FGC UEC - CSR Report 2015 - Implementation of the CSR and Sustainable Developmnet Plans and Commitments in 2015

	Commitments	Progress status	Comments
Ensuring reliability of power supply
1	Complete maintenance and repairs and the 2015 targeted programmes in accordance with Order No. 232 of Federal Grid Company, dated 22 April 2011, “On the Approval of Procedures” within the budgeted financing for 2015	Implemented
2	Complete the following work scheduled for 2015 – within the budgeted financing and decisions of the Management Board about the approval of income and expenditure budgets (excerpt from the minutes of the Management Board’s meeting No. 1282/2, dated 30 December 2014:
2.1	Action plan to improve reliability of power supply at the facilities of JSC Russian Railways in 2010–2020		Federal Grid Company and JSC Russian Railways signed Cooperative Agreement No. 198000000397492 dated 15 September 2015
2.2	Programme to replace air switches with voltage class of 330–750 kV at the Company’s facilities	Work in progress	A comprehensive programme for 2011–2030
2.3	Programme to increase lightning-surge protection of the Company’s overhead lines	Work in progress	A comprehensive programme for 2011–2025
2.4	Programme for replacement of oil circuit breakers, separators and short circuitors with voltage class of 110–220 kV at the Company’s facilities	Work in progress	A comprehensive programme for 2011–2030
2.5	Programme for replacement of current transformers with voltage class 110–750 kV at the Company’s facilities, to be implemented in 2015	Work in progress, the 2015 target is met	A comprehensive programme for 2011–2025
2.6	Programme for replacement of transformers with voltage class 110–750 at the Company’s facilities, to be implemented in 2015	Work in progress, the 2015 target is met	A comprehensive programme for 2011–2025
2.7	Programme for replacement of autotransformers, to be implemented in 2015	Work in progress, the 2015 target is met	A comprehensive programme for 2011–2021
2.8	Programme for improving the reliability of equipment at the Company’s substations and OHL	Work in progress	A comprehensive programme for 2011–2021
2.9	Programme for widening of glades under the UNEG overhead lines in 2015	Implemented
2.10	Programme of special diagnosis of equipment or facilities in the poorer condition, in accordance with work volumes for 2015	Implemented	Comprehensive inspection of 71 units of equipment; Comprehensive inspection of 2,184 OHL supports
2.11	Programme for improving fire protection at Federal Grid Company’s UNEG facilities	Implemented	In 2015, 27 actions of this programme were implemented in Federal Grid Company’s branches in accordance with the work volumes approved for the year
2.12	Programme to build an accident reserve and procure equipment and materials in 2015	Implemented
2.13	Programme to procure cars, special-purpose vehicles and machinery in 2015	Work in progress	A comprehensive programme to be implemented by 2021
2.14	Programme to establish the protection zones for the electric grid facilities in accordance with the work volumes for 2015	Work in progress as far as PTLs are concerned	The tentative deadline for establishing the PTL protection zones is 2016 (MES South)
2.15	Actions to restore the working capacity of emergency blocking at substations	Implemented
2.16	Actions to mitigate the risks of power supply disruptions in the regions with high risks of power supply disruptions – to be implemented in 2015 in accordance with an executive order issued by the Ministry of Energy	Implemented	Two out of 17 programme actions scheduled for 2015 were implemented
3	Implement Federal Grid Company’s investment programme.	Implemented
4	Update (extend) agreements with contractor organisations, related electric grid organisations, Ministry of Emergency Situations, RosHydroMet etc. These agreements will help to minimise the time for post-accident repairs at the power facilities	Updated	The Register of Agreements with Contractor Organisations (as regards HV lines) was updated by using information from MES; Agreements with the Ministry of Emergency Situations and RosHydroMet were fully extended.
