The current quality policy of JSC IDGC of the North-West forms the main strategic priorities of the Company's activities within a three-year horizon of planning the Company's management and its major production indicators, starting from 2010.

In 2011-2012, the implementation of the basic principles embodied in the quality policy of the Company of 2010 was carried out in the following areas:

1. Systematic identification and fulfillment of customer requirements, improvement of the quality of customer service:
   It is ensured by the functioning of the centralized customer service system. In the framework of the System in 2011-2012 years:
• automated systems "Registration of complaints and requests", "Accounting for additional paid services" were put into operation;
• the organizational and functional structure of interaction with customers at every level of the management hierarchy, which consolidates Network Management Centers, subdivisions for interaction with clients and responsible officers in a unified system of centralized customer service, was created;
• the system of Internet service was developed: establishment of "hot-lines", creation of the call-center;
• evaluation of customer satisfaction for 2011 and 2012 was carried out. The evaluation demonstrated a high level of satisfaction.
2. Continuous improvement of management system through the use of modern management methods:
   In 2009 JSC IDGC of the North-West introduced and certified the Quality Management System (QMS). The inspections of QMS carried out in 2011-2012 under the guidance of Certification Association "Russian Register" confirmed the compliance and improvement of the management system of JSC IDGC of the North-West.
   Since 2009, the Company has quality established quality-related goals aimed at raising the efficiency and effectiveness of the core activities.
   Based on the QMS analysis carried out by the management in 2011, the overall performance in the achievement of established quality-related goals was 73.6%.
   The 2012 forecasted indicator of the degree of achievement of quality-related goals should be more than 85%.
   Thus, in 2012, we provided more than 11% growth in the degree of achievement of quality-related goals.
   In 2012 the quality-related goals of the Company are focused on:
• budget planning optimization: adapting formats for budget revenues and expenditures, integration of software tools and instruments;
• building a unified system of personnel evaluation: introduction and beginning of practical application of the common methodology for assessing the Company's personnel;
• development of interactive forms of customer service and Internet services: creation of online services for accepting applications for technological connection, restoration of previously issued specifications, re-registration (redistribution) of capacity;
• improving the level of timeliness of performance by the Company of its obligations for technological connection: reducing the number of complaints on overdue obligations under contracts for technological connection up to 5%;
• increase of the economic efficiency of investments to achieve a level of return on investment of 12% in planning of the investment program;
• increasing the unification of elements of operational and technological management of the Company: development and implementation of uniform regulatory and technical documents (corporate standards, regulations and rules) in the field of operational and technological management;
• automation of document flow procedures: transition to the widespread use of automated document flow system adopted for managers at all levels.
The 2012 Quality Management Program contains the following plans and programs of the Company:
• standardization plan for 2012;
• program of top-priority measures under QMS for 2012;
• program of innovative development for 2011-2016;
• plan for implementation of JSC IDGC Holding strategy in JSC IDGC of the North-West.
In 2012, the activities under the quality management program were implemented in the following areas:
• design of the basic elements of modern management systems based on QMS (risk management, environmental management);
• standardization and unification of unified corporate procedures;
• optimization and standardization of organizational and functional model of activity;
• development of a unified information and reference environment of the Company;
• organization of training for modern principles and methods of management.
QMS analysis carried out by the management:
Among the improvements proposed on the basis of the QMS analysis by of the management for 2011 the following improvements have been implemented in 2012:
• cross-audits were introduced in the practice of QMS internal audit;
• the procedure for internal audits was introduced, bringing together the executive apparatus and branches;
• actions for creation of a unified JSC IDGC call-center of the North-West for receipt of consumers' complaints were taken;
• the organizational and functional model of the supervisory control of the Company was reformed for the purpose of creation of network management centers
3. Clear allocation and regulation of powers and responsibilities:
   In 2012, the Company continued its work for improvement and optimization of the organizational structure of the Company. In 2012, the activities on harmonization and optimization covered the organizational structures of production departments of the Company. The introduction of optimized organizational structures allowed forming a vertically integrated company management, providing a through-passage of processes, procedures and functions in the structure of the Company.
4. Optimization of production and management processes:
   In 2012, optimization of business processes was carried out in the context of the following areas:
• Automation of business processes:
  • development of interactive forms of customer service, automated services;
  • introduction of an integrated system for collection and analysis of network reporting information on repairs and maintenance of equipment;
  • introduction of a unified service of catalogues of IT services;
  • introduction of an automated document management system.
• Standardization of processes and procedures:
  • management, motivation and evaluation of staff;
  • organization of production metrological support;
  • organization of financial and economic planning;
  • design of overhead lines;
  • operational and technological management of the Company;
  • production asset management.
5. Continuous improvement of the level of personnel competence and creation of favorable conditions for involvement of every employee in the Company's activity:
• for the purpose of organizing the processes of the human resources management, the Company developed and approved the Human Resources Policy;
• the Board of Directors developed and approved on August 31, 2010 the Program for Support and Development of Human Resources in JSC IDGC of the North-West;
• the work resulted in the increased vacancy substitution in deficit specialties, improvement of personnel structure by the level of education, significant reduction in staff turnover, participation of young specialists in the industry;
• due to the shortage of skilled workers (electricians, electrical fitters) in remote (rural) areas, initial training of newly hired employees and education of reservists for positions of masters was organized in secondary schools;
• in order to train energy specialists on the base of Kolenergo, a branch of "Energy and Transport" department of the Murmansk State Technical University was established, whose work allowed to improve and optimize the educational process for specialties 140211 "Energy supply" and 140106 "Energy Supply to Enterprises" as well as to train competitive professionals and adapt their knowledge to the needs of the branch.
6. The most efficient use of resources:
   The Company has developed and implemented corporate procedures for procurement of goods, works and services which are regulated by the relevant local regulations and establish a set of evaluation and selection criteria, techniques of application thereof, data acquisition, decision-making and interaction with suppliers for the procurement of goods, works and services for the needs of the Company, ensuring optimal cost of acquisition of resources with optimal characteristics for the Company. The tendering system applied by the Company allows for reduction of the Company's costs for purchasing.
7. Development of long-term, stable and mutually beneficial partnership with suppliers:
   Requirements established by the Company to the procedures for the selection of suppliers and the development of partnership relations with them contain continuously updated and relevant criteria for evaluation and selection of partners, as well as tools, methods and means of communication that ensure the creation of partnership relations with suppliers based on their ability to meet contractual obligations in accordance with the statutory requirements, and improve their own processes and procedures to optimize cooperation with JSC IDGC of the North-West.
8. Management decision-making based on continuous analysis of operations results:
   The Company has established and implements the procedures for performance monitoring and evaluation based on the analysis of the performance indicators system of business processes of JSC IDGC of the North-West, internal QMS audits, analysis of product quality data, etc. The results of this analysis are reflected in the relevant reports on the results of the Company's activities and leading management decisions.
9. Maintaining a high level of corporate values:
   In 2012 we issued a draft of the Corporate Code of Conduct of the Company, as well as the Corporate Governance Code of the Company aimed to ensure the unity and integrity of the internal corporate environment of the Company and form a model of behavior in the external environment. Adoption and administration of these documents is planned for the first quarter of 2013.

   In addition, the high corporate values are formed in the Company through the use and development of various forms of involvement of employees and their self-identity. However, as a mechanism for maintaining high standards of corporate culture we implemented the system of corporate events, professional competitions, trainings and seminars.