General Meeting of Shareholders

The General Meeting of Shareholders is the supreme governing body of the Company, which operates in accordance with the laws of the Russian Federation, the Company’s Charter and the Regulations on the Procedure for Convening and Holding General Meetings of Shareholders of RusHydro.

Board of Directors[102−24]

The Board of Directors is a governing body that sets the priority areas of the Company’s operations, approves its strategy and defines the core principles and approaches to the organization of the Company’s internal control and risk management functions. The Board of Directors also makes decisions on corporate governance improvements along with investment and business planning matters, manages performance, innovations and sustainable development. The Board of Directors is also involved in some of the most important or regularly supervised operational matters, such as reliability and security of the Company’s facilities, monitoring of progress against major projects, approval of the certain types of transactions, and management of subsidiaries.

The Board of Directors consists of 13 directors and operates on the basis of the Charter and the Regulations on the Procedure for Convening and Holding Meetings of the Board of Directors of PJSC RusHydro. Candidates to the Board of Directors must show proof of relevant experience in energy, financial (including analysis, assessment and audit of financial statements), management, production and other areas irrespective of their gender.

Independent directors

Independent directors are required to have an efficient and highly professional Board of Directors exercising an unbiased and independent judgement and adopting resolutions that respect the interests of the Company and its shareholders.

Candidates to the Board of Directors are assessed for compliance with the independence criteria set out in the Corporate Governance Code recommended for implementation by the Bank of Russia and the Listing Rules of the Moscow Exchange.

RusHydro meets the Moscow Exchange requirements setting out the number of independent directors that should serve on the Board of Directors. There are four independent directors serving on the Company’s Board of Directors: Maxim Bystrov, Pavel Grachev, Aleksei Chekunkov and Vyacheslav Pivovarov*. Independent directors monitor the Company’s statement of financial results and analyze its financial performance and delivery against targets.

Each year, in the run-up to the General Meeting of Shareholders the Nomination and Compensation Committee of RusHydro’s Board of Directors reviews compliance of potential candidates to the Board of Directors with independence criteria and submits an opinion on their independence to the shareholders as part of the meeting materials.

The compliance of the existing independent directors is assessed by the Nomination and Compensation Committee on a quarterly basis throughout their tenure as part of the procedure for confirming compliance with the Moscow Exchange listing requirements, with their details and regularly updated personal information used as the basis for the assessment.

Independent directors bring in well-balanced opinions and exercise unbiased judgment based solely on their experience and expertise. Independent directors and their input to the work of the Board of Directors enhance the trust and confidence of shareholders and a wide range of investors, improve the quality of management decisions, and promote compliance with corporate governance principles.

Composition of the Board of Directors

The Board of Directors consists of 13 members. In 2019, there were two line-ups of the Board of Directors: one elected by the Annual General Meeting of Shareholders on June 27, 2018 and the other elected on June 28, 2019, with the mandates of 10 out of 13 directors extended for another term.

All candidates nominated for election to the Company’s Board of Directors at the Annual General Meeting of Shareholders held on June 28, 2019 have higher education and are highly professional and qualified, and:

• are recognized experts in energy, finance, law, strategic and corporate governance, audit, risk management, HR, innovation and investment, as well as production and R&D;
• have a track record of serving on boards of directors or in senior positions at other joint-stock companies listed on organized exchanges;
• have impeccable business and personal reputation, sufficient skills, expertise and experience to make decisions falling within the Board of Directors' remit and perform their responsibilities efficiently.

The current composition of RusHydro’s Board of Directors is well-balanced in terms of necessary competencies and professional experience. The balance of the Board of Directors is achieved through a high level of professional knowledge and expertise, sufficient time for performing the duties of a member of the Board of Directors, and absence of a conflict of interest, all of which contribute to effective decision-making.

Induction program

A newly elected member of the Board of Directors takes an induction program, including introduction to the members of the Management Board and familiarizing with:

• the Company’s internal regulations;
• the Company’s key performance indicators;
• RusHydro Group Development Strategy and RusHydro Group’s Long-term Development Program;
• the Company’s specifics as a joint-stock company with a majority government stake and other specific aspects;
• the software and technical facilities used in the work of the Board of Directors.

Independent directors also acquaint themselves with additional rights and obligations of independent directors, their functions and roles in the Company’s corporate practice. In addition, Corporate Secretary assists newly elected members of the Company’s Board of Directors with answers to their questions and sets up meetings with the Company’s officers.

Education and further professional training

To improve its overall performance, the Board of Directors may decide to send its individual members for training and further professional development programs at the Company’s expense within the limits of the Company’s budget allocated for these purposes.

The training and further professional development programs for Board of Directors members are subject to approval by the Nomination and Compensation Committee.

