Annual Report 2015

Anticorruption Policy and Corporate Ethics

Commentary-interview of the First Deputy Director General for Corporate Protection and Corruption Control A. V. Filin

In 2015, the Security Department of PJSC MOESK performed a complex of activities and proactive measures to prevent damages, corruption risks, protect PJSC MOESK finances and assets.

The key areas of focus for the Security Department in the previous year were as follows:

  • Support of the most costly investment projects in accordance with the PJSC MOESK capital construction and repair program;
  • Identification, prevention and rectification of financial damages of PJSC MOESK in connection with its procurement activities and technological connections of consumers;
  • Implementation of algorithm for identification of power consumption without contract and recovery of the costs of electric power utilized by unfair consumers without contract;
  • Organization of interaction with the law enforcement authorities in connection with identification exposure and prevention of financial crimes.

In 2015, the economic security divisions of PJSC MOESK prevented damages in the amount of 508 mln 085.1 thous. rubles (in 2014 — 284 mln 960 thous. rubles); recovered damages in the amount of 245 mln 317.0 thous. rubles (in 2013 — 299 mln 293 thous. rubles). 260 claims were submitted to the law enforcement agencies (in 2014 — 161 claims). Following the investigation, the law enforcement agencies initiated 13 criminal cases, convicted 2 persons; disciplinary sanctions were applied to 162 PJSC MOESK employees, 18 employment agreements were terminated.

In my opinion, in 2015 PJSC MOESK successfully complied with the requirements of the PJSC MOESK Anticorruption Policy, performed necessary activities to prevent, identify and rectify the economic losses of PJSC MOESK. Special attention in the year 2015 was paid to identification of unauthorized consumption of electric power, procurement activities, and connection of consumers to the electric grids of PJSC MOESK.

In line with its commitment to the high anticorruption standards, PJSC MOESK supported the initiative of the Russian Business Community and joined the Anticorruption Charter of Russian Business in May 2015.

In my opinion, the main objective for 2016 is to further improve the economic efficiency of the Company’s security and corruption control divisions.

In view of the above, the key objective of the PJSC MOESK Security Department in the shortterm perspective are as follows:

  • Take actions in cooperation with the law enforcement agencies and special services to decriminalize the electric grids complex in the Moscow area;
  • Active cooperate with the federal executive authorities, law enforcement and judicial authorities to protect the legal interests of PJSC MOESK, coordinate the activities of interested divisions within PJSC MOESK to reduce the level of receivables with the assistance of the governmental authorities and special services;
  • Prevent unreasonable increase in the price of procured materials, work and services relative to the market value by over 1.0% of the cost of PJSC MOESK investment program and program of operational activities for 2016;
  • Increase the rate of recovery of the financial damages caused to PJSC MOESK by 44% and the rate of prevention of the financial damages to PJSC MOESK by 35%;
  • Reduce the amount of overdue receivables for electric power transmission services by 850 mln rubles relative to the level recorded as of December 31, 2015;
  • Recover payments for electric power consumption in the amount at least 500 mln rubles.

Principles and Objectives of PJSC MOESK Anticorruption Policy

The key objective of PJSC MOESK Anticorruption Policy is to establish a uniform approach to compliance with article 13.3. of the Anticorruption Law:

  • Identify, prevent and stop corruption and other crimes;
  • Minimize and/or liquidate the consequences of corruption and other crimes, including as stipulated by article 19.28 Administrative Offences Code of the Russian Federation;
  • Identify and rectify the causes of corruption (corruption prevention).

Anticorruption Activities in 2015 and their Results

In 2015, PJSC MOESK ensured steady functioning of Anticorruption Hot Line: 8(499)951-06-49.

Information on this communication channel is posted on the web site of PJSC MOESK. The Anticorruption Hot Line operates 24/7. Information on corruption cases can also be submitted via the web site of PJSC MOESK in the section “About Company / Anticorruption Policy / feedback”.

A number of activities were performed in 2015 to recover and prevent financial damages of PJSC MOESK. The planned indicator for 2015 was 80 mln rubles, the actual indicator was 753 mln 402.1 thous. rubles, specifically:

  • Prevented damages — 508 mln 085.1 thous. rubles;
  • Recovered damages — 245 mln 317.0 thous. rubles.

The following activities were performed to identify corruption risk:

  • analysis of certain business processes of PJSC MOESK for possible corruption risk;
  • establishment of crossfunctional work group to identify corruption indicators in the framework of the business processes “Technological Connection” and “Investment Activities”.

The following activities were performed in connection with disclosure of information on the PJSC MOESK counterparty owners (to the final beneficiary) and prevention of conflict of interest:

  • Improvement of procedure for disclosure of information on the PJSC MOESK counterparty owners (to the final beneficiary);
  • Activities for conflict of interest resolution.

The following activities were performed to prevent unauthorized use of insider information and market manipulation:

  • organization of insider information handling in compliance with Federal Law No. 224-FZ dated July 27, 2010 On Prevention of Unauthorized Use of Insider Information and Market Manipulation and on Amendment of Certain Legal Acts of the Russian Federation.

The following activities were performed to raise legal awareness and ensure lawful conduct of employees:

  • Consultations were provided for the employees on the subjects of corruption prevention and lawful conduct;
  • An educational course entitled “Corruption Prevention and Control” was prepared and organized for the top-level executives and employees of PJSC MOESK.

The following activities were performed in the field of common initiatives for corruption control and prevention:

  • Interaction with representatives of Russian business community in connection with implementation of the Anticorruption Charter of Russian Business approved on September 21, 2012 by the RF Chamber of Commerce and Industry, Russian Union of Industrialists and Entrepreneurs, Russian Public Organization “Business Russia” and Russian Public Organization “OPORA Rossii”;
  • Representative of PJSC MOESK present their expert opinions in the course of anticorruption activities organized by the RF Chamber of Commerce and Industry and Moscow Chamber of Commerce and Industry.
  • In order to ensure compliance with the anticorruption law of the Russian Federation, improve the anticorruption activities of PJSC MOESK and fulfill Ordinance of PJSC “Rosseti” No. 413r dated August 21, 2015 On Compliance with the Anticorruption Law of the Russian Federation, the Company approved the Anticorruption Clause (order No. 1182 dated September 22, 2016) which shall be included into all new contracts.
  • The Corporate Protection and Corruption Control Department of PJSC MOESK coordinates the activities of PJSC MOESK Committee for Compliance with Corporate Ethics Code and Settlement of Conflict of Interest.

My Report

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