Information Concerning the Issuer’s Auditor(s)

1.2. Information Concerning the Issuer’s Auditor(s)
Information concerning the auditor (audit organization) that independently audited the accounting (financial) statements of the issuer and the consolidated financial statements of the issuer, which statements are included in the quarterly report, under the agreement with the auditor, and information concerning the auditor (audit organization) approved (selected) for auditing the annual accounting (financial) statements and annual consolidated financial statements of the issuer for the present and closed fiscal year:
Full corporate name: Ernst & Young Limited Liability Company
Short corporate name: Ernst & Young LLC
Location: Russia, 115035, Moscow, Sadovnicheskaya naberezhnaya, 77, str. 1
INN (Taxpayer Identification Number): 7709383532
OGRN (Principal State Registration Number): 1027739707203
Telephone: 7 (495) 755-9700
Fax: 7 (495) 755-9701
E-mail: moscow@ru.ey.com
Data concerning the auditor’s membership in self-regulatory audit organizations:
Full name: Auditor Chamber of Russia Non-profit Partnership
Location
Russia, 105120, Moscow, 3-i Syromyatnichesky pereulok 3/9 str. 3
Additional information:
Principal Registration Number on the Register of Auditors and Audit Organizations of the self-regulatory organization of auditors, the Auditor Chamber of Russia: 10201017420
Reporting year(s) from among the five most recently closed fiscal years and the present fiscal year for which the auditor conducted (will conduct) an independent audit of the annual accounting (financial) statements of the issuer
Accounting (Financial) Statements, Year
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Consolidated Financial Statements, Year
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2014
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2014
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Period(s) from among the five most recently closed fiscal years and the present fiscal year for which the auditor conducted (will conduct) an independent audit of the interim accounting (financial) statements of the issuer
Accounting (Financial) Statements, Reporting Date
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Consolidated Financial Statements, Reporting Date
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June 30, 2014
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Factors which may affect the auditor’s (audit organization’s) independence from the issuer, including information about significant interests connecting the auditor (persons holding positions in the management bodies and financial and economic control bodies of the audit organization) and the issuer (persons holding positions in the management bodies and financial and economic control bodies of the issuer)
Factors which may affect the auditor’s (audit organization’s) independence from the issuer, including information about significant interests connecting the auditor (persons holding positions in the management bodies and financial and economic control bodies of the audit organization) and the issuer (persons holding positions in the management bodies and financial and economic control bodies of the issuer): none
Procedure for selecting the issuer’s auditor
Bidding process related to auditor selection and its key terms:
Pursuant to Federal Laws No. 307-FZ of December 30, 2008, “On Auditing”; No. 208-FZ of July 27, 2010, “On Consolidated Financial Statements”; and No. 44-FZ of April 5, 2013, “On the Contract System in Procurement of Goods, Work, and Services for the Government and Municipalities” and in accordance with the Company’s Ordinance No. 56r of February 19, 2014, “On the Public Bidding Procedure for the Right to Enter into the Agreement to Conduct a Mandatory Annual Audit of the Statements of JSC ROSSETI for 2014,” a public bidding procedure was conducted to select the auditing firm.
The principal requirements applicable to bidders are as follows:
- compliance with the requirements applicable under the laws of the Russian Federation to persons engaged in the supply of goods, the performance of work, and the provision of services for procurement purposes;
- not being liquidated;
- no resolution on the suspension of operation adopted in accordance with the procedure provided for by the Code of Administrative Offences of the Russian Federation as of the date of submission of the Bidding Application;
- no overdue taxes, dues and other compulsory payments to the budgets of any level or extra-budgetary public funds for the previous calendar year whose amount exceeds twenty-five percent of the book value of the member’s assets according to the accounting statements for the latest reporting period;
- no details in the register of mala fide suppliers.
Procedure for submitting the auditor candidate for approval by the meeting of shareholders (members), including the management body adopting the relevant decision:
As specified in Article 15.2 of the Articles of Association of JSC ROSSETI, the Company’s auditor (auditing organization) shall be recommended to the General Meeting of Shareholders by the Board of Directors of the Company according to the results of a competitive selection of the auditing organization for the mandatory audit of the Company, which selection is conducted in accordance with the procedure prescribed by the Board of Directors of the Company. The General Meeting of Shareholders shall approve the auditor (auditing organization) of the Company.
