168 169 Annual Report 2019 Annual Report 2019

01 01

0201 Corporate 0201 03 CORPORATE Governance 03 GOVERNANCE System

Corporate governance at PJSC is exercised CORPORATE GOVERNANCE CORPORATE GOVERNANCE CORPORATE by the General Meeting of 04 Shareholders, the Board of 04 Directors, the Management Board, and the Chief Executive Officer. The responsibilities of PJSC Aeroflot’s Corporate Secretary are vested in the Executive Secretary of the Board of Directors, also holding the position of Director of PJSC Aeroflot’s Corporate Governance Department.

The Revision Committee supervises the financial and business operations of the Company, its units and services. To ensure reliability and transparency of its financial statements prepared under both the Russian Accounting Standards and the International Financial Reporting Corporate Governance System 169 Standards, PJSC Aeroflot regularly engages Risk Management 203

external auditors. The Internal Audit Department Information for Shareholders and Investors 214 accountable to the Audit Committee of PJSC Aeroflot’s Board of Directors also audits the Company’s financial and operational activities. PJSC Aeroflot PJSC Aeroflot 170 171

Corporate Governance System continued Annual Report 2019 Annual Report 2019

01 Key documents ensuring protection of PJSC Aeroflot PJSC Aeroflot controls enabled each of them to have PJSC Aeroflot’s corporate governance 01 shareholder rights include: interests in (holds shares in the a dedicated revision committee principles and procedures are set out 0201 0201 4 Articles of Association charter capital of) a number of made up of PJSC Aeroflot’s Core principles of PJSC Aeroflot’s corporate governance system: in its Articles of Association and other 03 4 Regulations on the General Meeting of subsidiaries, including airlines, representatives. In addition to internal documents. The Corporate 03 Shareholders where PJSC Aeroflot also ensures inspections by revision committees, Governance Code of PJSC Aeroflot 4 Regulations on the Board of Directors compliance with the top standards the airlines are subject to inspections 4 Protection of shareholder rights 4 Establishing an efficient internal summarises and systematises the 4 Regulations on the Management Board of corporate governance by by an auditor approved pursuant to Company’s corporate governance 4 Fair and equal treatment of all control and risk management 4 Regulations on the Revision Committee developing and implementing the relevant bidding procedures. practice. shareholders in exercising their system 4 Corporate Governance Code Group-wide policies and principles. rights 4 Ensuring transparency and 4 Regulations on the Corporate Information Policy The Company has in place a cross- In accordance with the applicable The experts noted, inter alia, the following 4 openness of the Company’s 4 Dividend Policy functional governance system for its laws and their articles of association, Preventing shareholders from positive developments: business 4 Corporate Conduct Code. aviation subsidiaries. each subsidiary airline developed abusing their rights, inflicting 4 Extension of the period for publishing 4 and adopted dedicated internal damage to the Company and other Taking material corporate actions information about an upcoming shareholders on fair terms ensuring that the

CORPORATE GOVERNANCE CORPORATE To ensure supervision over documents stipulating the General Meeting of Shareholders GOVERNANCE CORPORATE financial and business activities of responsibilities of its governing 4 Efficient distribution of roles and rights and interests of shareholders to 30 days 04 and other stakeholders are upheld 04 its subsidiary airlines, the Group bodies. powers among the Company’s 4 Expansion of the list of additional governing bodies 4 Compliance with ethical norms and information to be provided to persons 4 Expertise, responsibility and social responsibility standards when entitled to participate in General accountability of the Board of doing business. Meetings of Shareholders Directors and executive bodies 4 Expansion of the scope of the Board of Director’s authority to include PJSC Aeroflot’s corporate governance structure approving internal documents and ensuring functional accountability to the Board of Directors of the Company’s business unit responsible for organising and conducting internal External auditor CEO audits. Compliance with the Russian Corporate Governance Code

Code section Principles Complied Partially Not recommended with complied complied by the Code with with 7++ Shareholder Rights 13 13 – – General Board Management Board of Directors 36 26 6 4 Meeting of of Directors Board Shareholders Corporate Secretary 2 2 – – In 2019, the Russian Institute Remuneration System 10 9 1 – of Directors confirmed Risk Management System 6 6 – – PJSC Aeroflot’s corporate Personnel and

governance rating at 7++, Remuneration Committee Information Disclosure 7 7 – – Advanced Corporate Revision Internal Audit Management Practices, Audit Committee Material Corporate Actions 5 4 1 – Committee Department according to the new National TOTAL 79 67 8 4 Corporate Governance Rating Strategy Committee scale.