5	Raise the level of security and anti-terrorist protection at electric grid facilities, including via actions under investment programme “Protection of Federal Grid Company’s Electric Grid Facilities” by equipping the facilities with engineering and technical security devices	Implemented
6	Take actions based on investigations of accidents and implement comprehensive programmes for elimination of irregularities and improvement of the grid reliability	Implemented	In 2015, the Company took 3,892 actions based on investigations of accidents
7	Conduct timely technical inspections of equipment of substations, electricity transmission lines, buildings and installations, and full examination of buildings and structures	Implemented	In 2015, branches of Federal Grid Company conducted technical inspections of equipment at 263 substations, 406 OHLs, buildings and installations at 305 facilities (SS, repairs and production bases, etc.). Besides, comprehensive inspections of buildings and installations at 306 facilities were conducted
8	Organise, monitor and analyse the formation of data about technical condition of the primary electric grid equipment with voltage class 110 kV and above at SS and OHL.	Implemented
9	Analyse failures of new equipment during the burn-in period; identify systemic defects in design, manufacturing and installation technique, and organise claim settlement	Work in progress	In 2015, the Company regularly analysed defects and manufacturing weaknesses of equipment produced by Siemens, ZETO, Alstrom and Elektrozavod The Company initiated repairs and refining of column-mounted switches produced by Siemens, and RG 330–500 disconnecting devices (producer: ZETO)
10	Conduct joint trainings with the Ministry of Emergency Situations and local authorities	Implemented	Joint trainings with the Ministry of Emergency Situations and local authorities were held as scheduled
Energy efficiency and energy management
11	Conduct re-certification and internal audits of the Company’s energy management system that confirm compliance with the international standard ISO 50001:2011	Implemented	In April and May 2015, an external audit of the Company’s energy management was successfully conducted for consistency with the international standard ISO 50001:2011. The independent auditor did not identify any inconsistencies with the standard requirements, including loss-reduction actions. The auditors recommended that the validity of the compliance certificate should be extended
12	Implement the Programme for Energy Saving and Improving Energy Efficiency for 2015–2019	Implemented	The programme was implemented in 2015 in accordance with Order No. 262 “On Organisation of Implementation of the Programme for Energy Saving and Improving Energy Efficiency for 2015–2019” dated 29 June 2015
Labour protection
13	Eliminate workplace injuries and occupational diseases	Not implemented	Five accidents occurred in Federal Grid Company’s branches – MES, and 2 employees were injured: Two people during work at substations, 1 person as a result of violation of work technique during dismantling of a construction platform, and 1 person due to his own carelessness Three fatal accidents, including 1 case when a person died due to poor organisation of vehicle repair work, 1 person due to violation of the stream crossing procedure, and 1 due to a third party’s guilt The number of injured employees and injuries in Federal Grid Company’s branches increased from 3 to 5, or by 66%, in 2015 relative to 2014. The number of fatal accidents increased by threefold, from 1 to 3, because the number of employee injuries in transport increased Labour protection actions are held before repairs begin, injury risks are assessed and remedial actions are developed in order to improve occupational safety
14	Develop safe conduct and accident-prevention skills among employees	Work in progress	The Company implements a project “Behaviour- Based Safety Audit” (BBSA) which is targeted at changing the employees’ approach to the informed compliance with the safety rules In 2015, 43.2% of foremen received training, including: 1,791 foremen in PMES and MES labour protection 128 foremen took courses in the Personnel Training Centre (MES Centre and MES Ural) Training in BBSA was poorly organised in MES Centre (Volgo-Donskoy and Volgo-Oksky PMES), MES North-West (Bryansk, Vyborg, Karelia and Northern PMES), MES Volga (Sredne-Volzhsky PMES), MES Siberia (Kuzbass PMES), and MES East (Amur PMES)
15	Improve working conditions continuously	Implemented	Per capita labour protection costs amount to RUB45.81 thousand The total labour protection costs increased by 1.3 times in 2015 relative to 2014, largely due to scheduled purchases of the summer and winter heat-resistant outfits and shielding sets
HR management and social policy
16	Award employees for their service to Federal Grid Company and the electricity sector, and for long and conscientious work	Implemented
17	Employee wage indexation	Implemented
