Corporate governance report

Memorandum of the controlling shareholder

Purpose of ownership and plans pertaining to controlled stakes

Rosseti PJSC is a public holding company where the government holds 88.04% of its authorized capital; Rosseti PJSC was founded pursuant to Presidential Order No. 1567 dd. November 22, 2012 in order to improve the efficiency and coordinate the development of the power grid complex of the Russian Federation as well as to control the grids via subsidiaries.

PJSC Rosseti owns controlling interest in 14 major distribution grid operators¹² : Rosseti Kuban PJSC, Rosseti Lenenergo PJSC, Rosseti Moscow Region PJSC, Rosseti Volga PJSC, IDGC of the North-West PJSC, Rosseti Northern Caucasus PJSC, Rosseti Siberia PJSC, IDGC of the Urals PJSC, Rosseti Center PJSC, Rosseti Centre & Volga Region PJSC, Rosseti South PJSC, TDC PJSC, Rosseti Tyumen JSC, and Yantarenergo JSC; and in one transmission grid operator (FGC UES PJSC).

Rosseti PJSC defines these stakes as strategic assets that are subject to no alienation.

Key asset targets

Under the Rosseti Group Development Strategy 2030 as approved by Rosseti PJSC’s Board of Directors (Minutes No. 388 dd. December 26, 2019), Rosseti PJSC seeks first and foremost to develop its grid complex by means of advanced innovations in order to meet the demands of its customers and of the Russian economy.

Rosseti PJSC defines the following strategic priorities for the Group:

• reliable, high-quality, and affordable electricity delivery in the new digital environment, as well as promotion of the energy security of the Russian Federation;
• further efficiency improvement for the core electricity delivery business, including by virtue of digital technologies and innovations;
• development of new service categories (non-tariff and consumer services) by virtue of the comprehensive introduction of new digital technologies to adapt to the industry changes;
• introduction of the principles of sustainable development.

Principles of Corporate Governance

Rosseti PJSC manages the Group’s companies in accordance with the uniform corporate standards designed to assure the efficiency and quality of business processes, and minimize all kinds of corporate risks.

Being the controlling shareholder, Rosseti PJSC is fully aware of the importance of improving corporate governance within the Group and seeks to ensure the transparency in the Group and to make the Code of Corporate Governance an integral part of these companies’ business practices.

Pursuant to the best practices of corporate governance, Rosseti PJSC takes annual effort to make sure that the Group’s companies involved in organized trading have enough independent directors onboard to comply with the rules of listing and with the principles of corporate governance. In order to keep the Boards of Directors in the Group independent and objective, the Group plans to keep at least as many independent directors as its companies currently have.

Besides, Rosseti PJSC’s representatives take part in the General Annual Meetings of Shareholders of the Group’s companies in order to have a dialogue with minority shareholders on the developmental prospects of their respective companies.

Rosseti PJSC takes effort to make sure that the Group’s companies comply with the market principles in their businesses.

Being the controlling shareholder, Rosseti PJSC supports the Group’s initiatives to protect the rights and interests of minority shareholders.

Pursuant to the Governmental Decree No. 1094-r dd. May 29, 2017, Rosseti PJSC strives to make sure that at least 50% of the net profit under financial statements, including consolidated IFRS statements, with the adjustments set forth the Decree, goes into dividends.

Corporate governance: general information (including assessment of corporate governance)

Rosseti Tyumen JSC is part of the Rosseti Group and is material to Rosseti PJSC. Understanding the importance of corporate governance, the Company is duly committed to comply with the Code of Corporate Governance approved on March 21, 2014 by the Board of Directors of the Bank of Russia and recommended for adoption by joint-stock companies which securities are admitted to on-exchange trading (letter of the Bank of Russia No. 06-52/2463 dd. April 10, 2014 On the Corporate Governance Code) (“the Corporate Governance Code of the Bank of Russia”).

What makes the corporate governance of Rosseti Tyumen JSC so peculiar is that Rosseti PJSC is the Company’s sole shareholder.

The Company follows the principles and recommendations set forth in the Code and the MOEX Listing Rules in its annual analysis of corporate governance, which is reported to the Audit Committee and to the Board of Directors. In 2021, Rosseti Tyumen JSC’s corporate governance was in line with the best practices. Some improvements could be made on a few issues. Company does not exclude further effort to improve its company governance.

According to the Charter of Rosseti Tyumen JSC, the Company is governed by:

• General Meeting of Shareholders;
• Board of Directors;
• Management Board;
• Director General.

The Internal Audit Commission is responsible for control over the financial and economic activities of the Company.

Rosseti Tyumen JSC enlists an independent third-party auditor to audit its financial statements under the Russian Accounting Standards (RAS) as well as its consolidated statements under the International Financial Reporting Standards (IFRS). Auditor is nominated by the Board of Directors and shall be approved by the General Meeting of Shareholders.

General meeting of shareholders

General Meeting of Shareholders is the highest governing body of the Company.

General Meeting of Shareholders is responsible for various matters as specified in the Federal Law No. 208-FZ dd. December 26, 1995 On Joint-Stock Companies (“Federal Law On Joint-Stock Companies”) and in Cl. 10.10.2 of the Company’s Charter. The Charter is published on the corporate website of the Company in the About the Company / Internal Documents section at: http://www.te.ru/about/vnutrennie_dokumenty .

Matters within the competence of the GMS cannot be resolved by the Board of Directors or the Director General of the Company.

The resolutions of the General Shareholders Meeting are also available in the For Shareholders and Investors / Corporate Governance section of the Company’s official website: http://www.te.ru/investors/korporativnoe_upravlenie/obshchee_sobranie_akcionerov/ .

In accordance with Clause 11.1, Article 11 of the Charter of Rosseti Tyumen JSC, if all the voting shares are held by a single shareholder, all resolutions on matters within the competence of the General meeting of Shares shall be made by such shareholder or its authorized governing body in writing, and further communicated to the Company.

For Rosseti Tyumen JSC, pursuant to subclause 3, Clause 13.2, Article 13 of the Charter, the authorized governing body is a collegial executive body, the Management Board of Rosseti PJSC, which functions as the General Meeting of Shareholders for Rosseti Tyumen JSC.

June 9, 2021, the Management Border of Rosseti PJSC, acting as Rosseti Tyumen JSC’s Annual General Meeting of Shareholders, made the following resolutions:

• to approve the annual report and annual financial statements of the Company for 2020;
• to approve the distribution of the Company’s profits for 2020;
• to re-elect the Board of Directors;
• to re-elect the Internal Audit Commission;
• to approve the Company’s auditor;

August 13, 2021, the Management Border of Rosseti PJSC, acting as Rosseti Tyumen JSC’s Annual General Meeting of Shareholders, made the following resolutions:

• to approve the Revised Company’s Charter;
• to approve the Regulations on the Management Board.

October 25, 2021, the Management Board of Rosseti PJSC acting as an extraordinary General Meeting of Shareholders resolved to prematurely terminate the powers of the Board of Directors of the Company and to elect a new Board of Directors.

Report of the board of directors of the company

The Board of Directors is the key governing body of Rosseti Tyumen JSC responsible for strategic management of the Company’s activities and resolving all matters except those within the responsibility of the General Meeting of Shareholders. The Board of Directors oversees the managers’ performance and protects the rights and legitimate interests of Rosseti Tyumen JSC’s shareholder as required by law of the Russian Federation.

In its activities, the Board of Directors is guided by the Federal Law On Joint-Stock Companies, other regulations of the Russian Federation, the Charter of Rosseti Tyumen JSC and the Regulations on the Board of Directors of Rosseti Tyumen JSC.

