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System of internal control

System of internal control at ROSSETI South, PJSC:

The Company has implemented and operates an integrated risk management and internal control system, which is an integral part of the overall management system. This system is a set of organizational measures, methods, procedures, corporate culture standards and actions taken by the Company to achieve an optimal balance between the growth of the Company's value, profitability and risks, to ensure the Company's financial stability, efficient business operations, ensure the safety of assets, compliance with the legislation, the Charter and internal documents of the Company, timely preparation of reliable reports.

The internal control and risk management system is regulated by the following local regulatory documents:

- Risk Management and Internal Control Policy of PJSC Rosseti Yug;

- Procedure for organizing risk management and internal control of PJSC Rosseti Yug;

- Procedure for determining the preferred risk (risk appetite) PJSC Rosseti Yug.

The main participants in the Company's risk management and internal control system are the Board of Directors, the Audit Committee of the Board of Directors, the Strategy Committee of the Board of Directors, the Audit Commission, the General Director and Top Management of the Company, risk owners, collegial working bodies created by executive bodies to perform specific functions, heads and employees of the Company's structural divisions, the Internal Control Department control and Risk Management Department, Internal Audit Department.

Ensuring the effective functioning of the Company's risk management and internal control system is carried out by the Internal Control and Risk Management Department (DVKiUR). In order to minimize the risks associated with the inefficient organization of processes (areas of activity), DVKiUR coordinates the Company's risk management and internal control processes, and conducts control activities related to the organization and functioning of the risk management and internal control system.

In accordance with the Company's organizational structure, DVKiUR reports directly to the Company's General Director.

Main functions of the Internal control and risk Management division:

- organization and implementation of follow-up control of the Company's and its subsidiaries ' activities;

- organization of effective interaction and support of the Company's Audit Commission activities, organization of the activities of the audit commissions of subsidiaries and affiliates;

- interaction with the Audit Committee and the Strategy Committee of the Company within the framework of functional subordination;

- introduction of unified approaches to building a risk management and internal control system in the Company and its subsidiaries and affiliates;

- methodological and organizational support for the implementation of preventive and ongoing control in the Company and its subsidiaries and affiliates;

- interaction with state control and supervisory authorities on internal control issues.