Implementing policies, activities and systems, including regular review of policies and other organizational documents defining the roles, responsibilities, parameters, assessment methods and processes within the system.
The company systematically builds an integrated model of risk governance to consolidate its functions activity as to key risk management and integrates the risk governance system into the corporate culture. The target model of the corporate risk governance represents a set of functional elements and organizational mechanisms of their interaction to develop, implement, monitor, analyze and continuously improve the risk governance practice at the company.
Internal Control System
Implementation use and maintenance of internal control system is an integral component of the company’s corporate governance. The internal control system of the company is focused on prevention of adverse consequences due to main risks of financial statements. As a result, it helps to company in achieving the goals defined by the Board of Directors. That relates to ensuring the company assets soundness, reliability of financial statements, compliance with internal regulations and procedures as well as laws of the Russian Federation.
Protection level 1 Protection level 2 Protection level 3 I
ndependent from BU and RO
Risk management (Business units/Risk owners) Risk Control
Risk Committee
Internal audit
- Board of Directors of PJSC Enel Russia - Audit and Corporate Governance Committee of PJSC Enel Russia
Identification, assessment and
management of risks
Implementation of measures for
mitigation of risks and their timely
update
Support to implementation of the
internal control and risk governance
system
Monitoring and control of risks,
maintenance of reporting,
control of the compliance with
limits, authorization in case of
excess
Proposals for mitigation of
risks and assistance in taking
measures for their
implementation
Ensuring risk management in
accordance with local
regulatory acts
Chairman of the committee:
General Director
Periodic meetings for
consideration and approval of
Key Risk Indicators (KRI)
Control of the company
exposure to risk
Identification of measures for
mitigation of risks and
monitoring of their
implementation
Control of the efficiency
and application of the risk
management system
Control of the efficiency of
application of policies and
procedures as well as risk
governance systems
130
The internal control system is built in accordance with the model “Internal Controls: Integrated Approach” (COSO, The Committee of Sponsoring Organizations of the Treadway Commission). To ensure adequate assessment, measurement and risk governance the internal control system is continuously improved and brought in compliance with changes and updated targets of the company.
The company uses the following main principles of internal control system:
The main principles of internal control system:
Organization Units and Corporate Bodies Related to Risk Governance System
102-29 102-30
In accordance with the Risk Governance and Internal Control Policy, the structure of risk governance and internal control system at the company includes involvement of the following bodies and organization units:
• Board of Directors;
• Audit and Corporate Governance Committee;
• Risk Committee;
• Managers of business units and organization units for risk management
• Risk Control.
The Board of Directors oversees the risk governance and internal control system including making decisions and providing recommendations after reviewing the list of relevant risks. The Board of Directors is responsible for approval of the risk appetite level that is determined jointly with the General Director, Chief Financial Officer with assistance of the risk control unit. The Board of Directors participates in consideration of the company’s map of key risks.
The duties of the Audit and Corporate Governance Committee includes expressing of its opinion on specific aspects regarding identification of the main risks, checking of the periodic reporting documentation on assessment of risk governance and internal control system. The Audit and Corporate Governance Committee
Transparent and timely informing
• The information portal with regulations, policies and procedures and instructions is clear and available to the employees
• The company employees are familiar with the Code of Ethics, Zero Tolerance to Corruption Plan Regulation
• The mechanisms of informing of possible violations and abuse and implementation of relevant measures on repeated violations elimination and prevention.
Regular external and internal assessment
• The processes and procedures recommended by COBIT standard are used. General information control is periodically audited
• The independent testing is performed based on the selected data. The results are communicated to the management, Internal Audit Department as well as upon request from the external auditor
• The internal controls are regularly subject to assessment by the operating personnel and management
Segregation of duties • A principle for segregation of duties is applied to mitigate the risk of errors or abuse of authorities • Operation and control functions are strictly divided to prevent or reduce probability of conflict of
interest’s risks
Strict schedule of processes
• The job duties are strictly regulated • The business processes and internal controls are documented; when business processes are
changed, the relevant changes are made to the documentation • The procedures and policies are updated periodically. All the employees are immediately
informed about the changes
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develops recommendations for risk governance and internal control system as well as evaluates its results. The Audit and Corporate Governance Committee reviews periodically the issue of the results of efficiency of risk governance and internal control system in terms of individual risks.
The Risk Committee is a collegial body established to coordinate activities at the operational level. It consists of top managers of the company, is appointed by the General Director and controls the company's exposure to risks, defines the measures to mitigate risk and monitors their implementation. The Risk Committee is also responsible for periodic approval of the limit of risks and their monitoring.
The managers of business units and organization units for risk management ensure compliance with the Risk Governance and Internal Control Policy by the employees of its organization units, timely development and implementation of risk governance measures, resource allocation, and if necessary, take prompt corrective measures.
The risk control unit is an independent organization unit for risk control directly subordinate to the Chief Financial Officer, who coordinates the work of organization units in identifying and assessing risks as well as developing measures for their management, ensures update of the Risk Governance and Internal Control Policy, develops and fosters risk culture. Moreover, the reporting and internal communication tools, educational events and change management measures are used.
Thus, in full compliance with regulatory requirements and best practices, the company considers three main pillars of the risk governance and internal control system:
• The effective Risk Governance and Internal Control Policy approved by the Board of Directors (Minutes No. 14/18 dated 21.12.2018) for identification, measurement, monitoring and control of risks that the company may be exposed to;
• A supplement to the Risk Governance and Internal Control Policy is a risk map, the so-called “Risk Universe”, indicating the potential risks that the company may be exposed to, taking mainly into account the frequency and severity of each risk event that affects the company's annual financial results. The risk universe was updated periodically based on interviews held with the managers of business units during 2019, in accordance with the principles set out in the Risk Governance and Internal Control Policy;
• Periodic reports of risk owners to the members of the Audit and Corporate Governance Committee on exchange, technical, industrial, environmental, social and managerial risks with the support of the risk control organization unit.
In December 2019, the Audit and Corporate Governance Committee proposed to the Board of Directors that to recognize the work of the risk governance and internal control system as effective for 2019. In the reporting period, the Board of Directors of the company recognized the work of the risk governance and internal control system as effective within the scope of the risk governance and internal control system review.
Description of Main Risk Factors Associated with the Company's Activity
102-11 102-15
Description of risk categories *
Risk factors Degree of impact
Implemented risk governance measures
1. Country and regional
• Changes of general economic and political situation in the country and its influence on the company.
Medium The risk can be poorly managed but is accounted during adoption of strategic decisions.
• Changes of the conditions of activity in a particular region. The first price zone is the target one for the company. (European part of Russia and Ural).
Medium
The majority of regional risks cannot be controlled by the company. The target regions of Russia for the company are more economically developed as compared to the regions from the Second price zone, non-price and isolated zones.
132
Description of risk categories *
Risk factors Degree of impact
Implemented risk governance measures
2. Industry
• Changes in economic state of the industry, possible fluctuations of prices for energy sources (gas, fuel oil) and their supply compared to planned values, lower selling prices for products and services
Medium
Signing long-term agreements with independent suppliers, improvement of operating efficiency, determination of best time for fuel purchase, diversification of supply sources, maintenance of the equipment fleet through timely and high-quality maintenance campaigns, technical refurbishment, minimization of unavailability fines
3. People management
• Retention of talented employees
• Personnel development program
• Recruiting
Low
Maintenance and development of the corporate culture, monitoring of the labor market, competitive salary, implementation of personnel development programs
4. Project/Investment
• Impact on the budget
• Duration/terms of investment project
• Quality of equipment and service
• Land tenure and land use
Medium Monitoring of actual costs and project schedule, hedging of currency component of costs
5. Financial
• Credit and counterparty
• Commodity
• Shortage of funds due to termination of external financing
• Exchange rate fluctuations
• Interest rate fluctuations
• Liquidity
Medium
Forecast and control of (including daily) liquidity, a significant amount of open credit facilities, currency risk hedging, sale of bad debt receivables
6. Technical, industrial and environmental
• Impact of blackouts on the company's core activities - electric power generation
• Non-compliance with environmental standards and accidental pollution
• Use of resources and waste management
Medium-High
Examination and audit of equipment, timely and high-quality maintenance campaigns. Establishment of constructive relationships with authorities to timely resolve the issues that may arise
7. Information security
• Impact of failures in the information system on the day-to-day activities of the company
• Loss of personal and confidential data
• Lack of access to the technical and banking system, as well as access to common data system
Low
Access limitation (administratively, and physically), regular inspections. Antivirus software, detailed investigation of unauthorized access attempts
8. Regulatory
• Changes in regulations and laws of the industry and related industries
• Changes in capacity payment
• Revocation of the license for operation
• Non-compliance with the equipment localization requirements
Medium
Interacts with government authorities (Ministry of Energy, Ministry of Economic Development, Federal Antimonopoly Service), membership in NP Market Council with presentation and protection of the company's position
9. Legal
• Legal proceedings including default on obligations by the suppliers
• Impact of sanctions on the company’s core activities
Medium Legal protection, trial monitoring
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Description of risk categories *
Risk factors Degree of impact
Implemented risk governance measures
10. Reputational
• Loss of good will and incurring losses as a result of unfavorable attitude to the company image through conventional mass media and social networks;
• Interacting with local communities, including formation of negative attitude towards the company due to insufficient information transparency, ignoring the influence of the company operating activities on the local context
Medium
Publication of articles reflecting the company activities media monitoring, on-going dialogue with representatives of local administrations and local communities, prompt response to incoming requests/complaints/suggestions
11. Social
• Human rights violations, rejection of company values
• Relations with stakeholders (with communities)
• Operating impact on the communities
Low
Holding regular social events aimed at supporting employees, active interaction with regional authorities. Risk analysis at the stage of selection of suppliers, tendering and signing of agreements. A cl. is introduced in the agreements with suppliers regarding compliance with human rights, environmental protection, health and safety.
12. Climatic
• The impact of extreme natural phenomena associated with climate change
• Over-riding of environmental compliance rules leading to outflow of investors
• Impact of non-compliance with climate change laws
Low
Monitoring and necessary preventive measures related to operation and maintenance of power plants. Development of climate strategy. Regular monitoring of conversions, modifications, and updates in the rules on climate change both internationally and locally. Participation in climate initiatives.
13. Health and Safety
• The impact of accidents on the sustainable development of the company
• The effect of coronavirus infection (COVID-19) on the sustainability of the company
Medium
Maintenance of weekly reports, issue of personal protection equipment, workplace assessment schedule, monitoring of accidents. Implemented risk management measures are as follows:
• crisis team set up; • a comprehensive behavior
guide for COVID-19 was developed and communicated to all employees of the company;
• personal protective equipment was purchased;
• increased the frequency of sanitization of common areas;
• additional measures have been taken to divide staff at the power plants;
• different entry/exit times and different meal times for the company's employees and contractors’ employees’;
• set a limit on the number of people in one room (including PP control rooms);
• daily monitoring of the temperature for all employees, including smart working personnel;
• self-isolation implemented upon returning from abroad;
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Description of risk categories *
Risk factors Degree of impact
Implemented risk governance measures
• international business trips are suspended until further notice, domestic business trips only in case of absolute necessity to ensure business continuity;
• participation in external events is suspended;
• smart work has organized for all employees of HQ and PP, including operational and maintenance personnel, in the absence of a need to be presented at the workplace according to the profile of the position or business needs;
• rules for access of suppliers and external visitors to the territory of the company were developed and implemented.
* The key risk indicators are identified for each of the categories described. Control of these indicators allows timely identification of negative
trends and taking actions to optimize the risk level of the company.
In 2019, some of the risks represented in the table were realized but did not have significant impact on the
financial indicators of the company.
Medium
Medium-High
High
Low
Medium
Medium-High
Low
Low
Medium
Risk damage
Probability 9 13 6
11 1 2 8
3 7 12 4 5 10
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CORPORATE GOVERNANCE
Corporate Governance System
103-1 103-2 103-3 102-18
PJSC Enel Russia strives to comply with the best national practices in corporate governance. Our objective is to create the most transparent and efficient corporate governance system to increase investment attractiveness of the company.
Corporate governance in PJSC Enel Russia is built in accordance with the requirements of the laws of the Russian Federation, the Listing Rules of the PJSC Moscow Exchange, and also taking into account the recommendations of the Corporate Governance Code approved by the Bank of Russia.
The main internal documents regulating corporate governance are:
The PJSC Enel Russia’s Charter https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Charter.pdf
Regulation on Preparation and Holding of General Shareholders’ Meeting https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Regulations%20of%20GSM.pdf
Rules of Procedure for Convention and Holding of Meetings of PJSC Enel Russia Board of Directors https://www.enelrussia.ru/content/dam/enel-ru/documents/en/annual/BoD%20Regulation.pdf
Organizational Regulation on Committees of The Board of Directors https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Committes%27%20regulation.pdf
Regulation on Executive Board of Open Joint-Stock Company https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/e109.PDF
Regulation on Corporate Secretary https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Regulation%20for%20Corporate%20Secretary%20of%20PJSC%20Enel%20Russia.pdf
Regulation of Internal Audit Department https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Regulation%20on%20Internal%20Audit%20Commission%20of%20PJSC%20Enel%20Russia.pdf
Internal Control and Risk Management Policy
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Corporate governance system*
*The risk management and internal control system is not included into the scheme and is described in the chapter “Risk management”. PJSC Enel Russia is a company whose shares are admitted to organized trading in the quotation list of the first (highest) level, which means compliance with strict requirements for the quality of corporate governance of the company. To comply with the requirements for corporate governance set out in the Listing Rules of PJSC Moscow Exchange, the company took the following actions:
• the Board of Directors had been formed with four independent directors;
• The Audit and Corporate Governance Committee as well as HR and Remuneration Committee were headed by independent directors;
• the company had a Corporate Secretary accountable to the Board of Directors;
• the previously approved dividend policy was in effect;
• the head of the internal audit unit was functionally accountable to the company’s Board of Directors, and administratively to General Director.
Improvement of Corporate Governance
For the last years the company achieved significant results for implementation of advanced standards of corporate governance contained in the Corporate Governance Code: by the end of 2019, 77* of 79 possible recommendations were complied with in full (), 2 more recommendations were complied with in part. * the recommendation on stock option plan in favor of the members of the Board of Directors (p. 4.2.2 of the Corporate Governance Code) are not applicable to PJSC Enel Russia but was included in 77 recommendations implemended by PJSC Enel Russia. Without this 1 recommendation PJSC Enel Russia is in compliance with 76 recommendations of the
Corporate Governance Code.
137
Dynamics of the implementation of recommendations for the Corporate Governance Code in 2017-2019
During the year 2019, the company improved its corporate governance by the following three evaluation criteria:
1. The Audit and Corporate Governance Committee consisted solely of independent directors. 2. The HR and Remuneration Committee consisted solely of independent directors. 3. A memorandum of the controlling entity was published on the company's website regarding such
entity’s plans for corporate governance at the company – Enel Group Corporate Governance Guidelines.
Enel Group Corporate Governance Guidelines
https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Corporate%20Governance%20Guidelines%20ENG.pdf
A detailed report on compliance with the principles and recommendations of the Corporate Governance Code is given in the section “Information about observance of the Corporate Governance Code recommendations by the company”. The company plans to continue maintaining the achieved level of compliance with the recommendations of the Corporate Governance Code. In 2019, the company also held other corporate governance related events. The General Shareholders’ Meeting approved a version of the Charter, according to which:
• the shareholders can participate in the General Meeting by electronic voting;
• the competence of the Board of Directors regarding approval of a number of regular transactions was adjusted. That will reduce the workload on the Board of Directors without losing control over the most significant transactions for the company;
• with regard to judicial practice in the Russian Federation, a list of grounds for recognizing members of the Board of Directors as retired was adjusted;
• establishment of the Audit Commission is not provided for.
60
74 77
15
5 2
2017 2018 2019
complied complied in part non complied
138
The PJSC Enel Russia’s Charter https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Charter.pdf
In order to assist the Board of Directors in considering issues of strategy definition, participation in investment projects and sustainable development, a Strategy Committee was established. Instead of three separate regulations on the Committees of the Board of Directors, a single Organizational procedure of interaction with suppliers and contractors was issued. It provides for a uniform approach to organization of work of the Committees.
Organizational procedure of interaction with suppliers and contractors https://www.enelrussia.ru/content/dam/enel-ru/documents/en/Org%20Procedure%20522%20dd%2019%20of%20April.pdf
The new version of the Regulation on Payment of Remuneration and Compensations to Members of Board of Directors and Committees of the Board of Directors changed the amount of remuneration to members of the Board of Directors, the Chairman and Senior Independent Director as well as set the amount of remuneration to members and Chairmen of Committees of the Board of Directors.
Regulation on Payment of Remuneration and Compensations to Members of Board of Directors and Board of Directors’ Committees https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Regulation%20on%20BoD%20and%20Committee%20remuneration.pdf
The Board of Directors approved the The Long Term Incentive Plan at PJSC Enel Russia for 2018-2020 and for 2019-2021.
Management Bodies of the Company
General shareholders’ meeting
102-18 The supreme Management Body of PJSC Enel Russia - General shareholders’ meeting. The procedure for preparation and holding the General Shareholders’ Meeting, its competence is defined by the Federal Law On Joint Stock Companies, by-laws of the Bank of Russia, by the Charter as well as by the Regulation on Preparation and Holding of General Shareholders’ Meeting.
The PJSC Enel Russia’s Charter
139
https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Charter.pdf
Regulation on Preparation and Holding of General Shareholders’ Meeting https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Regulations%20of%20GSM.pdf
The amendments made to the Charter of the company in 2019 allow the shareholders to participate in the General Shareholders' Meeting not only in person or by sending filled out bulletins, but also by electronic voting if the Board of Directors makes a relevant decision when convening the General Shareholders' Meeting. In 2019, the General Shareholders' Meeting was convened two times28.
The annual General Shareholders' Meeting dated June 18, 2019:
• approved the following documents: annual report of the company for 2018; annual accounting (financial) statements for 2018; New version of the Charter of PJSC Enel Russia; New version of the Regulation on payment of remunerations and compensations to members of the Board of Directors and Committees of the Board of Directors of PJSC Enel Russia;
• adopted a decision on distribution of profit (including on payment (announcement) of dividends) of PJSC Enel Russia by the results of financial year 2018;
• gave consent for signing of agreements, insurance of liability of directors and officers comprising related part transactions;
• elected the members of the Board of Directors of PJSC Enel Russia and approved the auditor;
• elected the members of the Internal Audit Commission;
• adopted a decision to terminate the authorities of the members of the Internal Audit Commission, to terminate the internal documents governing the activities of the Internal Audit Commission, from the date of state registration of new version of the Charter. The specified decisions are related to the fact that the new version of the Charter does not provide for establishment of the Internal Audit Commission.
• approved participation of PJSC Enel Russia in the Renewable Energy Development Association.
Extraordinary General Shareholders' Meeting that were held on July 22, 2019, approved a major transaction. Board of Directors of the Company
102-20 102-24 102-26 102-31 The Board of Directors of PJSC Enel Russia carries out general management of the company. The competence of the Board of Directors, the procedure for its activities, the rights and obligations of its members are defined by the Federal Law on Joint Stock Companies, the Charter, Rules of Procedure for Convention and Holding of Meetings of PJSC Enel Russia Board of Directors.
The PJSC Enel Russia’s Charter https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Charter.pdf
Rules of Procedure for Convention and Holding of Meetings of PJSC Enel Russia Board of Directors https://www.enelrussia.ru/content/dam/enel-ru/documents/en/annual/BoD%20Regulation.pdf
The Board of Directors of the company consists of 11 members and is elected for the period until the next Annual General Shareholders’ Meeting.
28 Decisions adopted by the General Shareholders’ Meeting, materials for the General Shareholders’ Meetings and the minutes of the General Shareholders’ Meetings are posted at the company’s website https://www.enelrussia.ru/.
140
Meetings of the Board of Directors are held in accordance with the approved Plan of Work of the Board of Directors, and also as the need arises, but at least once a quarter. The work plan of the Board of Directors is formed on the basis of proposals from the Chairman and members of the Board of Directors, the Internal Audit Commission, the General Director of the company, a member of the Management Board and the Auditor of the company. The General Director reports regularly to the Board of Directors on the company activities. The Board of Directors, when overseeing the management of the company and its activities, may instruct the management of the company on certain issues. Authorized managers of the company are vested with the rights and obligations for solving economic, environmental and social problems with the right to delegate authority to other employees in accordance with their competence and function. In 2019, a Strategy Committee was formed under the Board of Directors, its competence also includes a preliminary consideration of sustainable development issues and ESG strategy. One of the members of the company's Board of Directors was the Deputy General Director – Head of People and Organization of PJSC Enel Russia, Нead of Sustainability of PJSC Enel Russia.
Independent Members of the Board of Directors The Board of Directors elected in 2019 included 4 independent directors: Andrea Guaccero, Vitaly Yurievich Zarkhin Giorgio Callegari, Andrea Palazzolo. Giorgio Callegari was elected to the Senior Independent Director who coordinates interaction between independent directors including convening of meetings of independent directors as may be necessary and chairs such meetings. Independence of the members of the Board of Directors is defined in accordance with the independence criteria of Moscow Exchange (posted at the website https://www.moex.com). During the General Shareholders' Meeting in 2019, where the Board of Directors was elected, the shareholders were provided with evaluation of candidates as well as the opinion of the Board of Directors on the status of independence of candidates in accordance with the independence criteria. Initiation After election of new members of the Board of Directors, the Corporate Secretary sends information to the first elected members of the Board of Directors regarding the company's strategy, corporate governance system, risk management and internal control system, distribution of responsibilities between the executive bodies of the company and other relevant information about its activities. In 2019, the induction program was implemented for the newly elected members of the Board of Directors: Vitaly Zarkhin, Simone Mori, Giancarlo Pescini, Laurent Souviron.
Composition of the Board of Directors
102-22
In 2019, there were two Boards of Directors – the Board elected on 04.06.2018, and the Board elected on 18.06.2019.
Composition of the Board of Directors
The Board of Directors of PJSC Enel Russia elected on 04.06.2018
The Board of Directors of PJSC Enel Russia elected on 18.06.2019
1.Stephane Maurice Zweguintzow 2. Andrea Guaccero, independent director 3. Roberto Antonio Enzo Deambrogio 4. Rodolfo Avogadro Di Vigliano 5. Maria Antonietta Giannelli 6. Giorgio Callegari, independent director 7. Denis Mosolov 8. Andrea Palazzolo, independent director 9. Tagir Alievich Sitdekov
1. Stephane Maurice Zweguintzow 2. Andrea Guaccero, independent director 3. Vitaly Yurievich Zarkhin independent director 4. Maria Antonietta Giannelli 5. Giorgio Callegari, independent director 6. Simone Mori 7. Denis Mosolov 8. Andrea Palazzolo, independent director 9. Giancarlo Pescini 10. Tagir Alievich Sitdekov
141
10. Alexander Arthur John Williams, independent director 11. Marco Fragale
11. Laurent Nicolas Souviron.
Composition of the Board of Directors
Curriculum vitae of the members of the Board of Directors of the company29
102-22 102-23 102-25
29 Information as of March 2020. More details on the members of the Board of Directors are available in the quarterly issuer’s reports in Russian posted at the company’s website https://www.enelrussia.ru/. Curriculum vitae of the members of the Board of Directors elected in 2018 and valid until election of the Board of Directors in 2019 are available in the Annual Report for 2018.
Status of directors elected in 2019
Independent Non-executive Executive
Duration of work at the Board of Directors
Less than 1 years From 1 to 3 years
From 3 to 7 years More than 7 years
Stephane Maurice Zweguintzow Chairman of the Board of Directors
Corporative status Executive director
Membership in the Board of Directors
He was first elected in 2007. He was a member of the company’s Board of Directors in 2007–2008, and from 2013 to the present
Born 1968
Citizenship France
Education Institut d’Etudes Politiques de Paris, Master’s Degree in International Business
Work experience over the last 5 years
2018 – present – Deputy General Director - Нead of People and Organization, Нead of Sustainability in PJSC Enel Russia 2014-2018 – Head of External Relations, Нead of Sustainability of PJSC Enel Russia 2010-2014 – Business Development Director in Enel France SAS
Ownership on shares He has no shares in the charter capital/ ordinary shares of Company. He has made no transactions with ordinary shares of Company in 2019
Andrea Guaccero Chairman of HR and Remuneration Committee Member of the Audit and Corporate Governance Committee
Gender composition
women men
142
Member of Related Party Transaction Committee
Corporative Status Independent Director
Membership of the Board of Directors
He was first elected to the Board of Directors of PJSC Enel Russia in 2018, he is a member of the company’s Board of Directorscurrently
Born 1970
Citizenship Italy
Education He graduated with honors from the Law School of the University La Sapienza in Rome and holds a Ph.D. in Public Law of Economy from the University La Sapienza in Rome
Work experience over the last 5 years
2019– January 2020 – member of the Surveillance Committee in Banca Carige S.p.A. in extraordinary administration (appointment by the European Central Bank) 2017-present – member of the Board of Directors of Marzotto s.p.a. 2007- present – full Professor of Law in University Roma Tre, in Rome Lawyer
Ownership on shares He has no shares in the charter capital/ ordinary shares of Company. He has made no transactions with ordinary shares of Company in 2019.
Zarhin Vitaliy Yurievich Chairman of Audit and Corporate Governance Committee Member of Related Party Transaction Committee Member of Strategy Committee
Corporative status Independent Director
Membership in the Board of Directors
He was first elected to the Board of Directors of PJSC Enel Russia in 2019, he is a member of the company’s Board of Directors currently
Born 1976
Citizenship Russian Federation
Education High School of Economy, Bachelor’s Degree in Economy, Master’s Degree in Management
Work experience over the last 5 years
2019-p.t. – member of the Board of Directors of PJSC “IDGC of Centre”, of PJSC “IDGC of Centre and Volga region”, of “IDGC of South” PJSC (previous name is PJSC “IDGC of South”) 2018-2019 – member of the Board of Directors of PJSC “KTC” 2011-2018 – managing Director, Gazprombank (PJSC)
Ownership on shares He has no shares in the charter capital/ ordinary shares of Company. He has made no transactions with ordinary shares of Company in 2019
Giannelli Maria Antonietta Member of the Strategic Committee
Corporative Status Non-executive director
Membership of the Board of Directors
She was first elected to the Board of Directors of PJSC Enel Russia in 2018, she is a member of the company’s Board of Directors currently
Born 1973
Citizenship Italy
Education University of Lecce, graduation in Economics and Finance LUISS Guido Carli, MBA.
Work experience over
the last 5 years
2019-present – member of Supervisory Board of Slovenske Elektrarne AS 2013-present – Mergers & Acquisitions Senior Project Manager in Administration, Finance and Control Department of Enel S.p.A.
Ownership on shares She has no shares in the charter capital/ ordinary shares of Company. She has made no transactions with ordinary shares of Company in 2019.
Giorgio Callegari
143
Senior independent director Chairman of the Related Party Transaction Committee Chairman of Strategy Committee Member of the HR and Remuneration Committee
Corporative status Independent director
Membership of the Board of Directors
He was first elected to the Board of Directors of PJSC Enel Russia in 2018, he is a member of the company’s Board of Directors currently
Born 1959
Citizenship Italy
Education Polytechnical Institute in Torino, Degree in Mining Engineering
Work experience over
the last 5 years
2018-present – CEO and Chairman of LLC Generali Russia and CIS 2013-present –member of the Board of Directors of Ingosstrakh 2018-2019 – CEO in LLC Insurance Brokers Generali Russia and CIS 2017–2018 – member of the Board of Directors of JSC "Aeromar” 2016–2018 – Council of Sita 2014-2018 – member of the Board of Directors of Pobeda Airlines LLC 2011–2018 – deputy CEO Strategy and Alliances of PJSC Aeroflot
Ownership on shares He has no shares in the charter capital/ ordinary shares of Company. He has made no transactions with ordinary shares of Company in 2019
Simone Mori Deputy Chairman of the Board of Directors Member of the Strategy Committee
Corporative status Non-executive Director
Membership of the Board of Directors
He was first elected to the Board of Directors of PJSC Enel Russia in 2019, he is a member of the company’s Board of Directors currently
Born 1964
Citizenship Italy
Education Parma University, degree in physics LUISS Guido Carli, MBA degree
Work experience over the last 5 years
2018-present – Head of Europe and Euro-Mediterranean Affairs in Enel S.p.A. 2017 – present – member of the Board of Directors in Bruegel 2017- present – member of the Board of Directors in CERRE 2017- present – member of General Board in Confindustria Energia 2016 – present – president in Elettricita Futura 2016 – present – member of the Energy Technical Committee, since 2017 - member of Europe Technical Committee in Confindustria 2012- 2020 – non- resident fellow of German Marshall Fund of US 2009-2014 – Head of Regulatory Affairs, Environment and Innovation, Head of European Affairs in Enel S.p.A
Ownership on shares He has no shares in the charter capital/ ordinary shares of Company. He has made no transactions with ordinary shares of Company in 2019.
Mosolov Denis Member of Strategy Committee
Corporative status Non-executive director
Membership of the Board of Directors
He was first elected to the Board of Directors of PJSC Enel Russia in 2016, he is a member of the company’s Board of Directors currently
Born 1981
Citizenship Australia
Education Macquarie University, Bachelor of Commerce, specializing in Actuarial Studies.
144
Work experience over the last 5 years
He has been with Macquarie Group since 2008, specializing in funds management of infrastructure assets in Australia, Europe and Russia
Ownership on shares He has no shares in the charter capital/ ordinary shares of Company. He has made no transactions with ordinary shares of Company in 2019.
Andrea Palazzolo Member of Audit and Corporate Governance Committee Member of HR and Remuneration Committee
Corporative status Independent director
Membership of the Board of Directors
He was first elected to the Board of Directors of PJSC Enel Russia in 2018, he is a member of the company’s Board of Directors currently
Born 1974
Citizenship Italy
Education He graduated with honors from Business Law School of the LUISS Guido Carli.
Work experience over the last 5 years
2019-present – member of the Board of Directors Sea Beach Immobiliare 2008-present – lawyer of Studio Legale Palazzolo 2018-present – independent consultant, member of Legality, Trasparence and Adminstrative Efficiency Committee in Sicily Region and Chairman Of Supervisory Body of Law 231/2001 of Happy Games 2009-present –professor, Scientific Coordinator in the LUISS University, Rome. 2013–2014 –independent Consultant of Sicily Region 2013-2015 – member of the Board of Directors of Fintyre S.p.A. 2004–2016 –Trustee with power of attorney, Compliance Officer in Gruppo Maggiore
Ownership on shares He has no shares in the charter capital/ ordinary shares of Company. He has made no transactions with ordinary shares of Company in 2019.
Giancarlo Pescini
Corporative status Non-executive director
Membership in the Board of Directors
He was first elected to the Board of Directors of PJSC Enel Russia in 2019, he is a member of the company’s Board of Directors currently
Born 1962
Citizenship Italy
Education University La Sapienza in Rome, Economy and Business Management
Work experience over the last 5 years
2015-2019 – member of Internal Audit Commission of PJSC Enel Russia 2014-2019 – Head of Unit “Group’s Participation” in Enel S.p.A. 2014-2019 – member of the Board of Directors of Enel Investment Holding B.V. 2013-2014 – Head of Unit “Participated Companies, Branches and Powers Systems” in Enel S.p.A.
Ownership on shares He has no shares in the charter capital/ ordinary shares of Company. He has made no transactions with ordinary shares of Company in 2019.
Tagir Alievich Sitdekov
Corporative status Non-executive director
Membership of the Board of Directors
He was first elected to the Board of Directors of PJSC Enel Russia in 2012. He was a member of the Board of Directors in 2012-2014, and from 2015 to present time
Born 1976
Citizenship Russian Federation
Education Plekhanov Russian Academy of Economics, economist University of Chicago Booth School of Business, MBA
Work experience over the last 5 years
2012-present – First Deputy General Director, since 2012 hi is member of the Executive Board of JSC Management Company RDIF
145
Report on the Work of the Board of Directors
102-22 In 2019, 16 meetings of the Board of Directors of PJSC Enel Russia were held (10 meetings in absentia-praesentia and 6 meetings in absentia).
2012-present – director of Causie Investments Limited 2012-present – director of PFR Partners Management Limited 2012-present – director of RDIF Asset Management Limited 2014 – present – non-executive Director and member of Audit, Risks and Internal Control Committee of Tigers Realm Coal Limited 2015-present – member of the Board of Directors in LLC Severo-vostochnaya magistral, LLC Yugo-vostochnaya magistral 2016 – present – member of the Board of Directors LLC Professional logistics technologies 2016-present – member of the Board of Directors of LLC Road-investment company 2017-present – member of the Board of Directors in JSC Terminal Vladivostok 2017- present – chairman of the Board of Directors of LLC Natsionalnaya sim-karta 2018 – present – member of the Board of Directors in PJSC GTM 2018-present – member of the Board of Directors of Desiberg Holdngs Limited 2019-present – member of the Board of Directors in JSC “KRSK” 2019-present – member of the Board of Directors of Ristango Holding Limited
2019- present – chairman of the Board of Directors Thalita Trading Limited 2020- present – member of the Board of Directors SESH holding 2014-2015 – Member of the Board of Directors in JSC “Stolichny Trakt” 2014-2017 – director in Kristian Holdings Limited 2016-2016 – director in RP Asset Management 2016-2016 – director of RS Investment Advisor 2016-2016 – CEO in LLC «Professional logistic technologies» 2015-2016 – CEO in LLC «Infrastructure investments-2» 2016-2017 – CEO in LLC «RDIF – Investment management -16» 2016-2016 – CEO of LLC of LLC «RS Investment management»
Ownership on actions He has no shares in the charter capital/ ordinary shares of Company. He has made no transactions with ordinary shares of Company in 2019.