18	improve the effectiveness of industrial personnel training programmes and identify priority training programmes	Implemented	Thirty-eight industrial personnel training programmes were updated and made consistent with the requirements of the Moscow Department of Education
Anti-corruption activities
19	Take part in collective anti-corruption initiatives	Implemented	Federal Grid Company joined the Anti-Corruption Charter of Russian Business. The Company is included in the General Register of Charter Signatories (Certificate No. 2041 dated 13 March 2015) Head of Operational Controlling and Compliance Department was elected to the Anti-Corruption Expert Council of the Russian Chamber of Industry and Commerce In 2015, the Company took part in several roundtable sessions on anti-corruption
20	Revise and improve the internal rules and regulations on anti-corruption	Implemented	The Company drew up a new version of the Anti-Corruption Policy, and the Board of Directors approved it (Minutes No. 280 dated 24 August 2015) In accordance with Federal Law No. 285-FZ dated 5 October 2015, amendments were made in the Company’s Order No. 207 “On Approving the Regulation on Settling a Conflict of Interests” dated 25 April 2014
21	Draw up a list of corruption risks and assessment procedures for these risks	Implemented	The Company drew up a “Map of Corruption Risks” and “Matrix of Corruption Risks and Anti- Corruption Control Procedures”
22	Organise regular training of the Company employees on the prevention and fight against corruption, effective Russian anti-corruption legislation and the respective internal regulations	Implemented	The Company held several educational video conferences for employees of its branches and Executive Directorate on anti-corruption and transparency of financial and business operations. The Company regularly updated information posted on its web portal on the page dedicated to the Anti-Corruption Policy
23	Take organisational, explanatory and other actions that are aimed at ensuring employee compliance with restrictions and bans and at the performance of duties to fight corruption	Implemented	The Company implemented measures to minimise the corruption risks: It conducted an anti-corruption review of transaction documents (including procurement procedures), instructions/guidelines and their drafts It reviewed documents related to charitable assistance and oversaw the use of donated funds It oversaw financial security (in the form of bank guarantees) of counterparties’ contractual obligations It organised declaration of a conflict of interest by the Company managers. Efforts were taken to identify conflicts of interests, settle preconflict situations and conflicts of interests in the Company It collected and analysed information about income, property and property obligations of persons that claim executive positions, as well as existing executives and their family members
24	Establish a procedure whereby certain categories of the Company’s officers will report when they receive gifts in relation to their position or performance of their job duties; and a procedure for relinquishing, evaluating and selling such gifts, and crediting the proceeds to the corporate budget	Implemented	The Company approved a “Regulation on the Exchange of Business Gifts, Communication of Information about Business Gifts Received by Executives of Federal Grid Company in Relation to Their Position or Job Duties, Release and Evaluation of Gift, Sale / Buyout of Gift and Crediting of Proceeds” Similar regulations were approved by the Company’s branches and subsidiaries The Company established working commissions at the Executive Directorate and in the branches. Their mandate is to take decisions about the sale or any other use of business gifts in the Company’s operations
Environmental protection
25	Ensure environmental safety in accordance with the environmental laws of the Russian Federation	Implemented on the ongoing basis	Directive No. 121r dated 6 March 2015 “On Approving the Procedure for an Internal Environmental Audit in Federal Grid Company Branches – MES and PMES”
26	Refine standards and technical documents that regulate environmental protection activities	Implemented on the ongoing basis	The Company drew up proposed improvements of the Russian laws and regulations The Company formulated its position on draft Russian laws and regulations on environmental protection, environmental safety and environmental management
27	Improve the corporate system of the Company's environmental protection activities	Implemented on the ongoing basis	The Company issued 4 executive orders and 8 directives about environmental protection
28	Build reputation of Federal Grid Company as an environmentally-oriented and socially responsible company	Implemented	Federal Grid Company won the Eleventh Russian competition “2015 Leader of Environmental Protection in Russia”
29	Innovative development in environmental protection and environmental management.	Implemented within the amount of funds allocated in 2015	The Company implemented several projects that help to minimise the adverse impact on the environment
