State Program on Federal Property Management Action plan

State Program on Federal Property Management Action plan Key Deliverables – – – Delivery date corporate governance importance increased simplification and streamlining of SOE sector no SUEs by 2018 keep or sell “smart sell” Feb, 2013 2. State Property Privatisation Plan approved by Government State Property Privatisation Plan for 2014– 2016 July, 2013 3. CODE of CG approved by Government and the Central Bank of Russia – corporate governance importance increased – effective governance April, 2014 1. State Program on Federal Property Management approved by Government Building blocks & Key principles Transparency – equal access to information on the process Predictability Effective governance through the framework: Guidelines for the BODs Guidelines for the corporate secretary Guidelines for the SOE’s risk management and internal control Dividend policy Openness information policy disclosure of achieved KPIs, LTD and etc. 1

Raise corporate governance standards in SOEs Action plan I Guidelines 1. Guidelines for BOD functionality Key Deliverables Delivery date - Assistance to BOD - Increase in BODs efficiency Oct, 2013 2. List of Qualification Requirements for SOE BOD candidates - Improvement in professional qualification of BOD members Jun, 2014 3. Guidelines for SOE Corporate secretary procedures - Protect and facilitate execution of shareholders’ rights - Communication between BOD and shareholders Oct, 2013 procedures 4. Guidelines for: 4. 1. Audit Committee (AC) - Describe functions and responsibility of RCs and ACs 4. 2. Revision Commission (RC) - Functionality split between RC and AC 5. List of Qualification Requirements for SOE RC members - Improvement in professional qualification of RC members Jun, 2014 Aug, 2013 Oct, 2013 II Evaluation of BOD and CG Guidelines on evaluation of SOE BOD members and CG - Increase effectiveness of BOD members and CG Aug, 2014 - Increase SOEs efficiency May, 2014 III Strategic planning system 1. Strategy formation and long-term development 2. KPI’s system - Ownership effectiveness Apr, 2014 2

Number of Professional directors increases consistently Professional directors in BOD of SOEs, average (number of people) Professional directors Average number of people 2, 4 33 % 2, 9 BOD composition in largest SOEs State officials 181 66 % 3, 2 293 347 235 63 51 2012 2013 2014 In 2014 average number of professional directors in BODs of SOEs increased comparing with 2013 from 2. 9 to 3. 2 % 2011 391 51 141 122 51 63 2013 104 57 57 2012 43%% 43 2014 2011 2012 2013 51 2014 Number of Professional directors in SOE BODs increases consistently, while the number of state officials steadily decreases We are providing for a step- by- step exclusion of the State officials from SOEs bodies up to 1 September 2015 3