PJSC Aeroflot Note. Statistics are based on the Corporate Governance Code Compliance Report (Appendix to this Annual Report). PJSC Aeroflot 172 173

Corporate Governance System continued Annual Report 2019 Annual Report 2019 General Meeting of Shareholders Board of Directors

01 The General Meeting of Shareholders is The Board of Directors acts as the The main objectives of the Board of Directors 01 PJSC Aeroflot’s supreme governing body Company’s supreme governing 0201 Annual General Meeting of Shareholders on 25 June 2019 0201 responsible for matters most crucial to body between General Meetings of 03 the Company. The respective scope of In 2019, PJSC Aeroflot convened New versions of the following internal Shareholders. The Board of Directors is 4 define the core areas of business for 4 develop the Company’s dividend 03 authority and procedures for convening, the Annual General Meeting of documents of PJSC Aeroflot were responsible for the general management the Company (including subsidiary policy, work out proposals on the holding and summarising General Shareholders in on 25 June approved: Articles of Association, of the Company’s operations, excluding airlines) to increase its operating profit amount of dividend on Company Meetings of Shareholders are set forth in (Minutes No. 44 dated 26 June 2019). Regulations on the General Meeting matters reserved to the General Meeting 4 operate for the benefit of shareholders, shares and dividend payout procedure, PJSC Aeroflot’s Articles of Association The meeting was attended by holders of Shareholders, Regulations on the of Shareholders, Management Board and supervise the implementation of and present them for approval by the and Regulations on the General Meeting of 64.1% of PJSC Aeroflot’s total share Board of Directors, Regulations on Chief Executive Officer. corporate initiatives General Meeting of Shareholders 4 of Shareholders. The Annual General capital. Remuneration and Compensations 4 supervise the activities of the approve the annual budget and Meeting of Shareholders is held annually Payable to Members of the Board Board activities are guided by Russian Company’s Management Board and monitor its performance no earlier than three months and no later The Annual General Meeting of of Directors, and Regulations on regulations, the Articles of Association Chief Executive Officer 4 discuss and pre-approve draft annual than six months after the end of the fiscal Shareholders approved the Annual the Management Board. of PJSC Aeroflot, resolutions passed by 4 present resolutions on matters within reports, annual accounting statements,

CORPORATE GOVERNANCE CORPORATE year. Report, 2018 accounting (financial) General Meetings of Shareholders, and GOVERNANCE CORPORATE the authority of the General Meeting and profit and loss statements statements, the distribution of The General Meeting of Shareholders the Regulations on the Board of Directors of Shareholders for approval by 4 analyse audit reports and opinions of 04 Materials required in preparation for the net profit for FY2018, and the also approved a number of interested of PJSC Aeroflot. 04 shareholders the Revision Committee, and present General Meetings of Shareholders are distribution of prior period retained party transactions (including 4 discuss and approve business plans documents featuring the results of published on the Company’s website earnings. The Annual General Meeting one major transaction), as well The Board’s key focus areas include such audits for consideration by the 4 determine the procedure for in compliance with the majority of of Shareholders also approved the as amendments to the terms of the Company’s long-term sustainable Company’s shareholders recommendations of the Corporate remunerations of members of the an interested party transaction development, effective oversight of distributing profit 4 approve the Company’s special Governance Code to providing Board of Directors and Revision (a series of related transactions). its executive bodies, uncompromising registrar and the terms and conditions shareholders with additional materials in Committee, as recommended by PJSC Aeroflot’s participation in the observance and protection of shareholder of the contract therewith, as well as preparation for meetings. The Company’s the Board of Directors. Digital Transportation and Logistics rights and legitimate interests. the contract termination. internal documents stipulate that Association was approved. shareholders may put questions to New Board of Directors and In line with the Board of Directors’ members of governing and control bodies Revision Committee were elected. The Annual General Meeting of activities plans, the Board meetings are during the General Meeting, along with The Company’s auditor for 2019 Shareholders of PJSC Aeroflot held at least once a month. The Board of the rules for answering such questions. (to audit the statements prepared under approved a dividend of RUB 2.6877 Directors’ activities plan for the corporate The agenda of the Board of Directors’ The Board meetings held in absentia The results of the General Meeting of the Russian Accounting Standards per ordinary share for FY2018, year is approved at the first meeting of the meetings must include items proposed consider matters on which members of Shareholders are announced at the and International Financial Reporting with total dividend payments of new Board. As a rule, the activities plan for discussion by shareholders who in the Board of Directors do not have any meeting. Standards) was selected. RUB 2,856,500,000 (50% of Aeroflot includes essential matters concerning the aggregate hold at least 2% of shares, material comments, as well as matters Group’s net profit under the IFRS). Company’s operations (strategy, finance, members of the Board of Directors and of procedure. However, a matter may be budget and risks, human resources, etc.), Revision Committee, the Management moved to the agenda of a meeting held in which are to be discussed in line with Board, the Company’s auditor, and the person upon request of two members of the strategic and business planning CEO. the Board of Directors. cycle. Proposals made by members of the Board of Directors and the All items on the agenda of the Board In their work, the Company’s Board of Company’s management are factored in. meetings are generally previewed Directors and its Committees use tablets Extraordinary meetings may be convened by dedicated committees to enable with the dedicated software developed in