Pursuant to Cl. 13.1, Art. 13 of the Charter of Rosseti Tyumen JSC, the Board of Directors consists of eleven (11) persons.

The election procedure is set forth in said Charter and complies with the law of the Russian Federation. Persons elected to the Board of Directors can be re-elected for an unlimited number of terms. The Chairperson of the Board of Directors is elected by the Board members by majority voting.

Competences of the Board of Directors

The Board of Directors is responsible for various matters as specified in the Federal Law No. 208-FZ dd. December 26, 1995 On Joint-Stock Companies and in Cl. 12.1, Art. 10 of the Company's Charter.

Matters within the competence of the Board of Directors cannot be resolved by the Director General of the Company.

The Board of Directors’ operations are regulated by the corresponding Regulations of Rosseti Tyumen JSC as approved by Resolution of the General Meeting of Shareholders of Rosseti Tyumen JSC on May 28, 2020 (Minutes No. 1010pr/2) (“‘the Regulations”).

The Board of Directors’ operations are regulated by the corresponding Regulations of Rosseti Tyumen JSC as approved by Resolution of the General Meeting of Shareholders of Rosseti Tyumen JSC on May 28, 2020 (Minutes No. 1010pr/2) (“‘the Regulations”).

The Corporate Secretary of the Board of Directors shall comprehensively inform the Directors and notify them on meetings of the Board of Directors beforehand.

In 2021, neither the Company nor anyone on the Board of Directors entered enter into any transactions, and no member of the Board of Directors was claimed against.

In 2021, the Company did not fund the training of the Board of Directors members either by loan or in any other form.

Report of the Board of Directors

In the reporting year, 27 meetings of the Board of Directors of the Company were held in the form of absentee voting, at which 129 issues were considered.

Minutes of the meetings of the Board of Directors can be found on the Company’s corporate website at: https://www.te.ru/investors/korporativnoe_upravlenie/sovet_direktorov/resheniya/ .

Attendance of the Board of Directors and Committee members from January 1 to December 31, 2021

Average attendance rates of the Board of Directors in 2019-2021

98% Average Participation Percentage
members of the Board of Directors
in meetings
in 2021

Board of Directors statistics for 2019-2021

The report also provides statistics on the categories of matters discussed by the Board of Directors in 2019–2021.

Breakdown of matters discussed by the Board of Directors in 2021, %

Orders of the Board of Directors to the Company’s management, 2019–2021

Composition of the Board of Directors

On October 25, 2021, the Management Board of Rosseti PJSC elected the following persons to the Board of Directors of Rosseti Tyumen JSC (positions valid as of the date of election):

Goncharov Yury Vladimirovich

Non-Executive Director

First elected to the Board of Directors of the Company by the General Shareholders’ Meeting on 6/28/2014.

Birth year: 1977.

Education:

1. Moscow State Mining University, major in Management (Master), graduated in 2000.
2. Moscow Institute of Economics, Politics and Law, major in Legal Studies (Bachelor), graduated in 2014.

04.2013–03.09.2018 – Rosseti PJSC, Deputy Director General on corporate governance;
04.09.2018 to present – Rosseti PJSC, Chief Adviser to Director General on corporate governance.
04.09.2018 to present – FGC UES PJSC, Chief Advisor to the Director General.

Participation in the management bodies of other organizations:

IDGC of Urals JSC,
Rosseti North-West PJSC,
Rosseti Northern Caucasus PJSC,
Rosseti Center and Volga Region PJSC,
Rosseti Volga PJSC,
Rosseti Center PJSC
Rosseti Kuban PJSC

Gritsenko Vladimir Fedorovich

Independent Director

First elected to the Board of Directors of the Company by the General Shareholders’ Meeting on 6/28/2019.

Birth year: 1965.

Education:

1. Russian State University for the Humanities, major in Jurisprudence (Master), graduated in 2007.

02.2016 – 02.2021 – NP OPORA, member of the Management Board Presidium;
12.2017 to present – FGC UES PJSC, member of the Investment Committee of the Board of Directors;
06.2021 to present – All-Russian Non-Governmental Organization of Small and Medium business “Opora Russia”, Chairperson of the Electricity Committee.
07.2012 to present – Unitel Engineering LLC, Business Development Director

Kravchenko Konstantin Yurievich

Non-Executive Director

First elected to the Board of Directors of the Company by the General Shareholders’ Meeting on 10/25/2021

Birth year: 1973

Education:

Voronezh Polytechnic Institute, qualification of Engineer-Designer-Technologist majoring in Design and Technology of PDZ, graduated in 1999. PhD in Technical Sciences.

26.04.2012 – 31.07.2018 – JSC Gazprom Neft, Head of the Department of Information Technology, Automation and Telecommunications;
13.08.2018 – 14.05.2020 – JSC Uralvagonzavod Scientific and Production Corporation named after F.E. Dzerzhinsky, Director of Information Technology at the Center for Corporate Governance (Moscow office);
15.05.2020 – 30.04.2021 – JSC Concern Uralvagonzavod, Deputy Director General for Information Technology;
06.08.2021 to present – JSC VOLS-VL Management, Acting Director General;
13.09.2021 to present – FGC UES PJSC, Chief Advisor to the Director General, Acting Deputy Director General for Digital Transformation;
13.09.2021 to present – Rosseti PJSC, Chief Advisor to the Director General, Acting Deputy Director General for Digital Transformation.

Participation in the management bodies of other organizations:

VOLS-VL Management JSC,
JSC MUS Energetiki,
LLC IT Energy Service,
JSC Chitatekhenergo,
LLC Infrastructural Investments-3

Krainsky Daniil Vladimirovich

Non-Executive Director

First elected to the Board of Directors of the Company by the General Shareholders’ Meeting on 6/9/2021

Birth year: 1979.

Education:

Moscow State Law Academy, major in Jurisprudence, graduated in 2002

02.2018 – 07.2021 – Rosseti Lenenergo PJSC, Deputy Director General for Legal and Corporate Governance, Advisor to the Director General;
07.2021 to present – Rosseti Lenenergo PJSC, Advisor to the Director General;
02.2018 to present – Rosseti Lenenergo PJSC, member of the Board of Directors, member of the Management Board;
09.2017 to present – Rosseti PJSC, Deputy Director General for Legal Support;
05.2020 to present – FGC UES PJSC, Deputy Director General for Legal Support.

Participation in the management bodies of other organizations:

Yantarenergo JSC,
Tyvaenergo JSC,
VOLS-VL Management JSC,
JSC NIC UES,
Rosseti Volga PJSC,
Rosseti North-West PJSC,
IDGC of Urals JSC,
Rosseti South PJSC,
Rosseti Center PJSC,
Rosseti Siberia PJSC,
Rosseti Northern Caucasus PJSC,
Rosseti Moscow Region PJSC,
Rosseti Lenenergo PJSC,
Rosseti Kuban PJSC,
TRK PJSC,
Energy Service Company Lenenergo JSC,
NTC FGC UES JSC,
Energotrans LLC

Lavrova Marina Alexandrovna

Non-Executive Director

First elected to the Board of Directors by the General Shareholders’ Meeting on 6/28/2017

Birth year: 1982.

Education:

1. State University of Management, qualification of Manager major in Management in the Power Industry, graduated in 2004.
2. Financial Academy under the Government of the Russian Federation (second higher education), major in Finance and Credit, graduated in 2008.
3. Moscow State Institute of International Relations (University) of the Ministry of Foreign Affairs of the Russian Federation, MBA, graduated in 2015.

