Target benchmarks for corporate governance

Being the controlling shareholder of PJSC Rosseti, the Russian Federation, acknowledges the significance of enhancing the corporate governance of the Company. It endeavours to maintain transparency and openness in its operations and incorporate the recommendations of the Bank of Russia’s Corporate Governance Code along with the highest international standards in its business practices.

Every year, the Russian Federation — represented by Rosimushchestvo (Federal Agency for State Property Management) — takes part in the Rosseti Board of Directors’ nomination process for independent directors. The primary goals are to establish the framework for corporate governance while taking into account cutting‑edge standards and principles, as well as to improve Rosseti’s investment appeal and capitalisation growth. The number of independent directors complies with the listing rules. There is no intention to go below the present number.

Participating in annual shareholder meetings, representatives of Rosimushchestvo allow minority shareholders to raise direct questions about PJSC Rosseti’s development potential.

The Russian Federation, being a controlling shareholder, backs the efforts of Rosseti to safeguard the rights and interests of minority shareholders and improve its investment case.

The dividend policy of PJSC Rosseti is founded on the rigorous observance of shareholders’ rights as outlined by Russian Federation laws. It is centred on the Company’s concurrent strategic development, enhancement of its investment appeal and growth in market capitalisation. The decision of the General Meeting of Shareholders of PJSC Rosseti on the payment of dividends shall be made in line with the recommendations of the Board of Directors of PJSC Rosseti on the basis of its financial results of the Company, including those derived from the consolidated IFRS financial statements.