30	Approve the Programme for Implementation of the Environmental Policy in 2015–2019	Implemented	Order No. 150 dated 31 March 2015 “On Approving the Programme for Implementation of the Environmental Policy in 2015–2019”
31	Improve environmental control and reporting in the Company.	Implemented on the ongoing basis	The Company issued several orders and directives
32	Implement an environmental management system in the Company’s branches – MES Siberia, MES Ural, MES Volga, and MES Western Siberia; receive ISO 14001:2004 compliance certificate for the Company	Implemented	An environmental management system was implemented in the Company’s branches – MES Siberia, MES Ural, MES Volga, and MES Western Siberia The Company took actions to include all its branches in the unified corporate system of environmental management in accordance with the ISO 14001:2004 standard requirements
33	Achieve targeted quantitative environmental indicators for 2015 that were approved by Order No. 227 dated 15 May 2014	Implemented	Water consumption was reduced by 11.2% The volume of waste disposed in landfills was reduced by 12.6% The number of violations of environmental laws that were identified during industrial environmental control amounted to 3.6%
34	Develop corporate standards for environmental safety at all life cycle stages of electric grid facilities	Implemented	Order No. 110 “On Approving Corporate Standards for Environmental Safety of Electric Grid Facilities” dated 30 March 2016
35	Federal Grid Company and World Wildlife Fund for Nature (WWF Russia) will monitor the effectiveness of actions implemented by the Company’s branch – MES East – to prevent death of oriental storks on power lines and draw up recommendations on the co-ordination of efforts on the conservation of oriental storks and protection of PTLs from emergency outages caused by birds	Implemented	The outcomes of monitoring confirmed the effectiveness of oriental stork protection actions implemented by a branch of MES East
Import substitution
36	Promote the development of a competitive Russian market of state-of-the-art electrical equipment	Work in progress	Russian manufacturers cover Federal Grid Company’s needs in power transformers, switchgears, disconnecters of all voltage classes, and instrument transformers of up to 500 kV
37	Promote the development of a multidimensional industry-wide innovative infrastructure.	Work in progress	Proactive co-operation with the state corporations and institutions including Skolkovo, Rosnano, Russian Technologies, Rosatom, R&D think tanks and educational organisations.
38	Promote the development and improvement of technologies for the manufacturing of new types of electrical equipment	Work in progress	Togliatti Transformer LLC and Shanghai Huaming Power Equipment Co. Ltd. (China) run a joint project of localisation of production and testing of on-load tap changers for the Russian and foreign markets Project to develop domestic production of gas turbine plants for distributed generation systems Development of production of secondary equipment (EZAN, Infinet LLC.)
39	Improve the regulatory framework and methodological support of cooperation with the producers of electrical equipment	Work in progress	The Company issued orders about methodology for assessing localisation of electrical equipment in the Russian Federation and approved the Procedure for Implementation of the Import Substitution Programme The Company accepted recommendations of the round-table session “Import Substitution: Boundaries of Energy Safety” on how to implement import substitution policy and promote the development of the Russian electrical equipment industry The Company took part in working teams at the Russian Ministry of Energy and Ministry of Industry and Trade on issues of import substitution, and in the expert panel “Import Substitution in the Fuel and Energy Complex” at the State Duma Committee for Energy
40	Lower the cost of electrical equipment procured by the Company through import substitution and raising the localisation level	Work in progress	The increased share of domestic products in the Company’s procurements helped to mitigate the adverse impact of Rouble devaluation on the cost of procured electrical equipment
41	Increase the share of Russian-made electric equipment in the Company’s procurements relative to 2014	Work in progress	At 2015 year-end, the share of Russian-made primary equipment was 75%, which is 30.5% above the 2014 level
42	Increase the number of commercially manufactured innovative products and technologies that were developed in the joint projects of Federal Grid Company and Russian producers, relative to the previous year	Work in progress	The production of an updated version of digital multiplexer ENE-04E (by EZAN) and upgraded broadband communications networks (by LLC Infinet) began in 2015 as a result of co-operation

Implementation of the CSR and Sustainable Developmnet Plans and Commitments in 2015

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