THE CONCEPT OF DIGITAL INTERACTION

Good afternoon!

My name is DIGITAL OFFICER and I will be your guide to the annual report.

Today we become the participants of very important events — the new era of electric power industry is coming. The network architecture is changing, as well as quality requirements, services, their providing term due to the consumers are increasing. The main thing for a consumer is constant electric light available, as well as accounting and calculations are transparent and predictable, and modern services are accessible easily, and energy-comnsuming projects are feasible.

In 2018 IDGC of South started a number of technological solutions and began its transition into a digital platform radically changing the system of the electric grid complex organizing and managing.

In this report, we will represent the most promising projects implemented by the Company within 2018.

SMART

METERING
DEVICES

In 2018, 102.9 thousand smart metering devices were installed under energy service contracts, and another 50 thousand are planned to be installed this year. In total, more than 126 thousand intelligent metering devices have been installed within the territory of responsibility of IDGC of South. All meters installed are combined into their single system of commercial and technical electricity metering.

This has enabled IDGC of South, PJSC to save more than 41.5 million kWh. The use of «smart meters» makes it possible to monitor the quality of power supply constantly, which eliminates voltage surges, short circuits, fires caused by illegal connections, power theft and other interference into the power supply system.

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THE RECONSTRUCTION OF
POWER GRIDS

OF THE REPUBLIC
OF KALMYKIA

In 2018, within the first stage of reconstruction of 110 kV overhead line «Elista Zapadnaya — Elista Vostochnaya» onto the area of 1.5 km older wooden pillars were completely replaced into the metal ones, regarding worn-out insulators, coupling fittings, steal and aluminium wire and lightning-grounding wire. As a result of the reconstruction, the reliability of the power supply to the capital of the Republic of Kalmykia and adjacent areas will increase. The project plan provides its complete reconstruction of the network with its total length of 12.6 km in 2023.

In connection with the active development of individual residential construction, the residential area almost came close to the security zone of high-voltage lines, which posed a threat to life and health of people and complicated the regular maintenance of the line, and repairs scheduled. Within the reconstruction, the air line will be taken out of the residential area.

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THE ICE
MELTING

ONTO OVERHEAD
POWER LINES

Last winter was a serious challenge for IDGC of the South specialists. Compared to the previous autumn-winter period, the number of icing and frost deposits on power transmission lines has significantly increased. Providing reliable power supply to consumers in the 6 kV network and above, the specialists of IDGC of the South this winter held 226 ice melts, which is 43.9% more than in the same period of 2017–2018.

In the early detection of ice deposits system of IDGC of the South on the 35-220 kV overhead lines, there are more than 85 posts of control over ice deposits on the wires. It allows a real-time monitoring of the icy conditions in the area.

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THE ACTIVITIES AGAINST
ILLEGAL

CONSUMPTION
OF ELECTRICITY

For 2018, specialists of IDGC of the South PJSC have suppressed more than 4.4 thousand facts of unaccounted and non-contractual electricity consumption with a total volume of more than 218 million kWh. As a result of the Company’s effective actions, this volume decreased by 38.8%. To prevent electricity theft, the electricity grid is equipped with a metering system, the so-called “smart meters”, which provide the strictest metering of the resource from generation to transmission to the end user. In addition, the Company’s specialists conduct regular scheduled and unscheduled inspections of electricity metering devices.

At the initiative of IDGC of the South PJSC in 2018, 168 sites and online stores were blocked and excluded from the Unified Register of Internet Resources for distributing information prohibited in Russia about the methods of electricity theft and selling charged electricity metering devices.

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6++
ONTO THE SCALE OF

NATIONAL
CORPORATE GOVERNANCE
RATING

The experts of the Russian Institute of Directors during their annual monitoring noted a number of positive changes concerning the practice of corporate governance in IDGC of South. In particular, the positive dynamics within the field of compliance with the rights of shareholders, the activities of management and control bodies, within the field of disclosure of information were reported. The corporate governance practices in IDGC of the South is also characterized by the key positive aspects, as extending the Board of Directors competence in terms of approval of large transactions, implementing the competitive selection of goods and services suppliers. Generally recognized audit companies are involved into the audit of the company’s financial statements under IFRS and RAS, there is a comprehensive regulation of the interests conflict of the Board of Directors members and Executive bodies, etc. Also, the company demonstrates its good level of disclosure concerning financial and non-financial information on its activities.

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THE NET
PROFIT

OF IDGC OF SOUTH
INCREASED 2.2 FOLD

The company’s management has significantly strengthened the financial and economic position of IDGC of the South over the past few years. The net profit for this year exceeded the target value. The main factor influenced the increase regarding net profit was the growth of boiler useful electricity supply in Volgograd, Rostov and Kalmyk branches of IDGC of the South, and as a result, the increase in revenue from electricity transfer services up to 34.93 billion rubles.

The positive dynamics were also established by an increase of the power net generating on the one hand and a decrease in losses on the other. The efficiency of expenses controlled increased, the loan portfolio with a decrease in interest rates was revised.

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