to make decisions on urgent matters. a more detailed discussion and prepare (the Board of Directors application). recommendations for voting to the Board The platform allows directors to study of Directors. materials for meetings in a prompt manner and have access to the Board of Directors’ earlier materials and resolutions. PJSC Aeroflot PJSC Aeroflot 174 175

Corporate Governance System continued Annual Report 2019 Annual Report 2019 Chairman of the Independent directors Composition of the Board of Directors Board of Directors

01 4 is responsible for the general stew- Independent directors promote opinions As at 31 December 2019, PJSC Aeroflot’s Members of the Board of Directors Changes in the Board 01 ardship of the Board of Directors, and judgements unaffected by relations Board of Directors was comprised of the efficiently performed their functions and 0201 of Directors 0201 convenes and chairs meetings, with the Company’s shareholders or exec- Chairman (non-executive director), one tasks throughout 2019 notwithstanding 03 arranges for keeping the minutes of utive bodies, as well as decision-making executive director, seven non-executive their service on boards of directors of The following directors left the Board: 03 meetings, chairs the General Meeting which benefits different shareholder directors and two independent directors. other companies. 4 Mikhail Voevodin – CEO of VSMPO- of Shareholders groups. AVISMA Corporation 4 helps ensure the timely provision to In the reporting year, no members of the 4 Roman Pakhomov – CEO of Avia Capital members of the Board of Directors The presence of independent directors Company’s Board of Directors purchased, Service of all the information required to pass enhances corporate governance at the or disposed of, their shares in the resolutions and vote on agenda items Company. Independent members of the Company. The following directors were elected 4 ensures productive discussion of Board of Directors are actively involved in to the Board: agenda items involving non-executive the activities of the Board Committees. Board of Directors of PJSC Aeroflot in 2019 4 Alexander Galushka – Counsellor at the and independent directors In accordance with the requirements of International Congress of Industrialists Until 25 June (elected by resolution of Since 25 June (elected by resolution of the CORPORATE GOVERNANCE CORPORATE 4 controls the implementation of resolu- the Moscow Exchange, independent and Entrepreneurs (ICIE) GOVERNANCE CORPORATE tions passed by the Board of Directors directors head the Board of Directors’ the Extraordinary General Meeting of Annual General Meeting of Shareholders 4 Maxim Liksutov – Deputy Mayor of 04 and General Meeting of Shareholders. Audit Committee and Personnel and Shareholders on 23 October 2018) on 25 June 2019) Moscow at the Moscow Government, 04 Remuneration Committee. The majority Evgeny Ditrich Evgeny Ditrich Head of the Department for Transport of members of the Board of Directors’ and Road Infrastructure Development Committees are also independent direc- Mikhail Poluboyarinov Mikhail Poluboyarinov of Moscow tors, which helps achieve a balanced and Mikhail Voevodin Alexander Galushka independent position on agenda items. Other members of PJSC Aeroflot’s Board Igor Kamenskoy Igor Kamenskoy of Directors were re-elected. In the reporting period, Maxim Sokolov, Roman Pakhomov Maxim Liksutov a member of the Board of Directors, was recognised as an independent director Dmitry Peskov Dmitry Peskov by resolution of the Board of Directors Vitaly Saveliev Vitaly Saveliev (Minutes No. 2 dated 8 August 2019). The Board of Directors recognised Vasily Sidorov Vasily Sidorov that Maxim Sokolov’s association with Yury Slyusar Yury Slyusar the state, a significant shareholder of PJSC Aeroflot, is formalistic and has no Maxim Sokolov Maxim Sokolov influence on his ability to make inde- pendent and objective judgements in Sergey Chemezov Sergey Chemezov good faith. On December 2019, he seized to be independent after he was appointed Vice Governor of Saint Petersburg.