Laurent Nicolas Souviron
Corporative Status Non-executive director
Membership of the Board of Directors
He was first elected to the Board of Directors of PJSC Enel Russia in 2015. He was a member of the Board of Directors in 2015-2018, and until now from 2019
Born 1966
Citizenship France
Education Columbia University, bachelor's degree in operations research Columbia University, MBA
Work experience over the last 5 years
2016 – present – member of the Board of Directors in ASTIR 2009 – present – Partner at AGC Equity Partners Ltd 2012-2016 – member of the Board of Directors in Conformis
Ownership on shares He has no shares in the charter capital/ ordinary shares of Company. He has made no transactions with ordinary shares of Company in 2019.
Participation of the members of the Board of Directors in the meetings
In the period of the meeting the person was not a member of the Board of Directors
Date and form of meeting/Full name of Board of Directors’ members
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Roberto Antonio Enzo Deambrogio
Rodolfo Avogadro Di Vigliano
Alexander Arthur John Williams
Marco Fragale
Stephane Maurice Zweguintzow
Andrea Guaccero
Maria Antonietta Giannelli
Giorgio Callegari
Denis Mosolov
Andrea Palazzolo
Tagir Alievich Sitdekov
Laurent Nicolas Souviron
Vitaly Yurievich Zarkhin
Simone Mori
Giancarlo Pescini
Number of meetings of the Board of Directors in 2017-2019
Structure of items considered by the Board of Directors in 2019.
The most important issues considered by the Board of Directors of PJSC Enel Russia in 2019:
• on the company's business plan for 2019-2021;
• on approval of investment projects;
• on approval of consolidated financial statements of PJSC Enel Russia as per IFRS;
• on approval of charity program for 2019;
• on consideration of various related party transactions;
• on preparation and holding of the General Shareholders' Meetings as well as on evaluation of independence of candidates to the Board of Directors;
• on performance of self-assessment of the Board of Directors for 2018;
• on corporate governance practices;
11 1210
62 6
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2
4
6
8
10
12
14
16
18
2017 2018 2019
In praesentia/absentia In absentia
Corporate governance Business planning and investments
Financial statements Remuneration
Management of controlled entities Transactions and agreements
Reports Other
148
• on The Long Term Incentive Plan at PJSC Enel Russia.
The Board of Directors regularly reviewed the reports of the General Director on company activities as well as on investment projects in wind energy, reports of the chairmen of the Committees of the Board of Directors. During 2019, the Board of Directors approved a number of internal documents, namely a new version of the Policy on remuneration and reimbursement of expenses (compensations) of the members of the executive bodies and other key managers of Public Joint Stock Company Enel Russia of. Committees of the Company’s Board of Directors
The committees of the company’s Board of Directors are advisory bodies formed on the basis of the Board of Directors decisions that are not authorized to act on behalf of the company or the Board of Directors. The committees act in accordance with the Charter of the company as well as the Organizational Regulation on Committees of The Board of Directors defining the objectives, functions and procedure for holding meetings of the Committees30. The quantitative composition of the Committees is defined by the Board of Directors.
The PJSC Enel Russia’s Charter https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Charter.pdf
Organizational Regulation on Committees of The Board of Directors https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Committes%27%20regulation.pdf
In 2019, in order to assist the Board of Directors in considering issues of strategy definition, participation in investment projects and sustainable development, a Strategy Committee was established. Moreover, the Audit and Corporate Governance Committee, the HR and Remuneration Committee, and the Related Party Transaction Committee were formed solely from independent directors, and the Strategy Committee was headed by an independent director. Audit and Corporate Governance Committee
REPORT OF THE AUDIT AND CORPORATE GOVERNANCE COMMITTEE FOR 2019
As the Chairman of the Audit and Corporate Governance Committee of the Board of Directors of PJSC Enel
Russia, I am pleased to present our report for 2019 to shareholders. I hope that in this report we will be able to
demonstrate our commitment, as the Audit and Corporate Governance Committee, to our duties in accordance
with the Corporate Governance Code recommended for use by letter of the Bank of Russia dated April 10,
2014 No. 06-52/2463, and efficient fulfillment of these duties during 2019.
Our key objective is to facilitate the efficient fulfillment of the functions by the Board of Directors of PJSC Enel
Russia in resolving issues related to control of financial and economic activities as well as development and
improvement of the corporate governance system and practice at PJSC Enel Russia. To accomplish this
objective, the Committee is granted the following functions, namely:
In the field of accounting
- preliminary review, analysis of the annual financial statements of the company;
30 The Charter of the company and Regulation on the Committees of the Board of Directors of PJSC Enel Russia are posted at the company's website https://www.enelrussia.ru
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(financial) statements
- control of ensuring completeness, accuracy and reliability of the company's financial statements.
In the field of risk management and internal control
- monitoring the efficiency and reliability of the internal control and risk management system; - creation and ensuring efficiency of procedures in the field of risk management and internal control including consideration of policies in relation to risk management and internal control; - creation of conditions that prevent, identify and reduce the likelihood of financial and operational risks.
In the field of internal audit
- ensuring independence and objectivity of the internal audit functions; - ensuring functioning of the internal audit of the company including consideration of the internal audit work plan and preliminary consideration of the appointment (dismissal) of the Head of Internal Audit Department.
In the field of external audit
- selection of candidates for subsequent election of the external Auditor of the company and determination of the amount of remuneration for its services; - evaluation of independence and absence of the conflict of interest of the external Auditor as well as assessment of the quality of audit of accounting (financial) statements; - ensuring independence and objectivity of implementation of the external audit functions as well as ensuring efficient interaction of the external Auditor with the company.
In the field of corporate governance
- preliminary review, analysis of the annual report of the company; - ensuring company’s compliance with the legislation and stock exchange requirements, ethical standards, rules and procedures of the company, as well as best national and international practices in relation to corporate governance; - analysis of the corporate governance system of the company, evaluation of corporate governance practices and development of recommendations for improvement of the corporate governance system; - assistance in creating conditions at the company aimed at preventing bad faith actions by the employees of the company and third parties; - control of special investigations on the issues related to potential fraud, unfair use of insider or confidential information.
I chair the Committee consisting of three members, each being an independent director. The Committee in its
current composition was elected by the Board of Directors of PJSC Enel Russia on June 25, 2019. (Minutes
No. 10/19 of the meeting of the Board of Directors of PJSC Enel Russia dated June 26, 2019), in the previous
composition – on June 26, 2018 (Minutes No. 8/18 of the meeting of the Board of Directors of PJSC Enel
Russia dated June 27, 2018):
Composition of the Audit Committee operating from January to June 2019
Composition of the Audit Committee operating from June to December 2019
Andrea Palazzolo – Chairman, independent director
Vitaly Zarkhin – Chairman, independent director
Andrea Guaccero – independent director Andrea Palazzolo – independent director
Giorgio Callegari – Senior Independent Director Andrea Guaccero – independent director
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Denis Mosolov
Alexander Arthur John Williams – independent director
Each of the Committee’s members gained extensive experience in their previous activities in the field of finance,
audit and corporate governance, and was elected with the purpose of using a wide range of business
knowledge to fulfil the duties assigned to the Audit and Corporate Governance Committee in accordance with
the Corporate Governance Code.
10 meetings of the Audit and Corporate Governance Committee were held totally in 2019.
o Composition of meetings by the form:
in praesentia in absentia
The number of meetings of the members of the Audit and Corporate Governance Committee in 2019 with
various organizational units and the company's auditor within the scope of meetings:
Auditor Internal Audit Group Corporate Affairs Group Risk Control Group Administration, Finance and Control
The Committee’s work was carried out on the basis of the Work Plan approved by the Committee on July 26,
2018 (Minutes No. 8/18 of the meeting of the Audit and Corporate Governance Committee of the Board of
Directors of PJSC Enel Russia dated July 26, 2018), as well as the Work Plan approved by the Committee on
July 23, 2019 (Minutes No. 6/19 of the meeting of the Audit and Corporate Governance Committee of the Board
of Directors of PJSC Enel Russia dated July 24, 2019).
The Committee considered totally 41 issues in 2019, the main of them are:
- recommendations to the Board of Directors regarding the candidacy of the company’s Auditor,
- recommendations to the Board of Directors regarding approval of the new version of the company's Charter,
annual report of the company for 2018,
- recommendations to the Board of Directors regarding the annual financial statements of the company for
2018, consolidated financial statements in accordance with IFRS for 2018 and distribution of profit and payment
of dividends,
- Committee’s evaluation of the Auditor's reports on the company's accounting (financial) statements for 2018,
- consideration of regular reports of the Internal Audit Department, risk reports,
3
5
4 4 3
7
3
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- recommendations to the Board of Directors regarding consideration of the report on implementation of the
Annual Audit Plan, approval of the Annual Audit Plan.
Chairman of the Audit and Corporate Governance Committee
of the Board of Directors of PJSC Enel Russia, independent director
V. Zarkhin
HR and Remuneration Committee The duties of the HR and Remuneration Committee include support of the activities of the Board of Directors of the company in efficient and transparent personnel management policy, continuity planning, creating efficient remuneration system for the members of the Board of Directors, members of the Executive Board, Corporate Secretary and key managers of the company as well as efficient assessment of the activities of the Board of Directors and its members and Committees31.
Composition of the HR and Remuneration Committee
Composition of HR and Remuneration Committee elected on 26.06.2018:
Composition of HR and Remuneration Committee elected on 25.06.2019:
1. Andrea Guaccero, Chairman, independent director
2. Giorgio Callegari, Senior Independent Director
3. Tagir Alievich Sitdekov
1. Andrea Guaccero, Chairman, Independent Director
2. Giorgio Callegari, Senior Independent Director)
3. Andrea Palazzolo, Independent Director
8 meetings of the HR and Remuneration Committee were held in 2019.
Format of the meetings
In praesentia In absentia In praesentia/absentia
5 3 -
The most significant issues and main recommendations made by the HR and Remuneration Committee are:
• issuing recommendations to the company Board of Directors on approval of remuneration terms, long-term bonuses as well as key performance indicators for key managers of PJSC Enel Russia,
• issuing recommendations to the company Board of Directors on consideration of the self-assessment report of the Board of Directors of PJSC Enel Russia for 2018,
• issuing recommendations to the company Board of Directors on the issues related to remuneration of key managers,
• issuing recommendations to the company Board of Directors on assessment of independence of the candidates, formation of an opinion on the status of independence of candidates and on evaluation of
31 More details information about the functions of the Committee are available in the Regulation on the Committees of the Board of
Directors of PJSC Enel Russia posted at the company's website https://www.enelrussia.ru
152
candidates for the members of the Board of Directors elected at the annual General Shareholders' Meeting of PJSC Enel Russia,
• issuing recommendations to the company Board of Directors on the proposal to the General Shareholders' Meeting of PJSC Enel Russia on the issue “On approval of new version of the Regulation on payment of remunerations and compensations to the members of the Board of Directors and Committees of the Board of Directors of PJSC Enel Russia”,
• issuing recommendations to the company Board of Directors on approval of the new version of the Policy for remuneration and reimbursement of expenses (compensation) to the members of executive bodies and other key managers of PJSC Enel Russia;
• the issue of independence of the members of the Board of Directors as well as the issues of self-assessment of the Board of Directors of the company.
Related Party Transactions Committee The duties of the Related Party Transactions Committee include assisting the Board of Directors in evaluation and decision-making during consideration of related party transactions, cases of the conflict of interest and significant corporate actions32.
Members of the Related Party Transactions Committee
Members of the Related Party Transactions Committee elected on 26.06.2018:
Members of the Related Party Transactions Committee elected on 25.06.2019:
1. Giorgio Callegari, Chairman, Senior Independent Director
2. Denis Mosolov 3. Andrea Palazzolo, Independent Director)
1. Giorgio Callegari, Chairman, Senior Independent Director
2. Andrea Guaccero, Independent Director 3. Vitaly Yurievich Zarkhin, Independent
Director
Seven meetings of the Related Party Transactions Committee were held in 2019.
Format of the meetings
In praesentia In absentia In praesentia/absentia
4 1 2
The most significant issues and main recommendations made by the Related Party Transactions Committee are:
• issuing recommendations to the company Board of Directors on approval of related party transactions,
• ,
• consideration of reports on related party transactions for previous periods. Strategy Committee
102-31 It was formed in June 2019. The duties of the Strategy Committee include assisting the Board of Directors in evaluation and making decisions on the company's strategy through preparatory work for making proposals and providing recommendations. The Committee is provided, among other things, with the functions to prepare, consider information and provide recommendations on the following issues related to sustainable development 33:
32 More details information about the functions of the Committee are available in the Regulation on the Committees of the Board of Directors of PJSC Enel Russia posted at the company's website https://www.enelrussia.ru 33 More details information about the functions of the Committee are available in the Regulation on the Committees of the Board of Directors of PJSC Enel Russia posted at the company's website https://www.enelrussia.ru
153
• revision of the Sustainability Plan and relevant documents (policies, strategies) of the company including ESG (environmental, social and corporate governance) and relevant KPIs;
• analysis of periodic management reports on sustainable development of the company;
• monitoring of compliance with GRI reporting standards (Global Reporting Initiative) and checking of ESG reports;
• monitoring of the company’s performance in accordance with selected external sustainability indicators;
• the issues of sustainable development related to the company’s activities and dynamics in interaction of the latter with stakeholders.
Members of the Strategy Committee
Members of the Strategy Committee elected on 25.06.2019:
1. Giorgio Callegari, Chairman, Senior Independent Director 2. Vitaly Yurievich Zarkhin, Independent Director 3. Maria Antonietta Giannelli 4. Simone Mori 5. Denis Mosolov
Seven meetings of the Strategy Committee were held in 2019.
Format of the meetings
In praesentia In absentia In praesentia/absentia
7 - -
The most significant issues and main recommendations made by the Strategy Committee are:
• Issuing recommendations to the Board of Directors of PJSC Enel Russia on approval of the heat generation investment projects, modernization as well as approval of the company’s business plan for 2020 – 2022 including the company’s budget for 2020,
• consideration of the reports on sustainable development. Participation of the members of the Board of Directors in the meetings of the Committees of the
Board of Directors of PJSC Enel Russia in 2019
Participation in the meetings of the committees
Audit and corporate governance committee
HR and remuneration committee
Related party transactions committee
Strategy Committee
Andrea Guaccero 10/10 8/8 4/4
Maria Antonietta Giannelli
6/7
Vitaly Yurievich Zarkhin
5/5 4/4 7/7
Giorgio Callegari 5/5 8/8 7/7 7/7
Simone Mori 6/7
Denis Mosolov 5/5 3/3 7/7
Andrea Palazzolo 10/10 4/4 3/3
Tagir Alievich Sitdekov
4/4
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102-28 Communication on the Board of Directors’ Self-Evaluation
PJSC Enel Russia conducted a self-evaluation procedure of the Board of Directors for 2019 in line with the Russian Corporate Governance Code recommendations and Information Letter of the Bank of Russia №IN-06-28/41 On Recommendations for organizing and conducting a Board of Directors’ self-evaluation of the its effectiveness in public companies. According to the Corporate Governance Code’s recommendations, the next external evaluation will take place at the end of 2020. Board of Directors’ self-evaluation is an important instrument for improving efficiency, which helps to identify areas of the Board of Directors’ improvement. The self-evaluation of the Board of Directors’ performance for 2019 was held through a questionnaire survey of the directors’ opinions, individual interviews with Board of Directors’ members and desktop review of company’s materials and information in the following sections:
- evaluation of the whole Board of Directors, - evaluation of each Board of Directors’ Committee, - evaluation of the Board of Directors’ Chairman, - evaluation of the Senior Independent Director, - and evaluation of each individual Board of Directors’ members.
The self-evaluation identified both strong points and areas of concern for the Board of Directors and its Committees in 2019. Strong points of Audit and Corporate Governance Committee still the same as last year. These are reviewing the financial reporting, monitoring the effectiveness and efficiency of the internal/external audit process and the auditor’s independence, as well as considering internal audit reports and monitoring how major identified shortcomings are cured. Directors declared as the strongest point of HR and Remuneration Committee’s performance during 2019 - the assessment of the executive performance, rather than consideration of the executive compensation system as in 2018. Related Party Transaction Committee manages well consideration of the related party transaction with subsidiaries. Strategy Committee was good in analyzing modernization issues. Strong points of the Board of Directors correspond with Committees’ strong points, such as ensuring effective internal audit, ensuring occupational and industrial safety, ensuring accurate financial reporting and robust external audit process and overseeing subsidiaries. Overall, it appears that the Board of Directors devotes insufficient time and focus to HR matters, risk management and some other important functions. According to the directors, the Board of Directors areas of concern are:
- Planning the executive succession; - Setting the right strategy, monitoring its implementation and strategy’s timely revising, where needed; - Detecting emerging business risks and opportunities; - Monitoring major investments; - Monitoring all critical risks and ensuring putting appropriate risk mitigation actions in place.
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The Audit and Corporate Governance Committee’s areas of concern are risk management, including considering the risk appetite, monitoring all critical risks and ensuring, as well as the effective functioning of the corporate risk management system. Executive/director succession planning and considering director succession planning and Board of Directors’ refreshment, as well as developing and retaining talent require more focus of HR and Remuneration Committee. Within the self-evaluation of the Board of Directors for 2019, directors have indicated several business lines, which can improve the Board of Directors efficiency. Firstly, the Board of Directors should deal with strategic issues but not engage in micromanagement. Secondly, the Board of Directors’ composition should be strengthened through election a director with industry-specific experience and changing the Chairman on non-executive / independent director. Thirdly, directors suggested to decrease the work load of the Board of Directors through increasing the period of submission of the Board of Directors’ materials from 5 calendar days to 5 business days. Fourthly, directors pointed at necessity of additional training, which would help them for understanding better the key points of the core business, power market and other issues discussed during the Board of Directors’ meetings. The following recommendations can be given to the Board of Directors’ Committees for further improvement: The areas to concern for the Audit and Corporate Governance Committee and HR and Remuneration Committee remain the same as a year ago: the risk management area and questions to be considered within succession plan, talent development and talent retaining respectively. Related Party Transaction Committee should desirably focus on considering RPT (especially intragroup transactions). There are no recommendations to the Strategy Committee because it has been in operation for less than 1 year. Adoption of the above-mentioned measures will help the Board of Directors and its Committees to improve its efficiency. The results of self-evaluation and recommendations, aiming to improve the efficiency of the Board of Directors and its Committees, were considered at an in-person meeting of the Board of Directors. Corporate Secretary
The company’s Corporate Secretary acts in compliance with the Regulation on Corporate Secretary of PJSC Enel Russia.
Regulation on Corporate Secretary https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Regulation%20for%20Corporate%20Secretary%20of%20PJSC%20Enel%20Russia.pdf
The main objective of the activities of the Corporate Secretary is to ensure efficient interaction with the shareholders, coordination of the company’s measures for protection of rights and interests of the shareholders, support of the effective work of the company’s Board of Directors. The Corporate Secretary acts as the secretary of the company Board of Directors, the company General shareholders' meeting, Committees of the company Board of Directors unless otherwise provided by the resolutions of the company Board of Directors.
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Corporate secretary is officer of the company. The Corporate Secretary of the company is appointed and dismissed by the General Director of the company by decision of the Board of Directors. The candidate for the position of the Corporate Secretary of the company shall have the higher education in law, economics or in business, shall have working experience in the area of corporate governance and experience in executive positions of minimum two years. The Corporate Secretary shall have knowledge, skills and experience sufficient for him/her to perform his/her obligations, excellent reputation and enjoy the trust of the shareholders. Since April 2012, Zhanna Igorevna Sedova has been the Corporate Secretary of the Board of Directors.
Sedova Zhanna Igorevna Corporate Secretary
Born 1973
Citizenship Russian Federation
Education Higher (Perm State University, major "Jurisprudence")
Degree PhD in Legal Sciences since 2001 (Russian Academy of Public Administration under the President of the Russian Federation).
Work experience over the last 5 years
Has been employed in PJSC Enel Russia since August 2010, and is current Corporate Secretary, Head of Legal and Corporate Affairs of PJSC Enel Russia, is an assistant professor of international law at the Russian State University of Justice, since May 2019, Chairman of the Energy Law Commission of Moscow Region; since March 2020, member of the Scientific Advisory Council on International Law under the Ministry of Justice of Russia.
Ownership on shares
He has no shares in the charter capital/ ordinary shares of Company. He has made no transactions with ordinary shares of Company in 2019.
General Director and Executive Board
Management of current activities of the company is carried out by the sole executive body - General Director - and collegial executive body - Executive Board. The General Director and Executive Board of the company report to the General Shareholders’ Meeting and the Board of Directors of the company and act based on the Charter of the company, the activities of the Executive Board are also regulated by the Regulation on Executive Board34.
The PJSC Enel Russia’s Charter https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Charter.pdf
Regulation on Executive Board of Open Joint-Stock Company https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/e109.PDF
Formation of the Executive Board of the company and appointment for the position of the General Director of the company as well as early termination of powers of the members of the Executive Board and the General Director is exercised based on the decision of the Board of Directors of PJSC Enel Russia. There were no changes among the members of the Executive Board in 2019; 4 meetings of the Executive Board were held
34 The Charter and Regulation on the Executive Board of PJSC Enel Russia are posted at the company's website
https://www.enelrussia.ru
157
Members of the Executive Board:
1. Carlo Palasciano Villamagna, Chairman 2. Andrey Aleksandrovich Volkov 3. Oleg Nikolayevich Kosmenyuk 4. Yulia Konstantinovna Matyushova
Information on the members of the Executive Board of the Company35
35 Information as of March 2020
Carlo Palasciano Villamagna General Director Chairman of Executive Board
Born 1959
Citizenship Italy
Education La Sapienza University, Degree in Law Additional education in the sphere of finance. Finished postgraduate course of specialization in International Taxation. Member of the Chartered Accountants’ Registry.
Work experience over the last 5 years
2015-present. – General Director, Chairman of the Executive Board of PJSC Enel Russia 2017- present – member of the Board of Directors, since January 2020 hi is the Chairman of the Board of Directors of LLC Rusenergosbyt 2007-2016 – member of the Board of Directors of Enel France 2007-2017 – member of the Board of Directors of Enel Investment Holding B.V. 2008-2015 – member and the Chairman of the Internal Audit Commission of PJSC Enel Russia 2016-2017 – Chairman of the Board of Directors Enel Rus Wind Generation 2015-2017 – member of the Board of Directors of Res Holdings BV 2014-2015 – President, CEO of Enel Factor 2013-2014 – member of the Board of Directors of Enel Italia SrL 2012-2014 – member of the Board of Directors of ENEL Finance International N.V. 2004-2014 – Head of Tax of Enel S.p.A.
Awards Certificate of the Ministry of Energy of Russian Federation, 2017 Badge of honor of the All-Russian Electric Trade «For the development of social partnership», 2019
Ownership on shares
He has no shares in the charter capital/ ordinary shares of Company. He has made no transactions with ordinary shares of Company in 2019.
Volkov Andrey Aleksandrovich Head of Energy Management
Born 1977
Citizenship Russian Federation
Education Moscow Institute of physics and technology, engineer-physicist, and Moscow State University, mathematician
Degree Institute of safety problems of nuclear energy development of the Russian Academy of Sciences, candidate of physical and mathematical Sciences
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Remuneration
102-35 102-36 A decision on payment of remunerations and (or) compensations to the members of the Board of Directors and on determination of the amount of such remuneration and (or) compensations falls within the competence of the General Shareholders' Meeting. A proposal on the specified agenda item of the General Shareholders' Meeting is prepared by the Board of Directors after preliminary consideration of the item by the HR and Remuneration Committee.
Determination of the amount, procedure and conditions for payment of remuneration to the member of the Executive Board and other key managers of the company is carried out by decision of the company Board of
Work experience over the last 5 years
2015-2020 – Head of Energy Management of PJSC Enel Russia 2015-2020 – member of the Executive Board in PJSC Enel Russia 2015-present – member of the Board of Directors in LLC "Teploprogress" 2013- 2015 – Deputy General Director for Trading in LLC "Rusenergosbyt" 2013-2015 – Deputy Head of Energy Management – Head of Department in Enel Russia PJSC (overlapping job) 2015-2015 – Head of Short and Real Time Management in Enel Russia PJSC
Ownership on actions He has no shares in the charter capital/ ordinary shares of Company. He has made no transactions with ordinary shares of Company in 2019.
Kosmenyuk Oleg Nikolaevich Deputy General Director – Head of Generation
Born 1970
Citizenship Russian Federation
Education Pavlodar State University, Thermal Power Engineer
Degree Нe has worked in the company since 2011, since 2016 he has worked as Deputy General Director –Head of Generation of PJSC Enel Russia 2016- present – Deputy General Director – Head of Generation of PJSC Enel Russia 2013 – present – member of the Executive Board in PJSC Enel Russia
Awards Certificate of Honor from the Ministry of Energy of the Russian Federation, 2015 Certificate of Honor of the Governor of the Sverdlovsk Region, 2015
Ownership on actions He has no shares in the charter capital/ ordinary shares of Company. He has made no transactions with ordinary shares of Company in 2019.
Matyushova Yulia Konstantinovna Deputy General Director – Head of Administration, Finance and Control
Born 1982
Citizenship Russian Federation
Education Volgograd State University, degree in Financial Management CIMA Advanced Diploma in Management Accounting
Work experience over the last 5 years
She has worked in the company since 2011, since 2017 she has worked as Deputy General Director –Head of Administration, Finance and Control of PJSC Enel Russia. 2017-present – member of Board of Directors of "Rusenergosbyt" LLC 2016-present – member of Executive Board of PJSC Enel Russia
Ownership on shares She has no shares in the charter capital/ ordinary shares of Company. She has made no transactions with ordinary shares of Company in 2019
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Directors, subject to prior consideration of these issues by the HR and Remuneration Committee of the Board of Directors of the company.
Remuneration to the Board of Directors Members
Payment of remunerations and compensations to the members of PJSC Enel Russia Board of Directors is governed by the Regulation on payment of remunerations and compensations to the members of the Board of Directors and Committees of the Board of Directors (approved by the decision of the annual General Shareholders' Meeting of PJSC Enel Russia dated 18.06.2019, minutes No. 1/19 dated 18.06.2019), prepared with regard to recommendations of the Corporate Governance Code.
Regulation on Payment of Remuneration and Compensations to Members of Board of Directors and Board of Directors’ Committees https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Regulation%20on%20BoD%20and%20Committee%20remuneration.pdf
The revision of the Regulation on payment to members of the Board of Directors and Committees of the Board of Directors dated 2019 establishes a fixed annual remuneration to the Chairmen and members of the Committees of the Board of Directors, its level is equal to the level of remuneration for previous corporate years. In addition, the above Regulation provides for increased level of fixed annual remuneration that was proposed for approval by the General Shareholders' Meeting on the basis of analysis of the remuneration market for the members of the Board of Directors of the Russian and foreign companies as well as an analysis of applicable remuneration policies for the members of the Board of Directors at Enel Group companies performed by Stanton Chase independent from the management.
The amount of fixed remuneration to the members of the Board of Directors for the year, rubles.
The Regulation on payment of remunerations and compensations to the members of the Board of Directors and Committees of the Board of Directors following the recommendations of the Corporate Governance Code provides for a fixed annual remuneration as the main form of remuneration. In addition, the members of the Board of Directors are entitled to sign an agreement for sales of shares with the company under the Stock Options Plan. The Regulation does not provide for the use of any form of short-term or long-term incentives for the members of the Board of Directors, accrual of severance payments due to termination of powers, other types of remuneration in non-monetary form.
Fixed remuneration is not paid to the members of the Board of Directors:
• in their relation the federal law provides for a restriction or prohibition on receiving any payments from commercial organizations;
• who hold concurrently paid positions in the company;
• those refused from remuneration in full or in a certain part;
• those not participating in more than 70% of the meetings of the Board of Directors/Committee held during the month.
The members of the Board of Directors receive reimbursement of expenses due to their presence at the meetings of the Board of Directors/Committees or performance by them of job duties as the members of the Board of Directors/Committees.
Member of the Committee (optional)
Chairman of the Committee
(optional)
Member of the Board of Directors
Chairman of the Board of Directors, Senior
Independent Director
4 460 000 6 320 000 570 000 860 000
Amount of fixed remuneration for the year (RUB)
160
Compensation of expenses
Fig. 1 The total amount of remunerations and compensations paid to the members of the Board of Directors, thousand rubles
The fluctuations in the total amount of all types of remuneration paid to the members of the Board of Directors are associated primarily with a change in the members of the Committees, appearance of new Committees, different frequency of the meetings of the Committees for the reporting period as well as with changes in the provisions of documents establishing the amount and conditions for payment of remuneration.
Remuneration paid due to fulfillment of duties of the member of the Board of Directors in 2019, thousand rubles
Full name Remuneration to the Board of
Directors
Remuneration to the Chairman of the Board
of Directors/Senior Independent Director
Remuneration to the member of Committee
s
Remuneration to the Chairman of
Committees
Alexander Arthur John Williams
Roberto Antonio Enzo Deambrogio
Rodolfo Avogadro Di Vigliano
Marco Fragale
Denis Mosolov 3,825.2 709.7
Stephane Maurice Zweguintzow*
Daily allowance
Expenses related to travel to the business trip place and back to the permanent place of work/residence
Expenses
Remuneration Compensations
161
Andrea Guaccero 3,825.2 745.6 737.7
Maria Antonietta Giannelli
Simone Mori
Andrea Palazzolo 3,825.2 736.9 329.9
Giancarlo Pescini 371.7
Giorgio Callegari 5,028.6 741.9 1,062.2
Vitaly Yurievich Zarkhin 2,019.4 494.0 372.7
Tagir Alievich Sitdekov 3,825.2 243.3
Laurent Nicolas Souviron 2,019.4
Total: 19,711.3 5,028.6 3,671.4 2,502.5
In 2019, the members of the Board of Directors Giancarlo Pescini (until 01.11.2019), Roberto Antonio Enzo Deambrogio, Rodolfo Avogadro Di Vigliano, Marco Fragale, Stephane Maurice Zweguintzow, Maria Antonietta Giannelli, Simone Mori did not receive remuneration due to refusal from it.
Member of the Board of Directors S. Zweguintzow, who is also Deputy General Director - Head of People and Organization of PJSC Enel Russia, did not receive remuneration for the duties of a member of the Board of Directors, but received remuneration as an employee of the company.
In 2019, no agreements were signed with the members of the Board of Directors for sales of shares of the company under the Stock Options Plan; members of the Board of Directors did not receive payments for the work at the management bodies of entities controlled by the company.
The directors’ liability insurance agreements do not apply to the members of the Board of Directors. See details about the terms of such agreements signed in 2019 in the Annex “Information about the most material transactions and related party transactions closed by the company in 2019”.
Remuneration to the Members of the Executive Board and Key Managers
The documents governing remuneration to the members of the Executive Board and key managers of PJSC Enel Russia are:
• Policy on remuneration and reimbursement of expenses (compensations) of the members of the executive bodies and other key managers approved by the Board of Directors of PJSC Enel Russia (minutes No. 14/19 dated 08.11.2019);
• The Long Term Incentive Plan at PJSC Enel Russia for 2017-2019 approved by the Board of Directors of PJSC Enel Russia (minutes No. 16/17 dated 30.11.2017);
• The Long Term Incentive Plan at PJSC Enel Russia for 2018-2020 approved by the Board of Directors of PJSC Enel Russia (minutes No. 1/19 dated 29.01.2019);
• The Long Term Incentive Plan at PJSC Enel Russia for 2019-2021 approved by the Board of Directors of PJSC Enel Russia (minutes No. 1/19 dated 29.01.2019).
Policy on Remuneration and Reimbursement of Expenses (Compensations) of the members of the Executive Bodies and Other Key Managers of Public Joint Stock Company Enel Russia https://www.enelrussia.ru/content/dam/enel-ru/documents/ru/basic/Remuneration%20Policy2019.pdf
The Policy on remuneration and reimbursement of expenses (compensations) of the members of the executive bodies and other key managers (hereinafter referred to as key managers) as amended in 2019 was prepared with regard to the requirements of the Corporate Governance Code and did not change the approach to the system of remuneration and reimbursement of expenses for these company employees.
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The remuneration system for key managers of the company is aimed at achieving the optimal balance between the interconnection of remuneration with the company’s performance and the personal contribution of each key manager of the company to achieving this result.
Key managers of the company in 2019
f
General Director Carlo Palasciano Villamagna
Deputy General Director -Head of Generation Oleg Nikolayevich Kosmenyuk
Deputy General Director - Head of Administration, Finance and Control
Yulia Konstantinovna Matyushova
Deputy General Director - Head of People and Organization Stephane Zweguintzow
Head of Energy Management Andrey Vladimirovich Volkov
Head of Legal and Corporate Affairs Zhanna Igorevna Sedova
Head of Communications Alsu Haidyarovna Zagorskaya
Head of Procurement Anton Tarasovich Grinkov
Head of Internal Audit Shukran Alakbarov Abdullah Ogly
Head of Digital Solutions Sergey Kirillovich Rozenberg
Head of Regulatory and Institutional Affairs Viktor Valeryevich Naboychenko
Transparency of mechanisms for determination of the amount of
remuneration, regulation of all types of payments, benefits and privileges as well as transparency of the system of payment
of remuneration and reimbursement of expenses (compensations)
Consolidation of the relationship between remuneration and result of
the company’s work in the remuneration system as well as
personal contribution of key company leaders in achievement of this result
The adequacy and proportion of the remuneration paid:
Principles of the system of remuneration and reimbursement of expenses (compensation) of the members of executive bodies and other key managers
• company goals • responsibility imposed on
the members of executive bodies and key managers of the company
• level of risks assumed by them
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Remuneration for fulfillment of duties of the member of the Executive Board and reimbursement of expenses (compensations) to the members of the Executive Board is not assumed due to the fact that the members of the Executive Board are key managers of the company who receive remuneration in accordance with the terms of the Policy on remuneration and reimbursement of expenses (compensations) of the members of the executive bodies and other key managers.