Committees of the Board of Directors

The committees are advisory bodies helping the Board of Directors to effectively perform its general management duties.

RusHydro’s Board of Directors has six committees:

• Audit Committee;
• Nomination and Compensation Committee;
• Strategy Committee;
• Investment Committee;
• Committee on Energy Development of the Far East;
• Committee on Reliability, Energy Efficiency and Innovation.

Corporate Secretary

Natalya Kovaleva

Born in 1972

Education, academic degree:
In 1996, graduated from Irkutsk State University with a degree in Law

Professional experience over the last five years:

• 2016−present: Corporate Secretary, RusHydro
• 2016−present: Deputy Head of Corporate Governance and Property Management, RusHydro
• 2010−2015: Head of Corporate Governance, PJSC MO ESK

Positions held in collective governing bodies as at December 31, 2019:

• member of the Board of Directors at Blagoveshchenskaya CHPP
• member of the Board of Directors at Boguchanskiy Aluminum Smelter
• member of the Board of Directors at PJSC DEK
• member of the Board of Directors at Malaya Dmitrovka
• member of the Board of Directors at SNRG
• member of the Board of Directors at JSC Chuvashskaya Electricity Sales Company.

Natalya Kovaleva has no stake in RusHydro’s authorized capital. She does not hold, whether directly or indirectly, any ordinary shares of RusHydro and did not acquire or dispose of such shares during the reporting year, the Corporate Secretary holds no shares of RusHydro’s subsidiaries.

No loans were issued by PJSC RusHydro or RusHydro Group companies to Natalya Kovaleva, Corporate Secretary of RusHydro.

The Corporate Secretary has no conflict of interest (including participation in the governing bodies of the Company’s competitors).

Executive bodies

Management Board

The Management Board is a collective executive body responsible for the day-to-day management of the Company as prescribed by the scope of responsibilities set out in the Charter, Regulations on the Management Board, and resolutions adopted by the Company’s General Meeting of Shareholders and Board of Directors.

The number of the Management Board members is determined by the Board of Directors. Pursuant to the resolution adopted by the Board of Directors on December 12, 2018* , the Management Board consisted of seven members, including Victor Khmarin, a newly elected member who assumed his responsibilities on January 16, 2019. On February 19, 2019*, the Board of Directors resolved to terminate the powers of Vladimir Markin as a Management Board member, with the Management Board restructured to consist of six members from February 24, 2019. On December 24, 2019*, the Board of Directors resolved to terminate the powers of George Rizhinashvili as a Management Board member, with the Management Board restructured to consist of five members.

Information on Management Board members*

Shulginov

Nikolay

Chairman of the Management Board — General Director

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Born in 1951

Education, academic degree, academic rank:
Sergo Ordzhonikidze Novocherkassk Polytechnic Institute awarded the Order of the Red Banner of Labor; holds a PhD degree in Technology

Professional experience over the last five years:

• 2015−present: Chairman of the Management Board — General Director of RusHydro

• 2009−2015: First Deputy Chairman of the Management Board of JSC SO UES

Year of the first election to the Management Board: 2015

Bogush

Boris

Member of the Management Board, First Deputy General Director — Chief Engineer

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Supervised units:
Production unit

Born in 1952

Education, academic degree, academic rank:
Graduated from Saratov State Technical University with a degree in Mechanical Engineering;

Graduated from Russian Presidential Academy of National Economy and Public Administration with a degree in Management of Business / Organization Development

Professional experience over the last five years:

• 2009−present: Managing Director, Head of Business Unit ”Production”; member of the Management Board; member of the Management Board — Chief Engineer; member of the Management Board, First Deputy General Director — Chief Engineer

Year of the first election to the Management Board: 2010

Kazachenkov

Andrey

Member of the Management Board, First Deputy General Director

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Supervised units:
Unit of financial and corporate law management

Born in 1980

Education, academic degree, academic rank:
Graduated from Saint Petersburg State University of Engineering and Economics with a degree in Economics and Management at Mechanical Engineering Enterprises;

Has an MBA from the University of Wisconsin-Madison, USA

Professional experience over the last five years:

• 2015−present: Advisor for the Chairman of the Management Board — General Director; member of the Management Board and First Deputy General Director of RusHydro

• 2012−2015: First Deputy Chairman of the Management Board, Deputy Chairman of the Management Board of PJSC FGC UES

Year of the first election to the Management Board: 2016

Kirov

Sergey

Member of the Management Board, First Deputy General Director

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Supervised units:
Unit of sales, economic planning and investments

Born in 1976

Education, academic degree, academic rank:
Graduated from Perm State Agro-Technological University with a degree in Economics and Agricultural Production Management;

