Presentation

Message from the Chairman of the Board of Directors of JSC ROSSETI Tyumen Alexey Polinov (GRI 102-14)

Ladies and gentlemen,

Despite the continued impact of the pandemic on the social and economic development of our country, in 2021, the Company entered the stage of sustainable development.

The recovery of industrial activity helped to improve the Company’s financial and economic stability, which enabled us to continue to focus on innovative development and technological transformation. Last year, we made a number of strategic decisions aimed at integrating the Company into the new economic environment.

The systemic nature of the documents approved in 2021 by the Board of Directors, including the Innovative Development Program, the Energy Conservation and Energy Efficiency Program, the Program for Reducing Electricity Losses in Electricity Grids, and the Road Map for the Development of Additional (Non-Tariff) Services, set out our approaches to prioritized tasks, such as improving the performance of our core business, developing new business areas, ensuring reliability, maintaining high quality and providing equal access to energy infrastructure for our consumers, maintaining a balance between the interests of all our stakeholders and generating a positive net cash flow.

Total investments by ROSSETI Tyumen in the economies of the Yamalo-Nenets Autonomous District, the Khanty-Mansi Autonomous District – Yugra and the Tyumen Region exceeded 8.5 billion rubles. The Company completed 136 projects focused on renovating, modernizing and upgrading power facilities in the macroregion.

As part of the development of power supply for the oil industry, the Company accomplished a high-priority objective of commissioning facilities for the Erginsky oil cluster. A high-voltage power hub, which comprises the new Chaprovskaya substation, the upgraded Batovo substation and the Batovo – Chaprovskaya 110 kV transmission line, is worth more than 2.6 billion rubles.

We continue to actively introduce new digital technologies across almost all aspects of the Company's operations. This involves a transition to the management of power grid facilities based on situation analysis. The Company has already progressed from building a portfolio of non-tariff services and projects to implementing a market-based business model focused on increasing non-tariff revenue.

The Company’s well-balanced development strategy, strong operating results, significant financial assets and technological capabilities provide a foundation for sustainable development and further improvement of operating and investment performance of ROSSETI Tyumen. Our continued efforts to increase adaptability and improve organizational mechanisms will enable the Company to follow its path, remain a reliable partner in a changing environment and demonstrate positive financial results.

Chairman of the Board of Directors of JSC ROSSETI Tyumen
Alexey Polinov

Message from the Director General of JSC ROSSETI Tyumen Oleg Petrov (GRI 102-14)

Dear colleagues and partners,

We have successfully completed yet another period of operation amid COVID-related restrictions, which provide a challenging but predictable environment.

All of the Company’s key financial and economic indicators demonstrated steady growth. The Company's net assets increased by 3.2% to 126.7 billion rubles. Gross profit rose significantly: between January and December 2021, it totaled 1.8 billion rubles as against a loss of 3.5 billion rubles in 2020, while the net loss decreased 15-fold last year.

Amid a moderate increase in the economic activity of oil and gas enterprises, which are major consumers accounting for a large share of net electricity supply, the Company's revenue increased by 13.7%. At the same time, measures taken by the Company to optimize production, organizational and management processes enabled it to curb the growth of the cost of its services.

The pace of implementation of production programs remains steady. Last year, JSC ROSSETI Tyumen allocated more than 4 billion rubles to improve the reliability of Tyumen’s power system. The Company repaired 2,500 kilometers of power lines and 619 substations with a voltage class of 35 kV or higher. More than 5,000 new consumers were connected the Company's grids.

The Company's employees invariably remain its top priority and are at the center of the Company’s sustainable development policy. We managed to switch about 80% of administrative and management personnel to remote work without any negative impacts on performance; we introduced health monitoring practices for our team, which numbers about seven thousand people; we arranged regular COVID-19 testing and vaccination for more than 85% of our total headcount. The Company views its people as its main value and considers the improvement of social and labor relations to be a key tool for the development of social partnership. Accordingly, the Company implemented all guarantees and benefits that it had committed to provide, including full-scale wage indexation.