2008 to present – PJSC Rosseti, Deputy Head of the Department of Economics.
2008 to present – PJSC FGC UES, Deputy Head of the Department for Economic Planning and Tariff Formation.

Participation in the management bodies of other organizations:

Dagestan Energy Retail Company PJSC,
Sevkavkazenergo JSC

Mayorov Andrey Vladimirovich

Non-Executive Director

First elected to the Board of Directors of the Company by the General Shareholders’ Meeting on 6/9/2021

Birth year: 1967.

Education:

1. Moscow Power Engineering Institute, major in Electric Power Systems and Grids, graduated in 1994.
2. JSC Scientific and Technical Center of the Federal Grid Company of the Unified Energy System, graduated in 2017. PhD in Technical Sciences.

05.2014 – 11.2018 – United Energy Company JSC, Director General;
04.2020 to present – PJSC FGC UES, First Deputy Chairperson of the Management Board – Chief Engineer (from 04/24/2020 to 05/17/2020), First Deputy Director General – Chief Engineer (from 05/18/2020);
11.2018 to present – PJSC Rosseti, Deputy Director General – Chief Engineer / First Deputy Director General – Chief Engineer.

Participation in the management bodies of other organizations:

Rosseti Volga PJSC,
Rosseti Moscow Region PJSC,
Rosseti Northern Caucasus PJSC,
Rosseti Center and Volga Region PJSC,
Rosseti Center PJSC,
Rosseti North-West PJSC,
Rosseti Lenenergo PJSC,
Mobile GTES JSC,
Association of organizations for digital development of the industry “Digital Energy”,
VOLS-VL Management JSC

Molsky Alexey Valerievich

Non-Executive Director

First elected to the Board of Directors of the Company by the General Shareholders’ Meeting on 6/9/2021

Birth year: 1980.

Education:

Moscow Power Engineering Institute, major in Electric Power Systems and Grids and Economics and Management at Electric Power Enterprise, graduated in 2004.

2013 to present – Association NP Market Council, member of the Supervisory Board;
2014 to present – JSC United Energy System SakRusenergo, Chairperson of the Supervisory Board;
2015 – 2017 – Union ENERGOSTROY, Chairperson and President of the Union;
2015 – 2019 – PJSC FGC UES, Deputy Chairperson of the Management Board;
2019 – 2020 – PJSC FGC UES, First Deputy Chairperson of the Management Board;
2020 – 2020 – PJSC FGC UES, Deputy Chairperson of the Management Board for Investments, Capital Construction and Services;
2020 to present – Association Russian National Committee of the International Council on Large Electric Systems of High Voltage (RNC CIGRE), member of the Presidium;
2020 to present – PJSC FGC UES, Deputy Director General for Investments, Capital Construction and Services;
2020 to present – PJSC Rosseti, Deputy Director General for Investments, Capital Construction and Services, Member of the Management Board.

Participation in the management bodies of other organizations:

TaigaEnergoStroy JSC,
CIUS UES JSC,
Tomsk Backbone Networks OJSC,
Rosseti Moscow Region PJSC,
Energocenter JSC,
Rosseti North-West PJSC,
Rosseti Center PJSC,
Rosseti Volga PJSC,
Rosseti Kuban PJSC,
Rosseti Siberia PJSC,
Tyvaenergo JSC,
TRK PJSC,
Rosseti Northern Caucasus PJSC,
VOLS-VL Management JSC,
CTZ JSC,
NTC FGC UES JSC

Petrov Oleg Valentinovich

Executive Director

First elected to the Board of Directors of the Company by the General Shareholders’ Meeting on 25.10.2021

Birth year: 1964.

Education:

1. Tomsk Polytechnic Institute, major in Power Supply of Industrial Enterprises of Cities and Agriculture, graduated in 1987. PhD in Economics (2010).
2. Academy of National Economy under the Government of the Russian Federation, MBA program “Top Manager”, major in Business Administration, graduated in 2006.

09.2007 – 06.2015 – OJSC TRK, Managing Director – First Deputy Director General;
07.2015 – 06.2021 – PJSC TRK, Director General, Chairperson of the Board;
07.2021 – 08.2021 – PJSC TRK, Managing Director – First Deputy Director General;
08.2021 to present – Rosseti Tyumen JSC, Director General.

Participation in the management bodies of other organizations:

TRK PJSC

Polinov Alexey Alexandrovich

Non-Executive Director

First elected to the Board of Directors of the Company by the General Shareholders’ Meeting on 6/9/2021

Birth year: 1978.

Education:

Moscow State University of Civil Engineering, major in Economics and Management at the Enterprise (Construction), graduated in 2000. PhD in Economics.

10.2015 – 12.2017 – CJSC Sintez Group, Deputy Director General for Development;
01.2018 – 05.2018 – JSC OEK, Advisor to the Director General;
04.2018 – 12.2019 – PJSC Rosseti Lenenergo, Advisor to the Director General;
02.2019 to present – PJSC Rosseti Lenenergo, Deputy Director General for Economics and Finance
01.2021 to present – PJSC Rosseti, Chief Advisor;

Participation in the management bodies of other organizations:

Rosseti Moscow Region PJSC
Rosseti Lenenergo PJSC;
Rosseti North-West PJSC;
IDGC of Urals JSC;
Rosseti South PJSC;
Rosseti Kuban PJSC;
Rosseti Siberia PJSC;
Yantarenergo JSC;
Rosseti Tyumen JSC;
VOLS-VL Management JSC.

Prokhorov Egor Vyacheslavovich

Non-Executive Director

First elected to the Board of Directors of the Company by the General Shareholders’ Meeting on 6/9/2021

Birth year: 1982.

Education:

Saint Petersburg State University, major in Mathematical Methods in Economics, graduated in 2004. PhD in Economics.

12.2013 – 04.2020 – PJSC Rosseti, Deputy Director General for Finance;
04.2020 to present – PJSC Rosseti, Deputy Director General for Strategy;
04.2020to present – PJSC FGC UES, Deputy Director General for Strategy (part-time).

Participation in the management bodies of other organizations:

Rosseti Center and Volga Region PJSC,
Rosseti South PJSC,
Rosseti Volga PJSC,
Rosseti Northern Caucasus PJSC,
Rosseti Center PJSC,
TRK PJSC,
IDGC of Urals JSC

Tikhonova Maria Gennadievna

Non-Executive Director

First elected to the Board of Directors of the Company by the General Shareholders’ Meeting on 6/9/2021

Birth year: 1980.

Education:

1. Volga-Vyatka Academy of Public Administration, major in State and Municipal Administration, graduated in 2002.
2. Academy of National Economy under the Government of the Russian Federation, occupational retraining in Public Administration of Economic Development, graduated in 2005.
3. Higher School of Economics, MBA in Finance, graduated in 2008. PhD in Economics.

2013 to present – PJSC FGC UES, Deputy Chairperson of the Management Board, Deputy Director General for Corporate Governance;
2020 to present – PJSC Rosseti, Deputy Director General for Corporate Governance.

Participation in the management bodies of other organizations:

PJSC TNS Energo,
JSC NIC EES,
Yantarenergo JSC,
TRK PJSC,
Tyvaenergo JSC,
Rosseti Siberia PJSC,
Rosseti Kuban PJSC,
Rosseti Volga PJSC,
IDGC of Urals JSC,
JSC DVEUK-UNEG

* To present means to December 31, 2020.

Members of the Company’s Board of Directors own no shares in the Company.

All the members of the Board of Directors have consented to the disclosure of this information in the Company’s Annual Report and on the corporate website.