The constituent elements of the remuneration system for key managers
Fixed part (base salary)
It is established by the decision of the Board of Directors and is reflected in the labor agreement signed between the company and the respective key manager of the company. When defining the amount of base salary, the following is taken into account: - level of competence and qualification of the relevant person, his/her individual skills and experience; - scope and area of responsibility, level of risks taken; - personal contribution into the company’s performance; - current compensation practices at comparable companies for positions of similar level.
Variable part
Short-term element*
(for the results of the performance over the year)
Actual bonus amount for the results of performance over the year of the key manager of the company shall be calculated according to the following formula: ABA = BBA * ∑ (% of KPI achievement * KPI weight) * correction factor, where: - ABA – actual bonus amount for the results of the performance over the year; - BBA – base bonus amount subject to performance over the year; - % of KPI achievement – actual percent of KPI achievement calculated depending on the result achieved; - correction factor (multiplier or general denominator) unified for all the company key managers. The actual bonus amount can reach 150% of the base amount. After preliminary review by the HR and Remuneration Committee, the base bonus amount of each key manager is approved by the decision of the Board of Directors of the company and is fixed in the labor agreement signed with the key manager of the company. Individual key indicators for each calendar year are developed by the HR and Remuneration Committee and approved by the Board of Directors of the company. Indicators can be: financial and economic, non-financial as well as goals, their achievement is a strategic factor in success of a certain business line of the company. The annual bonus is calculated and paid on the basis of approval of the report by the Board of Directors on implementation of annual KPIs by these persons after preliminary consideration of this issue by the HR and Remuneration Committee.
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Long-term item* (bonus for the results of the
company performance over
a three-year period)
Bonus awarding for the results of the performance over a three-year period due to the key managers of the company is carried out in accordance with the "Long-Term Incentive Plan"” approved by the Board of Directors after preliminary consideration of this issue by the HR and Remuneration Committee. Long Term Incentive Plan at PJSC Enel Russia for 2017-2019, the Long Term Incentive Plan at PJSC Enel Russia for 2018-2020 and the Long-Term Incentive Plan at PJSC Enel Russia for 2019-2021”. establish dependence of actual amount of the bonus for achievement of key performance indicators and provide for accrual and payment of bonuses upon expiration of the program. The bonus is calculated and paid on the basis of the decision of the Board of Directors on approval of the results of implementation of KPIs and calculation of the actual amounts of the bonus after preliminary consideration of this issue by the HR and Remuneration Committee.
Other payments by decision of the Board of Directors
In special cases, by decision of the Board of Directors of the company, other payments to key managers of the company are possible. (for example, payment of Una Tantum bonus in line with salary revision process, etc.)
* Information about KPIs of key managers comprising the conditions for using the specified incentive forms are contained in the Annex to this annual report.
The Board of Directors is entitled to initiate recovery of funds (bonus payments) to the company illegally received by the key managers of the company as a result of manipulation of reporting indicators or other bad faith actions by the relevant persons in accordance with the provisions of labor laws of the Russian Federation.
The ratio of the parts of remuneration in determination of the basic part of remuneration
In order to improve the efficiency and quality of fulfillment of the duties by the key managers, the company provides them with additional benefits and social guarantees, their list is approved by the decision of the Board of Directors.
The Board of Directors approved the following list of additional benefits and social guarantees:
• voluntary medical insurance;
• voluntary life, illness and accident insurance;
• compensation in case of termination of the labor agreement due to recognition of the employee as incapable to work;
• financial assistance in case of death of close relatives;
• financial assistance in case of birth of a child;
• fringe benefit in case of temporary disability;
Ratio of the parts of remuneration in
determination of the basic part of remuneration
50%- 65% fixed part of remuneration
15%-20% short-term variable part of
remuneration
20%-35% long-term variable part of
remuneration
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• compensation for using a private car or taxi services;
• additional paid leave for irregular working hours;
• representation expenses;
• in case of transfer to a new place of work within a company that entails relocation of a key manager from one locality (region) to another within Russia, the key manager is covered by the “Policy on housing support and relocation benefits” approved by the General Director of the company;
• the program of non-state pension coverage approved by the Board of Directors of the company and set forth in the Regulation on non-state pension coverage for employees of PJSC Enel Russia is applied to the key managers of the company. The approach to determination of the post-retirement benefits of key managers does not differ from the approach to determination of the post-retirement benefits of other employees of the company;
• the “Policy on arrangement of business trips and business trip expenses” approved by the General Director of the company applies to the key manager of the company;
• the company can provide a loan to a key manager.
The policy on remuneration and reimbursement of expenses (compensations) of the members of the executive bodies and other key managers does not define the company's approach to determination of payments related to dismissals for key managers (except for the case of payment of compensation upon termination of the labor agreement due to recognition of the employee as incapable to work). In each case, the approach to such payments is determined individually.
Total amount of all types of remuneration paid to the members of the Executive Board, ths. rubles.
The reason for the reduction in 2019 of the total amount of all types of remuneration paid to the members of the Board, is the change in the number of Board members.
The amount of compensation paid to the persons being among the members of the Executive Board: in 2019 amounted to RUB 2,619.78 ths.
The amount of payments paid to the members of the Executive Board
and key managers in 2019, ths. rubles
Total remuneration to the members of the Executive Board
Total remuneration for a group of at least five top-paid key managers
Total remuneration to all key managers
84 463,05
115 150,16
102 516,98
2017
2018
2019
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Fixed part (official salary) 59,376 68,101 102,256
Variable part of remuneration, including
43,141 47,694 59,523
Short-term element (bonus subject to performance over the year)
18,198 21,291 31,660
Long-term item (bonus for the results of the company’s activities for a three-year period)
19,101
19,101 19,101
In 2019, the key managers did not quit and, accordingly, the payments related to dismissal were not made.
In 2019, the company issued loans to the members of the Executive Board, their terms do not differ significantly from market conditions.
The directors’ liability insurance agreements do not apply to the General Director, members of the Executive Board and members of the Board of Directors. See details about the terms of such agreements signed in 2019 in the Annex “Information about the most material transactions and related party transactions closed by the company in 2019”.
Internal Audit Commission
Prior to introducing changes to the Charter of the company in 2019, the Internal Audit Commission was elected by the General Shareholders’ Meeting to control financial and economic activities of the company. The procedure for activities of the Internal Audit Commission was defined by the Regulation on the Internal Audit Commission of the company. The Internal Audit Commission of the company consisted of 5 persons.
Composition of the Internal Audit Commission elected on 04.06.2018
Full name Position Share in the authorized capital of PJSC Enel Russia, %
Giancarlo Pescini Head of Group’s Participation Unit , Enel S.p.A. 0 Mauro Di Carlo Head of Planning and Control Infrastructure and
Network in Enel GIN srl. 0
Marketti Mechal Ebis Kumlachev
Head of Financial Strategy in Enel S.p.A 0
Pirri Paolo Head of Group Consolidation, Enel S.p.A. and the Netherlands’ Administration
0
Natalia Alexandrovna Khramova
Senior Accountant at Enel Finance International B.V.
0
Composition of the Internal Audit Commission elected on 18.06.2019
Full name Position Share in the
authorized capital of PJSC Enel Russia», %
Cristiano Bussi Head of the Unit for Planning, Monitoring and Reporting for Thermal Generation in Enel Global Thermal Generation s.r.l.
0
Marketti Mechal Ebisa Kumlachev
Head of Financial Strategy in Enel S.p.A 0
Pirri Paolo Head of Group Consolidation, Enel S.p.A. 0 Nicoletta Pollio Head of Corporate Governance Unit, Enel S.p.A 0 Natalia Alexandrovna Khramova
Senior Accountant at Enel Finance International B.V.
0
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On 18.06.2019, the annual General Shareholders' Meeting decided to terminate the authorities of the members of the Internal Audit Commission from the date of state registration of the new version of the Charter. The new version of the Charter was registered on July 23, 2019 and does not provide for presence of the Internal Audit Commission at the company.
The PJSC Enel Russia’s Charter https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Charter.pdf
In 2019, remuneration for participation in audit to the members of the Internal Audit Commission of PJSC Enel Russia was not paid.
Auditor
For independent assessment of the reliability of financial statements, the company involves an external auditor. After necessary internal procedures, the candidate for an external auditor is approved annually by the General Shareholders’ Meeting.
The company made a request for proposals on the selection of an auditor for the audit of the accounting (financial) statements. Based on the results of completed procurement procedures, the Board of Directors of the company, after preliminary consideration of the issue by the Audit and Corporate Governance Committee, decided to propose Ernst & Young LLC to the annual General Shareholders' Meeting to be approved by as the auditor.
The annual General Shareholders' Meeting on 18.06.2019 approved Ernst & Young Limited Liability Company for the auditor of PJSC Enel Russia.
The amount of remuneration of the auditor is approved by the Board of Directors and is indicated in the agreement with the auditor. The amount of the auditor's remuneration for 2019 is RUB 10,969,734, inclusive of VAT. In the reporting year, the auditor did not provide non-audit services to the company, and, accordingly, remuneration for non-audit services was not paid to them.
Information about the Internal Audit
103-1 103-2 103-3 The Internal Audit Group maintains efficient management and work ethics at Enel Russia. It is responsible for evaluation of adequacy and efficiency of the internal control system, evaluation of efficiency of risk management system, and evaluation of the corporate governance. Conducting objective internal audits based on risk-oriented approach, submission of recommendations and rendering of advisory services allows you to save and increase the value of the company. Internal auditors respect the value of information and ownership of the information and do not have the right to disclose it without being granted with proper authority, unless they are required to do so based on law or professional duty. They exhibit a high level of professional objectivity when collecting, evaluating and transmitting information and carry out a balanced evaluation of all relevant circumstances and are not influenced by their own interests as well as the interests of others. The employees of the Internal Audit Department of PJSC Enel Russia must adhere to the integrity principle, thus creating a basis of trust in their judgements. The employees of Internal Audit Department improve regularly their qualifications and participate in training arranged by the Institute of Internal Auditors (IIA) and Information Systems Audit and Control Association (ISACA). Main documents
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Regulation on the internal control system https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Regulation%20on%20Internal%20Audit%20Commission%20of%20PJSC%20Enel%20Russia.pdf
Enel Global Compliance Program on Corporate Criminal Liability https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Enel%20Global%20Compliance%20Program.pdf
Regulation of Internal Audit Department https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Regulation%20on%20Internal%20Audit%20Commission%20of%20PJSC%20Enel%20Russia.pdf
The internal audit activities are also regulated by the following internal documents:
• Procedure “Reporting and cooperation of the Internal Audit Group with corporate governance bodies”
• Identification and settlement of cases of conflict of interest (operating instructions No. 0002-OI-AUD) - establishes and describes actions for declaring and storing information about declared potential conflicts of interest.
At a strategic level, the vision is formed by the Internal Audit Committee at the company's Board of Directors. At the executive level, the Head of Internal Audit is responsible. Head reports to Board of Directors of the company, appointed and dismissed by the General Director under the decision of the company’s Board of Directors. The Internal Audit Department performs a wide range of financial, industrial and IT audits as well as provides advisory services. In order to ensure the required level of independence, the Internal Audit Department shall functionally report to the company’s Board of Directors and administratively to the General Director of the company. Main objectives and tasks:
• support to the management and personnel of to develop and monitor implementation of the procedures and activities on improvement of the risk management system, internal control system, corporate governance system;
• coordination of activities with the external auditor as well as those providing advisory services in risk management, internal control and corporate governance;
• carry out the internal audit of the controlled companies in accordance with the established procedure;
• prepare and submit reports on fulfillment of the annual audit plan to the Audit and Corporate Governance Committee of the Board of Directors, Board of Directors and management including those with information about material risks, defects, results and effectiveness of the activities performed on elimination of identified defects, results of the internal audit plan performance, results of assessment of actual state, reliability and effectiveness of the risk management system, internal control system and corporate governance system;
• check whether the members of the executive bodies, management and personnel of the company observe the provisions of the laws and internal executive documents related to the insider information, corruption prevention and compliance with the requirements of the Code of Ethics.
Main projects and initiatives:
• annual evaluation of PJSC Enel Russia’s commitment to the highest ethical, legal and professional standards to strengthen and preserve the company's reputation within the scope “Global Compliance Program on corporate criminal liability”;
• investigation of violations of the “Code of Ethics”;
• continuous monitoring of the procurement of professional and advisory services, procurement process and agreement management process;
• and annual audits of operating, financial activities of the company, IT services and information security.
In the next reporting periods, the company plans to develop new methods and approaches in internal audit and increase gradually the number of audits with continuous monitoring. Continuous monitoring will allow ensuring
169
continuous review of the status of control implementation and review of risks by ensuring continuous identification and monitoring of possible risks. Every year, the Internal Audit Group evaluates the efficiency and quality of its work in accordance with the internal audit standards. There are the following types of quality assessment:
• self-assessment (carried out by auditors who are the members of the audit team);
• internal assessment (carried out by auditors who are not the members of the audit team);
• independent assessment (carried out by third-party professionals);
• assessment of the audited entity (carried out by the audit subject).
Once every five years, the activities of the Internal Audit Department are evaluated by an external Company for compliance with the standard” 1300 - Program for ensuring and improving the quality of internal audit” developed by The Institute of Internal Auditors (The IIA). In 2016, Enel Russia received a certificate of conformity to the standard. The next evaluation is scheduled for 2021.
Securities of the company and interaction with shareholders and investors
Shares
As of 31.12.2019, the share capital of PJSC Enel Russia amounted to 35,371,898,370 rubles and is divided into 35,371,898,370 ordinary shares with par value of 1 ruble each. For the whole period of activity upon the company state registration on 27.10.2004 and until 31.12.2017, the company has not issued preferred shares.
The company shares are included in the First level of the list of securities (highest level) accepted for trading on PJSC Moscow Exchange (MOEX).
170
Issuing history
Principal issue Additional issue Additional issue Additional issue Additional issue Additional issue
State registration issue number
1-01-50077-A 1-01-50077-A-001D 1-01-50077-A-002D 1-01-50077-A-003D 1-01-50077-A-004D 1-01-50077-A-005D
Date of the issue state registration
24.12.2004 16.03.2006 16.03.2006 28.09.2006 07.08.2007 07.08.2007
Shares placed 29,407,170,459 4,105,388,231 69 5,100,000,000 600,000 400,000
Shares actually placed
29,407,170,459 864,514,976 69 5,100,000,000 168,061 44,805
Placement method
Acquisition of shares by the sole founder of the joint stock company
Conversion of ordinary registered shares of Konakovskaya GRES OJSC being affiliated with OGK-5 OJSC, into additional ordinary shares of OGK-5 OJSC
Conversion of ordinary registered shares of Nevinnomysskaya GRES OJSC being affiliated with OGK-5 OJSC, into additional ordinary shares of OGK-5 OJSC
Public subscription (IPO)
Conversion of ordinary registered uncertificated shares of OJSC OGK-5 Holding into additional ordinary registered shares of OJSC OGK-5. The shares are placed when spinning off OGK-5 Holding OJSC from RAO UES of Russia OJSC together with affiliation of OGK-5 Holding OJSC with OGK-5 OJSC
Conversion of preferred registered uncertificated shares of OJSC OGK-5 Holding into additional ordinary registered shares of OJSC OGK-5. The shares are placed when spinning off OGK-5 Holding OJSC from RAO UES of Russia OJSC together with affiliation of OGK-5 Holding OJSC with OGK-5 OJSC
Start date 27.10.2004 01.04.2006 01.04.2006 01.11.2006 03.09.2007 03.09.2007
End date 27.10.2004 01.04.2006 01.04.2006 10.11.2006 03.09.2007 03.09.2007
Date of state registration of the report on the results of issue / date of sending notification on the results of issue
24.12.2004 27.04.2006 27.04.2006 13.11.2006 11.10.2007 11.10.2007
Date of the additional issue individual number (code) cancellation
— 22.08.2006 17.08.2006 20.02.2007 15.01.2008 15.01.2008
Name of the registering body
Federal Financial Markets Service of Russia
171
Exchange Information About the Shares of PJSC Enel Russia
The company shares are included in the First level of the list of securities (highest level) accepted for trading on PJSC Moscow Exchange (MOEX).
Number of ordinary shares, Pcs 35,371,898,370
Par value of the share, rubles. 1
ISIN RU000A0F5UN3
Trading platform MOEX
Start of trading September 2005
Quotation list First Level
Stock code (ticker) ENRU
Bloomberg code ENRU RX
The share of free float as of 31.12.2019 is 25% according to the methodology of PJSC Moscow Exchange
The shares are included in the calculation base of industry index MOEX Electric Utilities (MOEXEU) with a weight of 3.05% as of 31.12.2019. Since March 2018, the shares are included in the index FTSE – Emerging Europe Small Cap and Emerging Europe.
Dynamics of the market and shares of PJSC Enel Russia in 2019, % change vs 2018
Capitalization of PJSC Enel Russia, million rubles GRI 102-7
Results of stock trading in 2017-2019
Year 2017 2018 2019
Minimum closing price, rubles
0,935 1,005 0,866
28,6%
25,0%
-10,7%
Индекс МосБиржи
Индекс МосБиржи -Электроэнергетика
Энел Россия
51 501
36 486
32 595
2017
2018
2019
Enel Russia
MOEX Electric Utilities Index
MOEX Index
172
Maximum closing price, rubles
1,537 1,685 1,177
Market price as of 31.12., rubles
1,456 1,032 0,922
Capitalization, million rubles
51 501 36 486 32 595
Average daily traded volume, rubles
19 137 150 26 264 436 30 658 996
Despite absence of strong growth of oil prices in 2019 (the price of Brent crude oil was in the corridor of $ 60-65/barrel), MOEX index increased by 29% from low levels at the end of 2018. The key factors of index growth included the dividend yield of the Russian market against the background of strong fundamental indicators of companies as well as favorable macroeconomic indicators that were less dependent on the risks of US-Chinese relations than analogues from other emerging markets. The main contribution to the index growth was made by individual companies in Oil and Gas, Finance and Metals and Mining sectors. Like other sectoral indices focused on the domestic market, the electric power industry index increased over the year (+25%). This dynamic was associated with adjustment of forecasts due to strengthening of ruble, positive expectations regarding the dividend policies of a number of companies as well as results of selection of modernization projects and accompanying changes in the rules and results of capacity auctions. The shares of PJSC Enel Russia were traded worse than those of competitors and market as a whole, which was explained by persistence of uncertainty on strategic issues including the company profile after the sale of coal asset and allocation of funds from its sale, dividend policy for 2019 and beyond, further complicated by limited liquidity of shares.
Shareholders
The number of persons filed in the register of company shareholders as of 31.12.2019 36
312,739
The number of persons included in the last list of persons who had the right to participate in the General Shareholders' Meeting (as of 27.06.2019)
346,904
The number of shares held by the company none
The number of shares held by the legal entities controlled by the company none
Changes in the composition of persons entitled to make use of at least 5% of the votes falling within the voting shares and companies37
36 without disclosing information about holders of shares whose rights are accounted for by nominal holders 37 The data are indicated in accordance with the notifications received by the company in accordance with Russian law. Prosperity
Capital Management Limited is a person, together with other persons entitled to administer a certain number of votes attributable to voting shares and included in the issuer’s authorized capital
173
According to the latest information received by the company, the person controlling PFR Partners Fund I Limited is PFR Partners Management Limited.
According to the notification received in February 2020, the share of Prosperity Capital Management Limited from 31.01.2020 is 5.74%. The Company has no data on existence of shares holdings exceeding five per cent, in addition to already disclosed.
The company's shareholders may enter into shareholder agreements including those providing for acquisition of a degree of control by any shareholder disproportionate to their participation. The company has no data on shareholders’ agreements that are relevant in 2019.
Dividends
The decision on dividend payment is taken at the General Shareholders’ Meeting based on recommendations of the company Board of Directors.
In accordance with Dividend Policy Regulation, the Board of Directors of the company advised the annual General Shareholders’ Meeting regarding the dividend payout that the amount of dividends must be: by the results of 2016 - 55%, by the results of 2017 - 60%, by the results of 2018 - 65% of ordinary net profit determined based on consolidated financial statements of the company (IFRS). The amount of the company net profit allocated to distribution of dividends complies with approved dividends policy.
Dividend Policy Regulation https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Dividend%20policy1.pdf
56,4319,03
7,6816,86
As of 31.12.2019
Enel S.p.A PFR Partners Fund I Limited Prosperity Capital Management Limited Иные лица
56,4319,03
8,2316,31
as of 31.12.2018
Enel S.p.A
PFR Partners Fund I Limited
Prosperity Capital Management Limited
Иные лица
56,4319,03
8,2316,31
as of 31.12.2017
Enel Investment Holding B.V.
PFR Partners Fund I Limited
Prosperity Capital Management Limited
Иные лицаOther persons Other persons
Other persons
174
The strategic plan of the company for 2020–2022 provides for a balance of growth opportunities, financial sustainability of business and predictable remuneration for shareholders. Given the period of change in the strategic positioning of the company and volatility of profit over the medium term, the company introduces a fixed dividend to ensure a guaranteed return for its shareholders.
By the results of 2019-2021, the company intends to distribute RUB 3 bln every year.
Information on accrued and paid dividends in the period from 2015 to 2019
Dividend payment reporting period
By the results of financial year 2014
from accumulated
retained earnings of
previous years
By the results of financial year 2015
By the results of financial year 2016
By the results of financial year 2017
By the results of year 2018
Date of the decision adopted by the General Shareholders’ Meeting of the company to pay dividends
17.06.2015 The General
Shareholders’ Meeting of the
company decided not to pay dividends on ordinary shares by
the results of financial year 2014.
17.06.2015
29.06.2016 The General
Shareholders’ Meeting of the company
decided not to pay dividends on ordinary
shares by the results of financial year 2015.
15.06.2017 04.06.2018 18.06.2019
Class, type, category of shares
registered ordinary
registered ordinary
registered ordinary
registered ordinary
Date when the persons entitled to receive dividends are determined
29.06.2015 28.06.2017 22.06.2018 08.07.2019
Total amount of accrued dividends RUB million
2,855 2,413 5,127 5,004
Total amount of dividends paid *, RUB million
2 757 2 402 5 105 4 982
Amount of dividends per one share, rubles
0.080731 0.06822 0.14493 0.141471
Date of dividends payment
03.08.2015 02.08.2017 27.07.2018 12.08.2019
The reasons for the dividends being paid not in full are represented by lack of current details for payment not provided by registered persons as well as return of outstanding dividends by nominee shareholders.
Depositary Receipts
Upon authorization by the Federal Financial Markets Service of Russia for circulation of the company ordinary shares outside the Russian Federation in the amount of not more than 7,074,537,100 pieces in August 2007 a program is opened for global depositary receipts (GDR) issue for ordinary shares of PJSC Enel Russia. The GDR program is established and supported according to Regulation S (Reg S). Ratio of GDR to ordinary shares of the company amounts to 1:50.
Program Depositary bank Amount of
depositary receipts circulating
Circulating receipts from the authorized
capital, %
Foreign organizer of trade
Sponsored* GDR (ordinary shares)
The Bank of New York Mellon
448,829 (corresponds to
22,491,450 Company ordinary
shares)
0.06 Over the counter securities market
* Information as of 31.12.2019.
175
Stock Exchange Bonds
In 2019, the company placed the commercial papers of series 001Р-02R and 001Р-03R by public subscription within the Program of commercial papers with identification number 4-50077-A-001P-02E dated September 2, 2015.
The commercial papers of PJSC Enel Russia are included in the section “Second Level” of the List of Securities accepted for trading on Moscow Exchange PJSC.
Interaction with the Shareholders and Investors
102-43 Enel Russia works actively in interaction with stock market participants and improvement of information disclosure. The company’s representatives are in on-going dialogue with analysts of investment banks and hold regular meetings with investors.
Key instruments for interaction with shareholders and investors
Company
General shareholders’ meeting Road show Disclosure of information including publication of results in excess of the amount required by law Conference calls Feedback forms for contacting the Chairman of the Board of Directors and Senior Independent Director and answers to the most frequently asked questions on the company's portal
Shareholders and investors
The regulation on information policy defines the procedure for interaction with shareholders, investors, and representatives of the mass media. Following the best national practices, it provides for an extended list of information disclosed by the company as well as the procedure for shareholders to access information about entities controlled by the company. Disclosure of information is carried out on the company's website as well as in the news feed e-disclosure.ru.
Regulation on the Information Policy https://www.enelrussia.ru/content/dam/enel-ru/documents/en/Information%20Policy.pdf
Documentary percentage bearer non-convertible commercial papers with obligatory collective
custody Series 001Р-02R 001Р-03R
Identification number of the issue 4B02-02-50077-A-
001P
4B02-03-50077-A-
001P
Date of the identification number assignment 29.03.2019 29.03.2019
International Securities Identification Number
(ISIN)
RU000A100824 RU000A100840
Number of securities issued 2,000,000 3,000,000
Issue amount, RUB 2,000,000,000 3,000,000,000
Coupon rate 8.6% 8.5%
Placement date 02.04.2019 02.04.2019
Circulation period, years 1352 915
Coupon period, days 169 183
Placement method public subscription public subscription
Maturity 14.12.2022 03.10.2021
176
Company’s website https://www.enelrussia.ru/en
Enel Russia’s page on e-disclosure.ru http://www.e-disclosure.ru/portal/company.aspx?id=5732
In 2019, the company continued to work for improvement of transparency of the public history and attractiveness of investments in the shares of PJSC Enel Russia including in the form of ongoing IR events:
• disclosure of annual and quarterly financial results
• update of the strategic plan with key operational and financial objectives for the next three years and further strategic vision
• update of the status of strategic projects
• direct meetings with investors including within the scope of conferences of brokers
• answers to the questions from investors and analysts During 2019, about 50 meetings were held with Russian and foreign investors, both current and potential.
The analytical coverage of the company was provided by seven experts from the leading investment banks, two of them initiated and resumed coverage in 2019.
Share price as of 31.12.2019 RUB 0.92
Consensus forecast
RUB 1.15
Upside potential +25%
Key IR-activities conducted in 2019
Q1 2019 Q2 2019 Q3 2019 Q4 2019
Conference call for 2018; Road show (Scandinavia and Europe); Raiffeisen Bank Conference (Stockholm)
Conference call for Q1 2019; Raiffeisen Bank Conference (Zurs); Renaissance Capital Conference (Moscow)
Conference call for 6 months of 2019; Update of the status of strategic projects (Moscow)
Conference call for 9 months of 2019; VTB Capital Investment Forum "Russia Calling!" (Moscow)
Calendar of events for investors in 2020 (IR calendar)
40%
25%
17%
19%
География встреч с инвесторами
РФ Скандинавия Великобритания Европа
Geography of meetings with investors
Russian Federation
Scandinavia Great Britain Europe
177
Financial Calendar For 2020
https://www.enelrussia.ru/en/investors/a201612-pjsc-enel-russia-investor-calendar.html
Controlled Companies and Participation in Other Organizations
102-13
Data on controlled companies as of 31.12.2019
Name Location Activity
Share in the
authorized
capital, %
Energetik Sanatorium-Preventorium LLC
Stavropol Territory,
Nevinnomyssk Activities of sanatorium and health resort organizations
100
LLC Enel Rus Wind Azov
Rostov region, Azov
district, village of
Kagalnik
Generation of electric
power from renewable
energy sources
100
LLC Enel Rus Wind
Generation Moscow
Generation of electric
power from renewable
energy sources
100
LLC Enel Rus Wind Kola Murmansk Region,
Murmansk
Generation of electric
power from renewable
energy sources
100
Teploprogress JSC Sverdlovsk Region,
Sredneuralsk
Activities to ensure the
reliability of the district
heating grid
60
LLC Reftinskaya GRES Sverdlovsk Region,
Reftinsky urban
settlement
Generation of electric
power by thermal power
plants
100
From 30.10.19, LLC Enel Rus Wind Kola is controlled company for the company having significant importance.
The company carries out management of controlled companies through its representatives at general meetings of shareholders/participants as well as at the company management bodies. The Board of Directors, in the cases defined by the Charter 38, gives recommendations to the company’s representatives regarding participation and voting procedure on the agenda items of general meetings of shareholders (participants) of controlled companies.
38 The Charter of PJSC Enel Russia is posted at the company's website https://www.enelrussia.ru
178
ANNEXES
Annex 1. GRI content index
GRI Standard Disclosure Page number(s)/ URL/ Direct
answer Omission and explanation
GENERAL DISCLOSURES
ORGANIZATIONAL PROFILE
GRI 102: General Disclosures
102-1 Name of the organization Title list, p. 13
102-2 Activities, brands, products and services
p. 13
102-3 Location and headquarters p. 13
102-4 Location of operations p. 13, 17
102-5 Ownership and legal form p. 13, 237
102-6 Markets served p. 17
102-7 Scale of the organization p. 13, 34-37, 40, 171
102-8 Information on employees and other workers
p. 98,104,226,227
102-9 Supply chain p. 124, 235
102-10 Significant changes to the organization and its supply chain
p. 12, 30, 124
102-11 Precautionary Principle or approach
p. 131-134
102-12 External initiatives p. 12,117-118
102-13 Membership of associations p. 56,177
STRATEGY
102-14 Statement from senior decision-maker
p. 6-7
102-15 Key impacts, risks, and opportunities
p. 131-134
ETHICS AND INTEGRITY
102-16 Values, principles, standards, and norms of behavior
p. 14, 26, 45
102-17 Mechanisms for advice and concerns about ethics
p. 95
GOVERNANCE
102-18 Governance structure p. 15, 135, 138
102-19 Delegating authority p. 15-16
102-20 Executive-level responsibility for economic, environmental, and social topics
p. 15-16, 139
102-22 Composition of the highest governance body and its committees
p. 140-148, 148-153
102-23 Chair of the highest governance body
p. 141
102-24 Nominating and selecting the highest governance body
p. 139 Partially disclosed
102-25 Conflicts of interest
p. 141-145. All members of the Board of Directors are reviewed to identify conflicts of interest. Information on the results of the review, in particular, on the absence of a conflict of interest, is publicly available and is part of the biographical background of each member of the Board of Directors
102-26 Role of highest governance body in setting purpose, values, and strategy
p. 139
102-28 Evaluating the highest governance body’s performance
p. 154-155
102-29 Identifying and managing economic, environmental, and social impacts
p. 114-15, 130-131
102-30 Effectiveness of risk management processes
p. 130-131
102-31 Review of economic, environmental, and social topics
p. 139, 152
102-32 Highest governance body’s role in sustainability reporting
The text of the Annual Report is approved by the Board of Directors of PJSC Enel Russia
102-33 Communicating critical concerns
The procedure for forming the agenda of meetings of the Board of Directors is described in the “Rules of Procedure for Convention and Holding of Meetings of Board of Directors of PJSC Enel Russia. The
full text of is available on the official website of the company, enelrussia.ru
102-35 Remuneration policies p. 158-166. The full text of “Regulation on Payment of Remuneration and Compensations to
Partially disclosed
179
GRI Standard Disclosure Page number(s)/ URL/ Direct
answer Omission and explanation
Members of Board of Directors of the PJSC Enel Russia” is available on the official website of the company, enelrussia.ru
102-36 Process for determining remuneration
p. 158-166, 212-215The full text of “Regulation on Payment of Remuneration and Compensations to Members of Board of Directors of the PJSC Enel Russia” is available on the official website of the company, enelrussia.ru
STAKEHOLDER ENGAGEMENT
102-40 List of stakeholder groups p. 50-54
102-41 Collective bargaining agreements p. 109-110
102-42 Identifying and selecting stakeholders
p. 50-52
102-43 Approach to stakeholder engagement
p. 50-54,93, 175-177
102-44 Key topics and concerns raised p. 50-52
REPORTING PRACTICES
102-45 Entities included in the consolidated financial statements
p. 7. The list of legal entities indicated in the section “Financial statements and auditor's report”.
The list of legal entities included in the consolidated financial statements differs from the list of legal entities, information on which is disclosed in the Annual Report. Non-financial data of PJSC Enel Russia is disclosed in the Report.
102-46 Defining report content and topic boundaries
p. 7-11
102-47 List of material topics p. 8-11
102-48 Restatements of information
The revision/ recalculation of data was performed for previous reporting period in the calculation of data for CO2 emissions. Please see the respective comment in the section “Air and water quality control”.
102-49 Changes in reporting p. 7
102-50 Reporting period p. 7
102-51 Date of most recent report p. 7
102-52 Reporting cycle p. 7
102-53 Contact point for questions regarding the report
p. 235
102-54 Claims of reporting in accordance with the GRI Standards
p. 7
102-55 GRI content index p. 178-183
102-56 External assurance
External assurance of non-financial data was not conducted. The internal assurance of the quality of the data provided for the report was carried out by the heads of relevant units, Sustainability Unit, the working Group responsible for creating the report, which included representatives of the Sustainability Unit, Corporate Relations Division, Investor Relations Group. We are considering the possibility of external assurance of the non-financial part of the report in the next reporting periods.