A high degree of responsibility towards consumers and partners is reflected in the documents signed by the Company with government bodies. Effective cooperation with the Government of the Tyumen Region in the development of municipalities resulted in an agreement on joint planning of the location of power grid facilities, improvement of reliability of the power system, implementation of a long-term tariff policy and development of street lighting systems.

To conclude, I would like to point out that the results achieved in 2021 confirmed the reputation of ROSSETI Tyumen as a reliable systemically important electricity company in the Tyumen Region, the Khanty-Mansi Autonomous District – Yugra and the Yamalo-Nenets Autonomous District and its ability to effectively respond to any challenges. The Company remains committed to its strategic goals, ensures reliable operation and promotes technological development of the power grid of the Tyumen macroregion in line with the current needs and in accordance with industry standards.

Director General of JSC ROSSETI Tyumen
Oleg Petrov

Company Profile (mission, history, core business activities) (GRI 102-1, 102-2, 102-4)

Company Profile

Rosseti Tyumen JSC:

• major interregional distribution grid operators providing reliable delivery of high-quality electricity and connecting customers in three Russian regions: the Tyumen Region, Khanty-Mansi Autonomous Okrug – Yugra, and Yamalo-Nenets Autonomous Okrug;
• part of the Rosseti Group, a significant part of the Rosseti PJSC assets;
• included in the Register of Natural Monopoly Entities in the Fuel and Energy Complex (section I “Electric and/or Thermal Power Transmission Services”);
• a registered taxpayer with the FTS of Russia Interregional Inspectorate for Large Taxpayers No. 6.

The sole shareholder of the Company is Rosseti PJSC.

Mission

Delivering high-quality electricity reliably and affordably in order to ensure comfortable living and enable unrestricted growth of Russia’s economy while also multiplying shareholder returns and opening up career opportunities for the employees. The Company uses advanced innovations and is a pillar of the country’s energy security.

History

Tyumen Regional Energy Administration “Tyumenenergo” was founded on May 3, 1979 by merging three Sverdlovenergo companies located in the Tyumen Region:

• Tyumen Electric Grids;
• Ishim Electric Grids (today called Ishim LGС, a part of Tyumen Electric Grids);
• Surgut Electric Grids;
• Tobolsk Electric Grids (today called Tobolsk LGC, a part of Tyumen Electric Grids);
• Nizhnevartovsk Electric Grid Operator (today called Nizhnevartovsk Electric Grids).

The Company also acquired CHPs in Tyumen and Tobolsk as well as Surgutskaya GRES-1.

In September 1988, Tyumen Regional Energy Administration was abolished, and the Tyumenenergo Tyumen Production Association of Energy and Electrification was founded on the basis of its subordinate enterprises.

In March 1993, pursuant to the state privatization program, Tyumenenergo Public Joint-Stock Energy and Electrification Company was founded as the legal successor to the Tyumenenergo Tyumen Production Association of Energy and Electrification.

Until 2005, Tyumenenergo JSC had been a vertically-integrated company concerned with the production, transmission, and distribution of electric power. After the industrial reform of March 2005, generating and distribution enterprises were separated from the Company, whereas Tyumenenergo JSC itself became a distribution grid company, and since April 2007, the Company has been an interregional distribution grid company.

In December 2019, the Company has been rebranded and gained a new legal name, Rosseti Tyumen JSC.

The Company serves an area exceeding 1.46 million sq. km, which is home to more than 3.8 million people.

Core business activities:

Company Structure (GRI 102-5)

In 2021, Rosseti Tyumen JSC’s headcount reached 7,416 employees exclusive of Tyumenenergo Engineering JSC, including 592 members of the Company’s Head Office.

No significant changes were made to the branches of Rosseti Tyumen JSC during the reporting period.