Board of Directors had other members in 2021 before the latest election on October 25, 2021 (positions specified as of the election date, May 28, 2020, June 9, 2021):

Liability insurance for directors, officers, and companies

Liability Insurance Contract for directors, officers, and companies is intended to protect the property interests of the Company’s shareholders, to compensate for the possible losses incurred by the Company and/or its Directors and officers, or the Directors and/or officers by any of the Company’s subsidiaries (“Insured Persons”) shall any insurable event occur, namely:

• shall an Insured Person be obliged to indemnify third parties against losses arising from the Insured Person’s wrong action or inaction that has occurred as part of their duties except any intentional crime or fraud, if the Insured Person is made a claim against with respect to such indemnification;
• shall the Company incur costs arising from its indemnification of liability of Insured Person, or in the interests of any Insured Person, if such liability arises from losses incurred by third parties;
• shall the Company be obliged to indemnify any third parties against losses related to the Company’s placement of securities.

Insured Persons are:

• Director, i.e., any individual that has ever been, is, or will become during the insurance period:
  • a member of the Company’s Board of Directors;
  • a member of the Board of Directors of any of the Company’s subsidiaries, elected to the Board of Directors of such subsidiary by the Company’s vote(s);
• Officer, i.e., any of the following:
  • any individual that has acted, acts, or shall act during the insurance period as the sole executive body (Director General) of the Company and/or any of its subsidiaries, or the Deputy Sole Executive Body (First Deputy Director General or Deputy Director General), Chief Accountant of the Company, or
  • any other individual that has ever been, is, or will be entitled to sign documents and/or give any assurances and/or make statements on behalf of the Company during the insurance period;
• Company, i.e., the Company and/or any of its subsidiaries.
• The insurance is applicable globally.
• Insurance period:
  • October 1, 2020 through September 30, 2021 under the insurance contract made in 2020;
  • October 1, 2021 through September 30, 2022 under the insurance contract made in 2021;

The insurance totals eight hundred and five million (805,000,000) rubles for all and any insurable events and all and any insured persons.

Report of the Board of Directors on Priorities

In 2021, the Board of Directors made resolutions on the key priorities described in detail in Section 2.2 of the Annual Report. In 2021, the Board of Directors did not determine priority activities.

In 2021, the Board of Directors worked on the priorities set forth in the Strategy of Rosseti PJSC and its subsidiaries (the Rosseti Group).

Priorities under the Strategy of Rosseti PJSC and its Subsidiaries (appr. December 26, 2019)

Technological and Innovative Development

• the approval of Rosseti Tyumen JSC’s Innovative Development Program for the period 2020–2024 with a perspective up to 2030;
• the approval of the Regulations of PJSC Rosseti On the Unified Technical Policy in the Power Grid Complex approved by the decision of the Board of Directors of PJSC Rosseti dd. March 31, 2021 (Minutes No. 450 dd. April 2, 2021) as Rosseti Tyumen JSC’s internal document

Business diversification

• the approval of the Additional Services Development Roadmap

Set Level of Reliability and Security of Power Supply

• taking a number of decisions on the implementation of the Information Security Program of the Company;
• the approval of the updated Energy Conservation and Efficiency Program of Rosseti Tyumen JSC for 2018–2022

Further Increase in Operational and Investment Efficiency

• the approval of the revised Risk Management Policy of Rosseti Tyumen JSC;
• the approval of Rosseti Tyumen JSC’s Internal Control and Risk Management Effectiveness and Development Action Plan;
• the approval of the revised Regulations on Use of Spare Cash of Rosseti Tyumen JSC;
• the approval of Rosseti Tyumen JSC’s scheduled Action Plan to reduce overdue receivables for the electric power transmission services and settlement of disputes;
• the approval of Rosseti Tyumen JSC’s withdrawal from TGC-1 PJSC;
• the approval of the Accession to the revised Uniform Procurement Standard of Rosseti PJSC (“the Procurement Regulations”) approved by the Decision of the Board of Directors of Rosseti PJSC (minutes No. 452 dd. April 7, 2021);
• the approval of the Accession to the revised Uniform Procurement Standard of Rosseti PJSC (“the Procurement Regulations”) approved by the Decision of the Board of Directors of Rosseti PJSC (minutes No. 452 dd. April 7, 2021);
• the approval of Rosseti Tyumen JSC’s withdrawal from TGC-2 PJSC, RusHydro PJSC;
• the approval of loan transactions with Gazprombank (Joint Stock Company);
• the approval of the essential terms and conditions of the loan agreement between Rosseti Tyumen JSC and FGC-Asset Management LLC;
• the approval of amendments to the Regulations on Third Party-Initiated Redevelopment of Rosseti Tyumen JSC’s Facilities;
• the approval of the standard form of the Compensation Agreement (monetary form) with Russian Railways JSC, in addition to the decision of the Board of Directors of the Company dd. February 26, 2020 on item On approval of the Regulations on Third Party-Initiated Redevelopment of Rosseti Tyumen JSC’s Facilities as part of the implementation of measures to modernize and expand the trunk infrastructure of Russian Railways JSC;
• the approval of the revised Standard and Regulations for Business Planning of Rosseti Tyumen JSC in order to ensure their implementation from the business planning process for the period from 2022 and beyond;
• the approval of the revised Internal Audit Policy of Rosseti Tyumen JSC;
• the approval of Rosseti Tyumen JSC’s Procurement Plan for 2022;
• the approval of Rosseti Tyumen JSC’s Business Plan 2022, with projections for 2023-2026 taken into account;
• the approval of the List of Rosseti Tyumen JSC’s investment projects for technological and price audit of all project phases

Increasing Grid Service Market Share

• the approval of the execution of Rosseti Tyumen JSC’s transaction related to the acquisition of property that constitutes fixed assets, intangible assets, construction-in-progress facilities, the purpose of which is the production, transfer, dispatching, distribution of electrical and thermal energy; method of acquiring property: conclusion of a sales and purchase agreement of property following the auction held by a person authorized to sell real property owned by the municipality, carried out in accordance with the procedure established by the current legislation of the Russian Federation

HR Development

• the approval of candidates for certain positions of the Head Office of the Company determined by the Board of Directors of the Company:
  • the candidacy of Kazbekov Islambek Rashidbekovich for the position of Deputy Director General – Head of Office of Rosseti Tyumen JSC;
  • the candidacy of Konishevsky Vladimir Valeryevich for the position of Director of Nefteyugansk Electric Grids branch of Rosseti Tyumen JSC;
  • the candidacy of Kinash Oleg Alekseevich for the position of First Deputy Director General – Chief Engineer of Rosseti Tyumen JSC;
  • the candidacy of Vyalkov Dmitry Vladimirovich for the position of Deputy Director General for Development and Sales of Services of Rosseti Tyumen JSC;
  • the candidacy of Baklanova Elena Leonidovna for the position of Deputy Director General for Investment Activity of Rosseti Tyumen JSC

The Company’s Business Plan and its Investment Program constitute an important management tool, a strategic planning component, and a guideline for the action, monitoring, and analysis of interim and final results.

Business planning is carried out for the medium term by drawing up plans, budgets, reports, KPIs and target programs, the activities of which relate to production, investment, repair activities and determine the need for the necessary resources to achieve the set strategic objectives. Therefore, the Board of Directors pays special attention to issues related to business planning and, accordingly, to the implementation of strategic plans. The Company’s Business Plan 2021 and projections for 2022-2025 were approved by Rosseti Tyumen JSC’s Board of Directors on December 28, 2020.