The Annual General Meeting of Shareholders of JSC ROSSETI held on June 30, 2014, decided to approve Ernst & Young LLC as the Company’s auditor.
The auditor did not perform work as part of special engagements.
Procedure for determining the amount of the auditor’s (audit organization’s) fee, the actual amount of the fee paid by the issuer to the auditor (audit organization) for the most recently closed reporting year for which the auditor (audit organization) conducted an independent audit of the annual accounting (financial) statements and/or annual consolidated financial statements of the issuer:
The amount of the auditor’s fee is determined by the Board of Directors.
The Company’s Board of Directors (Minutes of the Meeting No. 155 of May 26, 2014) resolved that the auditor’s fee for the mandatory annual audit of the statements of JSC ROSSETI for 2014 would be 7,080 thousand rubles. In accordance with the terms and conditions of the agreement, a fee of 3,186 thousand rubles and a fee of 3,894 thousand rubles were paid to the auditor in 2014 and 2015 respectively.
There are no deferred or overdue payments for the services provided by the auditor.
Full corporate name: RSM RUS Limited Liability Company
Short corporate name: RSM RUS
Location: Russia, 119285, Moscow, ul. Pudovkina, 4
INN (Taxpayer Identification Number): 7722020834
OGRN (Principal State Registration Number): 1027700257540
Telephone: 7 (495) 363-2848
Fax: 7 (495) 981-4121
E-mail: mail@rsmrus.ru
Data concerning the auditor’s membership in self-regulatory audit organizations:
Full name: Auditor Association Sodruzhestvo Non-profit Partnership
Location
Russia, 119192, Moscow, Michurinsky prospekt, 21, korp. 4
Additional information:
Principal Registration Number on the Register of Auditors and Audit Organizations of the self-regulatory organization of auditors, Auditor Association Sodruzhestvo: 11306030308
Reporting year(s) from among the five most recently closed fiscal years and the present fiscal year for which the auditor conducted (will conduct) an independent audit of the annual accounting (financial) statements of the issuer
Accounting (Financial) Statements, Year
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Consolidated Financial Statements, Year
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2015
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2015
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Period(s) from among the five most recently closed fiscal years and the present fiscal year for which the auditor conducted (will conduct) an independent audit of the interim accounting (financial) statements of the issuer
Accounting (Financial) Statements, Reporting Date
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Consolidated Financial Statements, Reporting Date
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June 30, 2015
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Factors which may affect the auditor’s (audit organization’s) independence from the issuer, including information about significant interests connecting the auditor (persons holding positions in the management bodies and financial and economic control bodies of the audit organization) and the issuer (persons holding positions in the management bodies and financial and economic control bodies of the issuer)
Factors which may affect the auditor’s (audit organization’s) independence from the issuer, including information about significant interests connecting the auditor (persons holding positions in the management bodies and financial and economic control bodies of the audit organization) and the issuer (persons holding positions in the management bodies and financial and economic control bodies of the issuer): none
Procedure for selecting the issuer’s auditor
Bidding process related to auditor selection and its key terms:
Pursuant to Federal Law No. 307-FZ of December 30, 2008, “On Auditing”; Federal Law No. 208-FZ of July 27, 2010, “On Consolidated Financial Statements”; the Federal Auditing Rules (Standards) approved by Resolution of the Government of the Russian Federation No. 696 of September 23, 2002; Order of the Ministry of Finance of the Russian Federation No. 46n of May 20, 2010, “On the Approval of the Federal Auditing Standards”; and the Regulations for the Procedure for Regulated Procurements of Goods, Work, Services for the Needs of JSC ROSSETI approved by the Board of Directors of JSC ROSSETI (Minutes of the Meeting No. 179 of March 13, 2015), a public bidding procedure was conducted for the right to enter into the agreement for the mandatory audit of the financial statements of JSC ROSSETI for 2015–2017.