MATERIAL TOPICS
ECONOMIC AND FINANCIAL VALUE CREATION
GRI 103: Management Approach
103-1 Explanation of the material topic and its boundary
p. 10-11, 21-26
103-2 The management approach and its components
p. 21-26
103-3 Evaluation of the management approach
p. 21-26
GRI 201: Economic Performance
201-1 Direct economic value generated and distributed
p. 55-56 NEW
OCCUPATIONAL HEALTH AND SAFETY
GRI 103: Management Approach
103-1 Explanation of the material topic and its boundary
p. 10-11, 59-61
103-2 The management approach and its components
p. 59-61
103-3 Evaluation of the management approach
p. 59-61
180
GRI Standard Disclosure Page number(s)/ URL/ Direct
answer Omission and explanation
GRI 403: Occupational Health and Safety
403-1 Occupational health and safety management system
p. 59-61, 226
403-2 Hazard identification, risk assessment, and incident investigation
p. 61-63, 63-65 Partially disclosed
403-3 Occupational health services p. 65 NEW
403-4 Worker participation, consultation, and communication on occupational health and safety
p. 66-67 NEW
403-5 Worker training on occupational health and safety
p. 66-67
403-6 Promotion of worker health p. 111-112
403-8 Workers covered by an occupational health and safety management system
p. 59 NEW
403-9 Work-related injuries p. 63-65, 226
403-10 Work-related ill health p. 65 Partially disclosed
ENVIRONMENTAL COMPLIANCE AND MANAGEMENT
GRI 103: Management Approach
103-1 Explanation of the material topic and its boundary
p. 10-11, 71-74
103-2 The management approach and its components
p. 71-74
103-3 Evaluation of the management approach
p. 71-74
GRI 301: Materials
301-1 Materials consumed by weight or volume
p. 84, 217
GRI 303: Water
303-1 Interactions with water as a shared resource
p. 79-82
303-2 Management of water discharge-related impacts
p. 80-82, 219-220
303-3 Water withdrawal p. 79-80, 220
303-4 Water discharge p. 80-82, 221
303-5 Water consumption p. 79-80, 222 NEW
GRI 304: Biodiversity
304-1
Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas
p. 85-86
304-2 Significant impacts of activities, products, and services on biodiversity
According to the data available, the current operation of the company does not have a significant impact on the biodiversity of the regions in which power and heat generating facilities are located
304-3 Habitats protected or restored p. 85-86
304-4
IUCN Red List species and national conservation list species with habitats in areas affected by operations
p. 85-86
GRI 305: Emissions
305-1 Direct (Scope 1) GHG emissions p. 77-78, 218
305-2 Energy indirect (Scope 2) GHG emissions
Figure not available in the actual monitoring system. Enel Russia will consider the possibility to review its methodological approach to collect and calculate indirect emissions in the next reporting periods.
305-3 Other indirect (Scope 3) GHG emissions
Figure not available in the actual monitoring system. Enel Russia will consider the possibility to review its methodological approach to collect and calculate indirect emissions in the next reporting periods.
305-4 GHG emissions intensity p. 77-78, 218 NEW
305-6 Emissions of ozone-depleting substances (ODS)
In the company’s operation, ozone-depleting substances are not emitted into the atmosphere and are not used in production activities, except for use in extremely limited quantities as a reagent during chemical tests in laboratories, as well as for fueling
NEW
181
GRI Standard Disclosure Page number(s)/ URL/ Direct
answer Omission and explanation
and refueling of compressor equipment, air conditioning units, industrial air conditioners and fire fighting systems.
305-7 Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions
p. 78-79, 223-224
GRI 306: Effluents and Waste
306-1 Water discharge by quality and destination
p. 80-81, 221 Partially disclosed
306-2 Waste by type and disposal method
p. 84-85, 225
306-3 Significant spills
The company's activities do not imply spills of oil and oil products. At each production brunch of the company systems of prevention of spills of chemical reagents and oil products are installed. In the reporting period, the company did not cause any significant spill
306-4 Transport of hazardous waste
The company does not transport hazardous waste. Hazardous waste refers to waste from I to IV hazard classes in accordance to FCCW (Federal Classificatory Catalogue of Wastes)
306-5 Water bodies affected by water discharges and/or runoff
In the reporting period, none of the water bodies used by the company in the water use cycle underwent significant discharges, leading to a change in its natural water regime
GRI 307: Environmental Compliance
307-1 Non-compliance with environmental laws and regulations
p. 74-75, 216
SOUND GOVERNANCE AND FAIR CORPORATE CONDUCT
GRI 103: Management Approach
103-1 Explanation of the material topic and its boundary
p. 10-11, 93-97, 135-138, 167-169
103-2 The management approach and its components
p. 93-97, 167-169, 135-138
103-3 Evaluation of the management
approach p. 167-169, 135-138
GRI 205: Anticorruption
205-1 Operations assessed for risks related to corruption
p. 93-97
205-2 Communication and training about anti-corruption policies and procedures
p. 93-97
205-3
Confirmed incidents of corruption and actions taken
In the reporting period there were no confirmed cases.
GRI 415: Public Policy
415-1 Political contributions p. 97
ENGAGING THE LOCAL COMMUNITIES
GRI 103: Management Approach
103-1 Explanation of the material topic and its boundary
p. 10-11, 112-113
103-2 The management approach and its components
p. 112-113
103-3 Evaluation of the management approach
We regularly conduct a self-assessment of the management approach to local community engagement. Evaluation of the management approach, as well as its improvement, occurs based on the results of ESG risks assessment, which is conducted by an external party for the second year in a row. We also participate in various international and local competitions and ratings to get a third-party view on our approach and compare it with other businesses.
GRI 203: Indirect Economic Impacts
203-2 Significant indirect economic impacts
p. 114-115 NEW
GRI 413: Local Communities
413-1 Operations with local community engagement, impact assessments, and development programs
p. 114-115
413-2 Operations with significant actual and potential negative impacts on
local communities
p. 114-115
EMPLOYEES MANAGEMENT, DEVELOPMENT AND MOTIVATION
GRI 103: Management Approach
103-1 Explanation of the material topic and its boundary
p. 10-11, 97-98
103-2 The management approach and its components
p. 97-98
182
GRI Standard Disclosure Page number(s)/ URL/ Direct
answer Omission and explanation
103-3 Evaluation of the management approach
p. 97-98
GRI 202: Market Presence
202-1 Ratios of standard entry level wage by gender compared to local minimum wage
p. 101-103, 228
GRI 401: Employment
401-1 New employee hires and employee turnover
p. 100-101, 229
401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees
p. 101-103, 110-111
401-3 Parental leave p. 110-111, 229-230 NEW
GRI 404: Training and education
404-1 Average hours of training per year per employee
p. 108-109, 230-231
404-2 Programs for upgrading employee skills and transition assistance programs
p. 108-109
404-3 Percentage of employees receiving regular performance and career development reviews
p. 109, 231
GRI 405: Diversity and Equal Opportunity
405-1 Diversity of governance bodies and employees
p. 103-106, 227-228, 231-232
405-2 Ratio of basic salary and remuneration of women to men
p. 103-104, 232-233 NEW
GRI 406: Non discrimination
406-1 Total number of incidents of discrimination during the reporting period
In the reporting period, the Internal Audit Department of PJSC Enel Russia did not find any cases of discrimination on the basis of gender, national origin and ethnicity, religion or any other signs
HUMAN RIGHTS
GRI 103: Management Approach
103-1 Explanation of the material topic and its boundary
p. 10-11, 121-122
103-2 The management approach and its components
p. 121-122
103-3 Evaluation of the management approach
p. 121-122
GRI 408: Child Labor
408-1
Operations and suppliers at significant risk for incidents of child labor
Enel Russia respects children's rights and condemns all forms of child labor. These provisions are enshrined in the Human Rights Policy. There have been no cases of child labor in the company or its suppliers.
NEW
GRI 409: Forced Or Compulsory Labor
409-1
Operations and suppliers at significant risk for incidents of forced or compulsory labor
Enel Russia rejects any form of forced or compulsory labor. These provisions are enshrined in the Human Rights Policy. During the reporting period, there was not a single case of the use of forced labor in the company or its suppliers.
NEW
GRI 410: Security Practices
410-1 Security personnel trained in human rights policies or procedures
All security personnel have been trained in human rights. The contracts with suppliers of security services include provisions that they undertake to comply with the principles of the Code of Ethics of PJSC Enel Russia when carrying out their business operations and interaction with partners. The Code of Ethics covers human rights observance.
GRI 411: Rights Of Indigenous Peoples
411-1 Incidents of violations involving rights of indigenous peoples
Operations of Enel Russia do not affect indigenous and small-numbered peoples. In the reporting period, there was not a single incident of violation of the rights of indigenous and small-numbered peoples, nor was there a single complaint regarding violation of human rights from these groups.
NEW
GRI 412: Human Rights Assessment
412-2 Employee training on human rights policies or procedures
p. 122-123
OPERATIONAL EFFICIENCY
GRI 103: Management Approach
103-1 Explanation of the material topic and its boundary
p. 10-11, 88-89
103-2 The management approach and its components
p. 88-89
103-3 Evaluation of the management approach
p. 88-89
GRI 302: Energy
302-1 Energy consumption within the organization
p. 82-83 Partially disclosed
302-3 Energy intensity p. 82-83
302-4 Reduction of energy consumption p. 83-84 NEW
DECARBONIZATION OF ENERGY MIX
183
GRI Standard Disclosure Page number(s)/ URL/ Direct
answer Omission and explanation
GRI 103: Management Approach
103-1 Explanation of the material topic and its boundary
p. 10-11. 29-30
103-2 The management approach and its components
p. 29-30
103-3 Evaluation of the management approach
p. 29-30
CUSTOMER FOCUS
GRI 103: Management Approach
103-1 Explanation of the material topic and its boundary
p. 10-11. 93
103-2 The management approach and its components
p. 93
103-3 Evaluation of the management approach
p. 93
INNOVATION AND DIGITAL TRANSFORMATION
GRI 103: Management Approach
103-1 Explanation of the material topic and its boundary
p. 10-11, 89-93
103-2 The management approach and its components
p. 89-93
103-3 Evaluation of the management approach
p. 89-93
SUSTAINABLE SUPPLY CHAIN
GRI 103: Management Approach
103-1 Explanation of the material topic and its boundary
p. 10-11, 124-128
103-2 The management approach and its components
p. 124-128
103-3 Evaluation of the management approach
p. 124-128
GRI 204: Procurement Practices
204-1 Proportion of spending on local suppliers
p. 125-126
GRI 308: Supplier Environmental Assessment
308-1 New suppliers that were screened using environmental criteria
p. 124-128, 235 Partially disclosed
308-2 Negative environmental impacts in the supply chain and actions taken
p. 124-128, 235
GENERAL STANDARD DISCLOSURES FOR THE ELECTRIC UTILITY SECTOR
EU1 Installed capacity, broken down by primary energy source and by regulatory regime
p. 18, 37-38, 184-186
EU2 Net energy output broken down by primary energy source and by regulatory regime
p. 39
EU15
Percentage of employees eligible to retire in the next 5 and 10 years broken down by job category and by region
p. 233-234 NEW
Former EU21 (DMA Disaster/Emergency Planning and Response) Mapped GRI Standards 103-2
Contingency planning measures, disaster/emergency management plan and training programs, and recovery/restoration plans
p. 68-71
Annex 2. Financial statements and auditor's report
Financial statements
Auditor’s Report
Evaluation of the auditor’s reports
Evaluation by the Audit and Corporate Governance Committee of the Board of Directors of PJSC Enel Russia
of the auditor’s reports on financial accounting and reporting of PJSC Enel Russia prepared on the basis of 2019 business activity results.
Pursuant to p. 177 of the Code of Corporate Governance recommended by Central Bank of the
Russian Federation (Letter of the Central bank dd.10.04.2014 No. 06-52/2463) the Audit and Corporate
Governance Committee of the Board of Directors shall provide evaluation of auditor’s reports on financial
accounting and reporting issues in accordance with International Financial Reporting Standards
184
(hereinafter – «IFRS») and Russian Accounting Standards (hereinafter – «RAS») - to be further submitted
as materials to the Annual General Shareholders’ Meeting.
Ernst and Young LLC located at Sadovnicheskaya Nab., 77, bld. 1 Moscow, 115035, Russia,
appointed as the auditor of PJSC Enel Russia to provide audit and issue auditor’s reports to express an
opinion on accounting (financial) statement prepared in accordance with IFRS and RAS. Ernst and Young
LLC is a member of the Self-regulated organization of auditors – Association “Sodruzhestvo”.
Based on the results of the audit of the financial accounting and reporting of PJSC Enel Russia for
2019 Ernst and Young drew up the auditor’s reports.
Upon examining the auditor’s reports issued by Ernst and Young LLC, the Audit and Corporate
Governance Committee of the Board of Directors has resolved:
1. That the audit was conducted in compliance with the terms and conditions of the contract
concluded by Ernst and Young LLC and PJSC Enel Russia, in adherence to the agreed schedule and audit
procedures.
2. That the auditor’s reports presented complies with the requirements of the Federal Law “On
audit activities” No. 307-FZ dated 30.12.2008; with the International Standards of Auditing approved by the
RF Government Decree No. 576 dated 11.06.2015; with internal regulations (standards) of audit activities
of the Self-regulated organization of auditors.
3. To note that the opinion of Ernst and Young LLC contains the positive notion that the accounting
and reporting statements of PJSC Enel Russia represent fairly, in all material respects, the financial position
of the company as at December 31, 2019 and its financial performance and its cash flows for 2019 in
accordance with the rules on preparation of financial statements in the Russian Federation as well as in
compliance with the IFRS requirements..
Chairman of the Audit and Corporate Governance Committee of PJSC Enel Russia Board of Directors V. Zarkhin
Annex 3. Structure of generation facilities and structure of fuel consumption
EU1 Konakovskaya GRES
Structure of generating facilities
t. № Electric
power, MW Turbine type Boiler type
Electrical generator type
Year
of putting into operation
Steam turbine No. 1 325 К-325-240-7МР ПП-950-255-ГМ (ПК-41) ТВВ-320-2-УЗ 1964
Steam turbine No. 2 325 К-325-240-7МР ПП-950-255-ГМ (ПК-41) ТВВ-350-2-УЗ 1965
Steam turbine No. 3 325 К-325-240-7МР ПП-950-255-ГМ (ПК-41) ТВВ-350-2-УЗ 1965
Steam turbine No. 4 305 К-305-240 ПП-950-255-ГМ (ПК-41) ТВВ-320-2-УЗ 1966
Steam turbine No. 5 305 К-305-240 ПП-950-255-ГМ (ПК-41) ТВВ-320-2-УЗ 1967
Steam turbine No. 6 305 К-305-240 ПП-950-255-ГМ (ПК-41) ТВВ-320-2-УЗ 1968
Steam turbine No. 7 305 К-305-240 ПП-950-255-ГМ (ПК-41) ТВВ-320-2-УЗ 1968
Steam turbine No. 8 325 К-325-240-7МР ПП-950-255-ГМ (ПК-41) ТВВ-320-2-УЗ 1969
Fuel consumption structure
Indicators Unit of
measurement 2019 2018 2017
Gas ths m3 1,665,352.39 1,921,257.03 2,042,405
Fuel oil tons 13 13 69
185
Share of fuel oil in the fuel
mix % 0.001 0.001 0.004
Nevinnomysskaya GRES
Structure of generating facilities
t. № Electric
power, MW Turbine type Boiler type
Electrical generator type
Year
of putting into operation
Steam turbine No. 1 30 ПТ-30/35-90/10-5
4 boilers, ТП-15
JISALT 255 2010
Steam turbine No. 2 25 ПТ-25/30-90/10 ТВС-30 1960
Steam turbine No. 3 80 ПТ-80/100-130/13
3 boilers, ТГМ-96
ТЗФП-110-2 2005
Steam turbine No. 4 50 Р-50-130/1 ТВФ-60-2 1968
Steam turbine No. 6 155 К-155-130 ТГМ-94 ТВВ-165-2 1964
Steam turbine No. 7 155 К-155-130 ТГМ-94 ТВВ-165-2 1964
Steam turbine No. 8 155 К-155-130 ТГМ-94 ТВВ-165-2 1965
Steam turbine No. 9 155 К-155-130 ТГМ-94 ТВВ-165-2 1966
Steam turbine No. 10 155 К-155-130 ТГМ-94 ТВВ-165-2 1967
Steam turbine No. 11 160 К-160-130 ТГМ-94 ТВВ-165-2 1970
Steam turbine No. 14 129.9 SST 700/900 DHR
Vertical HRSG AH-MT001
SGEN5-100A-2P
2011
Gas turbine No. 15 280.3 V94.3A 4 (SGT5-4000F)
SGEN5-1000A 2011
Fuel consumption structure
Reftinskaya GRES Structure of generating facilities
t. № Electric power,
MW Turbine type Boiler type
Electrical generator type
Year
of putting into operation
Steam turbine No. 1 300 К-300-240 ПК-39-2 ТГВ-300 1970
Steam turbine No. 2 300 К-300-240 ПК-39-2 ТГВ-300 1971
Steam turbine No. 3 300 К-300-240 ПК-39-2 ТГВ-300 1971
Steam turbine No. 4 300 К-300-240-2 ПК-39-2 ТГВ-300 1972
Steam turbine No. 5 300 К-300-23,5-4 ПК-39-2 ТГВ-300 2014
Steam turbine No. 6 300 К-300-240-2 ПК-39-2 ТГВ-300 1975
Steam turbine No. 7 500 К-500-240-2 ПК-57-2 ТВВ-500-2М УЗ 1977
Steam turbine No. 8 500 К-500-240-2 ПК-57-2 ТВВ-500-2М УЗ 1978
Steam turbine No. 9 500 К-500-240-2 ПК-57-3 ТВМ-500 У3 1979
Steam turbine No. 10 500 К-500-240-2 ПК-57-3 ТВМ-500-2 1980
Indicators Unit of
measurement 2019 2018 2017
Gas ths m3 1,869,126.66 2,081,009 2,197,020
Fuel oil tons 5,419 3,774 6,537
Share of fuel oil in the
fuel mix % 0.32 0.21 0.35
186
Fuel consumption structure
Indicators Unit of
measurement 2019* 2018 2017
Ekibastuz coal tons 8,217,757 11,475,102 11,586,811
Fuel oil tons 15,358 22,638 18,851
Share of fuel oil in the fuel
mix % 0.43 0.5 0.4
* Data on the share of Reftinskaya GRES are provided for 9 months. 2019. See details on the sale of the property of Reftinskaya
GRES in the section “Exit from Coal Generation”
Sredneuralskaya GRES Structure of generating facilities
t. № Electric power,
MW Turbine type Boiler type
Electrical generator type
Year
of putting into operation
Steam turbine No. 6 100 Т-100-130 3 ТГМ-96 boilers of
heating and hot water supply
ТВФ-100-2 1965
Steam turbine No. 7 100 Т-100-130 ТВФ-100-2 1966
Steam turbine No. 8 38 Р-38-130/34 ТВФ-60-2 1966
Steam turbine No. 9 310 К-310-240 ТГМП-114 ТВВ-320-2 1969
Steam turbine No. 10 300 Т-300-240 ТГМП-114 ТВВ-320-2 1969
Steam turbine No. 11 300 Т-300-240 ТГМП-114 ТВВ-320-2 1970
Steam turbine No. 12 137.8 КТ-140-13,3 Horizontal HRSG, three-circuit
SGEN5-100A-2P
2011
Gas turbine No. 13 281.2 MS 9001 (FB) 330H 2011
Fuel consumption structure
Indicators Unit of
measurement 2019 2018 2017
Gas ths m3 1,962,206 1,979,948 1,991,219
Fuel oil tons 122 157 6,172
Share of fuel oil in the
fuel mix % 0.01 0.004 0.38
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Annex 4. Information about observance of the Corporate Governance Code recommendations by
the company
This Report on compliance with the principles and recommendations of the Corporate Governance Code was reviewed by the Board of Directors of Public Joint Stock Company Enel Russia (hereinafter – the “Company”) at a meeting of the Board of Directors on April 21-22, 2020, minutes No. 6/20 dated 22.04.2020.
The Board of Directors confirms that the data contained in this Report contain complete and reliable information on compliance with the principles and recommendations of the Corporate Governance Code by the company for 2019.
Compliance with the corporate governance principles recorded in the Corporate Governance Code was assessed by the company in accordance with the methods stated in Letter of the Bank of Russia No. ИН-06-52/8 dated 17.02.2016.
A brief description of the most significant aspects of the corporate governance model and practice in a joint-stock company is contained in the annual report’s sections “Corporate Governance” and “Risk Management”.
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1.1 The Company shall ensure equal and fair treatment of all shareholders as regards their implementation of the right to participate in the company management.
1.1.1 The company creates for shareholders conditions that are as favorable as possible to participate in the general meeting, conditions for elaborating reasonable opinion on the general meeting agenda issues, coordinating their actions, as well as the possibility to express their opinion on the issues considered.
1. The internal document of the company approved by the General Shareholders' Meeting and governing the general meeting procedures is available to the public.
Complied with Continues to be complied with. The procedure for convocation, preparation and holding the General Shareholders' Meeting of the company is established by the “Regulations on Preparation and Holding of General Shareholders’ Meeting” and the Charter of the company. These documents are posted at the company's website (https://www.enelrussia.ru/en/investors/a201612-basic-documents-.html). During holding of each General Shareholders' Meeting, PJSC Enel Russia provides shareholders with e-mail address and WhatsApp number at which the shareholders can express their opinions and send questions regarding the agenda of the General Shareholders' Meeting.
2. The Company provides an available method for communication with the company, such as a "hot line", e-mail or an Internet forum, allowing shareholders to express their opinion and send questions relating to the agenda when preparing for the general meeting. The foregoing actions were taken by the company on the eve of each general meeting held in the reporting period.
1.1.2 The procedure for notifying of the general meeting and providing the materials for the general meeting provides the shareholders with an opportunity to be properly prepared for participation in the same.
1. The notification of the General Shareholders' Meeting is placed (published on the web-site at least 30 days prior to) the general meeting date.
Complied with Continues to be complied with. According to the article 11.8 of the company’s Charter, a notice of the company’s General Shareholders' Meeting specified the meeting venue, date and the documents required to access the premises should be published at the company’s website (https://www.enelrussia.ru/en.html.html) not later than 21 days prior to the date of its holding. Actually, the company places these notices at least 30 days before the General Shareholders' Meeting date. Information concerning the persons that proposed the agenda issues and the candidates for the Board of Directors is represented in the materials to the relevant issues.
2. The notification of the meeting specifies the meeting venue and the documents required to access the premises.
3. The shareholders were given access to the information concerning the persons that proposed the agenda issues and the candidates for the Board of Directors and the Internal Audit Commission of the company.
1.1.3 When preparing and holding the general meeting, the shareholders were able to receive the information about the meeting and materials for it in an easy and timely manner, as well as to ask questions to the executive bodies and the members of the Board of Directors, communicate with each other.
1. In the reporting period, the shareholders were allowed to ask questions to the members of the executive bodies and the members of the Board of Directors of the company on the eve and when holding the annual general meeting.
Complied with
Continues to be complied with. When preparing for the annual General Shareholders' Meeting in 2019, shareholders were provided with the opportunity to receive answers to their questions by sending them to a special e-mail address ([email protected]) or to WhatsApp number that were indicated in the meeting notification. The shareholders who participated in the meeting could set questions to the company’s management and the Board of Directors’ members, who were also present at the annual General Shareholders' Meeting.
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2. The stance of the Board of Directors (including dissenting opinions entered in the minutes) on each agenda issue of the general meetings held in the reporting period was included in the materials to the General Shareholders' Meeting. 3. The Company provided to the authorized shareholders the access to the list of persons entitled to participate in the general meeting, starting from the date of its receipt by the company, in all cases when general meetings were held in the reporting period.
The stance of the Board of Directors (including dissenting opinions entered in the minutes) on each agenda issue of the General Shareholder’s Meeting was represented in the materials to the relevant meeting. The shareholders had the right to examine a list of persons entitled to participate in the General Shareholders' Meeting.
1.1.4 Implementation of the shareholder's right to request convening of the general meeting, propose candidates for the management bodies and enter proposals to be included in the general meeting agenda was not associated with unreasonable difficulties.
1. In the reporting period, the shareholders were able to enter proposals to be included in the annual general meeting agenda within at least 60 days after expiration of a relevant calendar year. 2. In the reporting period, the company did not refuse to accept proposals for the agenda or the candidate for the company bodies due to misprints and other insignificant deficiencies in the shareholder's proposal.
Complied with Continues to be complied with. PJSC Enel Russia’s Charter p.13.1 establishes the term for the shareholders to submit proposals on the agenda issues of the annual General Shareholders’ Meeting - no later than 60 days after the end of the reporting year. If there are significant deficiencies in the shareholder’s proposal, the company shall immediately inform the shareholder of them in order to provide them with a possibility to correct them.
1.1.5 Each shareholder was able to implement the voting right without any obstacles in the easiest and the most convenient way for him/her.
1. The internal document (internal policy) of the company contains provisions stating that each participant of the general meeting may request a copy of the ballot that he/she filled in, certified by the counting committee, before completion of a relevant meeting.
Complied with Continues to be complied with. According to the p.11.21 of the company’s Charter each participant of the General Shareholders' Meeting may request a copy of the ballot that he/she filled in, certified by the counting committee, before completion of the relevant General Shareholders' Meeting.
1.1.6 The general meeting proceeding established by the company provides equal possibility to all attendants to express their opinion and ask the questions they are interested in.
1. When General Shareholders' Meetings were held in the reporting period in the form of a meeting (shareholders' joint presence) enough time was provided for reports on the agenda issues and time for discussing these issues.
Complied with Continues to be complied with. The annual General Shareholders' Meeting was held in the reporting period, in the form of co-presence. The annual General Shareholders' Meeting provided for up to 20 minutes for reports on each agenda issue and time for discussion of such issues. The shareholders were provided with a fairly large room that accommodated everyone who wanted to participate in the General Shareholders' Meeting. One part of the candidates for the company management and control bodies were available for answering the shareholders' questions at the meetings where these candidates were put to voting. Another part was available by conference call. When convening the annual General Shareholders' Meeting in the reporting period, the Board of Directors decided to use telecommunication means to provide shareholders with remote access for participation in the annual General Shareholders' Meeting of the company, if there are technical capabilities at the meeting venue.
2. The candidates for the company management and control bodies were available for answering the shareholders' questions at the meetings where these candidates were put to voting.
3. When making the decisions related to preparation and holding of the General Shareholders' Meetings, the Board of Directors considered using telecommunication means to provide shareholders with remote access for participation in the general meetings in the reporting period.
1.2 The shareholders are provided with an equal and fair opportunity to participate in the company revenue by receiving dividends.
1.2.1 The company developed and implemented a transparent and clear mechanism for determining the amount of dividends and their payment.
1. The dividend policy is developed, approved by the Board of Directors and disclosed at the company.
Complied with Continues to be complied with. The Company’s Board of Directors approved the Dividend Policy Regulation published at the company’s website (https://www.enelrussia.ru/en/investors/a201612-basic-documents-.html ).
2. If the company dividend policy uses the company's reporting indicators for determining the amount of dividends, relevant provisions contained in the Dividend Policy take into account consolidated financial statements indicators.
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1.2.2 The Company does not make any decision on dividends payment if such decision, not violating formally the restrictions set forth in the laws, is economically unreasonable and may lead to the formation of false ideas concerning the company's business.
1. The dividend policy of the company contains clear instructions concerning financial/economic circumstances when the company should not pay the dividends.
Complied with Continues to be complied with. Dividend Policy Regulation p.2.6 established a general rule that the company is obligated to pay dividends declared on shares of each category (type), unless otherwise provided by applicable f Russian legislation. Although the Dividend Policy Regulation does not formally provide clear guidance on financial/economic circumstances under which dividends are not paid, it seems sufficient for the company that the restrictions are set out in art. 43 of the Federal Law “On Joint Stock Companies”.
1.2.3 The company does not allow for deterioration of the current shareholders' dividend rights.
1. In the reporting period, the company did not take any actions leading to deterioration of the current shareholders' dividend rights.
Complied with Continues to be complied with. The Company issued one type of ordinary shares. During reporting year PJSC Enel Russia did not take any actions leading to deterioration of the current shareholders' dividend rights.
1.2.4 The Company seeks to eliminate the shareholders' using other ways for gaining profit (income) at the company's expense, besides dividends and liquidation value.
1. To eliminate the shareholders' using other ways for gaining profit (income) at the company's expense, besides dividends and liquidation value, the internal documents of the company establish the control mechanisms ensuring timely identification and approval procedure for the transactions with persons affiliated (associated) with current shareholders (persons entitled to make use of the votes falling within the voting shares), in the cases when the law does not recognize formally such transactions as related party transactions.
Complied with Continues to be complied with. The Company has created the Related Party Transactions Committee, its objectives include assisting the Board of Directors in evaluation and decision-making during consideration of related party transactions and cases of the conflict of interest. Since June 2019, the Related Party Transactions Committee consists of independent directors solely. The Board of Directors adopted the General Principles for Approval of Related Parties Transactions. This document provides for the need of determination of fair market-value appraisal of property acquired or sold in the course of related party transactions on the basis of tender results, analysis of market prices or engagement of an independent appraiser. Also, the company’s Board of Directors approved the Enel Group Corporate Governance Guidelines on 27.09.2018 that sets out the general principles and procedures for fulfillment of intra-group transactions and other related party transactions.
1.3 The system and practice of corporate management ensure equal conditions for all shareholders owning shares of similar category (type), including minority (minor) shareholders and foreign shareholders and their equal treatment by the company.
1.3.1 The Company created conditions for fair treatment of each shareholder by the management bodies and controlling officials of the company, including the conditions disallowing abuse of powers by major shareholders in relation to minority shareholders.
1. Within the reporting period the procedures for managing potential conflicts of interests arising among the current shareholders are efficient, and the Board of Directors paid due attention to the conflicts among shareholders, if any.
Complied with Continues to be complied with. Within the reporting period, the company had no conflicts registered between the shareholders.
1.3.2 The Company does not take any actions that lead or may lead to artificial redistribution of corporate control.
1. There are no quasi-treasury shares or they did not participate in voting within the reporting period.
Complied with Continues to be complied with. There were no quasi-treasury shares during 2018 – 2019.
1.4 The shareholders are provided with reliable and efficient methods for accounting the rights to shares, as well as the possibility to dispose of the shares they own in a free and easy manner.
1.4 The shareholders are provided with reliable and efficient methods for accounting the rights to shares, as well as the possibility to dispose of the shares they own in a free and easy manner.
1. Quality and reliability of the activity performed by the company Registrar to keep the register of securities owners meet the requirements of the company and its shareholders.
Complied with Continues to be complied with. Registrar of the company - JSC IRC - R.O.S.T. is the major registrar in Russia that provides its customers with the widest range of services and advanced services.
2.1 The Board of Directors performs strategic management of the company, determines general principles and approaches towards organization of the risk management and internal control system at the company, controls activities of the company's executive bodies, and also implements other key functions.
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2.1.1 The Board of Directors is responsible for making the decisions on appointment and dismissal for the positions at the executive bodies, including due to improper fulfillment of their duties. The Board of Directors also controls the company executive bodies so that they act in accordance with the approved development strategy and core businesses of the company.
1. The Board of Directors has the powers registered in the Charter to appoint, dismiss and determine the contract conditions in relation to the executive bodies' members. 2. The Board of Directors reviewed the report (reports) of the sole executive body and members of the collective executive body on compliance with the company strategy.
Complied with Continues to be complied with. According to the Charter of PJSC Enel Russia, the Board of Directors’ competence covers appointment and early termination of the powers of the company’s General Director, setting of the number, election and early termination of the powers of the Executive Board ‘s members. The Board of Directors considers regularly reports of the company’s General Director, which, among other things, represent implementation of business plans and implementation of the strategy of PJSC Enel Russia.
2.1.2 The Board of Directors establishes main business focuses of the company for a long term, evaluates and approves key performance indicators and main business objectives of the company, evaluates and approves the strategy and business plans for the company core activities.
1. Within the reporting period the Board of Directors at its meetings considered the issues related to the strategy fulfillment progress and update, approval of the financial and business plan (budget) of the company, as well as review of the criteria and indicators (including interim ones) concerning implementation of the company strategy and business plans.
Complied with Continues to be complied with. Within the reporting period the Board of Directors considered the issues related to the strategy fulfillment progress and update as well as approval of the financial and business plan (budget) of the company.
2.1.3 The Board of Directors determines principles and approaches towards organization of the risk management and internal control system at the company.
1. The Board of Directors determined principles and approaches towards organization of the risk management and internal control system at the company.
Complied with Continues to be complied with. The Company adopted a number of internal documents defining the principles and organization of risk management and internal control systems. In 2018, the Board of Directors approved the Risk Management and Internal Control Policy that defines the goals, objectives, principles and methods of risk management at the company. Also, the company has Regulation on the internal control system that defines the goals and objectives of the internal control system and the Regulation of Internal Audit Department, its purpose is to provide the Audit and Corporate Governance Committee, the Board of Directors and the General Director with the independent evaluation of the effectiveness of the internal control system, risk management and practice of corporate governance. During 2019, the Board of Directors considered the risk management and internal control systems of PJSC Enel Russia and recognized them as efficient.
2. The Board of Directors assessed the risk management and internal control system of the company within the reporting period.
2.1.4 The Board of Directors determined the company policy for remuneration and (or) reimbursement for the expenses (compensations) to the members of the Board of Directors, executive bodies and other key managers of the company.