In 2021, the Board of Directors made the following resolutions concerning business planning

• consolidated RAS and IFRS-based Rosseti Tyumen Group Plan 2021 and projections for 2022-2025 approved in March 2020;
• reviewed quarterly and annual reports on the completion of the Company’s Business Plan and the Rosseti Tyumen Group’s consolidated RAS and IFRS-based business plans;
• reviewed quarterly and annual reports on the completion of the Company’s Investment Program and on the progress of Rosseti Tyumen JSC’s priority investment projects;
• the List of Rosseti Tyumen JSC’s Investment Projects for technological and price audit of all project phases scheduled for 2021-2025 approved in December 2021.

In 2021, Rosseti Tyumen JSC’s Board of Directors also made resolutions on the Company’s operational activities.

Concerning insurance, the Board of Directors

• made contracts to insure its civil liability as an owner of hazardous facilities, to have voluntary insurance of its vehicles, to insure its liability to third parties as an aircraft owner, and to insure the liability of directors, officers, and companies;
• reviewed on the quarterly basis the Director General-raised matters of the Company’s insurance.

Concerning its Committees, the Board of Directors

• re-elected the members of all the Committees in July and December 2021 once new members of the Board of Directors inaugurated;
• reviewed the Committees’ reports for the corporate year 2020-2021.

Concerning internal audit, the Board of Directors

• made amendments to the Internal Audit Directorate’s Agenda for 2021, approved the Internal Audit Directorate’s Agenda for 2022;
• reviewed the Internal Audit Directorate’s report on its performance and results of 2020;
• reviewed the internal audit reports of Rosseti Tyumen JSC on the identification and sales of non-core assets in 2020, on the performance of internal control and risk management systems in 2020, and on the assessment of Rosseti Tyumen JSC’s corporate governance in the corporate year 2020-2021.

All the resolutions made by the Board of Directors are available at the Company’s corporate website: http://www.te.ru/investors/korporativnoe_upravlenie/sovet_direktorov/resheniya .

Company’s committees of the board of directors

Rosseti Tyumen JSC’s Board of Directors has established specialized Committees tasked with the preliminary discussion of matters that are within the purview of or are otherwise supervised by the Board of Directors as the body responsible for monitoring the Company’s sole executive body; the Committees are also tasked with drafting recommendations to the Board of Directors and to the executive bodies of the Company.

The following Committees were in place in 2021:

• Audit Committee (established on October 2, 2013);
• Strategy Committee (established on December 8, 2016);
• Personnel and Remuneration Committee (established on September 21, 2017);
• Reliability Committee (established on December 16, 2005);
• Grid Connection Committee (established on March 6, 2009).

The regulation of activities, establishment procedure, the competence and term of the Committees of the Board of Directors are determined by the Regulations on the Committees approved by the Board of Directors of the Company. All the documents regulating the activities of the Committees are available at the Company’s corporate website: https://www.te.ru/about/vnutrennie_dokumenty/ .

Corporate secretary

The Corporate Secretary is an officer of the Company responsible for the Company’s compliance with the Russian legislation, the Charter, and the internal documents that protect the rights and lawful interests of the Company’s shareholders. The Corporate Secretary is functionally subordinate to the Company’s Board of Directors.

The Corporate Secretary’s activities are regulated by the Regulations on the Corporate Secretary as approved by the Board of Directors on November 11, 2016 (Minutes No. 22/16 dd. November 11, 2016).

Andrey Nikolaevich Shaidurov is the corporate secretary of Rosseti Tyumen JSC.

Birth year: 1983.

Education:

1. Higher education, graduated from the Surgut Institute of World Economy and Business Planeta (Surgut) in 2005 majoring in Finances and Credit, qualification of Economist.
2. State University “Higher School of Economy” (Corporate Governance Center, Moscow). Advance training course “Corporate Secretary of Joint-Stock Company”, 2008.
3. State University “Higher School of Economy” (Corporate Governance Center, Moscow). Advance training course in Special (Extraordinary) Transactions in Joint-Stock Companies: Purchasing More than 30% of Shares, Major Transactions, Related Party Transaction, 2012.
4. State University “Higher School of Economy” (Corporate Governance Center, Moscow). State University “Higher School of Economy” (Corporate Governance Center, Moscow). Occupational retraining program “Professional Member of the Board of Directors – Corporate Director”, 2015.

Occupied positions:

2007–2018: Tyumenenergo JSC, Chief Specialist of the Department of Corporate Relations and Accountability, Corporate Policy Directorate;
2018 to present: Rosseti Tyumen JSC, Deputy Head of the Corporate Policy Directorate.

Does not own shares of Rosseti Tyumen JSC.

Executive bodies

Managing the Company’s ongoing activities is maintained by the collegial executive body – Management Board and the sole executive body – Director General.

The Director General and the Management Board of the Company are accountable to the General Meeting of Shareholders and the Board of Directors of the Company.

Establishment of the executive bodies and termination of employment are determined by the Company’s Board of Directors, except matters provided by federal law and in accordance with the Company’s Charter. The rights and obligations of Director General and members of the Management Board are determined by the Russian legislation, the Charter of the Company and the employment agreement concluded by each of them with the Company.

The employment agreement on behalf of the Company is signed by the Chairperson of the Board of Directors or a person authorized by the Board of Directors of the Company.

The terms of the employment agreement, including in termination of employment, are determined by the Board of Directors or by the person whom the Board of Directors has authorized to sign such employment agreement.

The Board of Directors is entitled to terminate the Director General’s office, members of the Management Board and to establish a new executive body at any time.

Management Board

The Management Board of Rosseti Tyumen JSC is a collegial executive body, headed by the Director General.

The Management Board maintains its activities in the interests of the shareholders, is guided in its activities by the decisions of the General Meeting of Shareholders and the Board of Directors and acts in accordance with the Russian legislation, the Charter of the Company, other internal documents, as well as in accordance with the Regulations approved by the General Meeting of Shareholders on the Management Board, which establishes the terms, procedure for convening and holding its meetings, as well as the procedure for making decisions by the Management Board and monitoring their implementation.

August 13, 2021, the Management Board of Rosseti PJSC, in exercising the powers of the Extraordinary General Meeting of Shareholders of Rosseti JSC, approved the Regulations on the Management Board of Rosseti Tyumen JSC (Minutes No. 1083/8 dd. August 19, 2021).

The number of members of the Management Board is determined by the decision of the Board of Directors of the Company and cannot be less than 3 (three) persons. In 2021, no decisions were made on the election of members of the Management Board of the Company.

The competence of the Management Board includes matters in accordance with paragraph 19.3, Article 19 of the Charter of Rosseti Tyumen JSC.

All decisions are taken by the Management Board by a simple majority of votes of the members of the Management Board who attended the meeting. In case of equality of votes of the members of the Management Board, the vote of the Director General of the Company is decisive.

Director General

The Director General of Rosseti Tyumen JSC is the sole executive body of the Company, which manages ongoing activities of Rosseti Tyumen JSC in accordance with the Federal Law on Joint-Stock Companies and the Charter of the Company.

The Company’s Director General is responsible for all matters related to managing the Company’s ongoing activities except matters within the competence of the General Meeting of Shareholders or the Board of Directors.

Director General is elected by the Company’s Board of Directors by majority voting (only the directors present at a meeting are eligible to vote).

August 16, 2021 the powers of the Director General of Rosseti Tyumen JSC Alexey Vladimirovich Soldatenko were terminated early and the employment agreement was terminated by agreement of the parties in accordance with paragraph 1, part 1, Article 77 of the Labor Code of the Russian Federation.

By the resolution of the Board of Directors, Oleg Valentinovich Petrov was appointed Director General of Rosseti Tyumen JSC from August 17, 2021 (Minutes No. 19/21 dd. August 16, 2021).