PJSC Aeroflot PJSC Aeroflot 176 177

Corporate Governance System continued Annual Report 2019 Annual Report 2019 Membership of the Board of Directors

as at 31 December 2019

01 Member of PJSC Aeroflot’s Board of Directors From 2012 to 2015, Deputy Director Member of PJSC Aeroflot’s Board of Directors From 2009 to 2020, Director of the Infrastructure 01 since 2018. of the Department of Industry and Infrastructure since 2017. Department, Deputy Chairman of VEB.RF, 0201 Born in 1973. of the Russian Government. Born in 1966. First Deputy Chairman of the State Development 0201 In 2015, Head of the Federal Service Corporation VEB.RF. 03 In 1996, graduated from the Moscow Engineering In 1988, graduated from the Moscow Finance 03 Physics Institute with a degree in Applied for Supervision of Transport. Institute with a degree in Finance and Credit. Since 2020, CEO of the State Transport Leasing Mathematics. In 1999, graduated from the Higher From 14 October 2015 to 17 May 2018, In 1998, graduated from the Plekhanov Russian Company. School of Privatisation with a degree in Law. First Deputy Minister of Transport of the Russian Academy of Economics with a PhD in Economics Awarded the title of the Honoured Economist From 1995 to 1998, Adviser, Deputy Division Federation. majoring in Finance, Currency Circulation and of Russia and a Certificate of Honour Head, Division Head at the State Committee Since 18 May 2018, Minister of Transport Credit. of the Russian Ministry of Transport. For his for State Property Management of the Russian of the Russian Federation. He is a member of the boards of directors of contribution to the preparation of the XXII Winter Olympic Games and the XI Winter Paralympic Federation. First Class State Adviser of the Russian Leader and Rostelecom, and a member of the Supervisory Board of DOM.RF. Games in Sochi in 2014, Mikhail Poluboyarinov From 1998 to 2004, Deputy Division Head, Federation. was awarded the Order of Honour. Division Head, Deputy Head of the Department From 1990 to 1999, Chief Accountant and Evgeny Ditrich Awarded the Order of Honour; in 2017, Mikhail Poluboyarinov of Normative and Methodological Support received Letters of Acknowledgement from Financial Director at Avtoimport. at the Russian Ministry of Property Relations. the President of the Russian Federation and From 2000 to 2009, Chief Accountant, Deputy Chairman of the Board of Directors, Deputy Chairman of the Board of Directors, Owns no shares in PJSC Aeroflot. From 2004 to 2005, Deputy Department Director from the Government of the Russian Federation, CEO of OJSC Aeroflot. CORPORATE GOVERNANCE CORPORATE Non-Executive Director Non-Executive Director GOVERNANCE CORPORATE at the Russian Ministry of Economic Development a lapel badge of the Honoured Worker of Transport 04 and Trade. of Russia, and other industry awards. 04 From 2005 to 2012, Deputy Head of the Federal Road Agency. Owns no shares in PJSC Aeroflot.

Member of PJSC Aeroflot’s Board of Directors CEO of DialogInvest, a Soviet-US joint venture Member of PJSC Aeroflot’s Board of Directors From April 2011, Adviser to the Mayor of Moscow since 2009. (1989–1993); since 2019. on transport and road infrastructure development Born in 1954. Chairman of the Management Board of Bank Born in 1976. matters. Holds degrees in mechanical engineering from the Rossiya (1993–1995); In September 2012, appointed Deputy Mayor From 2009 to 2010, CEO of Aeroexpress. Kalinin Polytechnic Institute in Leningrad (1977) Chairman of the Board of Bank Menatep of Moscow at the Moscow Government and From 2001 to 2011, member of the Board and from the Palmiro Togliatti Engineering and St Petersburg (1995–2001); Head of the Department for Transport and Road of Directors of TransGroup AC. Economic Institute (1986). Deputy Chairman of the Management Board Infrastructure Development of Moscow by Awarded the title of the Honoured Worker Holds a PhD in Economic Sciences. of (2001–2002); a decree of the Mayor of Moscow. of Transport of the Russian Federation in 2013, Vitaly Saveliev has been CEO of Aeroflot Deputy Minister for Economic Development In 2007, graduated from the Plekhanov Russian a Letter of Acknowledgement from the Chairman since 2009. and Trade (2004–2007); Academy of Economics with a degree in Finance of the State Duma of the Russian Federation in and Credit. In 2012, graduated from International 2016, the Order of Friendship in 2017, Certificates His previous positions include: First Deputy President of AFK Sistema Law Institute with a degree in Business of Honour of the President of the Russian Deputy Head of Sevzapmetallurgmontazh (2007–2009). Management in 2012. In 2016, completed Federation and the Federal Treasury in 2018. Vitaly Saveliev (1984–1987) Maxim Liksutov the Occupational Health and Safety programme Deputy Head of civil engineering at at the Institute of International Standards Holds a 0.121% shareholding in PJSC Aeroflot. of Accounting and Management. Chairman of the Management Board, Glavleningradinzhstroi (1987–1989); Non-Executive Director Owns no shares in PJSC Aeroflot. CEO Since December 2011, Head of the Department for Transport and Road Infrastructure Development of Moscow.