1. The Company developed and implemented the policy (policies) for remuneration and reimbursement for the expenses (compensations) to the members of the Board of Directors, executive bodies and other key managers of the company, and the policy (policies) is approved by the Board of Directors.
Complied with Continues to be complied with. The Company has internal documents that govern remuneration and reimbursement of expenses of the Board of Directors members, executive bodies of the company and other key managers of the company: - Regulation on payment of remuneration and compensations to members of Board of Directors and Board of Directors’ Committees of PJSC Enel Russia, approved by the General Shareholders’ Meeting of PJSC Enel Russia; - Policy on remuneration and reimbursement of expenses (compensation) of the members of executive bodies and other key managers of Public Joint-Stock Company Enel Russia approved by the Board of Directors of the company (https://www.enelrussia.ru/en/investors/a201612-basic-documents-.html). During 2019, the Board of Directors considered both of the above documents.
2. Within the reporting period the Board of Directors at its meetings considered the issues related to the foregoing policy (policies).
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2.1.5 The Board of Directors plays a key role in prevention, identification and settlement of the internal conflicts among the company bodies, shareholders and employees.
1. The Board of Directors plays a key role in prevention, identification and settlement of the internal conflicts. 2. The Company created the system for identification of transactions related to the conflict of interests and the system of measures aimed at such conflicts settlement.
Complied with
Continues to be complied with. The regulation of the Board of Directors’ key role in resolving internal conflicts is included in the company's Charter (article 15.1) and in the Rules of Procedure for Convention and Holding of Meetings of Board of Directors (p. 3.8). Also, the Related Party Transactions Committee is created and operates successfully at PJSC Enel Russia. The Board of Directors approved and published the Enel Group Corporate Governance Guidelines setting out the general principles and procedures for fulfillment of intra-group transactions and other related-party transactions (https://www.enelrussia.ru/en/investors/a201612-basic-documents-.htm) .
2.1.6 The Board of Directors plays a key role in ensuring the company transparency, timely and full disclosure of information by the company, easy access to the company documents for the shareholders.
1. The Board of Directors approved the Regulation on Information Policy.
Complied with Continues to be complied with. The revised Regulation on the Information Policy of PJSC Enel Russia was approved by the Board of Directors in 2018. The Board of Directors reserved the responsibility for monitoring compliance with this Regulation. (p. 9.1 Regulation on the Information Policy).
2. The Company determined the persons responsible for implementation of the Information Policy.
2.1.7 The Board of Directors controls the corporate management practice at the company and plays a key role in significant corporate events of the company.
1. Within the reporting period the Board of Directors considered the issue concerning the corporate management practice at the company.
Complied with Continues to be complied with. The Board of Directors reviewed the report on corporate governance practices at PJSC Enel Russia in November 2019.
2.2 The Board of Directors reports to the company shareholders.
2.2.1 Information about the Board of Directors work is disclosed and submitted to the shareholders.
1. The annual report of the company for the reporting period includes the information about attendance rate for the Board of Directors and committees meetings by individual Directors.
Complied with Continues to be complied with. In its Annual Report (https://www.enelrussia.ru/en.html.html), the company discloses information about the number of the Board of Directors’ meetings and its Committees’ meetings held during the reporting year with indication of the form of the meeting and information about presence of the members of the Board of Directors and the Board of Directors Committees at the meetings. Also, the main self-evaluation’s results of the Board of Directors’ performance are disclosed in the Annual Report of PJSC Enel Russia.
2. The annual report contains the information about main results obtained from assessment of the Board of Directors work, performed in the reporting period.
2.2.2 The Chairman of the Board of Directors is available for communication with the company shareholders.
1. The Company has a transparent procedure enabling the shareholders to send issues and their opinion on them to the Chairman of the Board of Directors.
Complied with Continues to be complied with. The Company’s shareholders have an opportunity to set questions to the Board of Directors’ Chairman or the Senior Independent Director through the Corporate Secretary of the company, or through feedback forms posted at the company’s website (https://www.enelrussia.ru/en/investors/a201612-form-content.htmll).
2.3 The Board of Directors is an efficient and professional management body of the company capable of making objective independent judgments and adopting resolutions corresponding to the interests of the company and its shareholders
2.3.1 Only the persons with impeccable business and personal reputation and having knowledge, skills and experience required to make decisions, falling within the competence of the Board of Directors and required for efficient implementation of its functions, shall be elected as the members of the Board of Directors.
1. The procedure for assessing the efficiency of the Board of Directors work adopted at the company includes without limitation assessment of the Board of Directors members' professional qualification.
Complied with Continues to be complied with. During the self-evaluation of the Board of Directors’ performance in 2019, evaluation of the competences of the Board of Directors’ members was performed in the following areas: -strategic planning; - international cooperation; - risk management; - industry area; - finance / accounting / audit. Based on the recommendations of the HR and Remuneration Committee, in 2019, the Board of Directors evaluated candidates for the Board of Directors for compliance with independence criteria and in terms of their necessary experience, knowledge and business reputation.
2. In the reporting period, the Board of Directors (or its Nomination Committee) assessed the candidates for the Board of Directors as to whether they have required experience, knowledge, business reputation, unavailability of the conflict of interests, etc.
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2.3.2 The members of the company Board of Directors are elected by a transparent procedure, allowing the shareholders to receive the information about the candidates, sufficient to form the idea about their personal and professional qualities.
1. In all cases when holding the General Shareholders' Meeting in the reporting period, if the agenda of such meeting included the issues concerning election of the Board of Directors, the company provided the shareholders with biographical data of all candidates for the members of the Board of Directors, the results of such candidates assessment performed by the Board of Directors (or by its Nomination Committee), as well as the information on the candidate's compliance with the independence criteria, pursuant to recommendations 102 - 107 of the Code, and the written consent of the candidates for election to the Board of Directors.
Complied with Continues to be complied with. The curriculum vitae of candidates for the Board of Directors and the Board of Directors’ recommendations regarding voting for candidates as well as information about compliance of candidates with independence criteria, were included in the scope of materials for the annual General Shareholders' Meeting 2019.
2.3.3 The composition of the Board of Directors is balanced, including as regards qualifications of its members, their experience, knowledge and business qualities, and the shareholders trust it.
1. Within the procedure for assessing the work of the Board of Directors performed in the reporting period, the Board of Directors analyzed own requirements related to professional qualification, experience and business skills.
Complied with Continues to be complied with. During the procedure for self-evaluation of the Board of Directors’ performance in 2019, the Board of Directors analyzed own requirements related to professional qualification, availability of experience and business skills.
2.3.4 The number of the company Board of Directors members enables organization of the Board of Directors activities in the most efficient manner, including the possibility to form the Board of Directors committees, as well as enables the significant minority shareholders of the company to elect the candidate they vote for to the Board of Directors.
1. Within the procedure for assessing the Board of Directors performed in the reporting period, the Board of Directors considered the issue as to whether the number of the Board of Directors members meets the requirements of the company and the interests of shareholders.
Complied with Continues to be complied with. During the procedure for self-evaluation of the Board of Directors’ performance in 2019, the Board of Directors analyzed the issue on compliance of the headcount of the Board of Directors with the needs of the company and the interests of shareholders.
2.4 The Board of Directors includes an adequate number of Independent Directors.
2.4.1 A person is recognized as an Independent Director if he/she is professional enough, experienced and independent to form an own stance, capable of making objective and good faith judgments, independent of the influence exerted by the company executive bodies, individual groups of shareholders or other stakeholders. In this case it should be taken into account that, generally, a candidate (elected member of the Board of Directors) may not be considered as an independent one if he/she is related to the company, its significant shareholder, significant counterparty or competitor of the company, or if he/she is related to the state.
1. Within the reporting period all independent members of the Board of Directors met all independence criteria, specified in recommendations 102 - 107of the Code, or were recognized as independent following the decision of the Board of Directors.
Complied with Continues to be complied with. During 2019, the company’s independent members of the Board of Directors met all independence criteria, which contained in the recommendations of the Corporate Governance Code and in the Listing Rules of Moscow Exchange.
2.4.2 Compliance of the candidates for the members of the Board of Directors with independence criteria is assessed, and also compliance of the independent Board of Directors members with independence criteria is regularly analyzed. During such assessment contents should prevail over the form.
1. In the reporting period, the Board of Directors (or the Nomination Committee of the Board of Directors) formed the opinion on independence of each candidate for the Board of Directors and provided the shareholders with relevant opinion. 2. Within the reporting period the Board of Directors (or the Nomination Committee of the Board of Directors) at least once reviewed independence of the current Board of Directors members, specified by the company in the annual report as Independent Directors. 3. The Company developed the procedures determining required actions of the Board of Directors member in case he/she is no longer independent, including the obligations to timely inform the Board of Directors accordingly.
Complied with
Continues to be complied with. During 2019, the Board of Directors formed an opinion on independence of each candidate for the Board of Directors members and presented it to the shareholders at the Annual General Shareholders' Meeting. The HR and Remuneration Committee reviewed independence of current members of the Board of Directors of PJSC Enel Russia in November 2019. The Company developed a procedure for determination of the required actions of the member of the Board of Directors if he/she is not independent any more. (p. 3.10 Rules of Procedure for Convention and Holding of Meetings of PJSC Enel Russia Board of Directors.
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2.4.3 Independent Directors constitute at least one third of the elected Board of Directors members.
1. Independent Directors constitute at least one third of the Board of Directors members.
Complied with Continues to be complied with. The annual General Shareholders' Meeting 2019 elected 4 independent directors to the Board of Directors. According with article 16.3 of the company’s Charter, the number of the Board of Directors members is 11 (eleven persons), so the independent directors comprise more than one third of the Board of Directors’ composition.
2.4.4 Independent Directors play a key role in prevention of internal conflicts at the company and performance by the company of significant corporate actions.
1. Independent Directors (having no conflict of interests) preliminary assess significant corporate actions related to a potential conflict of interests and provide the results of such assessment to the Board of Directors.
Complied with Continues to be complied with. The Related Party Transactions Committee is responsible for assisting the Board of Directors in evaluating and making decisions when considering significant corporate actions (p. (5.1. of Organizational Regulation on Committees of the Board of Directors). The Related Party Transactions Committee performs preliminary (before review of the issue by the Board of Directors) evaluation of significant corporate actions and the cases of the conflict of interest. Since June 2019, the composition of the Related Party Transactions Committee includes the independent directors solely.
2.5 The Chairman of the Board of Directors facilitates the most efficient implementation of the functions imposed on the Board of Directors.
2.5.1 The Chairman of the Board of Directors is an Independent Director or a senior Independent Director determined among selected Independent Directors, coordinating the activities of Independent Directors and cooperating with the Chairman of the Board of Directors.
1. The Chairman of the Board of Directors is an Independent Director, or a Senior Independent Director is determined among Independent Directors. 2. Role, rights and duties of the Chairman of the Board of Directors (and, if applicable, of the Senior Independent Director) are duly determined in the internal documents of the company.
Complied with Continues to be complied with. The Board of Directors’ Chairman is not an independent director therefore the Board of Directors identify the Senior Independent Director from among the independent directors elected to the Board of Directors, according to p. 4.1 of the Rules of Procedure for Convention and Holding of Meetings of the Board of Directors. The roles, rights and duties of the Senior Independent Director are contained in p. 4 of these Rules.
2.5.2 The Chairman of the Board of Directors ensures efficient atmosphere for holding the meetings, free discussion of the issues included in the meeting agenda, control over fulfillment of the decisions made by the Board of Directors.
1. Efficiency of the work performed by the Chairman of the Board of Directors was assessed within the procedure for assessing efficiency of the Board of Directors in the reporting period.
Complied with Continues to be complied with. The efficiency of performance of the Board of Directors’ Chairman was evaluated during procedure of self-evaluation of the Board of Directors’ performance in 2019.
2.5.3 The Chairman of the Board of Directors takes required measures to timely provide the members of the Board of Directors with the information required to make decisions on the agenda issues.
1. The obligation of the Chairman of the Board of Directors to take measures to timely provide the members of the Board of Directors with the materials on the agenda issues of the Board of Directors meeting is recorded in the company's internal documents.
Complied with Continues to be complied with. The obligation of the Board of Directors’ Chairman to take measures to timely provide the members of the Board of Directors with the materials on the agenda issues is established in p. 2.4 of the Rules of Procedure for Convention and Holding of Meetings of the company’s Board of Directors.
2.6 The members of the Board of Directors act reasonably and in good faith in the interests of the company and its shareholders on the basis of adequate information with due care and diligence.
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2.6.1 The members of the Board of Directors make decisions taking into account all available information, with no conflict of interests, taking into account equal treatment of the company shareholders within a general entrepreneurial risk.
1. The internal documents of the company set forth that the member of the Board of Directors shall notify the Board of Directors if he/she is in conflicts of interest in relation to any issue of the Board of Directors or the Directors Committee meeting agenda before commencement of the relevant agenda issue discussion. 2. The internal documents of the company provide that the member of the Board of Directors shall abstain from voting on any issue if he/she is in the conflict of interests in its relation. 3. The Company has the procedure allowing the Board of Directors to receive professional advice on the issues within its competence at the company's expense.
Complied with Continues to be complied with. P. 8.10 of the Rules of Procedure for Convention and Holding of Meetings of the company’s Board of Directors establishes the duty of the director to notify the Board of Directors if he/she has a conflict of interest in respect to any item on the agenda of the Board of Directors meeting prior to the discussion of the relevant agenda item. P. 8.11 of the above Rules has also established the need to abstain from voting on agenda items with regard to which the Board of Directors’ member has a conflict of interest. The concept of “conflict of interest” is set out in the Rules of Procedure for Convention and Holding of Meetings of the Board of Directors and in the Enel Group Corporate Governance Guidelines. Also, p. 3.7 of the above Rules provides for a procedure allowing the Board of Directors to receive professional advice on the issues within its competence at the company's expense.
2.6.2 The rights and obligations of the Board of Directors members are clearly worded and recorded in the internal documents of the company.
1. The Company adopted and published the internal document clearly determining the rights and obligations of the Board of Directors members.
Complied with Continues to be complied with. The General Shareholders’ Meeting approved the Rules of Procedure for Convention and Holding of Meetings of PJSC Enel Russia Board of Directors, which defines the rights and obligations of members of the company's Board of Directors. This regulation is published on the company's website on the Internet (https://www.enelrussia.ru/en/investors/a201612-basic-documents-.html).
2.6.3 The Board of Directors members have enough time to perform their duties.
1. Individual rate of the Board and committees attendance, as well as the time spent on preparing for the meetings participation was taken into account within the procedure for assessing the Board of Directors in the reporting period.
Complied with Continues to be complied with. The self-evaluation carried out by the Board of Directors in 2019 included evaluation of the organization and attendance rate of the Board of Directors/Committees of the Board of Directors. When elected to the Board of Directors, candidates fill out questionnaires in which they list the organizations that they are members of the governing bodies P. 3.9. of the Rules of Procedure for Convention and Holding of Meetings of the company’s Board of Directors established a duty for the Board of Directors’ member to notify the Board of Directors of the intent to become a member of the management bodies of other organizations as well as of the fact of such appointment having sent relevant notification to the Board of Directors’ Chairman no later than 14 days from the date of appointment.
2. In accordance with the internal documents of the company the members of the Board of Directors shall notify the Board of Directors of their intention to become members of the management bodies at other companies (besides controlled and associated businesses of the company), as well as of such actual appointment.
2.6.4 All members of the Board of Directors have equal possibility to access the company documents and information. Newly elected members of the Board of Directors are provided with sufficient information about the company and the work performed by the Board of Directors as soon as possible.
1. In accordance with the internal documents of the company the members of the Board of Directors are entitled to obtain access to the documents and make enquiries concerning the company and the businesses controlled by the company, and the company executive bodies shall provide relevant information and documents.
Complied with Continues to be complied with. In accordance with p. 3.3. and 3.4. of the Rules of Procedure for Convention and Holding of Meetings of the company’s Board of Directors, the Board of Directors’ members are entitled to obtain access to the documents and make enquiries concerning the company and the company’s subsidiaries, and the executive bodies shall provide relevant information and documents not later than 3 (three) business days upon receipt of relevant enquiry. The Company has a system of familiarization activities valid in accordance with p. 3.2. of the above Rules.
2. The Company has a formal program of familiarization activities for the newly elected members of the Board of Directors.
2.7 The meetings of the Board of Directors, preparation for these meetings and participation of the Board of Directors members in the same ensure efficient functioning of the Board of Directors.
2.7.1 The meetings of the Board of Directors are held when necessary taking into account the scale of activities and the tasks encountered by the company in a certain period.
1. The Board of Directors held at least six meetings in the reporting year.
Complied with Continues to be complied with. In 2019, In 2019, there were 16 meetings of the Board of Directors, 11 of which were held in person.
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2.7.2 The internal documents of the company establish the procedure for preparing and holding the meetings of the Board of Directors enabling the members of the Board of Directors to duly prepare for the same.
1. The Company has approved the internal document determining the procedure for preparing and holding the meetings of the Board of Directors, establishing, without limitation, that the notification of the meeting shall be made, in general, at least 5 days before its holding.
Complied with Continues to be complied with. In accordance with p. 7.6.1. of the Rules of Procedure for Convention and Holding of Meetings of the company’s Board of Directors, a notice on the holding of the meeting of Board of Directors should be sent to each Board of Directors’ member not later than 5 (five) calendar days before the date of holding of the meeting of the Board of Directors (end of the term for acceptance of voting ballots).
2.7.3 The form for holding the Board of Directors meeting is determined in view of the agenda issues importance. The most important issues are solved at meetings held in praesentia.
1. The Charter or the internal document of the company provides for that the most important issues (according to the list given in recommendation 168 of the Code) shall be reviewed at the Board meetings held in praesentia.
Complied with Continues to be complied with. This principle is set out in p. 8.12 of the Rules of Procedure for Convention and Holding of Meetings of PJSC Enel Russia Board of Directors.
2.7.4 The most important issues of the company activities are resolved by special or ordinary resolution of all elected Board of Directors members at the Board of Directors meeting.
1. The Charter of the company provides that the most important issues specified in recommendation 170 of the Code, shall be resolved at the Board of Directors meeting by a special resolution of at least three fourth of votes or by an ordinary resolution of all elected Board of Directors members.
Complied with Continues to be complied with. The most important issues that are decided by a qualified or absolute majority of the Board of Directors’ members are listed in art. 18.9 of the company’s Charter. Also, article 18.6 of the company’s Charter contains also a requirement for adoption of the decisions on the issues specified: - in p. 15.2.35 a majority of 9 votes out of 11 members of the Board of Directors, - unanimous vote of the members of the Board of Directors for taking a decision on the issue specified in p. 15.2.36.
2.8 The Board of Directors creates committees for preliminary consideration of the most important issues associated with the company's activities.
2.8.1 The Audit Committee comprising Independent Directors is established for preliminary consideration of the issues associated with control over the company financial and economic activities.
1. The Board of Directors formed the Audit Committee comprising Independent Directors only.
Complied with
Improvement as compared to the previous period. The Company fully complies with criterion 1 of principle 2.8.1 since June 2019. The annual General Shareholders’ Meeting 2019 elected 4 independent directors, then the Board of Directors formed the Audit and Corporate Governance Committee only from independent directors on June 25, 2019.
2. The internal documents of the company determine the tasks of the Audit Committee including, without limitation, the tasks set forth in recommendation 172 of the Code.
3. At least one member of the Audit Committee, who is an Independent Director, has experience and knowledge related to preparation, analysis, assessment and audit of the accounting (financial) statements.
4. The meetings of the Audit Committee were held at least once a quarter within the reporting period.
Continues to be complied with. The objectives of the Audit and Corporate Governance Committee are defined in p. 2.1. of the Organizational Regulation on the Committees of the Board of Directors of PJSC Enel Russia. The Chairman of the Audit and Corporate Governance Committee V.Yu. Zarkhin has experience and knowledge related to preparation, analysis, assessment and audit of the accounting (financial) statements. 10 meetings of the Audit and Corporate Governance Committee were held in 2019.
2.8.2 To preliminary consider the
issues associated with formation
of an efficient and transparent
remuneration practice, the
Remuneration Committee is
established, comprising
Independent Directors and
1. The Board of Directors established the Remuneration Committee comprising Independent Directors only.
Complied with
Improvement as compared to the previous period. The Company fully complies with criterion 1 of principle 2.8.2 since June 2019. The annual General Shareholders’ Meeting 2019 elected 4 independent directors, while on June 25, 2019 the Board of Directors decided to form the HR and Remuneration Committee solely from independent directors.
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headed by the Independent
Director who is not the Chairman
of the Board of Directors.
2. The Chairman of the Remuneration Committee is the Independent Director who is not the Chairman of the Board of Directors. 3. The internal documents of the company determine the tasks of the Remuneration Committee including, without limitation, the tasks set forth in recommendation 180 of the Code.
Continues to be complied with. An independent director - Andrea Guaccero was the HR and Remuneration Committee Chairman of that is assigned with the tasks of the remuneration committee throughout 2019. HR and Remuneration Committee’s Chairman, which is charged with the tasks of the remuneration Committee, was an independent director, Andrea Guaccero, throughout 2019. The tasks of the HR and remuneration Committee are defined in p. 3.1. of the Organizational Regulation on the Committees of the Board of Directors of PJSC Enel Russia.
2.8.3 To preliminary consider the issues related to HR planning (continuity planning), professional headcount and efficiency of the Board of Directors work, the Nomination Committee (appointments, staff) was established, and the majority of its members are Independent Directors.
1. The Board of Directors established the Nomination Committee (or its tasks specified in recommendation 186 of the Code are implemented within another committee <4>), and the majority of its members are Independent Directors.
2. The internal documents of the company determine the tasks of the Nomination Committee (or of a relevant committee with joint functions), including, without limitation, the tasks contained in recommendation 186 of the Code.
Complied with Continues to be complied with. The objectives specified in recommendation 186 of the Corporate Governance Code of the Regulation on the Committees of the Board of Directors are referred to the objectives and functions of the HR and Remuneration Committee. The HR and Remuneration Committee consists solely of independent directors since June 2019. Before this date the independent directors comprised the majority of its composition.
2.8.4 Taking into account the scale of activities and the level of risk the company Board of Directors made sure that the composition of its committees fully meets the company business objectives. Other committees were either formed or were not recognized as necessary. (Strategy Committee, Corporate Governance Committee, Ethics Committee, Risk Management Committee, Budget Committee, Health, Safety and Environment Committee, etc.).
1. Within the reporting period the company Board of Directors considered the issue as to whether the composition of its committees meets the tasks of the Board of Directors and the company business objectives. Other committees were either formed or were not recognized as necessary.
Complied with Continues to be complied with. The Board of Directors considered the issue on compliance of the Board of Directors’ composition with tasks of the Board of Directors and Company’s business objectives during the procedures for self-evaluation of the Board of Directors’ performance in 2019.
2.8.5 The composition of the committees is determined in such a way as to allow for comprehensive discussion of the preliminary considered issues taking into account various opinions.
1. The Committees of the Board of Directors are headed by Independent Directors. 2. The internal document (policies) of the Company contain provisions stating that the persons who are not the members of the Audit Committee, Committee for Nominations and Remuneration Committee may attend the Committees' meetings only if invited by the Chairman of the relevant Committee.
Complied with Continues to be complied with. All 4 Committees of the Board of Directors are headed by the Independent directors. The meetings of the Committees of the Board of Directors are attended by the members of the Committees as well as persons invited to the meeting for each of considered items.
2.8.6 The Chairmen of the Committees regularly inform the Board of Directors and its Chairman about the work performed by their committees.
1. Within the reporting period the Chairmen of the Committees regularly reported on the Committees' work to the Board of Directors.
Complied with Continues to be complied with.
In accordance with p. 1.10. of the Organizational Regulation on the Committees of the Board of Directors, the Committees’ Chairmen s should submit the reports on the Committees' work to the Board of Directors for consideration on quarterly basis.
2.9 The Board of Directors ensures that the quality of work performed by the Board of Directors, its committees and members of the Board of Directors is assessed.
2.9.1 Assessing the quality of the work performed by the Board of Directors is aimed at determining the level of efficiency for the work performed by the Board of Directors, committees and members of the Board of Directors, their work compliance with the company development needs, activating the work of the Board of Directors and identifying the areas for improvement.
1. Self-assessment or external assessment of the work performed by the Board of Directors carried out in the reporting period included assessment of the work performed by Committees, individual members of the Board of Directors and the Board of Directors in general.
2. The results of self-assessment or the external assessment of the Board of Directors performed within the reporting period were considered at the Board of Directors meeting held in praesentia.
Complied with Continues to be complied with. The self-evaluation of the Board of Directors’ performance for 2019 included evaluation of work of the Board of Directors in general and evaluation of each particular Committee. The results of self-evaluation of the Board of Directors for 2019 will be considered at the meeting of the Board of Directors considered the self-evaluation’s results during meeting held in-praesentia a in March 2020, according to the Methodology for self-evaluation of PJSC Enel Russia Board of Directors’ performance for 2019.
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2.9.2 Assessment of the work performed by the Board of Directors, Committees and members of the Board of Directors is performed regularly at least once a year. An external company (advisor) is involved for independent assessment of the work quality for the Board of Directors at least once in three years.
1. An external company (advisor) was involved by the company for independent assessment of the work quality for the Board of Directors at least once within the last three reporting periods.
Complied with Continues to be complied with. The external organization - PricewaterhouseCoopers Consulting Limited Liability Company was involved for external evaluation of the Board of Directors’ performance in 2017.
3.1 The Company Corporate Secretary performs efficient current interaction with the shareholders, coordination of the company activities to protect the shareholders' rights and interests, supports efficient work performed by the Board of Directors.
3.1.1 The Corporate Secretary has knowledge, experience and qualification adequate to perform the duties imposed on him/her, has impeccable business reputation, and shareholders trust him/her.
1. The following internal document is adopted and disclosed at the company - Regulation on Corporate Secretary.
Complied with Continues to be complied with. The Regulation on Corporate Secretary of PJSC Enel Russia is disclosed at the company’s website. (https://www.enelrussia.ru/en/investors/a201612-basic-documents-.html). The Corporate Secretary’s biographical data are disclosed in the company’s Annual report.
2. The Company web-site and the annual report contain the biographical information about the Corporate Secretary with the same details as for the members of the Board of Directors and the company executive management.
3.1.2 The Corporate Secretary is independent enough of the company executive bodies and has required powers and resources to perform the tasks assigned to him/her.
1. The Board of Directors approves appointment, dismissal and additional remuneration for the Corporate Secretary.
Complied with in part
The Company comply with principle 3.1.2 of corporate governance at the same extent. The Head of Legal and Corporate Affairs has been a Corporate Secretary of the company for more than 5 years. The Corporate Secretary reports in their activities directly to the Board of Directors, appointed to the position and dismissed by the decision of the Board of Directors in accordance with the Rules of Procedure for Convention and Holding of Meetings of Company’s Board of Directors. According to p. 2.2. of the Regulation on Corporate Secretary, the Corporate Secretary shall perform the functions of the secretary of the company’s Board of Directors, the company’s General Shareholders’ Meeting, and the company’s Committees of the Board of Directors. The Company believes that combining of the functions of the “Corporate Secretary” and “Head of Legal Affairs” does not create a conflict of interest and does not reduce in general the efficiency of the Corporate Secretary of the company. Also, the Board of Directors annually evaluates the effectiveness of the Corporate Secretary, during the process of its performance evaluation. During the external evaluation of the Board of Directors’ efficiency for 2017, external advisor noted, that “Corporate Secretary is highly competent and devotes much time and focus to fulfilling her role.” The Board of Directors’ members always highly rated the Corporate Secretary’s performance: at 4.1 points (out of 5 points possible), during the procedure of external evaluation of the Board of Directors’ performance, and within the scope of self-evaluation procedure they evaluated Corporate Secretary’s performance at 4.6 points for 2018 and 2019 (out of 5 points possible). Currently, the company doesn’t plan to appoint another person as a Corporate Secretary.
4.1 The level of remuneration payable by the company is sufficient for involvement, motivation and retention of the persons having the competence and qualification required by the company. Remuneration to the members of the Board of Directors, executive bodies and other key managers of the company is paid in accordance with the Remuneration Policy adopted at the company.
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4.1.1 The level of remuneration payable by the company to the members of the Board of Directors, executive bodies and other key managers creates adequate motivation for their efficient work allowing the company to involve and retain competent and qualified specialists. The Company avoids the level of remuneration greater than required, as well as unreasonably high discrepancy between the remuneration level of the foregoing persons and the company employees.
1. The Company adopted the internal document (documents) - the policy (policies) on remuneration of the Board of Directors members, executive bodies and other key managers, clearly determining approaches towards remuneration for the foregoing persons.
Complied with Continues to be complied with. The approaches to remuneration of the Board of Directors’/Committees’ of the Board of Directors members are defined in the Regulation on payment of remuneration and compensations to the member of the Board of Directors and the Board of Directors’ Committees of PJSC Enel Russia. The remuneration to the key managers is governed by the Policy on remuneration and reimbursement of expenses (compensations) of the members of the executive bodies and other key managers of PJSC Enel Russia. Both documents are posted at the company's website. (https://www.enelrussia.ru/en/investors/a201612-basic-documents-.html).
4.1.2 The Company Remuneration Policy is developed by the Remuneration Committee and approved by the company Board of Directors. The Board of Directors supported by the Remuneration Committee ensures control over implementation of the Remuneration Policy at the company, and if required - reviews and adjusts the same.
1. Within the reporting period the Remuneration Committee reviewed the Remuneration Policy (Policies) and the practice of its (their) implementation, and provided relevant recommendations to the Board of Directors, if required.
Complied with Continues to be complied with. The HR and Remuneration Committee considered in 2019 the Regulation on payment of remuneration and compensations to the members of the Board of Directors and Committees of the Board of Directors’ Committees of PJSC Enel Russia and recommended to the company's Board of Directors to adopt a decision on submission of this Regulation to the Annual General Meeting of the company 2019 for approval. Also, in 2019 The HR and Remuneration Committee recommended to the company's Board of Directors to approve new version of the Policy on remuneration and reimbursement of expenses (compensations) of the members of the executive bodies and other key managers of PJSC Enel Russia.
4.1.3 The Company Remuneration Policy contains transparent mechanisms for determining the amount of remuneration to the Board of Directors members, executive bodies and other key managers of the company, and also governs all types of payments, benefits and privileges provided to the foregoing persons.
1. The Company Remuneration Policy (Policies) contains (contain) transparent mechanisms for determining the amount of remuneration to the Board of Directors members, executive bodies and other key managers of the company, and also governs (govern) all types of payments, benefits and privileges provided to the foregoing persons.
Complied with Continues to be complied with. Such internal documents of PJSC Enel Russia as the Regulation on payment of remuneration and compensations to members of the Board of Directors and Committees of the Board of Directors of PJSC Enel Russia and Policy on remuneration and reimbursement of expenses (compensations) of the members of the executive bodies and other key managers contain transparent mechanisms for determination of the amount of remuneration to the Board of Director’s members, executive bodies and other key managers of the company as well as establish all types of payments, benefits and privileges that they are provided with.
4.1.4 The Company determines the Policy on Reimbursement for Expenses (Compensations) specifying the list of expenses to be reimbursed for, and the level of service that can be claimed by the Board of Directors members, executive bodies and other key managers of the company. This Policy may be a component of the company Remuneration Policy.
1. The Remuneration Policy (Policies) or other internal documents of the company determine the rules for reimbursement for the expenses of the Board of Directors members, executive bodies and other key managers of the company.
Complied with Continues to be complied with. The Regulation on payment of remuneration and compensations to members of the Board of Directors and Committees of the Board of Directors of PJSC Enel Russia and Policy on remuneration and reimbursement of expenses (compensations) of the members of the executive bodies and other key managers establish the rules for reimbursement of expenses to the members of the Board of Directors/Committees, executive bodies and other key managers of PJSC Enel Russia. The lists of such expenses are set out in the above internal documents of the company.
4.2 The system of remuneration to the members of the Board of Directors ensures convergence of the Directors' financial interests and long-term financial interests of shareholders.
4.2.1 The Company pays fixed annual remuneration to the Board of Directors members. The Company does not pay remuneration for participation in individual meetings of the Board or the Board of Directors Committees. The Company does not apply short-term motivation and additional financial incentives in relation to the Board of Directors members.
1. Fixed annual remuneration was the only monetary form of remuneration to the Board of Directors members for working at the Board of Directors within the reporting period.
Complied with Continues to be complied with. In accordance with p. 4.1. of the Regulation on payment of remuneration and compensations to members of the Board of Directors and of the Board of Directors’ Committees of PJSC Enel Russia, the Board of Directors’/Committees’ members receive fixed remuneration.
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4.2.2 Long-term ownership of the company shares facilitates convergence of the Board of Directors' members financial interests with long-term interests of the shareholders to the maximum extent. The Company does not make the rights to sell shares contingent upon achievement of certain performance indicators, and the Board of Directors members do not participate in option programs.
1. If the internal document (documents) - the company Remuneration Policy (Policies) provide for provision of the company shares to the Board of Directors members, clear rules for share owning by the Board of Directors members shall be provided for and disclosed aimed at encouraging long-term ownership of such shares.
Not applicable Continues to remain inapplicable. The Company did not approve implementation of the Stock Option Plan for provision of shares to the Board of Directors members.
4.2.3 The Company does not provide for any additional payments or compensations in case or early terminating the powers of the Board of Directors members due to transfer of control over the company or due to other circumstances.
1. The Company does not provide for any additional payments or compensations in case or early terminating the powers of the Board of Directors members due to transfer of control over the company or due to other circumstances.