Birth year: 1964.

Education : Higher

1. Tomsk Polytechnic University, major in Power Supply of Industrial Enterprises, Cities, and Agriculture, graduated in 1987.
2. Academy of National Economy under the Government of the Russian Federation, MBA program “Top Manager”, major in Business Administration, graduated in 2006.

PhD in Economics (2010).

Completed advanced training courses:

• GK Expert LLC, training in “Energy Efficiency and Energy Saving” (2015);
• ICE TSUAB, training in “Construction Safety. Organization of construction, reconstruction and overhaul” (2016);
• AHO Energetik Professional Training Center, training in “Training in labor protection and testing knowledge of labor protection requirements” (2017, 2020);
• Tomsk Institute for Retraining Personnel and Agribusiness, training in “Mobilization training” (2017);
• RSI UGOCHSPB TO, training in “Leaders of civil defense training in organizations” (2018);
• FSAEI IPK TEK Professional Training Center, training in “Management of mobilization training activities at economic facilities” (2021).

Positions in the last five years:
July 1, 2021 – August 16, 2021 Managing Director – First Deputy Director General, TRK PJSC
July 1, 2015 – June 30, 2021 Director General, TRK PJSC
September 25, 2007– June 30, 2015 Managing Director – First Deputy Director General, TRK PJSC

Система вознаграждения членов Совета директоров и порядок расчета вознаграждения

Prevention of conflicts of interest

Conflicts of interest that may arise within Rosseti Tyumen JSC are resolvable under the Company’s Code of Corporate Ethics, Code of Corporate Governance, and Regulations on the Board of Directors. Directors shall refrain from actions that may result in a conflict of interest between them and the Company.

The Company continuously monitors the information reported by managers for possible conflict of interest.

All the members of the Board of Directors comply with Article 82 of the Federal Law on Joint-Stock Companies as they continue to notify the Company of a possible related party transaction.

Shall a conflict of interest be found with a Director, this director is advised to refrain from voting on matters where such conflict of interest may apply.

Internal control, risk management

Internal Control System

The Company’s Internal Control System (‘the ICS’) is a component of the Company’s general management system intended to reasonably assure reaching the targets in the following:

• the Company’s efficiency and performance, including its financial and operational indicators as well as the security of its assets;
• compliance with the requirements of the legislation applicable to the Company and with the internal policies and procedures applicable to (without limitations) business operations and accounting;
• reliability and timeliness of accounting (financial) statements and other reports.

The ICS is a risk-oriented structure that uses risk-adjusted control procedures configured to reasonably guarantee timely and efficient response to any risk.

The ICS encompasses all areas of the Company’s activities. Control procedures are implemented in all processes at all levels of management in compliance with a three-line defense model:

• Line 1 comprises governance bodies (the sole and the collegial executive bodies), the Company’s units and subdivisions responsible for control within their functional and job duties;
• Line 2 comprises the Company’s special control units;
• Line 3 comprises the Internal Audit Subdivisions.

Functions of the ICS agents are set forth in the Company’s Internal Control Policy approved by the Board of Directors on March 21, 2016 (Minutes No. 06/16), as well as in the regulations specific to subdivisions and in job descriptions and are disclosed in Appendix 9 to the Annual Report.

The Company has a Directorate of Directorate of Internal Control and Risk Management (“DICRM”), which has the following functions set forth in the Internal Control Policy:

• develops and facilitates the introduction of core documents and guidelines on building and improving the Internal Control System (ICS);
• assists managers in building the ICS and drafting recommendations on the description and integration of control procedures into the processes (focus areas) as well as on setting forth the liability of executive officers;
• coordinates the activities to maintain and monitor the target state of the ICS;
• preparation of the information on the ICS state for concerned parties;
• relations with public regulatory and supervisory agencies on IC issues.

In order to ensure implementation and support of an efficient Internal Control System which (a) conforms to the established practices and standards in the field of the internal control, as well as to the requirements of regulators, and (b) is designed to help the Company reach its targets, the Internal Control Policy was approved by the Board of Directors on March 21, 2016 (Minutes No. 06/16).

The Internal Control Policy specifies the objectives, functioning principles, and components of the Company’s ICS, primary functions and responsibilities of the ICS agents, as well as the ICS effectiveness assessment procedures.

The Company has an Internal Control Policy Compliance Procedure in place that defines the applied aspects of using the norms set forth in the Internal Control Policy.

The control procedures for the processes and sub-processes of primary and supporting activities, as well as for the Company’s management processes, are documented in the control and risk matrices.

In order to guarantee that the ICS is efficient and conforms to the objectively changing requirements and conditions, the Company tasks the Internal Auditor to check if the ICS is sufficiently mature and performs as required.

The Internal Auditor Report on ICS Effectiveness for 2021 was discussed by the Board of Directors on May 27, 2022 (Minutes No. 13/22), with a preliminary review by the Audit Committee on May 18, 2022 (Minutes No. 05/22). Resolution: Take note of the Company Internal Audit Report No. 05-2022 dd. March 10, 2022 on the effectiveness and reliability of the internal control system and risk management system of Rosseti Tyumen JSC for 2021 (Appendix 10).

The ICS maturity level was rated optimal.

Due to the change in the methodology for assessing the ICS and RMS in 2021 (Order No. 558 dd. December 21, 2021), information on the dynamics of the maturity level compared to the previous year is not provided.

The Company has an approved Internal Control Effectiveness and Development Action Plan that is intended to further the maturity of the Company’s ICS (Minutes No. 06/21 dd. March 17, 2021).

In the reporting year, the Company took the following key measures to improve the ICS:

• updated the Procedure for implementing the requirements of the Internal Control Policy;
• organized ICS and risk management training for the Company’s staff;
• tested the effectiveness of controlling the following business processes:
  • legal support (contractual work, claim work);
  • financial management (management of receivables and payables, treasury operations);
• a mechanism was introduced to control the timely and full implementation of measures to protect interests, return funds and minimize the risks of financial losses in the framework of counterparty bankruptcy cases;
• a unified format and procedure for reporting on the liquidation and bankruptcy procedures of counterparties was approved and implemented in accordance with the standards of the Rosseti Group of Companies.

As part of assistance to the Company’s management in building a control environment for the DICRM, draft local regulations are being coordinated in accordance with the process approach, as well as the Procedure for applying the Internal Control Policy. 143 documents of the Integrated Management System were approved.

Key ICS Development Measures Planned for 2022:

• Integration of the existing Anti-Corruption Compliance System in the general Internal Control System and the Risk Management System.
• Updating the regulatory and methodological framework applicable to internal control.
• Improving the mechanism for controlling financial stability, supporting the insolvency and liquidation proceedings of the Company’s counterparties.

Risk management system

In order to determine the principles of and approaches to, the organization and functioning of the Risk Management System (“RMS”) in the Company, the Board of Directors approved the Risk Management Policy (“the Policy”) (Minutes No. 04/21 dd. February 25, 2021) (new edition).

According to the Policy, the purpose of the RMS in Rosseti Tyumen JSC is to ensure the reduction of uncertainty in reaching the Company’s targets, established at all levels of the Company’s management, including the Development Strategy of the Rosseti Group of Companies and in tactical and operational planning documents. The RMS is aimed at identifying events that may affect the Company’s activities and managing the risks associated with these events, as well as maintaining the Company’s integral risk at the level of preferred risk.

The Company responds to risks in three methods:

• risk avoidance;
• risk acceptance or risk-taking if there is benefit to it;
• reduction or transfer of risk.