PJSC Aeroflot PJSC Aeroflot 178 179

Corporate Governance System continued Annual Report 2019 Annual Report 2019

01 Member of PJSC Aeroflot’s Board of Directors From 2002 to 2009, member of the Federation Member of PJSC Aeroflot’s Board of Directors From 2009, Head of Strategic Initiatives 01 since 2014. Council, Deputy Committee Chairman at the since 2014. at the All-Russian Exhibition Centre. 0201 0201 Born in 1968. Federation Council. Born in 1975. From 2000, led the strategy development exercise, From 2000 to 2002, Advisor to the Chairman chaired the Internet Policy Centre, and oversaw 03 In 1993, graduated from the Moscow State In 1998, graduated from Voronezh State 03 Pedagogical Institute with a degree in Russian of the State Duma of the Russian Federation. University. In 1999, graduated with a Master’s the establishment of the Russian International Language and Literature. In 1999, Vice President of ROSBANK. degree in Political Studies from the Moscow Studies Association at the Moscow State Institute of International Relations (MGIMO University). Since 2014, Managing Director at Renaissance From 1992 to 1998, Vice President School of Social and Economic Sciences and the University of Manchester. Last position held – Deputy Scientific Vice Broker. of Soyuzcontract. President, Innovation Director. From 2009 to 2014, Chairman of the Board Member of the Government Expert Council, of Directors of Renaissance Capital. member of the Board of Directors of RVC. Owns no shares in PJSC Aeroflot. Since 2011, Director of the Young Professionals Owns no shares in PJSC Aeroflot. programme at the Agency for Strategic Initiatives. Igor Kamenskoy Dmitry Peskov

Independent Director Non-Executive Director

CORPORATE GOVERNANCE CORPORATE Head of the Strategy Committee, member Member of the Personnel and Remuneration GOVERNANCE CORPORATE of the Audit Committee and the Personnel and Committee and the Strategy Committee 04 Remuneration Committee of the Board of Directors of the Board of Directors 04

Member of PJSC Aeroflot’s Board of Directors From 2010 to 2013, President of Business Russia, Member of PJSC Aeroflot’s Board of Directors From 2012 to 2018, member of the Board since 2019. an all-Russian public organisation; member since 2013. of Directors of Russian Railways. of the Supervisory Board of the Agency for Strategic Born in 1975. Born in 1971. From 2010 to 2017, Managing Partner Initiatives (ASI) and a number of expert councils under of EuroAtlantic Investments Ltd. In 1997, graduated from the Moscow State Social the President of the Russian Federation on economics, In 1993, graduated from the Moscow State University with a degree in Economics. on modernisation and innovation, on national projects, Institute of International Relations (MGIMO From 2006 to 2010, co-owner of Telecom Express University) with a degree in International Public Group. Graduated from the Plekhanov Russian Academy and on demographic development. Law, and from the Wharton Business School From 2003 to 2006, President of MTS. of Economics with degrees in Professional From 1996 to 2013, engaged in entrepreneurship, of the University of Pennsylvania with a degree Assessment of Proprietary Subject Matters and social activities and teaching. in Finance. From 2000 to 2003, First Vice President of Sistema Proprietary Rights, and Business Valuation. Telecom. Awarded the Order of Honour for significant In 2016, was named Best Independent Director Graduated from the Russian Presidential Academy contribution to the social and economic development of the year at the award ceremony organised by From 1997 to 2000, Deputy CEO of Svyazinvest. of National Economy and Public Administration – of the Russian Far East; the Stolypin Medal, 1st class, PWC, Association of Independent Directors and the Top-Level Personnel Reserve Training for merits in addressing strategic tasks of national Russian Union of Industrialists and Entrepreneurs. Programme; completed an internship at the social and economic development and for many years Owns no shares in PJSC Aeroflot. Alexander Galushka University of Edinburgh (UK), defended the project of conscientious work; a Letter of Acknowledgement Vasily Sidorov Since 2012, CEO of Arida. on the Strategy of Human Capital Preservation and from the President of the Russian Federation Since October 2019, member of the Board Non-Executive Director Human Development in the Russian Federation until for providing expert and analytical support Independent Director of Directors of Russian Post. Member of the Personnel and Remuneration Head of the Audit Committee, member 2050. to the President; a Certificate of Honour of the Russian Since November 2018, member of the Board Committee and the Strategy Committee of the Personnel and Remuneration Committee Since 19 July 2019, Counsellor at the International Government for significant personal contribution of Directors of AC Rus Media (publisher of Forbes of the Board of Directors and the Strategy Committee of the Board Congress of Industrialists and Entrepreneurs (ICIE). to the modernisation of the Russian economy; Russia). Letters of Acknowledgement from the Russian of Directors Since June 2019, member of the Board of Directors Government for substantial contribution to developing of Russian Agricultural Bank. roadmaps of national entrepreneurship initiatives From 2013 to 2018, Minister of the Russian and creating a favourable investment environment Federation for the Development of the Far East. in Russia, for preparation of the tax section of Russia’s In 2013, during the elections of the Mayor Strategy 2020 and leading the Fiscal Policy team