Complied with Continues to be complied with. The additional compensations or severance payments to the Board of Directors’ members in case of early termination of their powers due to transfer of Company control or through other circumstances are not assumed.
4.3 The system for remunerating the executive bodies’ members and other key managers of the company provides for dependence of remuneration on the result of the company work and their personal contribution to this result achievement.
4.3.1 Remuneration to the executive bodies’ members and other key managers of the company is determined so as to ensure reasonable and substantiated ratio of the fixed remuneration part and variable remuneration part, dependent on the company work results and personal (individual) contribution of the employee to the final result.
1. Within the reporting period, the annual performance indicators approved by the Board of Directors were used when determining the amount of variable remuneration to the executive bodies’ members and other key managers of the company. 2. During the last undertaken assessment of the system of remunerations of the members of executive bodies and other key managers of the company, the Board of Directors (Remuneration Committee) made sure that the company applied efficient ratio of fixed and variable parts of remuneration. 3. The Company provides for the procedure ensuring return to the company of bonus payments wrongfully received by the members of the executive bodies and other key managers of the company.
Complied with
Continues to be complied with. The Company has short-term and long-term incentive program valid for the members of executive bodies and other key managers, who are approved by the Board of Directors. The HR and Remuneration Committee develops key performance indicator for each key manager for a calendar year and the Board of Directors approve the key performance indicators as the basic element of remuneration system. The Board of Directors analyzed remunerations of the members of executive bodies and other key managers and made sure that the company applied efficient ratio of fixed and variable parts of remuneration. The results within the scope of short-term incentive program are assessed by the annual work, and the results within the scope of long-term program are assessed for achievement of goals for a three-year period. P. 4.6.5 and 4.6.6 of the Policy on remuneration and reimbursement of expenses (compensations) of the members of the executive bodies and other key managers of PJSC Enel Russia provide for a procedure ensuring return to the company of bonus payments wrongfully received by the members of the executive bodies and other key managers of the company.
4.3.2 The Company implemented the program for long-term incentives for the members of the executive bodies and other key managers of the company using the company shares (options or other derivatives should the company shares be the underlying asset for them).
1. The Company implemented the program for long-term incentives for the members of the executive bodies and other key managers of the company using the company shares (financial instruments based on the company shares).
Complied with Continues to be complied with. In November 2017, the company adopted the long-term incentive program for the members of the executive bodies and other key managers that is premised on the financial instruments based on the company shares. This program is designed for 3 years. 2. The program for long-term incentives for the
members of the executive bodies and other key managers of the company provides that the right to sell the shares and other financial instruments used in this program arises not earlier than in three years upon their provision. Moreover, the right to sell them is conditional on achievement of certain Company performance indicators.
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4.3.3 The amount of compensation (golden parachute) payable by the company in case of early terminating the powers of the executive bodies members or other key managers on the Company's initiative and if no bad faith actions are performed by them does not exceed the double amount of the annual remuneration fixed part.
1. The amount of compensation (golden parachute) payable by the company in case of early terminating the powers of the executive bodies members or other key managers on the company's initiative and if no bad faith actions are performed by them did not exceed the double amount of the annual remuneration fixed part in the reporting period.
Complied with Continues to be complied with. The Policy on remuneration and reimbursement of expenses (compensations) of the members of the executive bodies and other key managers of PJSC Enel Russia does not provide for compensation in case of early termination of their powers on the company’s initiative.
5.1 The Company established an efficiently functioning system of risk management and internal control aimed at ensuring reasonable confidence in achieving the objectives set for the company.
5.1.1 The Company Board of Directors determined principles and approaches towards organization of the risk management and internal control system at the company.
1. The functions of various management bodies and the company units in the risk management and internal control system are clearly determined in the internal documents / relevant Company's policy approved by the Board of Directors.
Complied with Continues to be complied with. The Company has valid Internal Control and Risk Governance Policy approved by the Board of Directors that defines clearly the risk management system as well as the functions of the company’s organization units and its management bodies in risk management system.
5.1.2 The Company executive bodies ensure establishment and support of the efficient system for risk management and internal control functioning at the company.
1. The Company executive bodies ensured distribution of functions and powers in relation to risk management and internal control among the managers (heads) of units and departments that report to them.
Complied with Continues to be complied with. To manage risks, a three-stage system is established. It includes organization units of the company, Risk Control Group within the Administration, Finance and Control, Risk Committee at the General Director and the Internal Audit Department. The Risk Control Group coordinates the work of organization units in identifying and assessing risks as well as developing measures for their management, ensures update of the Internal Control and Risk Governance Policy, develops and fosters risk culture.
5.1.3 The risk management and internal control system at the company ensures objective, fair and clear idea about the company's current state and prospects, integrity and transparency of the company's reports, reasonableness and acceptability of the risks taken by the company.
1. The Company approved the Zero Tolerance to Corruption Policy. 2. The Company organized an easy method for reporting to the Board of Directors or the Board of Directors' Audit Committee on actual violations of the laws, internal procedures, the company's Code of Ethics.
Complied with Continues to be complied with. PJSC Enel Russia implemented the antibribery management system according to the requirements of international standard ISO 37001. The Company approved a number of internal anti-corruption documents: Corruption Prevention Policy, Code of Ethics, Zero Tolerance Corruption Plan. The Anti-Corruption Committee is established and operates at the company on a continuous basis. All employees of the company were informed about possible ways of notification of the violations of law and internal procedures.
5.1.4 The Company Board of Directors takes required measures to ensure that the risk management and internal control system effective at the company complies with the principles and approaches towards its organization, determined by the Board of Directors, and that it is efficiently functioning.
1. Within the reporting period the Board of Directors or the Board of Directors' Audit Committee assessed the efficiency of the company's risk management and internal control system. The information about the main results of such assessment are included in the company's annual report.
Complied with Continues to be complied with. During 2019, the Board of Directors considered the risk governance and internal control systems of PJSC Enel Russia and recognized them as efficient. The information about the main results of such assessment are included in the company's Annual Report for 2019.
5.2 Internal audit performance is organized for systematic independent assessment of the risks management and internal control system reliability and efficiency and the company corporate management practice.
5.2.1 The Company established a separate organization unit or involved an independent external company for internal audit. The functional and administrative accountability of the internal audit unit are divided. The internal audit functional unit reports to the Board of Directors.
1. The Company established a separate internal audit organization unit functionally reporting to the Board of Directors or the Audit Committee or involved an independent external company under the same accountability principle.
Complied with Continues to be complied with. The Internal Audit Department is established at PJSC Enel Russia operating on the basis of the Regulation on Internal Audit Department. The Department reports functionally to the Board of Directors and administratively to the General Director. Internal Audit Director shall be appointed and dismissed by the General Director under the decision of the company’s Board of Directors.
5.2.2 The internal audit unit assesses the efficiency of the internal control system, efficiency of the
1. Within the reporting period, the internal control and risk management system efficiency was assessed within the scope of the internal audit.
Complied with Continues to be complied with. The Internal Audit Department completed a number of audits during current year including audit of
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risk management system, as well as of the corporate management system. The Company employs generally accepted business principles in the internal audit sphere.
2. The Company employs generally accepted internal control and risk management principles.
efficiency of internal control and risk management system. The Internal Audit Department of PJSC Enel Russia adheres to the rules related to occupation of internal auditor defined by the Russian Institute of Internal Auditors that ensure a common approach to audits.
6.1 The Company and its activities are transparent for shareholders, investors and other stakeholders.
6.1.1 The Company developed and implemented the information policy ensuring efficient information interaction among the company, shareholders, investors and other stakeholders.
1. The Company Board of Directors approved the company Information Policy developed taking into account the recommendations of the Code. 2. The Board of Directors (or one of its committees) considered the issues related to compliance by the company with its Information Policy at least once within the reporting period.
Complied with
Continues to be complied with. The Board of Directors approved a Regulation on the Information Policy of the PJSC Enel Russia in 2018 that complies with the recommendations of the Corporate Governance Code. In November 2019, the Board of Directors considered information about compliance of PJSC Enel Russia with own Regulation on the Information Policy.
6.1.2 The Company discloses the information about the corporate management system and practice including detailed information about compliance with the Code principles and recommendations.
1. The Company discloses the information about the company's corporate management system and general corporate management principles used at the company including on the company's website. 2. The Company discloses the information on the composition of the executive bodies and the Board of Directors, independence of the Board members and their membership in the Board of Directors Committees (in accordance with the definitions of the Code).
Complied with Continues to be complied with. PJSC Enel Russia discloses the information about the system and principles of corporate governance at its website (https://www.enelrussia.ru/en/investors/a201612-governance-system-0.html). Also, the company discloses also information about management bodies and their composition including brief biographical data of the members of the management bodies within the scope of Quarterly and Annual reports.
3. If there is an entity controlling the company, the company publishes the memo of the controlling entity regarding the plans of such entity concerning the company's corporate governance.
Complied with The Company complies with criterion 3 of principle 6.1.2. upon posting the Enel Group Corporate Governance Guidelines on September 20, 2019 at its website (https://www.enelrussia.ru/content/dam/enel-ru/documents/en/basic/Corporate%20Governance%20Guidelines%20ENG.pdf). The Company considers the above document as
the controlling entity’s memo stipulated by the
Corporate Governance Code with respect to own
plans related to corporate governance within the
company.
6.2 The Company timely discloses complete, updated and reliable Company information to allow for reasonable decisions to be taken by the company shareholders and investors.
6.2.1 The Company discloses the information in accordance with the principles of frequency, sequence, efficiency, as well as availability, reliability, completeness and the possibility to compare the disclosed data.
1. The Company's Information Policy determines the approaches and criteria for defining the information capable of significantly affecting the company's assessment and the cost of its securities and procedures ensuring timely disclosure of such information.
Complied with Continues to be complied with. P. 3.5.20 of the Regulation on the Information policy of PJSC Enel Russia defines criteria to be used by the company to recognize information as having significant impact on the cost its securities. The securities of PJSC Enel Russia are traded only at the Moscow Exchange. The Company discloses information at its portal not only in Russian but in English since a significant number of shares of PJSC Enel Russia are held by foreign shareholders.
2. If the company's securities are circulated at the foreign regulated markets, the significant information is disclosed in a simultaneous and equivalent manner in the Russian Federation and at such markets within the reporting year.
3. If foreign shareholders own a significant number of the company's shares, the information was disclosed not only in Russian, but also in one of the most common languages within the reporting period.
6.2.2 The Company avoids a perfunctory approach during the information disclosure and discloses significant information about its activities even if such information disclosure is not provided for in the laws.
1. Within the reporting period the company disclosed the annual and semi-annual financial statements drawn up according to the IFRS standards. The Company's annual report for the reporting period includes the annual financial statements drawn up according to the IFRS standards with the auditor's opinion.
Complied with Continues to be complied with. Based on the Regulation on the Information policy of PJSC Enel Russia the company assume an obligation to disclose information about its activities voluntarily, in addition to disclosure of information stipulated by law. In accordance with p. 3.5.6. of the Regulation on the Information policy of PJSC Enel Russia, the
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2. The Company discloses complete information about the company's capital structure in accordance with Recommendation 290 of the Code in the annual report and at the company’s website.
company disclosed the annual and semi-annual financial statements drawn up according to the IFRS standards. (https://www.enelrussia.ru/en/investors/a201612-financial-reporting-0.htmll). The Company discloses also information about the structure of its stock capital in the Annual Report and at its own website (https://www.enelrussia.ru/en/investors.html).
6.2.3 The annual report being one of the most important tools for information cooperation with shareholders and other stakeholders contains the information allowing for assessment of the company's business results for a year.
1. The Company's annual report contains the information about key aspects of the company's operational activities and its financial results 2. The Company's annual report contains the information about environmental and social aspects of the company's activities.
Complied with Continues to be complied with. PJSC Enel Russia discloses main information in its Annual Report based on recommendations of the Corporate Governance Code.
6.3 The Company provides the information and documents at the shareholders' requests in accordance with the principles of equal and easy access.
6.3.1 The Company provides information and documents at request of shareholders in accordance with equal and easy access principles.
1. The Company's information policy determines an easy procedure for provision of shareholders with access to the information including on the legal entities controlled by the company at the shareholders’ request.
Complied with Continues to be complied with. The Company is governed by applicable laws when providing the shareholders with access to its documents and information as well as strives for not creating needless complexities for them. Also, p. 7 of the Regulation on the Information policy of PJSC Enel Russia provides for a procedure for provision of information about subsidiaries.
6.3.2 When the company provides the information to shareholders, it ensures reasonable balance between the interests of certain shareholders and the interests of the company itself interested in keeping in confidence the important commercial information that may significantly affect is competitiveness.
1. Within the reporting period the company did not refuse to satisfy the requests of the shareholders for provision of the information or such refusals were reasoned.
Complied with Continues to be complied with. The shareholders are warned about confidential nature of information and gain access to it after signing a Non-Disclosure Agreement (confidentiality agreement) with the company that is posted at the website of PJSC Enel Russia: (https://www.enelrussia.ru/en/investors/a201612-basic-documents-.html).
2. In the cases determined in the company's Information Policy, the shareholders are warned of the information confidential nature and they assume the obligation to keep it in confidence.
7.1 Actions significantly affecting or that may affect the structure of the stock capital and the company's financial state and, therefore, the shareholders' state (significant corporate actions) are performed on equitable conditions ensuring observance of the shareholders and other stakeholders' rights and interests.
7.1.1 The following actions are recognized as significant corporate actions: the company reorganization, procurement of 30 and more per cent of the company's voting shares (acquisition), major transactions consummation by the company, increase or reduction in the company authorized capital, the company shares listing or delisting, as well as other actions that may lead to significant changes in the rights of shareholders or violation of their interests. The Company's Charter determine the list (criteria) of transactions and other actions, constituting significant corporate actions, whose review falls within the competence of the company Board of Directors.
1. The Company's Charter determine the list of transactions or other actions that are significant corporate actions and the criteria for their determination. Decisions making in relation to significant corporate actions falls within the competence of the Board of Directors. When performance of these corporate actions directly falls within the General Shareholders' Meeting competence under the laws, the Board of Directors provides shareholders with relevant recommendations.
Complied with Continues to be complied with. The Company’s Charter defines criteria and list of transactions comprising the significant corporate actions. (Art. 24). The Board of Directors decides on significant corporate actions. When performance of these corporate actions directly falls within the General Shareholders' Meeting competence, the Board of Directors provides shareholders with relevant recommendations.
2. The Charter of the company describes at least the following actions as significant corporate actions: reorganization of the company, procurement of 30 and more per cent of the company's voting shares (acquisition), major transactions consummation by the company, increase or reduction in the company authorized capital, the company shares listing or delisting.
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7.1.2 The Board of Directors plays a key role in decision making or elaborating the recommendations in relation to significant corporate actions, the Board of Directors relies on the position of the company Independent Directors.
1. The Company provides for the procedure setting forth that the Independent Directors shall announce their stance on significant corporate actions before their approval.
Complied with Continues to be complied with. The significant corporate actions are considered within the scope of the Related Party Transactions Committee’s performance, that consists fully of independent directors since June 2019.
7.1.3 When significant corporate actions are performed affecting the rights and legitimate interests of the shareholders, equal conditions for all the company shareholders are ensured, and if there are not enough mechanisms aimed at protecting the shareholders' rights provided for in the laws, additional measures are ensured protecting the rights and legitimate interests of the company shareholders. The Company relies not only on compliance with formal legal requirements, but also on the corporate management principles set forth in the Code.
1. Taking into account specific business features, the company's Charter establish minimum criteria for referring the company's actions to significant corporate actions that are lower than that set forth in the laws.
Complied with Continues to be complied with. The Board of Directors considers all significant corporate issues in accordance with the procedure that is approved by the internal documents of the company. The Company’s Charter provides for the thresholds lower than stipulated by law for submission of a number of transactions to the Board of Directors for consideration. During 2019, all actions referred by the Corporate Governance Code to significant corporate actions were preliminary approved by the Board of Directors before their completion.
2. Within the reporting period, all significant corporate actions were subjected to the approval procedure before their consummation.
7.2 The Company ensures such procedure for the corporate actions performance that allows timely obtain complete information on such actions, ensures the possibility for the shareholders to influence such actions and guarantees compliance and adequate level of their rights protection in the course of such actions.
7.2.1 The information about consummation of significant corporate actions is disclosed explaining the reasons, conditions and consequences of such actions consummation.
1. Within the reporting period the company disclosed the information about the company significant corporate actions in a timely and detailed manner, including the grounds and terms for such actions performance.
Complied with Continues to be complied with. PJSC Enel Russia being a public company discloses the most complete information about all corporate actions including the grounds and terms for performance of such actions.
7.2.2 The rules and procedures related to significant corporate actions performance by the company are registered in the company internal documents.
1. The Company internal documents provide for the procedure for involving and independent appraiser to determine the cost of the property disposed of or procured under a major transaction or a related-party transaction.
Complied with in part
Criterion 1 of principle 7.2.2. is complied with to the same extent. On April 5, 2012 the company’s Board of Directors adopted the General Principles for Approval of Related Party Transactions, establishing an obligatory procedure of determination of fair market-value appraisal of property acquired or sold in the course of related party transactions on the basis of tender results, analysis of market prices or engagement of an independent appraiser. The Board of Directors of the company approved also the Enel Group Corporate Governance Guidelines. These Guidelines set out the general principles and procedures for intragroup transactions and related party transactions. The internal document regulating the procedure for engagement of an independent appraiser for determination of the value of property acquired or disposed in the course of a major transaction has not been developed since the company has no practice of effecting major transactions not related to the normal course of business for a long time. In 2019, the company completed major transaction on the sale of property comprising Reftinskaya GRES. The Independent Appraiser was selected on the basis of tender procedure among qualified participants of assessment market. The candidate for independent appraiser was approved by the Board of Directors in accordance with the requirements of laws of the Russian Federation and Company’s Charter. A report of the independent appraiser was provided for examination to the shareholders as part of the extraordinary General Shareholders' Meeting’s materials and it is available at the company’s website. Moreover, completion of such transaction comprises an extraordinary event for PJSC Enel Russia since major transactions for fuel purchase and exchange bonds placement transactions are
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related to the company’s normal course of business In 2020, the company does not plan to approve the internal document regulating procedures for involvement of an independent appraiser to determine the value of property acquired or disposed in a major transaction while the company does not eliminate a possibility for development and implementation of such document in future.
2. The Company internal documents provide for the procedure for involving and independent appraiser to assess the cost of the company shares procurement and buyout.
Complied with in part
Criterion 2 of principle 7.2.2. is complied with to the same extent. The Company’s internal documents do not stipulate the procedure for engagement of an independent appraiser to estimate the cost of acquisition and buyout of own shares since the company has no regular of acquiring and buying out of the shares, except for the fact of the company’s acquiring a 0.4% treasury shares from the subsidiary LLC OGK-5 Finance at market exchange value in 2017. During 2018 - 2019, such transactions were not carried out. Considering the fact that the company’s shares are listed at the stock exchange and have sufficient liquidity, the company always has reliable information about the value of own shares, therefore there is no need to involve an independent appraiser. Moreover, the company does not exclude a possibility for development and implementation of such document in future.
3. The internal documents of the company provide for an expanded list of grounds for the members of the company Board of Directors and other persons provided for in the laws to be recognized as interested in the company transactions.
Not complied with
Criterion 3 of principle 7.2.2. continues not to be complied with. In its operations, the company is guided by the provisions of article 83 of the Federal Law “On Joint Stock Companies” that contains an exhaustive list grounds that recognize members of the company’s Board of Directors as stakeholders in respect of the company’s transactions and cannot participate in the voting to approve such transactions. The internal documents of the company doesn’t provide for an expanded list of grounds on which the company’s Board of Directors’ members and other persons provided for in the laws are recognized as interested in the company transactions. The Company concludes related party transactions with the companies of the controlling shareholder group nominating the majority of the Board of Directors' dependent members, who have the right to vote for the approval of such transactions in line with article 83 of the Federal Law “On Joint Stock Companies”. P. 8.10 of the Rules of Procedure for Convention and Holding of Meetings of the company’s Board of Directors establishes the duty of the director to notify the Board of Directors if he/she has a conflict of interest in respect to any agenda issue of the Board of Directors meeting prior to the discussion of the relevant agenda item, as well as p. 8.11 of the above Rules has established the need to abstain from voting on agenda items with regard to which the Board of Directors’ member has a conflict of interest. The concept of “conflict of interest” is set out in the Rules of Procedure for Convention and Holding of Meetings of Board of Directors and in the Enel Group Corporate Governance Guidelines, which is approved by the company’s Board of Directors. PJSC Enel Russia relies on fair corporate conduct and objectivity of each the Board of Directors’ member in the issues of approval of related party transactions and reserves adoption of the decisions on these issues within the scope of their personal responsibility. Furthermore, according to the requirements of the Federal Law “On Joint Stock Companies”, PJSC Enel Russia provides obligatorily all persons who are entitled to participate in the General Shareholders' Meeting with a report on related party transactions concluded in the reporting year, based on which the shareholders can drive at conclusions on the amounts and terms of conclusion of transactions.
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Extension of the list of grounds for recognition of the members of the Board of Directors or other persons interested in the transactions of the company, is not assumed feasible by PJSC Enel Russia within short-term, although the company does not exclude the possibility for extension of the list of grounds in future.
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Annex 5. Information about the most material transactions and related party transactions closed
by the Company in 2019
Special-purpose loan Agreement Significant terms and conditions Parties to the Agreement: PJSC Enel Russia – the Lender, LLC Enel Rus Wind Kola – the Borrower. Subject of the Agreement: Provision of loans (tranches) by the Lender to the Borrower. Special purpose loan: Loans are provided to finance payments, which are necessary for due performance of agreements and activities related to the the project for construction of renewable generating facility (wind farm) with designed capacity of 200.97 MW in Murmansk region, as well as for operational and financial expenses of the Borrower. Max Loan Amount: the Lender undeertakes to provide the Borrower with interest-free targeted loans in a total amount not exceeding three billion eight hundred and eighty-one million (3,881,000,000.00) RUB. Rate: 0%. Maturity: Final maturity of each separate tranche will not exceed 20 years from the date of signing of each drawdown notice. Other terms and conditions: Amount, final maturity, repayment schedule and other terms and conditions to be defined in each specific drawdown notice within the above limits. Person interested in the performed transaction: Enel S.p.A. The basis (grounds) on which (according to which) a person is recognized as a related party in the transaction: Enel S.p.A. is the controlling person of legal entities that are parties to the transaction: PJSC Enel Russia and LLC Enel Rus Wind Kola. Related party's interest in the authorized (joint-stock) capital (shares held by the related party) of PJSC Enel Russia: 56.43%. Related party's interest in the authorized (joint-stock) capital of LLC Enel Rus Wind Kola: 0%, the share of PJSC Enel Russia in the authorized capital of LLC Enel Rus Wind Kola 100%. Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Annual General Shareholders’ Meeting, Minutes № 1/18, dd 04.06.2018. Addendum to the special-purpose loan Agreement Significant terms and conditions Parties to the Addendum: Lender – PJSC Enel Russia, Borrower – LLC Enel Rus Wind Azov. Special purpose loan under the Addendum: Loan is provided for financing the development of the project for the construction of a wind generating facility with an estimated capacity of 90,09 MW in Azov district, Rostov Region. Loan Amount under the Addendum: No more than one billion five hundred ten million (1 510 000 000) RUB. Max Loan Amount under the Special purpose loan agreement, including this Addendum: Shall not exceed two billion one hundred million (2 100 000 000) RUB. Maturity: Final maturity of each separate tranche will not exceed 15 years from the date of signing of each drawdown notice. Person interested in the performed transaction: Enel S.p.A. Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Board of Directors of PJSC Enel Russia, Minutes № 14/18, dd 21.12.2018.
Suretyship Agreement Significant terms and conditions Parties to Suretyship Agreement: Public Joint Stock Company Sberbank of Russia (Lender) and PJSC Enel Russia – the Suretyship Provider, Beneficiary LLC Enel Rus Wind Kola – the Borrower. Subject of Suretyship Agreement: The issuance of Suretyship by the Suretyship Provider to secure due performance all obligations of the Borrower under the Credit Contract with a credit line limit in the amount of 22,500,000,000 RUB, concluded between the Borrower and the Lender. The Suretyship Provider undertakes to be jointly and severally liable to the Lender for the Borrower's performance of its obligations under the Credit Contract. The Credit Contract shall be entered between the Borrower and Lender for the purposes of financing costs related to the project for construction of renewable generating facility (wind farm) with estimated capacity of about 201 MW in Murmansk region and/or to refinance the costs incurre: Shall not exceed 27.000.000.000,00 RUB. Tenor of the Suretyship: February 26, 2036. Interest on the Suretyship: The Suretyship Provider shall provide Suretyship free of charge. Person interested in the performed transaction: Enel S.p.A.
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The basis (grounds) on which (according to which) a person is recognized as a related party in the transaction: Enel S.p.A. is the controlling person of legal entities that are parties to the transaction: PJSC Enel Russia and LLC Enel Rus Wind Kola. Related party's interest in the authorized (joint-stock) capital (shares held by the related party) of PJSC Enel Russia: 56.43%. Related party's interest in the authorized (joint-stock) capital (shares held by the related party) of Public Joint Stock Company Sberbank of Russia 0%. Related party's interest in the authorized (joint-stock) capital of LLC Enel Rus Wind Kola: 0%, the share of PJSC Enel Russia in the authorized capital of LLC Enel Rus Wind Kola 100%. Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Annual General Shareholders’ Meeting, Minutes № 1/18, dd 04.06.2018.
Addendum to the special-purpose loan Agreement Significant terms and conditions Parties to the Addendum: Lender – PJSC Enel Russia, Borrower – LLC Enel Rus Wind Kola. Special purpose loan under the Addendum: Loan is provided for financing the development of the project for the construction of a wind generating facility with an estimated capacity of 200,97 MW in Murmansk Region. Loan Amount under the Addendum: Shall not exeed eighty four million (84 000 000) RUB. Max Loan Amount under the Special purpose loan agreement, including this Addendum: Shall not exceed one billion six hundred nineteen million (1 619 000 000) RUB. Person interested in the performed transaction: Enel S.p.A. Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Board of Directors of PJSC Enel Russia № 13/18 dd. 30.11.2018. Paid services agreement Significant terms and conditions Parties to the Agreement: PJSC Enel Russia and Enel Global Thermal Generation S.r.l. Subject of the Agreement: Enel Global Thermal Generation S.r.l. based on its own experience and tangible assets, technical means and human resources, shall continuatively perform in favour and for the benefit of PJSC Enel Russia the provision the following type of services: Health, Safety, Environment and Quality, Technical Support, Operations & Maintenance, Human Resources and Organization, Planning and Control, Business Development, Legal Affairs, Innovation, and PJSC Enel Russia shall undertake to pay Enel Global Thermal Generation S.r.l. for the above mentioned services in line with the agreement. Period of services: January 1, 2019 – December 31, 2019. The agreement price: The price shall not exceed EUR 5,600,000.00 VAT excluded. A 10% of flexibility in the price estimation is considered in case there is a documented evidence of additional services needed by PJSC Enel Russia. Duration of the Agreement: The agreement shall come into force after its signature and shall be valid until full performance of the Parties’ obligations. The agreement will be enforced with respect to Parties’ relations arising since 01.01.2019. Person interested in the performed transaction: Enel S.p.A. Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Board of Directors of PJSC Enel Russia № 9/18 dd 27.07.2018. Agreement on the transfer of the seller's rights and obligations under contracts for the provision of capacity for qualified generating facilities operating on the basis of renewable energy sources Significant terms and conditions Parties to the agreement: PJSC Enel Russia, LLC Enel Rus Wind Kola, JSC Trading System Administrator of Wholesale Electricity Market Transactions. Subject of the agreement: Transfer by the PJSC Enel Russia of all rights and obligations under the under contracts for the provision of capacity for qualified generating facilities (DPM) operating on the basis of renewable energy sources (RES) to the LLC Enel Rus Wind Kola. Entering into this Agreement is connected with the project execution for the construction of a wind generating facility (wind farm) with an estimated capacity of about 201 MW in the Murmansk region. Aggregated value of the assigned rights and obligations under DPM contracts is equal to the maximum cost of capacity of the renewable generating facility during the delivery period and exceeds 10 BRUB, VAT excluded. Price of the agreement: Free of charge.
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Person interested in the performed transaction: Enel S.p.A. The basis (grounds) on which (according to which) a person is recognized as a related party in the transaction: Enel S.p.A. is the controlling person of legal entities that are parties to the transaction: PJSC Enel Russia and LLC Enel Rus Wind Kola. Related party's interest in the authorized (joint-stock) capital (shares held by the related party) of PJSC Enel Russia: 56.43%. Related party's interest in the authorized (joint-stock) capital of LLC Enel Rus Wind Kola: 0%, the share of PJSC Enel Russia in the authorized capital of LLC Enel Rus Wind Kola 100%. Related party's interest in the authorized (joint-stock) capital (shares held by the related party) of JSC Trading System Administrator of Wholesale Electricity Market Transactions 0%. Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Annual General Shareholders’ Meeting, Minutes 1/18 dd 04.06.2018. Agreement for use of trademarks Significant terms and conditions Parties to the Agreement: Enel S.p.A. (the “Licensor”), PJSC Enel Russia (the “Licensee”). Subject of the Agreement: The Licensor grants to the Licensee the non-exclusive license to use the trademarks of the Licensor in the territory of the Russian Federation (the “license”). Price of the Agreement: Given the current arrangement and conditions of the target markets in which the Licensee carries out its activities, the Licenses are granted to the Licensee free of charge. Period of license: The license is provided by the Licensor for the period of Agreement Term. Term of the Agreement: The Agreement shall remain in effect for a term of one (1) year from the date of signing. The Agreement shall tacitly and automatically renew and the term shall be extended for an additional period equal to the initial term (Renewal Term) upon the same terms and conditions, until and unless either Party provides the other Party with one hundred eighty (180) days prior written notice to the end of the Initial Term or the Renewal Term. Person interested in the performed transaction: Enel S.p.A. Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Board of Directors of PJSC Enel Russia № 11/18 dd 28.09.2018. Sale purchase agreement Significant terms and conditions Parties to the sale purchase agreement; PJSC Enel Russia – the Seller, JSC Kuzbassenergo – the Purchaser. Subject of the sale purchase agreement : The Seller shall sell, and the Purchaser shall purchase the assets constituting Reftinskaya GRES, a thermal power plant located in Reftinskiy, Sverdlovsk region, including movable and immovable assets, as well as the stocks of coal, raw materials and spare parts. Price of the sale purchase agreement: No less than twenty one (21) BRUR (net of VAT RF) subject to price adjustments (by up to 5%). Timeline for Transfer of Title to Reftinskaya GRES property to the Purchaser: Within 18 months from signing and taking effect of the sale purchase agreement. Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Extraordinary General Shareholders’ Meeting, Minutes 2/19 dd 23.07.2019 In order to fulfill the sale purchase agreement of the Reftinskaya GRES property and on the basis of the instructions of JSC Kuzbassenergo, a contract was signed for the supply of coal with JSC SUEK, the cost of which will not exceed 15.5 BRUB. Sublease Agreement for non-residential premises Significant terms and conditions Parties to the Agreement: PJSC Enel Russia – Sublessor; LLC Enel Rus Wind Generation – Sublessee. Leasable area: shall not exceed 5,9 square meters. Subject of the Agreement: The Sublessor shall sublease in favour of the Sublessee the non-residential premises located at: Moscow, Pavlovskaya street, 7, build 1, 9th floor, which shall be used as premises for the office of the Sublessee in Moscow. Lease payment: The monthly lease rate per square meter of the subleased area is 5 954,01 RUB, net of VAT. A monthly lease payment: shall not exceed 35 128,66 RUB, net of VAT. Total price of the Agreement: shall not exceed 386 415,26 RUB, net of VAT. Term of sublease: from June 1, 2019 to April 30, 2020.
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The Agreement duration: From the moment of signing the Agreement until full execution of the obligations by the Parties. The Agreement shall apply to the Parties’ relations arising since June 1, 2019. Person interested in the performed transaction: Enel S.p.A. Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Board of Directors of PJSC Enel Russia № 13/19 dd 20.09.2019. Addemdum to ICT service ageement Significant terms and conditions Parties to the Addendum: Enel Italia S.r.l. (“Provider”), PJSC Enel Russia (“Client”). Subject of the Addendum: The Provider shall render following ICT services for the Client during the year 2019:
• OSI Soft (PI) Software License Agreement;
• Implementation of additional functionality and operation services for P-WAY system;
• Infrastructure and Technology services from Italy Data Center to Moscow;
• Implementation of additional functionality and operation services of CKS (SharePoint);
• Implementation of additional functionality and operation services for SAP WISE ERP system;
• Implementation of additional functionality and operation services for SAP HR Global system;
• Implementation of additional functionality and operation services for Electronic Financial Document Management System (EfDMS);
• Service Now system Platform Evolution;
• Digital Enabler services;
• Operation services for Global Material Catalog Definition (TAM);
• Flexera licences;
• Cyber Security services for the Enel’s Global Information systems;
• Global support of Internet and Intranet corporate applications;
• Operation services for Allegro system;
• Development and operation of Digital Plant Digital Report;
• Implementation of additional functionality of Global Operational System;
• Development and operation of Digital Plant IT Infrastructure;
• Development and operation of Digital Working Transformation;
• Development and operation of Digital Waste Management;
• Development of Digital Change Management;
• Global Governance support. Value cap of the Addendum: will not exceed 3 248 090 Euro excluding VAT. Period of the Addendum: 01.01.2019 – 31.12.2019. Term of the Addendum: The Addendum will enter into force on signing by the Parties and shall be valid until complete performance of the Parties’ obligations. It shall be applicable to the relations of the Parties starting from 01.01.2019. Person interested in the performed transaction: Enel S.p.A. Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Board of Directors of PJSC Enel Russia, Minutes № 8/19 dd 20.05.2019. Framework contract for the provision of project management and technical support services for the implementation of the project on refurbishment of the Waste Water Treatment System at Sredneuralskaya GRES Significant terms and conditions Contract type: Framework contract. Parties to the contract: Client – PJSC Enel Russia, Contractor – Enel Produzione S.p.A. Subject of the contract: Project management services and technical support services for execution of the Project on refurbishment of the Waste Water Treatment System at Sredneuralskaya GRES. Price of the contract: Shall not exceed 496.416,00 EUR net of VAT. Actual price shall be defined in the specific service order to the framework agreement; such price will be calculated based on the actual number of man hours worked and unitary rates agreed in the framework contract. Estimated number of man hours under the contract: shall not exceed 4.330 man hours in general. Duration of services: From 01.08.2019 till 31.12.2022. Actual services duration shall be defined in the specific service order to the framework agreement. Contract validity: The contract shall be valid upon signature and expire upon performance by the Parties of their respective obligations under the contract. Person interested in the performed transaction: Enel S.p.A.
