Financial (accounting) statements of the Company

Ludmila Loskutova Chief Accountant — Head of the Department for Financial and Tax Accounting and Reporting

Accounting (financial) statements of Rosseti Kuban PJSC for 2024 was prepared in accordance with the laws of the Russian Federation. The Company received the auditor’s opinion that the statements present fairly, in all material respects, the financial position of the Company as at 31 December 2024, as well as its financial performance and cash flows in 2024, in compliance with the accounting (financial) reporting standards set in the Russian Federation.

The financial statements are compiled on the basis of the accounting and reporting rules in force in the Russian Federation, established by Federal Law No. 402‑FZ ‘On Accounting’ dated 6 December 2011, federal accounting standards and other accounting regulations approved by the Ministry of Finance of the Russian Federation.

The annual accounting (financial) statements of Rosseti Kuban PJSC for 2024 prepared under RAS include (please see Appendix 4):

Balance Sheet
Profit and Loss Statement
Statement of Changes in Equity
Statement of Cash Flows
Explanatory Notes to the Balance Sheet and Statement of Financial Results
Auditor’s opinion

Summary of significant accounting policies of the Company

The Company maintains its accounting records of fixed assets in accordance with Federal Accounting Standard FAS 6/2020 Fixed Assets approved by Order of the Russian Ministry of Finance No. 204n dated 17 September 2020. Items of fixed assets are entered into the books at their historical cost, which is determined by the method of receipt, i.e., purchased, created using own resources, built, received free of charge, etc.

Borrowing costs related to the formation of an investment asset (items of fixed assets, property complexes and other similar assets that require a large amount of time and expense to acquire and/or build) are included in the value of the depreciable asset.

Items of fixed assets are depreciated on a straight‑line basis over their useful lives.

Profit or loss from the disposal, write‑off and gratuitous transfer of fixed assets is recorded in the profit and loss statement under other income and expenses.

Fixed assets include the lease rights in accordance with the Federal Accounting Standard on Lease Accounting (FAS 25/2018), taking into account exemptions for leases with a term of less than 12 months or lease items with a market value of no more than RUB 300,000. The useful lives of the lease rights are determined on the basis of the lease terms.

The Company’s stock accounting follows the Federal Accounting Standard on Stocks FAS 5/2019 approved by Order of the Ministry of Finance of the Russian Federation No. 180n dated 15 November 2019.

The accounting of revenue and other earnings is aligned with Accounting Regulations (PBU 9/99) Income of the Organisation, approved by the Order of the Ministry of Finance of Russia No. 32n dated 6 May 1999.

The Company has provisions resulted from potential compensation payments for carry‑over vacations, unsettled claims from power suppliers to compensate for losses and electricity transmission services, judicial proceedings and other payments to employees in accordance with PBU 8/2010 Provisions, Contingent Liabilities and Contingent Assets, approved by Order of the Ministry of Finance of Russia No. 167n dated 13 December 2010.

The Company makes provisions for doubtful accounts receivable that are outstanding or highly unlikely to be repaid when due under the contract and are not secured by relevant guarantees.

The Company holds reserves against the devaluation of financial investments in case of their sustained material reduction in their value.

Prior adjustments

No prior adjustments were made to the accounting (financial) statements.

The Company prepared consolidated financial statements in compliance with the requirements of Federal Law No. 208‑FZ ‘On Consolidated Financial Statements’ dated 27 July 2010 (Appendix No. 5).

The consolidated financial statements of Rosseti Kuban PJSC and its subsidiaries for the year ended 31 December 2024 were prepared in accordance with Federal Law No. 208‑FZ dated 27 October 2010 ‘On Consolidated Financial Statements’ and in accordance with International Financial Reporting Standards IAS 1 ‘Presentation of Financial Statements’ and IFRS 10 ‘Consolidated Financial Statements’ and include:

Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of cash flows
Consolidated statement of changes in equity
Notes to the consolidated financial statements, comprising a summary of significant accounting policies and other explanatory information
Independent auditor’s report

The consolidated financial statements include two purchased subsidiaries with 100% participation of Rosseti Kuban PJSC in their authorised capital:

Energoservis Kubani JSC
Energetik Health Resort JSC

Auditor’s details

Rosseti PJSC conducted centralised procurement procedures for the right to conclude a contract for the provision of services for the mandatory annual audit of RAS reporting and IFRS reporting of Rosseti’s subsidiaries and affiliates for 2024–2026. Based on the results of these procedures, a decision was made to conclude a contract with the leader of the collective participant — TSATR – Audit Services Limited Liability Company (TIN: 7709383532) (legal address: 77 Sadovnicheskaya Nab., bld. 1, Moscow, Russian Federation, 115035). Member of the collective participant — Intercom‑Audit LLC (TIN: 7729744770) (legal address: 2 3rd Yamskogo Polya Ul., bld. 13, floor 7, premise XV, room 6, Moscow, 125124, Russian Federation (Minutes of the Procurement Commission Meeting dated 14 March). The leader of the collective participant — TSATR – Audit Services LLC, member of the collective participant — Intercom‑Audit LLC, is a member of Sodruzhestvo Self‑Regulatory Organisation of Auditors Association (SSRO AA), included in the register of auditors and audit organisations of the SSRO AA under the main registration number 12006020327. The Auditor was approved by the resolution of the Annual General Meeting of Shareholders of Rosseti Kuban PJSC (Minutes No. 51 dated 17 June 2024).

The cost of the services provided by the Company’s audit organisation — an association of auditors (collective participant) comprising TSATR – Audit Services LLC (leader of the collective participant) (TIN: 7709383532) and Intercom‑Audit LLC (member of the collective participant) (TIN: 7729744770) in 2024 for the audit of the accounting (financial) statements under RAS and the audit of the consolidated financial statements of the Company under IFRS shall be RUB 7,055,739 (Seven million fifty‑five thousand seven hundred thirty‑nine) 10 kopecks, including VAT at 20% — RUB 1,175,956 (One million one hundred and seventy‑five thousand nine hundred and fifty‑six) 52 kopecks. There are no deferred and overdue payments for services rendered by the auditor.

In 2024, B1 — Consult LLC provided external independent assessment services for the Company’s internal audit activities in the amount of RUB 1,010,000. TSATR – Audit Services LLC and B1 — Consult LLC are members of B1 Group, an international network of audit organisations.