of Moscow, he was nominated by Sergey Sobyanin under the Russian Government, and for significant as a candidate to the Federation Council. personal contribution to the introduction and development of valuation in the Russian Federation. In 2013, Co-Chairman of the headquarters of the All-Russian Popular Front. Awarded the Order of Saint Equal-to-the-Apostles Grand Prince Vladimir, 3rd class, and numerous In 2012, professor at the Higher School industry awards. of Economics. PJSC Aeroflot PJSC Aeroflot

Owns no shares in PJSC Aeroflot. 180 181

Corporate Governance System continued Annual Report 2019 Annual Report 2019

01 Member of PJSC Aeroflot’s Board of Directors In 2010, Director of the Aviation Industry Member of PJSC Aeroflot’s Board of Directors From 1996 to 1999, Head of Foreign Economic 01 since 2015. Department at the Russian Ministry of Industry since 2011. Relations at the Directorate of the President 0201 0201 Born in 1974. and Trade. Born in 1952. of the Russian Federation. In 2009, was appointed Assistant to the Minister From 1988 to 1996, Deputy CEO of Sovintersport. 03 In 1996, graduated from the Lomonosov Graduated from the Irkutsk Institute 03 Moscow State University with a degree in Law. of Industry and Trade of the Russian Federation. of National Economy, completed advanced From 1980, worked at Luch Scientific Production In 2003, completed a post-graduate programme From 2003, Commercial Director at Russian courses at the Military Academy of the Association and headed its representative office at the Academy of National Economy under Helicopters, Rostov-on-Don. General Staff of the Russian Armed Forces. in East Germany from 1983 to 1988. the Government of the Russian Federation. Until 2003, worked with various business entities. Doctor of Economics, Professor, full member Started his career at the Irkutsk Research Institute PhD in Economics. of the Academy of Military Science. of Noble and Rare Metals and Diamonds. Since January 2015, President of United Aircraft Chairman of the boards of directors Member of the Bureau of the Supreme Council Corporation. Owns no shares in PJSC Aeroflot. of , VSMPO-AVISMA of the United Russia Party. Chairman of the Union In 2012, was appointed Deputy Minister Corporation, and Uralkali. of Machine Engineers of Russia. President of Industry and Trade of the Russian Federation. Member of the boards of directors of International of the Union of Machine Engineers of Russia. Yury Slyusar Sergey Chemezov Financial Club . Member of the Supervisory Board Head of the Department of Military and of State Corporation. Engineering Cooperation and High-Tech Non-Executive Director Non-Executive Director at the Moscow State Institute of International CORPORATE GOVERNANCE CORPORATE Member of the Strategy Committee Since December 2007, CEO of Rostec State GOVERNANCE CORPORATE Relations (MGIMO University). of the Board of Directors Corporation. 04 From 2004 to 2007, CEO of Rosoboronexport. Recipient of high government awards and winner 04 of a large number of other prestigious awards. From 2001 to 2004, First Deputy CEO of Rosoboronexport. From 1999 to 2001, CEO of Promexport. Owns no shares in PJSC Aeroflot.