Geographical Footprint and Fixed Assets (including a geographical map of Rosseti Tyumen JSC-served areas) ( GRI 102-6 )

Business Model of the Company, including relations with KPIs and risks

Key Performance Indicators in 2019-2021

Operating Performance

Electricity Released to the Grid, mln kW ·h

Electricity Released from the Grid, mln kW ·h

Electricity losses, mln kWh

Investment Performance

Implementation of Capital Investments, million rubles VAT exclusive

Transformer Power Put into Operation, MVA

Power Lines Put into Operation, km

Financial Performance (RAS)

Revenue from Sales of Products (Services), million rubles

Net Profit (Loss), million rubles

EBITDA*, million rubles

Financial Performance (IFRS)

Revenue from Sales of Products (Services), million rubles

Operating Expenses, million rubles

Profit over the Reporting Period, million rubles

Sustainable Development Key Performance Indicators

Accident rate, number

Environmental protection costs, million rubles

Bird protections, units

Average pay, thousand rubles

Headcount, persons

Occupational safety costs, million rubles

Psaidi, hour

Psaifi, units

Staff turnover, %

Milestones of 2021

JANUARY

Rosseti Tyumen JSC put into operation a training facility in the city of Uray, a training site for the personnel of the Company’s Uray branch.

FEBRUARY

Deputy Chief Engineer for Operation of the Surgut branch, Rosseti Tyumen JSC, Vitaly Butkevich and Head of Relay Protection and Automation Service at the Nizhnevartovsk Electric Grids Dmitry Isupov were granted Professional Engineer awards in the High-Voltage Engineering and Electricity Delivery. Electric Grids and Systems sections of the 21st Russian Engineer of the Year contest.

MARCH

Rosseti Tyumen JSC joined the project of cooperation with educational institutions and employers of KhMAO-Yugra. The company signed an agreement with the Department of Education and Youth Policy of KhMAO-Yugra and the three largest universities in the region: Nizhnevartovsk, Surgut and Yugra State Universities.

APRIL

The competence of employees of the energy company in occupational health and safety was marked by the Deputy Chief Medical Officer of the Surgut Municipal Clinical Station of Emergency Medical Care Three Surgut power engineers of Rosseti Tyumen JSC received a commendation from the EMERCOM for saving a colleague’s life.

Rosseti Tyumen JSC supported the Total Dictation international educational campaign with an opening of a dictation area at its headquarters in Surgut. The text of the dictation was read by Rostislav Doronin, a contestant of the 4th season of the popular TV show “The Voice”. More than a quarter of participants in the campaign at the Company’s site received high marks.

MAY

About 2,000 schoolchildren from the Tyumen region, KhMAO-Yugra and YNAO took part in the Victory Lesson organized by Rosseti Tyumen dedicated to the 76th anniversary of the Great Victory. Power engineers told the younger generation about the heroic deeds of their colleagues during the war.

On Victory Day, Rosseti Tyumen opened a monument on the Alley of Memory and Glory. A sketch of a new art object, symbolizing peace and victory, was selected as part of an open city competition.

Rosseti Tyumen JSC held the first regional competition “Smart Energy” for employees of the fuel and energy industry. The competition was attended by 20 teams of the major fuel and energy companies of the region and the country.

JUNE

The Analytical Credit Rating Agency (ACRA) assigned Rosseti Tyumen JSC a credit rating of AA+(RU), with the outlook “stable”. This is one level higher than the credit rating previously assigned on a comparable scale. The analysts highly assessed the Company’s market position, its business profile, strong liquidity and low leverage.

The Company was the winner in the Innovative Project of the Year category of the 11th Russian contest “The Best Russia’s Electric Grids”. The project submitted for the competition was related to the early troubleshooting of power equipment and provides for optimizing the process of examining substation elements.

JULY

Rosseti Tyumen JSC entered into a cooperation agreement with the largest resource providers in the Tyumen region. The document is aimed at providing accessibility of connection to engineering services of infrastructure facilities, reducing the time for grid connection, and contributes to improving the investment climate in the Tyumen region.

Rosseti Tyumen and the Yugra Development Fund entered into a cooperation agreement aimed at creating environment for the investment and industrial projects through the innovative competitive technologies and industries implemented in the Autonomous Okrug. The signing ceremony took place at the INNOPROM-2021 in Yekaterinburg.

AUGUST

Oleg Valentinovich Petrov was appointed as Director General of Rosseti Tyumen JSC by decision of the Board of Directors of the Company.