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Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Board of Directors of PJSC Enel Russia, Minutes № 11/19 dd 25.07.2019. Directors’ and Officers’ liability insurance Contract Significant terms and conditions Parties to the Contracts: Policyholder – PJSC Enel Russia, Insurer – JSC SK " Alliance". Subject Matter: In case of an insured event, Insurer shall pay the insurance indemnity according to the terms and conditions of the contracts and applicable law of the Russian Federation. Insurance Object: Insured Party’s and/or insured individuals’ property interests in connection with the liability according to the applicable law to compensate losses of third parties in case of an insured event. All Coverages: Cover A (Side A) Insured Person Liability The insurer shall pay the loss of each insured person resulting from a claim against the insured person except for and to the extent that the company has indemnified the insured person. Cover B (Side B) Company Reimbursement The insurer shall pay the loss of the company resulting from a claim against the insured person but only when and to the extent that the company has indemnified the insured person for the loss. Cover C – Global program Subsidiaries Directors Liability The insurer shall pay the loss of the subsidiaries directors resulting from a claim against the director. Cover D – Global program Representation at Investigations and Examinations The insurer shall pay the investigations costs. Cover E – Global program Special Excess Protection for Non-Executive Directors The insurer shall pay the loss of each non-executive director resulting from a claim against the non-executive director. Cover F (Side C) Company Liability for Securities Claims The insurer shall pay the loss of the company resulting from a claim against the company for any wrongful act committed by such company arising from a securities claims. Insured Persons (Beneficiaries): Including but not limited to:
- members of board of directors, members of executive board, general director of the Policyholder and its subsidiaries; - executive directors, heads of departments (functional directors) of the Policyholder and its subsidiaries; - statutory auditor, General Counsel or Risk Manager (or equivalent position) of the Policyholder and its subsidiaries.
Full list of insured persons is as per schedule and policy conditions of Directors & Officers Liability Insurance Policy. Annual insurance Premium: Shall not exceed EUR 20,000.00. Compensation limit: during the period from 10.11.2018 to 17.06.2019, the liability limit is EUR 7,034,197.07 in aggregate, during the period from 18.06.2019 to 9.11.2019, the liability limit is EUR 15,000,000.00 in aggregate. Validity period: 10.11.2018 – 09.11.2019. Person interested in the performed transaction: members of the Board of Directors of PJSC Enel Russia, members of the Executive Board of PJSC Enel Russia, CEO of PJSC Enel Russia. Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Annual General Shareholders’ Meeting, Minutes № 1/19 dd 18.06.2019. Directors’ and Officers’ liability insurance Contract Significant terms and conditions Parties to the Contracts: Policyholder – PJSC Enel Russia, Insurer – JSC “AIG”. Subject Matter: In case of an insured event, Insurer shall pay the insurance indemnity according to the terms and conditions of the contracts and applicable law of the Russian Federation. Insurance Object: Insured Party’s and/or insured individuals’ property interests in connection with the liability according to the applicable law to compensate losses of third parties in case of an insured event. All Coverages: Cover A (Side A)
211
Insured Person Liability The insurer shall pay the loss of each insured person resulting from a claim against the insured person except for and to the extent that the company has indemnified the insured person. Cover B (Side B) Company Reimbursement The insurer shall pay the loss of the company resulting from a claim against the insured person but only when and to the extent that the company has indemnified the insured person for the loss. Cover C – Global program Subsidiaries Directors Liability The insurer shall pay the loss of the subsidiaries directors resulting from a claim against the director. Cover D – Global program Representation at Investigations and Examinations The insurer shall pay the investigations costs. Cover E – Global program Special Excess Protection for Non-Executive Directors The insurer shall pay the loss of each non-executive director resulting from a claim against the non-executive director. Cover F (Side C) Company Liability for Securities Claims The insurer shall pay the loss of the company resulting from a claim against the company for any wrongful act committed by such company arising from a securities claims. Insured Persons (Beneficiaries): Including but not limited to:
- members of board of directors, members of executive board, general director, of the Policyholder and its subsidiaries;
- executive directors, heads of departments (functional directors) of the Policyholder and its subsidiaries;
- statutory auditor, General Counsel or Risk Manager (or equivalent position) of the Policyholder and its subsidiaries.
Full list of insured persons is as per schedule and policy conditions of Directors & Officers Liability Insurance Policy. Insurance Premium: EUR 42,500.00. Limit of Liability: EUR 30,000000.00. Validity period: 10.11.2019 – 09.11.2020. Person interested in the performed transaction: members of the Board of Directors of PJSC Enel Russia, members of the Executive Board of PJSC Enel Russia, CEO of PJSC Enel Russia Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Annual General Shareholders’ Meeting, Minutes № 1/19 dd 18.06.2019. Agency agreement Significant terms and conditions Parties to the agreement : Principal - PJSC Enel Russia, Agent - Enel Italia S.r.l. Subject of the agreement: The services are rendered in respect of the personnel of the Principal which temporarily resides in Italy under secondment Agreements and personnel of the Principal which has Italian citizenship and resides in the Russian Federation and works for the Principal. The Agent acts on the territory of Italy at the expense and on behalf of the Principal for the provision of the following services in accordance with the current Italian law:
• assistance in payment of mandatory social insurance to the government authorities of Italy (INPS - National Institution of Social Insurance and INAIL - National Institution of Industrial Accidents Insurance) in accordance with the laws of Italy;
• assistance in maintaining accounts and submission of reports on mandatory social insurance;
• advisory services and services on preparation of reports on income tax. Amount of the agreement: The amount shall not exceed 490,000 EUR (VAT excluding). Terms of services: From January 1, 2017 to December 31, 2019. Duration of the agreement: The Agreement shall come onto force upon its signature and shall remain in valid till December 31, 2019, but in terms of settlement will be valid until the Parties fulfill their obligations. The Agreement shall apply to relations between the Parties starting from January 1, 2017. Person interested in the performed transaction: Enel S.p.A. Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Board of Directors of PJSC Enel Russia, Minutes № 14/18 dd 21.12.2018.
212
LLC Enel Rus Wind Kola has not entered into any other transactions than the above major transactions after recognition as a controlled company, being of significant importance until 31.12.2019
Annex 6. Numerical and statistical information
Key Performance Indicators
102-36 Data on Key Performance Indicators for key managers for 2019
Key performance indicators for the position of the General Director
Objective Description Weight
1. Ordinary Net income Enel Russia 25%
2. Opex Enel Russia 20%
3. FFO Enel Russia (change in Net debt before dividends paid, extraordinary items, Gross Capex, cash impact of Capex` hedging and FX on Net debt)
15%
4. Business objective Determined on the basis of tasks assigned to the key manager
20%
5. Safety Enel Russia 15%
6. Safety Fatal Enel Russia 5%
Total: 100%
Key performance indicators for the position of the Deputy General Director – Head of Generation
Objective Description Weight
1. EBIT Thermal generation Enel Russia 25%
2. OPEX Thermal generation Enel Russia 20%
3. FFO Enel Russia (change in Net debt before dividends paid, extraordinary items, Gross Capex, cash impact of Capex` hedging and FX on Net debt)
15%
4. Business objective Determined on the basis of tasks assigned to the key manager
20%
5. Safety TGx RUSSIA 15%
6. Safety Fatal TGx RUSSIA 5%
Total: 100%
Key performance indicators for the position of the Deputy General Director – Head of
Administration, Finance and Control
Objective Description Weight
1. Ordinary Net income Enel Russia 30%
2. Opex Enel Russia 25%
3. FFO Enel Russia (change in Net debt before dividends paid, extraordinary items, Gross Capex, cash impact of Capex` hedging and FX on Net debt)
25%
213
4. Business objective Determined on the basis of tasks assigned to the key manager
20%
Total: 100%
Key performance indicators for the position of the Deputy General Director – Head of People
Human Resource and Organization
Objective Description Weight
1. Ordinary Net income Enel Russia 20%
2. Average Personnel Cost Enel Russia 20%
3. Business objective Determined on the basis of tasks assigned to the key manager
20%
4. Safety Enel Russia 15%
5. Safety Fatal Enel Russia 5%
6. Sustainability - Russia activities 20%
Total: 100%
Key performance indicators for the position of the Head of Energy Management
Objective Description Weight
1. Gross Margin Enel Russia 25%
2. Business objective Determined on the basis of tasks assigned to the key manager
20%
3. FFO Enel Russia (change in Net debt before dividends paid, extraordinary items, Gross Capex, cash impact of Capex` hedging and FX on Net debt)
15%
4. Business objective Determined on the basis of tasks assigned to the key manager
20%
5. Safety Enel Russia 15%
6. Safety Fatal Enel Russia 5%
Total: 100%
Key performance indicators for the position of the Head of Internal Audit:
Objective Description Weight
1. Audit Plan Russia 50%
2. Timing Audit Plan Russia 50%
Key performance indicators for the position of the Head of Digital Solutions
Objective Description Weight
1. Ordinary Net income Enel Russia 30%
2. ICT Cash Cost Enel Russia 20%
3. Business objective Determined on the basis of tasks assigned to the key manager
25%
4. Business objective Determined on the basis of tasks assigned to the key manager
25%
Total: 100%
Key performance indicators for the position of the Head of Legal and Corporate Affairs
214
Objective Description Weight
1. Ordinary Net income Enel Russia 30%
2. Opex Enel Russia 20%
3. Business objective Determined on the basis of tasks assigned to the key manager
25%
4. Business objective Determined on the basis of tasks assigned to the key manager
25%
Total: 100%
Key performance indicators for the position of the Head of Procurement
Objective Description Weight
1. EBIT Thermal generation Enel Russia 30%
2. Business objective Determined on the basis of tasks assigned to the key manager
25%
3. Business objective Determined on the basis of tasks assigned to the key manager
25%
4. Safety Enel Russia 15%
5. Safety Fatal Enel Russia 5%
Total: 100%
Key performance indicators for the position of the Head of Regulatory and Institutional Affairs
Objective Description Weight
1. Opex Enel Russia 30%
2. FFO Enel Russia (change in Net debt before dividends paid, extraordinary items, Gross Capex, cash impact of Capex` hedging and FX on Net debt)
20%
3. Business objective Determined on the basis of tasks assigned to the key manager
25%
4. Business objective Determined on the basis of tasks assigned to the key manager
25%
Total: 100%
Key performance indicators for the position of the Head of Communications
Objective Description Weight
1. Opex Enel Russia 30%
2. FFO Enel Russia (change in Net debt before dividends paid, extraordinary items, Gross Capex, cash impact of Capex` hedging and FX on Net debt)
25%
3. Business objective Determined on the basis of tasks assigned to the key manager
25%
4. Business objective Determined on the basis of tasks assigned to the key manager
20%
Total: 100%
Data on key performance indicators of key managers for 2019 related to sustainable development
Indicator / Head 1 2 3 4 5 6 7 8 9 10 11 Total
Health&Safety 20% 20% 20% 20% 20% 5 pers.
Energy efficiency 6% 1 pers.
215
Wind Generation Development
6% 6% 8% 3 pers.
Sustainability 20% 1 pers.
Corporate governance 25% 1 pers.
Total 26% 26% 0% 40% 26% 0% 0% 25% 20% 8% 0% 6 pers.
Key performance indicators established by the Long-Term Incentive Programs at PJSC Enel Russia for 2017-2019, for 2018-2020, for 2019-2021
№ Key performance indicator (KPI) Indicator weight
1. Total shareholder return (TSR*) of PJSC Enel Russia compared to the benchmarking group
60 %
2. Annual average margin of PJSC Enel Russia by EBITDA for the period of Program duration
40 %
Total: 100%
* Indicator «Total shareholders return» calculated as:
= Share price end of the period – Share price start of the period + Dividends
Share price start of the period
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Environmental indicators
307-1
Inspections by state authorities for compliance with environmental laws at the power plants in 2019
Power plant Organizer of audit Goal of inspection Result
Reftinskaya GRES
Department of the Federal Supervisory Natural Resources Management Service in the Ural Federal District (Rosprirodnadzor)
Unscheduled documentary audit for identification of the fact of previously issued compliance order dated 20.07.2018 No. 332-5 on compliance with the conditions of a special permit for emission of pollutants into the atmospheric air
It was found during the audit that this compliance order was complied with. Also, failure to comply with the requirements of laws on the mandatory performance of state environmental impact assessment when decommissioning the waste disposal facility "Borrow pit for backwash waters". In this connection, an administrative penalty (fine) was imposed in the amount of RUB 50 ths.
An unscheduled documentary audit in order to identify the fact of fulfillment of previously issued compliance order No. 332-8 dated 20.07.2018, its deadline expired on 18.11.2019.
A new compliance order No. 619-1 was received with a deadline on 30.08.2021 on the need for state environmental expert review when decommissioning the waste disposal facility "Borrow pit for backwash waters".
Konakovskaya GRES
Federal Environmental, Industrial and Nuclear Supervision Service (Rostekhnadzor)
Scheduled field inspection in radiation safety
The inspection revealed a violation of the mandatory requirements of federal rules and regulations in nuclear power use “Requirements for quality assurance programs for nuclear facilities” (НП-090-11). In addition, a nonconformity was identified to the requirements for the content of sections of quality assurance programs for nuclear facilities (section IV, НП-090-11). The compliance order was fulfilled on time 30.09.2019
Nevinnomysskaya GRES
Azov-Black Sea Territorial Administration of the Federal Fishery Agency
Scheduled field inspection
Based on the results of the inspection, Compliance Order No. 130 dated 28.10.2019 was received on the following activities with a deadline on 30.04.2020. The Company shall calculate the damage to water biological resources from operation of the buildings of the Barsuchkovsky water intake and cooling water intake facility (CWIF). To authorize performance of economic activities within the boundaries of water protection zones with Azov-Black Sea Territorial Administration of the Federal Fishery Agency. A reserve should be created in the amount of RUB 1.160 million. Install fish protection facility at water intake of CWIF. The agreement shall be signed for design of fish protection facility. Rulings were received on payment of fines No. 641/14 dated 08.11.2019 for the amount of RUB 100 ths and No. 639/14 dated 06.12.2019 for the amount of RUB 200 ths. The rulings are appealed in court.
Konakovskaya GRES Rospotrebnadzor
Scheduled documentary field inspection in sanitary and epidemiological welfare of population, laws in technical regulation during
Based on the inspection results, a Compliance order was received on carrying out activities with a deadline on 15.01.2020 including analysis of water from water well No. 9 for radiological indicators.
Konakovskaya GRES Moscow-Oka Territorial Administration of the Federal Fishery Agency
Scheduled field inspection No violations were revealed by the inspection results.
217
Resource use
301-1
The volume of non-renewable materials used by business unit and type, tons
Material type Quick lime Trivalent sodium phosphate Resins Ammonia Sodium hydroxide Sulfuric and soldering acid
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 0.00 0.00 0.00 0.00 0.00 0.00 130.08 142.58 126.48 6.37 4.25 3.92 335.41 336.07 281.27 726.60 719.82 681.62
Nevinnomysskaya GRES 38.50 4.00 3.00 4.45 4.24 3.53 16.20 0.00 0.00 3.94 0.47 0.32 165.68 122.75 134.91 147.12 96.69 139.60
Reftinskaya GRES 424.06 416.66 403.32 0.00 0.00 0.00 74.60 79.42 55.00 2.42 2.41 1.80 721.32 602.00 361.60 829.80 824.56 546.30
Sredneuralskaya GRES 0.00 0.00 0.00 2.58 2.66 3.79 3.79 8.50 33.29 2.78 5.78 10.12 581.24 482.01 435.12 628.87 565.27 648.49
Headquarters 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total 462.56 420.66 406.32 7.03 6.90 7.31 224.67 230.50 214.77 15.51 12.91 16.16 1,803.64 1,542.83 1,212.90 2,332.39 2,206.33 2,016.01
Material type Sodium hypochlorite Chlorine dioxide Ferrous sulphate (II) Lube Oil Dielectric oil Other* Total for the company
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 23.39 69.10 31.88 13.00 77.29 147.00 228.60 216.64 205.21 1463.45 1565.74 1477.36
Nevinnomysskaya GRES 7.55 7.45 4.89 0.00 0.00 0.00 0.00 0.00 0.00 39.49 44.98 21.61 20.00 0.00 0.00 90.56 145.94 152.35 533.47 426.52 460.21
Reftinskaya GRES 0.00 0.00 0.00 0.00 0.00 0.00 397.27 363.10 260.57 20.15 82.75 33.38 2.21 1.60 22.80 51.00 72.00 49.25 2522.83 2444.50 1734.02
Sredneuralskaya GRES 0.00 15.10 19.90 120.08 147.67 122.25 0.00 0.00 10.00 172.00 104.82 57.70 57.70 59.85 10.35 1325.78 1553.86 1222.78 2894.82 2945.51 2573.79
Headquarters 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.63 0.00 0.00 3.63
Total 7.55 22.55 24.79 120.08 147.67 122.25 397.27 363.10 270.57 255.03 301.65 144.57 92.91 138.74 180.15 1,695.94 1,988.44 1,633.21 7,414.57 7,382.27 6,249.01
“Other” material type includes: alumina (aluminum sulphate), foculant polyacrylamide, crushed anthracite, concentrate mineral halite, coagulant MF-18К, citric acid, Genesys LF scale inhibitor, Bopak
coagulant, Praestol 675TR flocculant, IOMS-1 inhibitor, Nalko inhibitor calcium hypochlorite, quartz, anionite, cationite, office paper.
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Control of air and water quality
305-1
Direct GHG emissions (scope 1) with a breakdown by power plants*, million tons СО2-equivalent
Russian methodology** Enel Group methodology***
2017 2018 2019 2017 2018 2019
Konakovskaya GRES 3,80 3,55 3,13 3,72 3,49 3,04
Nevinnomysskaya GRES 4,19 4,00 3,57 4,16 3,97 3,49
Reftinskaya GRES 18,09 18,25 13,24 18,64 18,37 13,14
Sredneuralskaya GRES 3,64 3,59 3,54 3,64 3,62 3,60
Total 29,73 29,38 23,47 30,16 29,45 23,27
305-4
GHG emissions intensity with a breakdown by power plants, g СО2-equivalent/kW·h,
Russian methodology** Enel Group methodology***
2017 2018 2019 2017 2018 2019
Konakovskaya GRES 529,92 531,32 530,24 519,07 523,14 514,69
Nevinnomysskaya GRES 434,46 430,89 423,30 431,48 427,68 414,35
Reftinskaya GRES 947,39 953,37 962,82 975,70 959,55 951,91
Sredneuralskaya GRES 365,71 366,62 362,08 365,66 370,14 368,37
Total 647,98 654,65 619,63 657,43 656,17 615,72
* In the report for 2018 СО2 indicators were incorrectly displayed due to technical error appeared during typography process. Corrected data for 2017-2018 represented in the table. Since 2019, the company has been calculating greenhouse gas emissions from the total amount of fuel burned, including fuel for commissioning after a scheduled overhaul.
** For calculation of greenhouse gases volume, the “Guidelines and manual for quantifying greenhouse gas emissions by organizations engaged in economic and other activities in the Russian Federation, approved by order of the Ministry of Natural Resources of Russia dated 30.06.2015 No. 300” were used. Company submits the data on quantity of greenhouse gases emissions to relevant regulatory authorities of Russian Federation. The following types of GPG is included to calculation: CO2.
*** In order to ensure consistency of greenhouse gases data in Sustainability plan and during preparation of non-financial part of the Annual report the Enel Group methodology is used. Nonsignificant difference relates to the volume of the burned fuel, based on which the emissions volume is being calculated. The following types of GPG is included to calculation: CO2.
219
303-1, 303-2
Detailed description of the approach to water consumption and water discharge
Description of water intake methods List of water intake points Description of water consumption Description of waste water discharge methods
Konakovskaya GRES
Surface water: Intake of surface water is carried out from the Ivankovskoye reservoir (Volga river) via two water intake facilities: - Cooling water intake facility CWIF-1 - Cooling water intake facility CWIF-2. Artesian water: artesian water is taken from 5 artesian wells
Surface water: - Cooling water intake facility CWIF-1; - Cooling water intake facility CWIF-2. Artesian water: 5 artesian wells
Surface water is used for cooling of thermal equipment and other production needs. Artesian water is used to feed the heating network and for household needs
The waste waters are discharged via open discharge channel through discharge outlet No.1 into the Ivankovskoye reservoir. The utility fluids from production and amenity premises are sent to the enterprise Municipal unitary enterprise "Waterworks” of urban settlement of Konakovo town»
Nevinnomysskaya GRES
Intake of surface water is carried out by two water intakes: - water is taken from the Bolshoi Stavropolsky Canal (Leveling water reservoir of HPP-4) by gravity through 2 water piping and is the main water intake for process water supply; - Water is taken from the Nevinnomyssk Canal at the cooling water intake facility (CWIF). Receipt of domestic water is carried out from Nevinnomyssky Azot JSC
Surface water: - Barsuchkovsky water intake (BWI); - Cooling water intake facility (CWIF). Domestic water is supplied through domestic water supply networks.
Surface water is used for cooling of thermal equipment and other production needs. Water obtained from Nevinnomyssky Azot JSC is used for domestic general needs
Waste water is discharged through discharge canals: - Via open discharge canal No.1 through discharge outlet No.2 in Nevinnomyssky channel; - Via open discharge canal No.2 through discharge outlet No.3 in Nevinnomyssky channel; - Via winter discharge canal through discharge outlet No.1 to the Kuban River. The utility fluids from production and amenity premises are sent to Vodokanal JSC. Industrial storm waters are diverted to the treatment facilities of Nevinnomyssky Azot JSC
Reftinskaya GRES Surface water: Intake of surface water is carried out from Reftinskoye reservoir. The water is taken through submerged intake from the reservoir and fed through an open inlet channel to the cooling water intake facilities. Underground water: the water is taken from two wells.
Surface water: - submerged intake; - supply channel; - cooling water intake facilities (CWIF No.1, CWIF No.2, CWIF No.3). Underground water: - production wells: Nos. 1/2546, 2/2549; - observation wells: 6, 7
Surface water: - for process needs of GRES; - for compensation of losses in hydraulic ash removal system; - for use in chemical water treatment system (CWT). Underground water: - for drinking and domestic water supply
The circulation water in various systems of GRES is discharged through outlet channels No. 1 and No. 2 to the Reftinskoye reservoir after cooling. The waste (filtrate) waters of ash lagoon No. 2 enter the Reftinskoye reservoir along the western collecting ditch (outlet No. 3) and into the river Reft through the river Poludenka along the eastern collecting ditch (outlet No. 7). Domestic waste waters from GRES industrial site are transferred to the third-party organization MU OP Reftinskoye for treatment
Sredneuralskaya GRES
Intake of surface water is carried out from the Isetskoye reservoir via 3 water intake facilities. Intake at CWIF-1 is carried out via a gravity sewer, then water supplied by circulation pumps for equipment cooling. Intake at CWIF-2 and CWIF-3 is carried out from the receiving chambers and supplied by circulation pumps for equipment cooling. Receipt of domestic water is carried out from Teplovodokanal LLC
Surface water: - Cooling water intake facility CWIF-1; - Cooling water intake facility CWIF-2; - Cooling water intake facility CWIF-3. Domestic water is supplied through a sewerage network
Surface water is used for cooling of thermal equipment and other production needs. The water received from Teplovodokanal LLC is used for domestic general needs
Circulation water is discharged after cooling of turbines into open discharge channel. The waste waters from cooling mechanisms of chemical water treatment, main building and CCGT is discharged through water discharge outlets No. 2, 3, 7, 10, 11 to the Isetskoye reservoir. The waste waters from cooling mechanisms of fuel oil facilities are discharged through discharge outlet No.8 to the untitled swamp near the mouth of the river Lebyazhka. The waste waters from RWTF and chemical water treatment as well as drains of the main building are discharged through discharge outlet No. 9 into the untitled swamp at the base of the cape of Yelovyi. The utility fluids from production and amenity premises are sent to Teplovodokanal LLC»
Headquarters Domestic water is supplied through a water main Domestic water is supplied through a water main
Water consumption is carried out for domestic general needs
The utility fluids are sent to the sewerage network
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303-2
Standards and regulations related to waste water quality
State and/or municipal standards and regulations used Power plant the standard/regulation is applicable
to
Order of the Ministry of Agriculture of Russia No. 552 dated 13.12.2016 “On approval of standards of quality water for the water bodies of commercial fishing importance including the standards of maximum permissible concentrations in the waters of water bodies of commercial fishing importance”;
Konakovskaya GRES, Nevinnomysskaya GRES, Reftinskaya GRES, Sredneuralskaya GRES
SanPiN 2.1.5.980-00 "Hygienic Requirements to Surface Water Protection Konakovskaya GRES, Nevinnomysskaya GRES, Reftinskaya GRES, Sredneuralskaya GRES
303-3
Total water intake by power plants and by source type*, million m3
Surface water bodies Underground water
Water provided by the third parties
BU total:
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 1,000.69 872.85 770.22 4.41 4.40 4.08 0.00 0.00 0.00 1,005.10 877.24 774.30
Nevinnomysskaya GRES 690.16 608.77 504.86 0.00 0.00 0.00 0.09 0.08 0.08 690.25 608.85 504.94
Reftinskaya GRES 13.86 12.73 7.89 0.30 0.32 0.17 0.76 0.62 0.45 14.92 13.68 8.52
Sredneuralskaya GRES 24.95 23.33 23.59 0.00 0.00 0.00 0.003 0.002 0.002 24.95 23.33 23.59
Headquarters n / a n / a n / a n / a n / a n / a 0.003 0.002 0.003 0.003 0.002 0.003
Total water taken 1,729.66 1,517.68 1,306.57 4.71 4.71 4.26 0.86 0.71 0.53 1,735.22 1,523.10 1,311.36
Total water intake in the regions with observed water shortages, by business unit and source type**, million m3
Surface water bodies Underground water
Water provided by the third parties
BU total:
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Nevinnomysskaya GRES 690.16 608.77 504.86 - - - 0,09 0,08 0,08 690,25 608,85 504,94
Reftinskaya GRES 13.86 12.73 7.89 0.30 0.32 0.17 0.76 0.62 0.45 14.92 13.68 8.52
Sredneuralskaya GRES 24.95 23.33 23.59 - - - - - - 24.95 23.3 23.59
Total water taken 728,97 644,83 536,35 0,30 0,32 0,17 0,85 0,71 0,53 730,12 645,86 537,05
*Data collection and recording was carried out using various methods based on actual measurements. In the cases where actual measurements were not assumed, the computational methods for data collection and recording were used. The calculations of 2019 are based on the Guidelines for completion of federal statistical observation form 2TP-water services as being revised by order of the Federal Service for State Statistics (Rosstat) No. 815 dated 27.12.2019. In 2019, we revised the methodology for breakdown of the volume of water intake by source type. Corresponding adjustments were made in the category “water provided by the third parties” to the data for 2017-2018 to ensure comparability with the reporting year. Surface water intake data of KGRES for 2018 and underground water intake data of KGRES for 2017 and 2018 were corrected due to technical error in the previous reporting period. **To determine whether there is a shortage of water resources in the region, we used both local sources and international tool recommended GRI “Aqueduct Water Risk Atlas” (https://www.wri.org/aqueduct)
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303-4 306-1
Total volume of wastewater discharged into surface waters* by treatment method *, million m3
Partially clean water (without purification)
Polluted insufficiently treated water
Waters treated to standard quality (mechanical and physical-
chemical treatment)
Disinfection
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 973.71 847.24 745.70 - - - 1.11 1.10 1.36 - - -
Nevinnomysskaya GRES 657.22 576.91 461.45 - - - - - - - - -
Reftinskaya GRES - - - 12.45 8.48 4.39 - - - - - -
Sredneuralskaya GRES 0.47 0.48 0.40 - - - 3.26 3.71 3.23 - - -
Headquarters - - - - - - - - - 0,003 0,002 0,002
Total 1,631.40 1,424.63 1,207.55 12.45 8.48 4.39 4.36 4.80 4.59 0,003 0,002 0,002
*Discharge of wastewater of the company at all power plants into the surface water bodies, with exception of Headquarters. The discharged water of Headquarter are being sent receiving object JSC “Mosvodokanal”. The 2019 calculations are based on the Guidelines for completion of federal statistical observation form 2TP-water services as being revised by order of the Federal Service for State Statistics (Rosstat) No. 815 dated 27.12.2019
Waste disposal by third party organizations*
Contractor Waste management standards applicable to the contractors’
activities
Konakovskaya GRES Inchermet LLC, Transsnab LLC
Federal Law On Production and Consumption Waste No. 89-FZ dated 24.06.1998 Procedure of PJSC Enel Russia No.522 "Interaction with suppliers and contractors in HSEQ"
Nevinnomysskaya GRES YuVM LLC, Chisty Gorod LLC, Yuzhmet LLC, TARA YUG LLC, Tenzor LLC
Reftinskaya GRES Industrial Waste Safety Center LLC, Chermetinvest-T LLC, Chermet-SMK LLC, MIDA LLC, TPM LLC
Sredneuralskaya GRES Splav-Stal LLC, MIDA Yekaterinburg LLC, Chermetinvest-T LLC, Meta-Yekaterinburg LLC, Profmet LLC, Industrial Materials Technologies LLC
Headquarters Not applicable Not applicable
*The company does not dispose hazardous waste independently. In order to dispose waste, we cooperate with the companies that have specialized licenses in accordance with current laws of the Russian
Federation for carrying out such activities.