The choice of risk response method depends on risk significance, probability and consequences, as well as on the costs of implementation and the benefits obtained.

Key internal documents that regulate the Company’s risk management were approved by Order No. 144 dd. April 9, 2020:

• Regulations on Risk Management;
• Risk Tree Model and Description;
• Risk Management System Maturity Model.

RMS Participants

The key agents of the risk management process are:

• Board of Directors of the Company;
• Strategy Committee of the Board of Directors, Rosseti Tyumen JSC
• Internal Audit Commission of the Company;
• Director General
• risk owners;
• risk managers;
• Directorate of Internal Control and Risk Management; -
• Department of Internal Audit.

The functions of the RMS participants are enshrined in the Company’s Risk Management Policy, Regulations on Structural Divisions, position descriptions and are disclosed in Appendix 9 to the Annual Report.

The Directorate of Internal Control and Risk Management was established pursuant to the Risk Management Policy and the Regulations on Structural Divisions, which task the Department with:

• coordination and methodological support of the Company’s risk management activities;
• aggregation of information on all identified risks and preparation of proposals for updating the risk register;
• adopting risk management and RMS operation guidelines;
• RMS training for the Company’s employees;
• ensuring monitoring of the Company’s risk management process;
• annual reporting on the organization, functioning, and effectiveness of the Company’s RMS as well as on any other matters listed in the Risk Management Policy.

The Internal Audit Department runs an independent internal evaluation of the RMS effectiveness pursuant to the Policy and the Regulations on the Internal Audit Department. The results of such evaluation for 2021 are presented in the Internal Audit Report.

Internal Auditor’s RMS Effectiveness Report for 2021 was discussed by the Board of Directors on May 27, 2022 (Minutes No. 13/22) with a preliminary review by the Audit Committee of the Board of Directors on May 18, 2022 (Minutes No. 05/22). Resolution: Take note of the Company Internal Audit Report No. 05-2022 dd. March 10, 2022 on the effectiveness and reliability of the internal control system and risk management system of Rosseti Tyumen JSC for 2021 (Appendix 10).

The RMS maturity level was rated intermediate between moderate-to-optimal. Due to the change in the methodology for assessing the ICS and RMS in 2021 (Order No. 558 dd. December 21, 2021), information on the dynamics of the maturity level compared to the previous year is not provided.

Pursuant to the decision of the Board of Directors of the Company (Minutes No. 06/21 dd. March 17, 2021), an Action Plan to maintain efficiency and develop the Company’s Internal Control and Risk Management System was approved in the reporting year.

In 2021, the Company took the following key measures to improve the RMS:

• The Risk Management Policy was updated based on the principles of the COSO concept “Organizational Risk Management. Integration with strategy and performance”, as well as ISO 31000-2018 “Risk Management – Governance” standards pursuant to the standards of the Rosseti Group of Companies.
• A unified methodology for determining risk appetite was introduced pursuant to the standards of the Rosseti Group of Companies.
• Order of Rosseti Tyumen JSC No. 464 dd. November 17, 2020 On Risk Management System Improvement approved the Company’s risk portfolio of 47 functional risks and 124 business process risks; Risk Management Action Plans were approved for 2021.
• Staff training in ICS and RMS organized at the Company.
• Control measures were taken to assess the sufficiency, effectiveness, and performance of risk management activities for the following business processes:
  • legal support (contractual work, claim work);
  • financial management (management of receivables and payables, treasury operations).

Key RMS Development Measures Planned for 2022:

1. Control actions to assess the sufficiency, effectiveness, and performance of the Company’s risk management activities for the Company’s business processes.

2. Determining Key Performance Indicators (KPIs) based on the unified methodology for determining KPIs for the Rosseti Group of Companies.

3. Updating the regulatory and methodological framework in the field of risk management.

4. Application of the mechanism for accounting and analysis of scenario conditions for the realization of risks and the possible consequences of their implementation when setting business goals, developing strategic initiatives, planning and implementing an investment program in accordance with the standards of the Rosseti Group of Companies.

5. Carrying out training activities for managers and employees on the organization and functioning of RMS.

Internal audit

The Company’s Internal Audit Department is responsible for internal audit.

Internal audit reports to the Company’s Board of Directors. It means that the Board of Directors controls and organizes the internal audit activities: approves the Internal Audit Action Plan, the report on its completion and the internal audit budget; it also pre-approves resolutions of the Company’s Sole Executive Body to appoint or terminate the duties (unless initiated by the employee), apply sanctions against, and approve the contractual terms and conditions as well as the remuneration of, the Head of Internal Audit. Another task is to analyze the assessments of internal audit function.

The purpose of the internal audit is to assist the Board of Directors and executive bodies of the Company in improving the efficiency of the Company’s management, improving its financial and economic activities, including through a systematic and consistent approach to the analysis and assessment of RMSs, Internal Control System, and Corporate Governance System as tools for securing reasonable confidence in the accomplishment of the Company’s objectives.

The goals and objectives, the key principles of organization, the functions and powers of internal audit are set forth in the revised Internal Audit Policy of Rosseti Tyumen JSC, approved by the decision of the Board of Directors of the Company dd. November 18, 2019 (Minutes No. 26/19 dd. November 20, 2019).

In 2021, the number of employees performing the internal audit function was six persons.

The Company has approved the following core documents regulating the function of internal audit:

• Internal Audit Policy and the Code of Ethics for Internal Auditors of Rosseti Tyumen JSC (new edition), approved by the decision of the Board of Directors of the Company dd. November 18, 2019 (Minutes No. 26/19 dd. November 20, 2019);
• Regulations on the Internal Audit Department dd. October 4, 2018 No. 19/1, approved by the Board of Directors of the Company (Minutes No. 14/18 dd. August 15, 2018):
• Internal Audit Quality Assurance and Improvement Program (the updated version is under consideration by the Audit Committee);
• in-house standards of internal audit and standards of practical application developed according to the International Standards for the Professional Practice of Internal Auditing.

Internal auditors receive feedback from the Audit Committee, including the Committee’s resolutions and recommendations on the matters of internal audit. Another feedback channel consists in surveying the Audit Committee members. In order to analyze the current state and the development of internal audit, said members are asked to score it on different scales; the questionnaire produces an average score. In 2021, the Audit Committee gave the Company’s internal audit the maximum score.

KPMG JSC provided an independent external audit in 2019 and concluded that the Company’s internal audit was in general consistent with the International Standards for the Professional Practice of Internal Auditing, the Code of Ethics, and the Internal Audit Policy, and recommendations were issued for improvement internal audit activities.

Based on the Audit Committee’s questionnaires and the recommendations of an independent external expert, the Company’s Board of Directors approved the Internal Audit Improvement Action Plan 2020-2024 (“the Action Plan”), Minutes No. 10/20 dd. March 16, 2020. At the end of 2021 all activities were completed on time.

Internal audit commission

The Internal Audit Commission is a permanent body exercising control over the financial and economic activities of the Company for compliance with the legislation of the Russian Federation, the Charter of the Company and internal documents.

The Internal Audit Commission protects the interests of the Company’s shareholder and is held accountable to the General Meeting of Shareholders.