Employees of Rosseti Tyumen JSC were among the winners of the Young Professionals Open Corporate Professional Excellence Championship of Rosseti PJSC held according to the WorldSkills methodology. Bronze medal in “Maintenance and repair of relay protection and automation equipment” category was awarded to Anton Cherkasov, an electrician for maintenance and repair of RPA devices of the Uray branch, bronze medal in “Smart electricity metering systems” category was awarded to Roman Shtertser, an engineer of the crew for repair and maintenance and to Evgeny Klementyev, a supervisor of the service area, Tyumen Electric Grids.

SEPTEMBER

Rosseti Tyumen JSC, together with the Departments of Education of Nizhnevartovsk and Novy Urengoy, opened energy classes in Nizhnevartovsk secondary school No. 5 and in Novy Urengoy secondary school No. 8. The opening of the specialized classes was the result of the concept of continuing education “school – university – enterprise” implemented by the Company.

The Rosseti Tyumen JSC team won the Rosseti Interregional competition of professional skills of personnel for maintenance of RPA and automated process control systems. Yugra power engineers Vyacheslav Panin and German Nikitin from the Nizhnevartovsk branch of the Company were recognized as the best professionals in RPA and APCS, respectively.

Rosseti Tyumen JSC won the prize in the International Competition of Scientific, Technical and Innovative Solutions Aimed at the Development of the Fuel, Energy and Extractive Industries for its contribution to the innovative development of the fuel and energy industry. Projects on digital control of electricity delivery and improvement of environmental safety of power facilities were the 1st place and 2nd place winners, respectively.

Rosseti Tyumen JSC put into operation power facilities to deliver electricity to the Kuzovatkinskoye and Untygeyskoye oil fields in KhMAO-Yugra, as well as other fields of the Ergin group. The Company funded construction of facilities: Kuzovatkinskaya SS with HVL Chupalskaya – Kuzovatkinskaya, Chupalsky SS, HVL Vostochny – Ugutsky / Ugutsky – Taiga, Chaprovskaya SS with HVL Batovo – Chaprovskaya – and renovation of the Batovo SS in the amount of about 4 billion rubles.

OCTOBER

Rosseti Tyumen JSC completed the reconstruction of the Khora 220 kV SS. The power center performs the electric power transit and redistribution between the energy systems of the KhMAO-Yugra, Tyumen and Sverdlovsk regions, and delivers electricity to the Talinskoye field. More than 70 million rubles were allocated to the project.

NOVEMBER

Rosseti Tyumen JSC took part in the All-Russian campaign “Little Joys for Doctors” who daily save people’s in medical centers and COVID-19 hospital units daily. The campaign was aimed at expressing sincere gratitude to those fighting the COVID-19 virus.

The Company held the first online championship in mind sports for students of schools, lyceums, colleges and universities. More than 60 people took part in the tournament via video conferencing. Eleven teams from educational institutions of the Khanty-Mansi and Yamalo-Nenets Autonomous Okrugs competed for the all-round champion title.

DECEMBER

Oleg Petrov, Director General of Rosseti Tyumen JSC, and Alexander Moor, Governor of the Tyumen Region, signed a cooperation agreement aimed at ensuring reliable and uninterrupted electricity delivery to consumers in the region and developing the investment potential of the Tyumen Region.

Six employees of Rosseti Tyumen JSC – Pavel Zyazev, Mikhail Lemdyanov, Artem Lopatin, Anton Guliyev, Alexander Polozov and Andrey Priymak – won the All-Russian Energy Leaders competition held by Rosseti PJSC and entered the golden hundred of the candidate pool of the Russian energy sector.

Rosseti Tyumen JSC put into operation the 110 kV substations Suvorovskaya in KhMAO-Yugra and Rospan in YNAO. The facilities provide electricity delivery to the Mamontovskoye oil field in Yugra and the Novy Urengoyskoye field in Yamal. The investment financing allocated by the Company to the construction of facilities amounted to more than 1.6 billion rubles.

The company won the Priority 2021 National Prize in the Fuel and Energy Industry category for the development of a prototype of the Minigrid grid hardware and software package.