The principal requirements applicable to bidders are as follows:
- the bidders shall comply with the requirements applicable under the laws of the Russian Federation to persons engaged in the supply of goods, the performance of work, and the provision of services for procurement purposes;
- the bidders that are corporate entities shall not go into liquidation, and no decision shall be made by an arbitration court to declare the bidders that are corporate entities or individual entrepreneurs to be insolvent (bankrupt) and initiate administration;
- the bidders’ operation shall not be suspended in accordance with the procedure provided for by the Code of Administrative Offences of the Russian Federation as of the date of submission of the bidding application;
- the bidders shall not have any overdue taxes, levies, and other compulsory payments to the budgets of the budgetary system of the Russian Federation (except for amounts that may be deferred, paid in installments, or deducted from taxes as an investment tax credit under the laws of the Russian Federation on taxes and levies, that have been restructured under the laws of the Russian Federation, that are subject to a final court decision whereby the bidders are deemed to have fulfilled their obligations to pay such amounts, or that are deemed to be uncollectible under the laws of the Russian Federation on taxes and levies) for the previous calendar year whose amount exceeds twenty-five percent of the book value of the bidder’s assets according to the accounting statements for the latest reporting period. The bidders are deemed to meet this requirement if, in accordance with the prescribed procedure, they file an appeal against such overdue payments and if no decision is made with respect to such appeal as of the date of considering the supplier’s (contractor’s) bidding application;
- the bidders that are individuals or the chief executives and members of the collegial executive body or the chief accountants of the bidders that are corporate entities shall not have convictions for economic crimes (except for the persons with such convictions expunged or overturned), and such individuals shall not be subject to the penalty of being deprived of the right to occupy certain positions or engage in certain activities associated with the supply of goods, the performance of work, and the provision of services that are the subject of procurement and shall not be subject to the administrative penalty of disqualification;
- the bidders and the ordering entity shall not have conflicts of interest, which means any cases where the ordering entity’s chief executive, a member of the procurement commission, the head of the ordering entity’s contract department, and the contract manager are spouses of individuals who are the beneficiaries, the sole executive body (director, director general, managing director, president, etc.) of an economic entity, members of the collegial executive body of an economic entity, the chief executive (director, director general) of an institution or unitary enterprise, or any other management body of the bidders that are corporate entities, and are spouses of individuals, including those registered as individual entrepreneurs, who take part in the bidding procedure, or are close relatives (relatives in the direct ascending and descending line (parents and children, grandparents and grandchildren), full and half brothers and sisters (sharing the same father or mother)), adoptive parents or adopted children of such individuals. The beneficiaries mean the individuals who own directly or indirectly (through a corporate entity or several corporate entities) more than ten percent of an economic entity’s voting shares or a stake of more than ten percent in an economic entity’s share capital;
- no details shall be contained in the register of mala fide suppliers (contractors) with respect to the bidders that are corporate entities, including such details with respect to the founding members, the members of the collegial executive body, or the person acting as the sole executive body of the bidders.
Procedure for submitting the auditor candidate for approval by the meeting of shareholders (members), including the management body adopting the relevant decision:
As specified in Article 16.2 of the Articles of Association of PJSC ROSSETI, the Company’s auditor shall be recommended to the General Meeting of Shareholders by the Board of Directors of the Company according to the results of a competitive selection of the auditing organization for the mandatory audit of the Company, which selection is conducted in accordance with the procedure prescribed by the Board of Directors of the Company.
The General Meeting of Shareholders shall approve the auditor of the Company (paragraph 10.1 of the Articles of Association of PJSC ROSSETI.
The Annual General Meeting of Shareholders of JSC ROSSETI held on June 30, 2015, decided to approve RSM RUS as the Company’s auditor.
The auditor did not perform work as part of special engagements.
Procedure for determining the amount of the auditor’s (audit organization’s) fee, the actual amount of the fee paid by the issuer to the auditor (audit organization) for the most recently closed reporting year for which the auditor (audit organization) conducted an independent audit of the annual accounting (financial) statements and/or annual consolidated financial statements of the issuer:
The amount of the auditor’s fee is determined by the Board of Directors.
The Company’s Board of Directors (Minutes of the Meeting No. 189 of May 29, 2015) resolved that RSM RUS would be recommended as the auditor of JSC ROSSETI to the Annual General Meeting of Shareholders of JSC ROSSETI and that the auditor’s fee for the mandatory annual audit of the statements of JSC ROSSETI for 2015 would be five million (5,000,000) rubles, inclusive of VAT.
In accordance with the terms and conditions of the agreement signed in August 2015, a fee of 2,200 thousand rubles was paid in 2015, and a fee of 1,680 thousand rubles was paid in the 1st quarter of 2016.
There are no deferred or overdue payments for the services provided by the auditor.
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