The system of compensation for expenses and remuneration of the Company’s governing bodies

GRI 2-19, 2-20

Remuneration of compensation for expenses and remuneration of members of the Board of Directors of the Company

According to the Regulations, remuneration is paid to members of the Board of Directors quarterly for the period from the date of election to the Board of Directors until the termination date.

The Regulations:

• Do not apply to members of the Board of Directors of the Company who are simultaneously members of the Management Board of the Company or the General Director of the Company;
• State that remunerations are not accrued and paid to the Chairman or members of the Company’s Board of Directors if the legislation of the Russian Federation restricts or prohibits them to receive any payments from commercial organisations
• Provides for the right of members of the Company’s Board of Directors to receive compensation for expenses associated with attending the meetings of the Board of Directors, the Company’s Board of Directors Committee, and meetings of the Company’s General Meeting of Shareholders, in accordance with the current travel reimbursement rates established for the Company’s top managers.

The amount of quarterly remuneration for participation in the work of the Company’s Board of Directors for each Board member is calculated taking into account the total number of meetings of the Company’s Board of Directors and absentee ballots of the Company in the reporting quarter and the number of meetings and absentee ballots attended by a member of the Company’s Board of Directors.

The remuneration consists of base and additional parts:

• The base part of the remuneration S (1) is calculated as per the formula:

S (1) = Rbase/4 × 100/130 × (n/m), where:

• • Rbase is the amount of the base annual remuneration by reference to the Company’s revenue under RAS calculated for the last completed reporting year before the election of the Company’s Board of Directors.

• • n – the number of meetings and absentee ballots in which a member of the Board of Directors participated in the reporting quarter,
  • m – the total number of meetings and absentee ballots in the reporting quarter;
• additional part – premiums expressed as a percentage of the remuneration base:
  • 30% – for the Chairman of the Company’s Board of Directors,
  • 20% – for the Chairman of committees of the Company’s Board of Directors,
  • 10% – for a member of committees of the Company’s Board of Directors.

The base remuneration is paid to the members of the Board of Directors within 30 calendar days after the end of the reporting quarter.

Premiums to the Chairman and (or) members of the Committees of the Board of Directors of the Company are not paid if no meetings or absentee ballots were held in the reporting quarter for decision-making by the relevant Committee of the Board of Directors of the Company.

The total amount of quarterly remuneration for each member of the Company’s Board of Directors, including premiums, may not exceed 1/4 of the base remuneration.

Remuneration is not paid to the member of the Board of Directors of the Company if they did not take part in more than 50% of the meetings and absentee ballots held in the reporting quarter.

No other remuneration was paid to the members of the Board of Directors of PJSC Rosseti South. In the reporting year, members of the Board of Directors of the Company were compensated for expenses in the amount of RUB 37,600. The Company has no remuneration or reimbursement payments overdue to the Board of Directors members.

The Company did not provide any loans (credits) to the Board of Directors members.

The Regulations do not provide for a system of long-term motivation for members of the Board of Directors of the Company.

Remuneration and compensation of expenses of executive bodies and other key management personnel

In accordance with the decision of the Board of Directors of the Company on 29 June 2023 (Minutes No. 531/2023 dated 30 June 2023), members of the Management Board of the Company are classified as senior managers of the Company.

Pursuant to the Regulations on Remuneration and Material Incentives for High-Ranking Executives of PJSC Rosseti South approved by the Board of Directors of the Company on 29 June 2023 (Minutes No. 531/2023 dated 30 June 2023), if a high-ranking manager is elected to the Management Board of the Company, remuneration shall be paid by setting an additional payment for membership in the collegial executive body (Management Board) of the Company in the amount corresponding to the minimum wage under art. 133 of the Labour Code of the Russian Federation.