Pursuant to Cl. 21.4, Art. 21 of the Company’s Charter, the competence of the Audit Commission of the Company includes:

• verification (audit) of the financial, accounting, payment and settlement and other documentation of the Company related to the Company’s financial and economic activities, for its compliance with the legislation of the Russian Federation, Company’s Charter and internal documents;
• verification and analysis of the financial condition of the Company, its solvency, the functioning of ICS and RMS, the liquidity of assets, the ratio of own and borrowed funds, the correctness and timeliness of accrual and payment of interest on bonds, income on other securities;
• control over spending of the Company’s funds in accordance with the approved business plan and budget of the Company;
• control over the formation and use of the reserve and other special funds of the Company;
• checking the timeliness and correctness of conducting settlement transactions with counterparties and the budget, as well as settlement operations for wages, social insurance, accrual and payment of dividends and other settlement operations;
• control over compliance with the established procedure for writing off debts of insolvent debtors to the losses of the Company;
• verification of business operations of the Company carried out in accordance with the agreements concluded;
• verification of compliance with the use of material, labor and financial resources in financial and economic activities of existing agreements, norms and standards,
• approved estimates and other documents regulating the activities of the Company;
• control over the safety and use of fixed assets;
• checking the cash desk and property of the Company, the efficiency of using the assets and other resources of the Company, identifying the causes of non-production losses and expenses, identifying reserves for improving the financial condition of the Company;
• verification of compliance with the instructions to eliminate violations and shortcomings previously identified by the Audit Commission of the Company;
• development of recommendations for the management bodies of the Company;
• implementation of other actions (measures) related to the audit of the financial and economic activities of the Company.

The Internal Audit Commission of the Company, in exercising its powers, is guided by the requirements of the legislation of the Russian Federation, the Company’s Charter and resolutions of the General Meeting of Shareholders.

The procedure for the activities of the Internal Audit Commission is determined by the Regulations on the Internal Audit Commission of the Company approved by the General Meeting of Shareholders.

Pursuant to paragraph 21.2 of Article 21 of the Company’s Charter, the Internal Audit Commission consists of 5 members.

In 2021, the Internal Audit Commission had two members. From November 27, 2020 to June 9, 2021 Rosseti Tyumen JSC’s Internal Audit Commission had the following members (positions specified as of the date of election, November 27, 2020):

June 9, 2021 the Management Board of Rosseti PJSC, exercising the powers of the Extraordinary General Meeting of Shareholders of Rosseti Tyumen JSC, elected the following Internal Audit Commission of Rosseti Tyumen JSC (positions specified as of the date of election):

* The present time the Company defines as the date to December 31, 2021.

Members of the Internal Audit Commission do not hold any shares of Rosseti Tyumen JSC and in the authorized capital of the subsidiary dependent company Tyumenenergo Engineering JSC (51% shares of Rosseti Tyumen JSC).

There were no transactions between the Company and members of the Internal Audit Commission in 2021. Rosseti Tyumen JSC did not make any claims against the members of the Internal Audit Committee.

Based on the questionnaires provided by the members of the Internal Audit Commission, the Company considers that:

• members of the Internal Audit Commission do not have relatives (spouses, parents, children, adoptive parents, adopted children, siblings, grandfathers, grandmothers, grandchildren) between members of the Board of Directors, members of the collegial executive body, a person holding a position (performing functions) of the sole executive body Rosseti Tyumen JSC;
• members of the Internal Audit Commission were not held administratively liable for offenses in the field of finance, taxes and fees, insurance, the securities market, or criminally liable (with a criminal record) for crimes in the field of economics and/or for crimes against state power;
• members of the Internal Audit Commission did not hold positions in the management bodies of commercial organizations during the period when bankruptcy proceedings were initiated against these organizations and/or one of the bankruptcy procedures provided for by Article 27 of the Federal Law On Insolvency (Bankruptcy) was introduced.

In 2021, an audit of the financial and economic activities of the Company for 2020 was carried out.

The internal audit program of the financial and economic activities of the Company included the following issues: assessment of the reliability of the accounting (financial) statements formed as of December 31, 2020, assessment of the reliability of the annual report for 2020, analysis of the financial condition as of December 31, 2020, verification of certain matters of the Company’s corporate governance, other matters related to the circumstances identified during the audit.

The opinion of the Internal Audit Commission was approved by the Audit Commission of the Company (Minutes No 3ns/2021 dd. April 15, 2021), according to which an opinion was expressed on the reliability of the data contained in the annual report for 2020, the accounting (financial) statements of the Company for 2020, in all material respects. The specified Conclusion was included in the materials provided to the shareholders of the Company in preparation for the annual General Meeting of Shareholders of the Company in 2021.

External auditor

In accordance with the requirements of the legislation of the Russian Federation, Rosseti Tyumen JSC is obliged to annually conduct an audit of its financial (accounting) statements.

Pursuant to Federal Law No. 307-FZ dd. December 30, 2008 On Audit Activities, the auditor shall be selected by an open bid at least every five years. Rosseti PJSC selects the external auditor by an open bid once a year. According to the results of the open non-prequalification tender to conclude an audit agreement for 2021, the winner was Ernst & Young LLC (leader of the collective participant).

June 9, 2021, Ernst&Young LLC was approved by Rosseti Tyumen LLC’s General Meeting of Shareholders.

About the Auditor: Ernst & Young Limited Liability Company. Registered with the Uniform State Register of Legal Entities on December 5, 2002, state registration number 1027739707203.

Address: 115035 Russia, Moscow, 77 Sadovnicheskaya Nab., Bld. 1.

Ernst & Young LLC is a member of the Sodruzhestvo Association, a self-regulation organization of auditors. Ernst & Young LLC listed in the check copy of the register of auditors and audit companies, entry number 12006020327.

May 31, 2021, the Board of Directors of Rosseti Tyumen JSC set the remuneration payable to Ernst and Young LLC for auditing the RAS-based accounting statements for 2019 and the IFRS-based consolidated financial statements as of December 31, 2021, at 7,500,000.00 rubles inclusive of VAT.

The auditor Ernst & Young LLC did not provide non-auditing services to the Company in 2021.

Management of subsidiaries and affiliates

Rosseti Tyumen JSC has one subsidiary, Tyumenenergo Engineering JSC. The main goal of Tyumenenergo Engineering JSC is to meet the needs of power grid enterprises and other market participants in the construction, reconstruction, modernization and technical re-equipment of overhead power lines (OL) and substations (SS) using a modern technical base and high-tech solutions, maintaining the highest possible level of safety, reliability and quality of services.

The management of subsidiaries and affiliates is regulated by the Tyumenenergo JSC Procedure for Interaction with business entities whose shares are owned by JSC Tyumenenergo JSC, approved by the Board of Directors on March 17, 2009 (Minutes No. 03/09).

Equity, securities

Pursuant to the Charter of Rosseti Tyumen JSC the authorized capital of Rosseti Tyumen JSC amounted to 27,373,895,100 rubles as of December 31, 2021, divided into 273,738,951 ordinary registered shares each of a 100-ruble nominal value. The Authorized Capital of Rosseti Tyumen JSC does not include any preferred shares.

The Company has authorized 3,121,409 additional ordinary shares each of a 100-ruble nominal value, for a total 312,140,900 rubles. Ordinary registered shares authorized by the Company for placement entitle their holders to the same as the placed ordinary registered shares.

Public Joint-Stock Company Russian Grids is the sole shareholder of Rosseti Tyumen JSC.

The Company’s shares are not traded in the organized securities market.

Rosseti Tyumen JSC holds preferred shares of Rosseti PJSC. Information on shares in cross-ownership as of December 31, 2021

Company’s Equity as of December 31, 2021

Bond loans

March 1, 2017 Moscow Exchange PJSC decided to assign ID 4-00159-F-001Р-02Е to the Company’s Program of Exchange Bonds Series 001P, which totaled 25 billion rubles and had a maximum maturity of 10,920 days (30 years).

As of December 31, 2021 and the date of approval of the Annual Report, no bond issues of Rosseti Tyumen JSC were in circulation.