Executive Secretary of the Board of Directors Member of PJSC Aeroflot’s Board of Directors From 2012 to 2018, Minister of Transport since 2018. of the Russian Federation. Born in 1977. The Executive Secretary of the Board of Born in 1968. From 2018 to 2019, CEO, Chairman Directors is responsible for the administrative of the Executive Committee and a member In 2001, graduated from the Institute of In 1991, graduated from the Department Economics and Entrepreneurship. Obtained a PhD and information support of the Company’s of Economics of Saint Petersburg State of the Board of Directors of LSR Group. from the Russian Presidential Academy of Public Board of Directors and General Meeting University with a degree in Political Economy. Since 2018, member of the boards of directors Administration. PhD in Economics. of JSC Zarubezhneft and PJSC Transneft. of Shareholders, and supervises compliance Joined PJSC Aeroflot in 1998. Held a number of by the Company’s bodies and officers From 1991 to 1993, lecturer at the Department Since December 2019, Vice Governor positions from a legal counsel at the regulations of Economics of Saint Petersburg State University. of Saint Petersburg. drafting and alignment team of the Company’s with corporate governance rules and From 1992 to 1993, commercial agent at Frezi Second Class State Adviser of the Russian Administration to Director of the Corporate procedures stipulated by the Russian laws, Grant. Federation. Governance Department. the Company’s Articles of Association and From 1993 to 1999, CEO of ROSSI. From 1999 Awarded the 4th class Order for Service internal documents. to 2004, CEO of Corporation S. to the Motherland, the Order of Honour, a Medal Maxim Sokolov of the Order For Merit to the Fatherland, From 2004 to 2009, Chairman of the Committee Owns no shares in PJSC Aeroflot. The proceedings of the Executive Secretary for Investments and Strategic Projects 2nd class, a Certificate of Honour Alexey Melyokhin Non-Executive Director of the President of the Russian Federation, are governed by the Regulations on the Head of the Personnel and Remuneration of the Government of Saint Petersburg.

a Letter of Acknowledgement from the President Executive Secretary of the Board of Directors

Executive Secretary and the Office of the Committee, member of the Audit Committee and In 2009, member of the Government of the Russian Federation, a lapel badge Board of Directors of PJSC Aeroflot. the Strategy Committee of the Board of Directors of Saint Petersburg, Chairman of the Committee of the Honoured Worker of Transport of Russia. for Economic Development, Industrial Policy and Trade. From 2009 to 2012, Director The functions and powers of the Executive of the Department of Industry and Infrastructure Secretary acting as a corporate secretary of the Russian Government. Owns no shares in PJSC Aeroflot. comply with the recommendations of the

PJSC Aeroflot Russian Corporate Governance Code. PJSC Aeroflot 182 183

Corporate Governance System continued Annual Report 2019 Annual Report 2019 Board of Directors performance report for 2019

01 In 2019, PJSC Aeroflot’s Board of Directors held 20 meetings, including 9 Key matters discussed by the Board of Directors in 2019 In its resolutions, the Board of Directors covers 01 in person and 11 in absentia, which addressed over 170 matters and passed a number of priority areas to: 0201 0201 about 400 resolutions. Strategy 4 Flight safety 4 ensure flight safety 03 4 Implementation of Aeroflot Group’s strategy 4 determine Aeroflot Group’s strategy and 03 4 Implementation of Aeroflot Group’s Long-Term Development identify priority business segments Number of meetings held by the Board of Directors Programme and KPIs achievement 4 build and maintain effective internal controls 9 11 4 Progress of strategic partnership promotion and risk management 2019 20 In person 4 Implementation of Aeroflot Group’s Innovative Development 4 map out a development strategy for Programme Aeroflot Group’s aircraft fleet and route network 10 8 In absentia 4 IT development 4 improve operating, financial and marketing 2018 18 practices through upgrades, innovation and 4 Implementation of Aeroflot Group’s marketing strategy 9 7 implementation of best practices from global 4 Customer service enhancement 2017 16 peers

