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The Russian Institute of Directors summarizing the results of performance appraisal in the field of corporate governance for 2022, confirmed Rosseti South, PJSC rating in line with NCGR 7 "Developed Practice of Corporate Governance" on National Corporate Governance Rating (NCGR®) scale.

Based on the results of assessment of activities in the field of corporate management over 2021, the Russian Institure of Directors confirmed the rating of "Rosseti South" PJSC at the level NCGS 7 "Advanced Corporate Governance Practices" according to the National Corporate Governance Score grading scale (NCGS®).

Experts note that in the course of THE monitoring (27.12.2019 – 08.02.2021) the following positive changes were fixed in the corporate management practices of "Rosseti South" PJSC:

• self-assessment of the Board of Directors;

• the Company implemented several charity and sponsor projects;

• contact data of the Company Corporate Secretary were disclosed on the web-page of "Rosseti South" PJSC.

Moreover, the corporate management practices of "Rosseti South" PJSC is characterised by the following positive key points:

• the functions for accountance of proprietary rights for the Company shares are fulfilled by the independent registrar NRC-R.O.S.T. JSC;

• The Company establishes conditions for the use of electronic means of communication by the shareholders to send demands for calling of the General Shareholder Meeting, propositions of submission of nominations to the Company control authorities and proposal of agenda items of the General Meeting;

• materials required to prepare to the General Shareholder Meeting are published on the Company web-page

• The Company includes some additional materials, recommended by the Corporate Management Code, in the list of materials required to prepare to the General Shareholder Meeting;

• the competence of the Board of Directors regarding approval of major transactions was extended;

• the structure of remuneration of the members of the Board of Directors meets recommendations of the Corporate Management Code;

• there is an integral regulation of the colliding interests of the members of the Board of Directors and executive bodies;

• the Company developed regulatory and methodological procedures for risk management, as well as created an internal department responsible for fulfillment of key risk management functions;

• the Company has an advanced Corporate Secretary Institure;

• The Company discloses annual and interim financial reporting prepared according to IFRS, as well as grants free access to it to concerned parties;

• The Company prepares a report on sustainable development according to the GRI standards.

At the same time, in addition to a decrease in the number of independent directors and changes to the composition of the Human Resources and Remuneration Committee, the experts noted the following negative changes in the corporate management practices of "Rosseti South" PJSC during the reporting period:

• during 2019-2020 corporate year the number of meetings of the Board of Directors in the form of joint attendance was reduced to three;

• information on the extent of remuneration of the members of the Board of Directors was disclosed collectively, not on an individual basis.

Moreover, the following key flaws remain in the corporate management practices of "Rosseti South" PJSC:

• The Company has no positive dividend history;

• the dividends are calculated out of net profit, determined according to the Russian Accounting Standards, not the IFRS;

• meetings of the Human Resources and Remuneration Committee are held extramurally only;

• the funtions assigned to the Human Resources and Remuneration Committee fail to meet the recommendations of the Russian Code of Corporate Management.

In total, these changes had no significant impact on assessment of the corporate management practices of "Rosseti South" PJSC, therefore at present the Company rating remains unchanged and is confirmed at the level NCGS 7.

The rating assessment 7 means that the Company meets the requirements of the Russial legislation in the field of corporate management, follows the majority of recommendations of the Russian Code of Corporate Management. The Company is characterised by quite low risks of loss of owners, associated with the quality of corporate management.