222
303-5
Total volume of water consumption by business unit, ths. m3
2017 2018 2019
Konakovskaya GRES 1,005.10 877.24 774.30
Nevinnomysskaya GRES 690.25 608.85 504.94
Reftinskaya GRES 14.92 13.68 8.52
Sredneuralskaya GRES 24.95 23.33 23.59
Headquarters 0.003 0.002 0.003
Total water taken 1,735.22 1,523.10 1,311.36
Konakovskaya GRES 974.81 848.34 747.06
Nevinnomysskaya GRES 657.22 576.91 461.45
Reftinskaya GRES 12.45 8.48 4.39
Sredneuralskaya GRES 3.72 4.18 3.63
Headquarters 0.003 0.002 0.002
Total discharged water 1,648.22 1,437.91 1,216.54
Konakovskaya GRES 30.29 28.90 27.24
Nevinnomysskaya GRES 33.03 31.94 43.49
Reftinskaya GRES 2.47 5.20 4.12
Sredneuralskaya GRES 21.23 19.15 19.96
Headquarters 0.003 0.002 0.003
Total water consumption 87.01 85.19 94.82
223
305-7
Gross emissions of pollutants into the atmosphere by significant types, tons
Power plant Pollutant type 2017 2018 2019
Konakovskaya GRES
NOx 6 748,02 5 671,89 5 149,81
SOx 2,76 0,57 0,54
Organic pollutants (POP) 0,00 0,00 0,00
Volatile organic compounds (VOC) 16,50 16,50 16,50
Hazardous air pollutants 0,00 0,00 0,00
Particulate matters (PM) 0,04 0,01 0,22
CO - carbon oxide 282,75 327,08 159,62
Other pollutants 0,61 0,61 0,41
Total 7 050,68 6 016,66 5 327,09
Nevinnomysskaya GRES
NOx 5 694,87 5 539,32 4 700,45
SOx 204,49 116,73 213,23
Organic pollutants (POP) 0,00 0,00 0,00
Volatile organic compounds (VOC) 12,67 12,78 12,72
Hazardous air pollutants 0,01 0,01 0,01
Particulate matters (PM) 0,59 0,37 3,19
CO - carbon oxide 2 511,06 2 710,17 2 575,36
Other pollutants 258,42 244,30 213,02
Total 8 682,12 8 623,68 7 717,98
Reftinskaya GRES
NOx 75 068,86 74 720,58 53 595,76
SOx 141 258,21 133 214,62 99 151,23
Organic pollutants (POP) 0,00 0,00 0,00
Volatile organic compounds (VOC) 33,87 33,87 25,40
Hazardous air pollutants 0,30 0,30 0,23
Particulate matters (PM) 66 714,16 41 601,79 30 529,24
CO - carbon oxide 731,65 750,37 555,58
Other pollutants 857,95 857,95 643,47
Total 284 665,00 251 179,48 184 500,90
Sredneuralskaya GRES
NOx 4 250,27 4 020,22 3 887,86
SOx 153,80 5,97 3,33
Organic pollutants (POP) 0,00 0,00 0,00
Volatile organic compounds (VOC) 1,90 1,90 1,90
Hazardous air pollutants 0,00 0,00 0,00
Particulate matters (PM) 1,27 0,18 0,72
CO - carbon oxide 641,28 638,07 636,21
Other pollutants 8,36 8,36 7,83
Total 5 056,87 4 674,69 4 537,84
Total for all Company
NOx 91 762,02 89 952,02 67 333,87
SOx 141 619,27 133 337,88 99 368,34
Organic pollutants (POP) 0,00 0,00 0,00
Volatile organic compounds (VOC) 64,93 65,05 56,52
Hazardous air pollutants 0,31 0,31 0,24
Particulate matters (PM) 66 716,06 41 602,33 30 533,36
CO - carbon oxide 4 166,73 4 425,69 3 926,77
224
Other pollutants 1 125,35 1 111,23 864,72
Total 305 454,68 270 494,51 202 083,81
225
306-2
Waste by hazard class*
Konakovskaya GRES Nevinnomysskaya GRES Reftinskaya GRES Sredneuralskaya GRES Total for the company
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Placement in a landfill 4,283.931 3,589.727 5,271.055 1,322.934 1,122.555 1,051.889 889.560 1,055.710 2,540.537 1,649.857 1,381.168 1,743.538 8,146.282 7,149.160 10,607.019
Waste of hazard class 1 - - - - - - - - - - - - - - -
Waste of hazard class 2 - - - - - - - - - - - - - - -
Waste of hazard class 3 - - - - - - 10.060 2.590 21.467 8.567 29.610 5.478 18.627 32.200 26.945
Waste of hazard class 4 3,220.771 2,465.283 1,344.051 542.437 792.316 555.061 849.800 1,027.920 1,800.026 1,201.300 977.700 587.608 5,814.308 5,263.219 4,286.746
Waste of hazard class 5 1,063.160 1,124.444 3,927.004 780.497 330.239 496.828 29.700 25.200 719.044 439.990 373.858 1,150.452 2,313.347 1,853.741 6,293.328
Disposal at operating facilities - - - 63.243 72.690 52.216 4,247,872.177 4,634,721.631 3,020,962.500 141.750 951.379 844.305 4,248,077.170 4,635,745.700 3,021,859.021
Waste of hazard class 1 - - - 0.000 0.000 - - - - 0.000 0.000 - - - -
Waste of hazard class 2 - - - 0.000 0.000 - - - - 0.000 0.000 - - - -
Waste of hazard class 3 - - - 2.623 9.700 5.356 - - - 0.128 0.123 0.120 2.751 9.823 5.476
Waste of hazard class 4 - - - 0.130 - - 10,800.400 10,631.931 4,534.200 0.000 2.356 - 10,800.530 10,634.287 4,534.200
Waste of hazard class 5 - - - 60.490 62.990 46.860 4,237,071.777 4,624,089.700 3,016,428.300 141.622 948.900 844.185 4,237,273.889 4,625,101.590 3,017,319.345
Transferred for recycling and disposal
160.964 1,268.682 508.741 758.678 1,596.371 1,475.119 249,184.762 5,851.365 6,092.053 607.719 1,732.694 1,071.147 250,712.123 10,449.112 9,147.059
Waste of hazard class 1 0.499 0.272 0.509 0.400 0.417 0.425 3.642 2.322 1.523 0.922 1.253 0.681 5.463 4.264 3.138
Waste of hazard class 2 - - - 0.745 0.524 0.491 0.000 0.166 - 0.000 0.039 0.035 0.745 0.729 0.526
Waste of hazard class 3 69.315 959.310 220.070 161.594 600.226 17.396 336.717 256.556 22.120 17.280 29.407 57.399 584.906 1,845.499 316.985
Waste of hazard class 4 3.800 195.200 0.013 3.118 0.384 1.750 - - 0.200 0.000 0.000 0.690 6.918 195.584 2.653
Waste of hazard class 5 87.350 113.900 288.149 592.821 994.820 1,455.057 248,844.403 5,592.321 6,068.210 589.517 1,701.995 1,012.342 250,114.091 8,403.036 8,823.758
*Since 2019, the data on the volume of waste by hazard class have been given rounded to three decimal places including data for previous reporting periods (2017-2018) This change is related to the
specifics of the approach to preparation of state reporting in terms of rounding indicators
226
Social disclosure
Health and Safety
102-8 403-1 403-9
Number of man-hours worked by employees, ths.
2017 2018 2019
Konakovskaya GRES 775.34 712.51 672.51
Nevinnomysskaya GRES 794.73 746.53 713.16
Reftinskaya GRES 1,825.42 1,756.37 1,713.61
Sredneuralskaya GRES 799.93 742.45 707.58
Headquarters 453.44 433.18 427.48
Total 4,648.85 4,391.03 4,234.33
Number of man-hours worked by contractors*, ths.
2017 2018 2019
Konakovskaya GRES 763.25 749.84 743.30
Nevinnomysskaya GRES 927.77 773.99 771.27
Reftinskaya GRES 3,492.97 5,579.12 4,777.19
Sredneuralskaya GRES 1,538.45 1,511.34 1,449.28
Headquarters 63.96 45.81 44.53
Total 6,786.41 8,660.10 7,785.58 * A significant part of works for maintenance of equipment and buildings is carried out at the company's power plants by contractors.
227
Human Resource and Social Policy
102-8 405-1
Employees by position, pers.
Managers Heads Specialists Workers Employees total at BU
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 1 1 1 67 65 61 158 155 150 191 176 160 417 397 372
Nevinnomysskaya GRES 1 1 1 71 68 68 167 153 146 194 190 183 433 412 398
Reftinskaya GRES 1 1 1 160 160 158 288 279 248 556 577 578 1,005 1017 985
Sredneuralskaya GRES 1 1 1 69 65 59 187 180 169 181 172 165 438 418 394
Headquarters 16 17 18 73 71 73 167 161 161 3 3 3 259 252 255
Total, employees 20 21 22 440 429 419 967 928 874 1125 1118 1089 2552 2496 2404
Employees by educational level, pers.
Secondary general education
Primary and secondary vocational
education Higher education Employees total at BU
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 25 19 16 122 112 99 270 266 257 417 397 372
Nevinnomysskaya GRES 5 4 4 69 58 54 359 350 340 433 412 398
Reftinskaya GRES 97 97 97 418 422 416 490 498 472 1005 1017 985
Sredneuralskaya GRES 28 26 26 127 113 107 283 279 261 438 418 394
Headquarters 2 2 2 5 5 4 252 245 249 259 252 255
Total, employees 157 148 145 741 710 680 1654 1638 1579 2552 2496 2404
Gender breakdown of employees, pers.
Men Women Employees total at BU
2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 322 303 284 95 94 88 417 397 372
Nevinnomysskaya GRES 328 317 310 105 95 88 433 412 398
Reftinskaya GRES 779 804 774 226 213 211 1005 1017 985
Sredneuralskaya GRES 290 276 263 148 142 131 438 418 394
Headquarters 140 136 138 119 116 117 259 252 255
Total, employees 1859 1836 1769 693 660 635 2552 2496 2404
Employees by age, pers.
up to 30 years old 30 - 50 years old Over 50 years old Employees total at BU
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 16 10 5 291 280 255 110 107 112 417 397 372
Nevinnomysskaya GRES 24 18 15 321 309 298 88 85 85 433 412 398
Reftinskaya GRES 111 121 120 728 729 695 166 167 170 1,005 1017 985
Sredneuralskaya GRES 51 38 31 313 310 297 74 70 66 438 418 394
Headquarters 27 24 25 193 182 183 39 46 47 259 252 255
Total, employees 229 211 196 1846 1810 1728 477 475 480 2552 2496 2404
pers.
Permanent Temporary Permanent Temporary Permanent Temporary
2017 2018 2019
Konakovskaya GRES 415 2 396 1 371 1
women 93 2 93 1 87 1
men 322 0 303 0 284 0
Nevinnomysskaya GRES 433 0 412 0 398 0
women 105 0 95 0 88 0
men 328 0 317 0 310 0
Reftinskaya GRES 1,005 0 991 26 974 11
women 226 0 212 1 211 0
men 779 0 779 25 763 11
Sredneuralskaya GRES 438 0 418 0 390 4
women 148 0 142 0 131 0
men 290 0 276 0 259 4
Headquarters 251 8 247 5 249 6
women 116 3 114 2 115 2
men 135 5 133 3 134 4
Total 2542 10 2464 32 2382 22
women 688 5 656 4 632 3
men 1854 5 1808 28 1750 19
228
Employees by type of employment and gender, pers.
Total Partially Total Partially Total Partially
2017 2018 2019
Konakovskaya GRES 416 1 396 1 371 1
women 94 1 93 1 87 1
men 322 0 303 0 284 0
Nevinnomysskaya GRES 433 0 412 0 398 0
women 105 0 95 0 88 0
men 328 0 317 0 310 0
Reftinskaya GRES 1,005 0 1017 0 985 0
women 226 0 213 0 211 0
men 779 0 804 0 774 0
Sredneuralskaya GRES 436 2 416 2 393 1
women 146 2 141 1 130 1
men 290 0 275 1 263 0
Headquarters 258 1 250 2 254 1
women 118 1 115 1 117 0
men 140 0 135 1 137 1
Total 2548 4 2491 5 2401 3
women 689 4 657 3 633 2
men 1859 0 1834 2 1768 1
202-1
Ratio of average salary at the power plants of the company and in the regions of presence*, RUB
** Due to inability to provide data on standard wages for entry-level employees, the company discloses the average salary without a breakdown by gender for each of the company's business units and gives its ratio to the average salary in the respective regions of presence. ** Calculation of the average salary does not include the salaries of employees classified as "Managers". *** The data on average salary in the regions of presence is given according to the report of the Federal State Statistics Service "Average monthly nominal accrued salary of employees by the full range of organizations by subjects of the Russian Federation in 2013–2019".
87 330 90 222 92 275
27 384 29 802 32 528
2017 2018 2019
Конаковская ГРЭС Тверская область
78 439 81 235 82 502
26 904 28 209 30 863
2017 2018 2019
Невинномысская ГРЭС Ставропольский край
80 480 83 856 84 073
34 500 36 677 39 979
2017 2018 2019
Рефтинская ГРЭС Свердловская область
92 621 93 959 94 970
34 500 36 677 39 979
2017 2018 2019
Рефтинская ГРЭС Свердловская область
225 802 227 737 229 919
73 153 80 816 90 093
2017 2018 2019
Центральный офис Москва
Konakovskaya GRES Tver Region Nevinnomysskaya GRES Stavropol Territory
Sredneuralskaya GRES
Headquarters Moscow
Sverdlovsk region Sverdlovsk region Reftinskaya GRES
229
401-1
Total number of new employees during the reporting period, pers.
up to 30 years old 30 - 50 years old Over 50 years old Employees total at BU
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 1 1 1 0 1 1 4 4 1 5 6 3
women 0 1 0 0 1 1 4 3 0 4 5 1
men 1 0 1 0 0 0 0 1 1 1 1 2
Nevinnomysskaya GRES 4 2 4 4 9 6 0 1 1 8 12 11
women 0 1 0 1 6 2 0 1 1 1 8 3
men 4 1 4 3 3 4 0 0 0 7 4 8
Reftinskaya GRES 28 48 39 39 40 22 3 4 5 70 92 66
women 2 3 2 12 3 3 3 2 5 17 8 10
men 26 45 37 27 37 19 0 2 0 53 84 56
Sredneuralskaya GRES 9 6 9 14 15 14 0 0 2 23 21 25
women 3 3 2 5 7 2 0 0 0 8 10 4
men 6 3 7 9 8 12 0 0 2 15 11 21
Headquarters 9 9 9 7 14 5 0 1 1 16 24 15
women 8 4 7 4 7 2 0 0 0 12 11 9
men 1 5 2 3 7 3 0 1 1 4 13 6
Total, employees 51 66 62 64 79 48 7 10 10 122 155 120
women 13 12 11 22 24 10 7 6 6 42 42 27
men 38 54 51 42 55 38 0 4 4 80 113 93
Total number and the turnover rate for the reporting period, by age group, gender and region*, persons
Fired employees Average number of employees of the organization for the year Turnover rate
2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 26 26 27 421.42 403.66 385.20 6.2% 6.4% 7.0%
women 9 7 6 92.52 89.27 89.29 9.7% 7.8% 6.7%
men 17 19 21 328.90 314.39 295.91 5.2% 6.0% 7.1%
Nevinnomysskaya GRES 20 32 24 429.72 416.30 397.29 4.7% 7.7% 6.0%
women 7 17 10 97.40 91.01 84.42 7.2% 18.7% 11.8%
men 13 15 14 332.32 325.29 312.87 3.9% 4.6% 4.5%
Reftinskaya GRES 102 77 98 1,022.28 1,000.88 985.57 10.0% 7.7% 9.9%
women 26 20 13 227.57 213.72 203.99 11.4% 9.4% 6.4%
men 76 57 85 794.71 787.16 781.58 9.6% 7.2% 10.9%
Sredneuralskaya GRES 35 41 47 437.01 417.95 397.65 8.0% 9.8% 11.8%
women 7 16 15 138.67 135.13 128.20 5.0% 11.8% 11.7%
men 28 25 32 298.34 282.82 269.45 9.4% 8.8% 11.9%
Headquarters 26 35 16 249.15 242.93 247.33 10.4% 14.4% 6.5%
women 15 15 8 102.40 102.53 108.85 14.6% 14.6% 7.3%
men 11 20 8 146.75 140.40 138.48 7.5% 14.2% 5.8%
Total, employees 209 211 212 2,559.59 2,481.72 2,413.04 8.2% 8.5% 8.8%
women 64 75 52 658.57 631.66 614.75 9.7% 11.9% 8.5%
men 145 136 160 1,901.02 1,850.06 1,798.29 7.6% 7.4% 8.9%
* In the reporting year, we adjusted the methodology for calculating the turnover by branches and by company. We also applied this approach to data for 2017-2018 to ensure comparability.
401-3
Total number of employees taking parental leave, by gender for the reporting period, pers.
2017 2018 2019
Konakovskaya GRES 5 3 3
women 5 3 3
men - - -
Nevinnomysskaya GRES 11 10 9
women 11 10 9
men - - -
Reftinskaya GRES 8 8 10
women 8 8 10
men - - -
Sredneuralskaya GRES 11 9 7
women 11 8 7
men - 1 -
Headquarters 19 12 7
women 19 12 7
men - - -
Total 54 42 36
230
2017 2018 2019
women 54 41 36
men - 1 -
Total number of employees returning to work during the reporting period after the end of parental leave, by gender, pers.
2017 2018 2019
Konakovskaya GRES 3 2 1
including women 3 2 1
including men - - -
Nevinnomysskaya GRES 3 5 2
including women 3 5 2
including men - - -
Reftinskaya GRES 7 4 2
including women 7 4 2
including men - - -
Sredneuralskaya GRES 1 3 1
including women 1 3 -
including men - - 1
Headquarters 4 6 9
including women 4 6 9
including men - - -
Total 18 20 15
including women 18 20 14
including men - - 1
Total number of employees returning to work after the end of the parental leave who still worked 12 months after their return to work, by gender, persons
2017 2018 2019
Konakovskaya GRES - 3 2
including women - 3 2
including men - - -
Nevinnomysskaya GRES - 3 3
including women - 3 3
including men - - -
Reftinskaya GRES - 7 4
including women - 7 4
including men - - -
Sredneuralskaya GRES - 1 2
including women - 1 2
including men - - -
Headquarters - 2 5
including women - 2 5
including men - - -
Total - 16 16
including women - 16 16
including men - - -
404-1
Total staff training hours at the end of the year by job, h
Managers Heads Specialists Workers Total training hours at BU
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 216 855 69 4125 1684 2985.5 3726 3574 5273.5 2316 4729 9022.9 10383 10842 17351
Nevinnomysskaya GRES 80 127 92.7 4266 3045 5997.3 5948 6370 13983 37748 16370 24467 48042 25912 44540
Reftinskaya GRES 167 121 111 4952 3845 8673.5 6862 6898 10147 13626 24230 33147 25607 35094 52079
Sredneuralskaya GRES 209 259 100 4766 5777 5364.2 6228 8839 7839.9 10337 18517 13500 21540 33392 26804
Headquarters 1053 2,268 1954.2 3973 5205 4331.5 7564 7881 6052.3 16 - - 12606 15354 12338
Total training hours per year
1725 3630 2326.9 22082 19556 27352 30328 33562 43296 64043 63846 80137 118178 120594 153112
Annual average number of staff training hours by job
Managers Heads Specialists Workers
Total training hours at BU
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 216.0 855.0 69.0 61.6 25.9 48.9 23.6 23.1 35.2 12.1 26.9 56.4 24.9 27.3 46.6
Nevinnomysskaya GRES 80.0 127.0 92.7 60.1 44.8 88.2 35.6 41.6 95.8 194.6 86.2 133.7 111.0 62.9 111.9
Reftinskaya GRES 167.0 121.0 111.0 31.0 24.0 54.9 23.8 24.7 40.9 24.5 42.0 57.3 25.5 34.5 52.9
Sredneuralskaya GRES 209.0 259.0 100.0 69.1 88.9 90.9 33.3 49.1 46.4 57.1 107.7 81.8 49.2 79.9 68.0
Headquarters 65.8 133.4 108.6 54.4 73.3 59.3 45.3 49.0 37.6 5.3 - - 48.7 60.9 48.4
Average annual number of training hours
86.3 172.9 105.8 50.2 45.6 65.3 31.4 36.2 49.5 56.9 57.1 73.6 46.3 48.3 63.7
Total staff training hours at the end of the year by gender, hours
Women Men Total training hours at BU
2017 2018 2019 2017 2018 2019 2017 2018 2019
231
Konakovskaya GRES 2,918.0 2,618.0 4,610.3 7,465.0 8,224.0 12,740.6 10,383.0 10,842.0 17,350.9
Nevinnomysskaya GRES 7,335.0 10,305.0 8,660.2 40,707.0 15,607.0 35,879.7 48,042.0 25,912.0 44,539.9
Reftinskaya GRES 4,030.0 6,754.0 9,208.5 21,577.0 28,340.0 42,870.0 25,607.0 35,094.0 52,078.5
Sredneuralskaya GRES 6,367.0 9,490.0 9,344.9 15,173.0 23,902.0 17,459.5 21,540.0 33,392.0 26,804.4
Headquarters 4,148.0 11,296.0 6,216.3 8,458.0 4,058.0 6,121.7 12,606.0 15,354.0 12,338.0
Total number training hours per year
24,798.0 40,463.0 38,040.2 93,380.0 80,131.0 115,071.5 118,178.0 120,594.0 153,111.7
Annual average number of training hours, hours per employee by gender
Women Men Total training hours at BU
2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 9.06 8.64 16.23 78.58 87.49 144.78 24.90 27.31 46.64
Nevinnomysskaya GRES
22.36 32.51 27.94 387.69 164.28 407.72 110.95 62.89 111.91
Reftinskaya GRES 5.17 8.40 11.90 95.47 133.05 203.18 25.48 34.51 52.87
Sredneuralskaya GRES
21.96 34.38 35.53 102.52 168.32 133.28 49.18 79.89 68.03
Headquarters 29.63 83.06 45.05 71.08 34.98 52.32 48.67 60.93 48.38
Average annual number of training hours
13.34 22.04 21.50 134.75 121.41 181.21 46.31 48.31 63.69
404-3
Share of employees receiving regular feedback on the results of work as to career development during the reporting period, by position*
Managers Heads Specialists Workers Total at BU
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES
- 100% 100% - 100% 100% - 94% 100% - 93% 100% - 94% 100%
Nevinnomysskaya GRES
- 100% 100% - 100% 100% - 93% 98% - 93% 89% - 94% 94%
Reftinskaya GRES - 100% 100% - 98% 94% - 94% 100% - 93% 77% - 94% 86%
Sredneuralskaya GRES
- 100% 100% - 100% 100% - 94% 99% - 93% 99% - 94% 99%
Headquarters - 100% 100% - 100% 100% - 94% 100% - 100% 100% - 96% 100%
Total share of employees - 100% 100% - 99% 98% - 94% 100% - 93% 86% - 95% 93%
Share of employees receiving regular feedback on the results of work as to career development during the reporting period, by gender*
Women Men Employees total at BU
2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES - 91% 100% - 95% 100% - 94% 100%
Nevinnomysskaya GRES - 92% 93% - 95% 95% - 94% 94%
Reftinskaya GRES - 92% 82% - 95% 87% - 94% 86%
Sredneuralskaya GRES - 92% 98% - 96% 100% - 94% 99%
Headquarters - 91% 100% - 100% 100% - 96% 100%
Total share of employees
- 92% 93% - 96% 93% - 95% 93%
* The process does not involve employees on maternity leave, maternity leave, employees on long-term sick leave, or employees who have worked for less than three months during the campaign period. The number of employees who participated in the process of receiving feedback during the year was brought in line with the number of employees at the end of the year. The data for 2018 is adjusted due to a technical error made in the report of 2018, the difference is no more than 1%.
405-1 Executive staff by gender and age*, pers.
30 - 50 years old Over 50 years old Total executives at BU
2017 2018 2019 2017 2018 2019 2017 2018 2019
232
Konakovskaya GRES 1 1 1 - - - 1 1 1
women - - - - - - - - -
men 1 1 1 - - - 1 1 1
Nevinnomysskaya GRES 1 1 1 - - - 1 1 1
women - - - - - - - - -
men 1 1 1 - - - 1 1 1
Reftinskaya GRES 1 1 1 - - - 1 1 1
women - - - - - - - - -
men 1 1 1 - - - 1 1 1
Sredneuralskaya GRES 1 1 1 - - - 1 1 1
women - - - - - - - - -
men 1 1 1 - - - - - -
Headquarters 15 17 17 3 3 4 18 20 21
women 3 4 5 1 - - 4 4 5
men 12 13 12 2 3 4 14 16 16
Total number of executives 19 21 21 3 3 4 22 24 25
women 3 4 5 1 - - 4 4 5
men 16 17 16 2 3 4 18 20 20
*This category includes senior employees of the first line reporting to the General Director of the company. As of 2017-2019, the company had no employees in senior positions in the age group under 30
405-2
The ratio of women's income to men's income, by categories and company power plants
Only male employees worked at the power plants in the category “managers” and at the headquarters in the category “workers” in 2017-2019, and therefore the ratio for this category is not presented.
Konakovskaya GRES
Nevinnomysskaya GRES
Workers Specialists Heads
Reduction of the salary gap between women and men Increase of the salary gap between women and men
Workers Specialists Heads
Reduction of the salary gap between women and men Increase of the salary gap between women and men
233
Reftinskaya GRES
Sredneuralskaya GRES
Headquarters
EU15
Percentage of employees of the total headcount eligible for retirement over the next 5 years as of 2019
Managers Heads Specialists Workers Total
Konakovskaya GRES -
5% 6% 3% 4%
Nevinnomysskaya GRES -
9% 3% 9% 7%
Reftinskaya GRES -
5% 6% 3% 4%
Sredneuralskaya GRES -
2% 5% 2% 3%
Workers Specialists Heads
Reduction of the salary gap between women and men Increase of the salary gap between women and men
Workers Specialists Heads
Reduction of the salary gap between women and men Increase of the salary gap between women and men
Managers Specialists Heads
Reduction of the salary gap between women and men Increase of the salary gap between women and men
234
Headquarters 6% 4% 4% - 4%
Total 5% 5% 5% 4% 4%
Percentage of employees of the total headcount eligible for retirement over the next 10 years as of 2019
Managers Heads Specialists Workers Total
Konakovskaya GRES -
7% 14% 7% 10%
Nevinnomysskaya GRES -
16% 12% 15% 14%
Reftinskaya GRES -
7% 12% 4% 6%
Sredneuralskaya GRES -
5% 9% 6% 7%
Headquarters 6% 7% 9% - 8%
Total 5% 8% 11% 7% 9%
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Sustainable supply chain
102-9 308-1 308-2
The number of suppliers evaluated in terms of environmental impact
The number of suppliers that have a significant actual and potential negative environmental impact
Existing actual and potential negative environmental impacts, environmental impact consequences identified in the supply chain
2018 2019 2018 2019 2018 2019
Konakovskaya GRES 32 25 1 2 Not identified Not identified
Nevinnomysskaya GRES
25 26 2 1 Not identified Not identified
Reftinskaya GRES 50 35 2 0 Not identified Not identified
Sredneuralskaya GRES
41 38 3 2 Not identified Not identified
Headquarters 12 0 0 0 Not identified Not identified
Total suppliers 160 124 8 5
CONTACTS
102-53
Discipline Focalpoints
Corporate governance Oksana Ryabchinskaya, Legal Advisor
Investor relations Ekaterina Dubovitskaya, manager
Sustainability
Maria Shipitsyna, Senior Manager
Sofya Krasnoyarova, Chief Specialist
Natalya Zherebyatyeva, Lead Specialist [email protected]
Press Office Nikolay Shchennikov, Press Office
Company Full name: Public Joint-Stock Company Enel Russia Short name: PJSC Enel Russia
236
Previous names: Open Joint-stock Company Fifth Generation Company of the Wholesale Electricity Market (OJSC OGK-5); Open Joint-Stock Company Enel OGK-5 (OJSC Enel OGK-5); Open Joint Stock Company Enel Russia (OJSC Enel Russia) Location of the company: Yekaterinburg Company address: 10 Khokhryakova Str., Yekaterinburg 620014, Sverdlovsk Region, Russian Federation Postal address: 7 Pavlovskaya Str., bldg. 1, Moscow 115093, Russia Phone: +7 (495) 539-31-31 Fax: +7 (495) 539-31-48 E-mail address: [email protected] Web site (web-sites) where information about the company is presented: https://www.enelrussia.ru
Power plants of PJSC Enel Russia Headquarters, 7 Pavlovskaya Street, bldg 1, Moscow, 115093, Russian Federation Konakovskaya GRES power plant, 12 Promyshlennaya Street, Konakovo 171252, Tver region, Russian Federation Nevinnomysskaya GRES power plant, 2 Energetikov Str., Nevinnomyssk 357107, Stavropol Territory, Russian Federation Reftinskaya GRES power plant, Reftinskiy settlement 624285, Asbest town, Sverdlovsk region, Russian Federation Sredneuralskaya GRES power plant, 2 Lenina Street, Sredneuralsk 624070, Sverdlovsk Region, Russian Federation, Depositary bank Title: The bank of New York Mellon Location: One Wall Street, New York, New York 10286, USA Website; www.bnymellon.com Registrar Before February 5, 2019: Full name: Joint Stock Company Independent Registrar Company Short name: JSC Independent Registrar Company Location18 Stromynka Street, building 5B, Moscow 107076, Moscow Phone: +7 (495) 926-81-60 Fax: +7 (495) 926-81-78 Website; http://www.ncreg.ru/ After February 5, 2019: Full name: Joint Stock Company Independent Registrar Company R.O.S.T. Short name: JSC IRC-R.O.S.T. Location18 Stromynka Street, building 5B, premises IX, Moscow 107076, Moscow Phone: +7 (495) 989-76-50, +7(495) 780-73-63 Website; http://rrost.ru/
237
Auditor Full company name: Ernst and Young Limited Liability Company Abbreviated company name: Ernst and Young LLC Location: 77 Sadovnicheskaya naberezhnaya, building 1, Moscow 115035, Russia Phone: +7 (495) 755-97-00 Fax: +7 (495) 755-97-01 Website: http://www.ey.com/russia
GLOSSARY
102-5
OGK-5 JSC, OJSC Enel OGK-5, OJSC Enel Russia, PJSC Enel Russia, company, Issuer — Public Joint-Stock Company Enel Russia Headquarters (HQ) — Headquarters, PJSC Enel Russia Konakovskaya GRES (KGRES) — Konakovskaya GRES power plant of PJSC Enel Russia Nevinnomysskaya GRES (NGRES) — Nevinnomysskaya GRES power plant of PJSC Enel Russia Reftinskaya GRES (RGRES) - depending on the context, Reftinskaya GRES power plant of PJSC Enel Russia, or the property constituting Reftinskaya GRES, in its respect the sales transaction was completed Sredneuralskaya GRES (SUGRES) — Sredneuralskaya GRES power plant of PJSC Enel Russia
Charter – Charter of PJSC Enel Russia», approved by decision of the annual General Shareholders Meeting, minutes No. 1/19 dated 18.06.19 (unless otherwise specified in the context of this report). Regulation on the order of preparation and holding the General Shareholders' Meeting - Regulation on the order of preparation and holding the General Shareholders' Meeting of OJSC Enel OGK-5, approved by decision of the annual General Shareholders Meeting, minutes No. 1/12 dated 20.06.12. Regulation on the procedure for convening and holding of meetings of the company's Board of Directors - Regulation on the procedure for convening and holding of meetings of the company's Board of Directors, approved by decision of the annual General Shareholders Meeting of PJSC Enel Russia, minutes No. 1/18 dated 04.06.2018. Regulation on the Committees of the Board of Directors - Regulation on the Committees of the Board of Directors of PJSC Enel Russia, approved by decision of the Board of Directors, minutes No. 10/19 dated 26.06.19. Regulation on Corporate Secretary - Regulation on Corporate Secretary of PJSC Enel Russia, approved by decision of the Board of Directors, minutes No. 8/16 dated 29.09.2016 Regulation on the Executive Board – Regulation on the Executive Board of OGK-5 JSC, approved by decision of the General Shareholders Meeting of OJSC OGK-5, minutes No. 1 dated 04.06.2007 Internal Control and Risk Management Policy - Internal Control and Risk Management Policy, approved by decision of the Board of Directors of PJSC Enel Russia, minutes No. 14/18 dated 21.12.18. Regulation on Internal Audit Department - Regulation on the Internal Audit Department of PJSC Enel Russia, approved by decision of the Board of Directors of PJSC Enel Russia, minutes No. 8/16 dated 29.09.16 Regulation on payment of remunerations and compensations to the members of the Board of Directors and Committees of the Board of Directors - Regulation on payment of remunerations and compensations to the members of the Board of Directors and Committees of the Board of Directors approved by the annual General Shareholders’ Meeting of PJSC Enel Russia, minutes No. 1/19 dated 18.06.2019
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The policy for remuneration and reimbursement of expenses (compensation) of the members of executive bodies and other key executives - Policy on remuneration and reimbursement of expenses (compensations) of the members of the executive bodies and other key managers of Public Joint Stock Company Enel Russia approved by the Board of Directors of PJSC Enel Russia, minutes No. 14/19 dated 18.11.19 Regulation on Dividend Policy - Regulation on Dividend Policy approved by the decision of the Board of Directors of PJSC Enel Russia. minutes No. 6/17 dated 04.05.17 Regulation on the Information Policy - Regulation on information policy of PJSC Enel Russia approved by the decision of the Board of Directors, minutes No. 13/18 dated 30.11.18
ALMP - accident localization and management plan API - application programming interfaces ARETU - All-Russian electrical trade union BM - balancing market CCGT - combined cycle gas turbine unit CD - Civil Defense CHPP combined heat and power plant CII - Critical Information Infrastructure Corporate Governance Code — The Corporate Governance Code recommended for application by letter of the Bank of Russia No. 06-52/2463 dated April 10, 2014 COSO - The Committee of Sponsoring Organizations of the Treadway Commission CSA - Capacity Supply Agreements CSV - creating shared value DAM - day ahead market E - Emergency EGSM - Extraordinary General Shareholders’ Meeting Efficiency - efficiency factor EPD - Environmental Product Declaration ESG - Ecology, Social Responsibility and Corporate Governance FPF - fish protection facilities FZ - Federal law GRES - state regional power plant GRI - Global Reporting Initiative HPP - hydro-electric power plant HV line - high voltage power transmission line H&S - Health and Safety HSEQ - Health, Safety, Environment and Quality IFRS - international financial reporting standards IoТ - Internet of Things IPS - Interconnected Power System KPI - key performance indicators LC RF - Labor Code of the Russian Federation Media - mass media
239
OSRP - oil spill response plan NPP - nuclear power plant RC - regulated contracts RES - renewable energy sources RF - Russian Federation, Russia SDG - Sustainable Development Goals SMP - Safety Moving Pool UES - Unified Energy System UN - United Nations WT - wind turbine WECM - wholesale electricity and capacity market Financial indicators: EBITDA – analytical indicator calculated as «Operating profit» plus «Depreciation and amortisation of property, plant and equipment and intangible assets», «Allowance for expected credit losses of trade and other receivables» (all data taken from audited IFRS financial statements) Ordinary EBIT – analytical indicator calculated as «Operating profit» adjusted for operations that are considered as not ordinary for the company in the period. In this report, for 2019 operating profit the following adjustments were used: Impairment of property, plant and equipment of Reftinskaya GRES, as well as recalculation of various provisions related to this power plant, due to its disposal Ordinary net income – analytical indicator calculated as «Profit for the year» adjusted for operations that are considered as not ordinary for the company in the period. In this report, for the profit for 2019 the following adjustments were used: Impairment of property, plant and equipment of Reftinskaya GRES, recalculation of various provisions related to this power plant, as well as related deferred tax, due to its disposal Measurement Units: kWh (kilowatt·hour), MWh (megawatt·hour), GWh (gigawatt·hour), TWh (terawatt·hour) - generated power measurement unit kW (kilowatt), MW (megawatt), GW (gigawatt) - capacity measurement unit Gcal (gigacalorie) - heat measurement unit Gcal/h (gigacalorie/hour) - heat output measurement unit