Graduated from the Regional Interdisciplinary Retraining Center of Perm National Research Polytechnic University with a degree in Economics and Management

Professional experience over the last five years:

• 2010−present: Director of Economic Affairs; Deputy General Director on Economics, Investment and Procurement, member of the Management Board and First Deputy General Director

Year of the first election to the Management Board: 2015

Khmarin

Victor

Member of the Management Board, Deputy General Director

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Supervised units:
Resources and future development unit

Born in 1978

Education, academic degree, academic rank:
Graduated from Saint Petersburg State University with a degree in Law

Professional experience over the last five years:

• 2015−present: Deputy General Director on Economics, Investment and Procurement, Deputy General Director for Resources and Prospective Development, member of the Management Board, Deputy General Director at RusHydro

• 2014−2015: Advisor to the First Deputy President — Chairman of the Management Board — Vice President, Department for work with clients of market sectors, PJSC VTB Bank

Year of the first election to the Management Board: 2019

In accordance with the Company’s Charter, members of the Management Board are elected by the Board of Directors. Candidates to the Management Board proposed by its Chairman for consideration by the Board of Directors must meet the following criteria:

• a university degree in technical, engineering, economic, legal or other sciences;
• track record as a manager of at least five years;
• compliance with the other criteria set forth in the Company’s internal regulations.

The Management Board’s powers include developing the Company’s business priorities and respective implementation plans and submitting them to the Board of Directors for review, reporting on KPI achievement and business plan implementation, approving budget parameters as regards income and expenditures, deciding on matters reserved to supreme governing bodies of the subsidiaries where the Company exercises the rights of the sole shareholder (participant), as well as approving (adjusting) KPI of the Company’s employees, and reviewing relevant implementation reports.

Powers of the Chairman of the Management Board — General Director include managing the Company’s day-to-day operations, approving internal regulations that are mandatory for all the Company’s employees, exercising employer functions, approving regulations on the Company’s branches and representative offices and appointing heads thereof, making transactions on behalf of the Company within the scope set out in laws and the Charter, arranging for accounting and reporting, arranging operations of the Management Board, as well as addressing other matters of the Company’s day-to-day operations that do not fall within the remit of the General Meeting of Shareholders, Board of Directors or Management Board.

Additional information on Management Board members

In 2019, RusHydro’s executive bodies had no conflict of interest (including participation in the governing bodies of the Company’s competitors).

On September 15, 2015, Nikolay Shulginov was elected for a term of five years to act as the Company’s sole executive body.

Newly elected Management Board members sign employment contracts. The terms of such employment contracts are determined by the Company’s sole executive body. Their effective period may not exceed three years.

In the reporting period, members of the Management Board received no loans from the Company or RusHydro Group.

Boris Bogush (a Management Board member) holds 0.003781% of RusHydro’s ordinary shares.

Members of the Management Board do not indirectly hold any of RusHydro shares or own shares in any of RusHydro’s subsidiaries.

In the reporting period, Management Board members entered into no deals to acquire or dispose of the Company’s shares.

Report on the Management Board’s performance

In 2019, the Management Board held 75 meetings, including 13 in person, and reviewed 420 items on the day-to-day operations of the Company, including preliminary consideration of recommendations submitted for review by the Board of Directors.

To protect the rights of investors and shareholders, the Company continued to implement its key strategic goals, including safe operation of the Company’s production facilities, value growth and investment returns to the shareholders, as well as the enhancement of corporate governance and social and environmental responsibility mechanisms.

In the reporting period, meetings of the Management Board reviewed such items as:

• implementation of a project to develop charging stations for electric vehicles in the Far Eastern Federal District;
• progress against the Long-term Development Program in 2018;
• review of the Group’s strategic risk register for 2020;
• concept of the Group’s positioning in the global market;
• report on progress against the Strategy Implementation Plan in 2018;
• approval of loans to RusHydro’s subsidiaries.

In addition, the Management Board reviews on a quarterly basis the performance of HQ (excluding members of the Management Board) and branch employees against their KPIs.

In 2019, the Management Board also approved a number of internal regulations, including:

• Annual Program of Strategic and Other Material Transactions of RusHydro Group for 2019;
• Implementation Program for the Environmental Policy for 2019−2021.

Management Board’s performance [102−28]

The Board of Directors evaluates the performance of the Management Board and its Chairman by reviewing the following matters:

• the Company’s business plan implementation;
• the Group’s Consolidated Business Plan implementation;
• RusHydro’s KPI achievement;
• corporate governance assessment;
• the report on the Management Board’s performance.

In 2019, RusHydro’s corporate governance system was assessed, including the executive bodies' performance. A report was drafted based on the assessment findings, with a relevant corrective action plan developed and approved.