CORPORATE GOVERNANCE CORPORATE 4 improve the performance of Aeroflot’s branches GOVERNANCE CORPORATE 9 9 Finance 4 Annual accounting statements, including the income statement and representative offices both domestically 2016 04 18 4 Consolidated budget and internationally 04 9 11 4 Auditors’ reports following the audit of RAS and IFRS 4 enforce higher standards for airport and 2015 20 statements in-flight passenger services, expand the service 4 Operational KPIs forecast mix and improve customer experience 4 Non-aviation revenues 4 promote cooperation with SkyTeam partners, Directors attendance at Board and Committee meetings in 2019 4 Sponsorship and philanthropy use the membership to expand the Company’s 4 Profit distribution, including dividend payout route network and boost the international flight performance Member Status Board of Directors Audit Committee Personnel and Strategy Committee 4 Procurement of the Board of Directors Remuneration 4 promote strategic partnerships with airlines Committee 4 Approval of auditors for RAS and IFRS statements across key geographies Evgeny Ditrich Chairman of the Board of Directors 20(11)/20 4 Risk management system 4 improve operational performance of Mikhail Voevodin* Non-Executive Director 12(10)/12 4(1)/4 7(1)/7 4 Review of the Internal Audit Department’s report subsidiaries and streamline the non-core asset structure to cut unnecessary spending and Alexander Galushka** Non-Executive Director 8(3)/8 4(1)/4 4/4 4 Review of materials and the opinion of the Revision Committee 4 Shareholder and investor relations increase returns on investments Igor Kamenskoy Independent Director 20(11)/20 12(1)/12 9(2)/9 11(1)/11 4 develop and upgrade information technologies Maxim Liksutov** Non-Executive Director 8(4)/8 Corporate 4 Corporate governance at PJSC Aeroflot 4 ensure information transparency, including Roman Pakhomov* Non-Executive Director 12(8)/12 7(1)/7 7(1)/7 governance 4 Performance of the Board of Directors and its Committees procurement 4 enhance shareholder and investor relations Dmitry Peskov Non-Executive Director 20(12)/20 5(2)/5 11(3)/11 and HR 4 Changes in the membership of the Management Board 4 develop and improve corporate policies. Mikhail Poluboyarinov Non-Executive Director 20(12)/20 4 Incentive system Vitaly Saveliev Executive Director 20(11)/20 4 Dividends from subsidiaries 4 Preparation for the next Annual General Meeting Vasily Sidorov Independent Director 20(11)/20 12(1)/12 9(2)/9 11(1)/11 of Shareholders Yury Slyusar Non-Executive Director 20(14)/20 11(11)/11 4 PJSC Aeroflot Annual Report Maxim Sokolov Non-Executive Director*** 20(11)/20 5/5 5(1)/5 11(2)/11

4 Remuneration of members of the Board of Directors,

Sergey Chemezov Non-Executive Director 20(15)/20 its Committees and the Revision Committee

Note. Data format: the number of meetings attended by the member of the Board of Directors/the total number of meetings held in 2019. Attendance through written opinions Transactions 4 Aircraft lease transactions or questionnaires (for meetings held in absentia) is shown in brackets. * Member of the Board of Directors until 25 June 2019. 4 Approval of interested party transactions ** Member of the Board of Directors since 25 June 2019. *** Independent director from August to December 2019. PJSC Aeroflot PJSC Aeroflot 184 185

Corporate Governance System continued Annual Report 2019 Annual Report 2019 Committees of the Board of Directors

Audit Committee Personnel and Remuneration Committee Strategy Committee

01 01

0201 The Audit Committee of the Board of Directors supervises The Personnel and Remuneration Committee promotes the The Strategy Committee was set up to prepare 0201 the Company’s financial and business operations to protect development of the HR policy, supervises matters concerning the recommendations and proposals to the Board of Directors, 03 To improve the effectiveness 03 of resolutions passed by the shareholder interests and ensure the growth of the Company’s Company’s organisational structure, selection and assessment enhancing the Company’s performance and improving its long- Board of Directors, ensure assets. Coordinating with the Company’s executive bodies, of persons appointed to the Company’s governing bodies, their term strategy. more detailed preliminary the Revision Committee and the Internal Audit Department, the remuneration, and the remuneration system. In 2019, the Strategy Committee held a total of 11 meetings, discussions of the most important Audit Committee prepares and submits for consideration by the In 2019, the Personnel and Remuneration Committee held including one meeting held in absentia. The Committee’s meeting matters and prepare relevant Board of Directors recommendations and proposals on relevant a total of 11 meetings, including one meeting held in absentia. agendas were compiled in line with the Committee’s activity plan recommendations, PJSC Aeroflot matters. The Committee’s meeting agendas were compiled in line with approved by the first post-election meeting, and reflected the has three dedicated Committees In 2019, the Audit Committee held a total of 12 meetings, the Committee’s activity plan approved by the first post-election instructions of the Board of Directors. of the Board of Directors: including one meeting held in absentia. The Committee’s meeting meeting, and reflected the instructions of the Board of Directors. agendas were compiled in line with the Committee’s activity plan approved by the first post-election meeting, and reflected the 4 Audit Committee CORPORATE GOVERNANCE CORPORATE instructions of the Board of Directors. GOVERNANCE CORPORATE 4 Personnel and Remuneration Committee 04 04 4 Strategy Committee

Key matters discussed in 2019:

4 Performance against Aeroflot Group’s consolidated budget targets 4 Remuneration of the Company’s management, members of the Board of 4 Implementation and update of Aeroflot Group’s Long-Term Development The Board of Directors’ Committees are 4 Aeroflot Group’s and PJSC Aeroflot’s budgets Directors and the Revision Committee, Long-Term Incentive Programme, and Programme 4 Initiatives to reduce Aeroflot Group’s operating costs Long-Term Incentive Programme for members of the Board of Directors 4 Implementation of Aeroflot Group’s marketing strategy elected by the Board of Directors and act in 4 Improvement of internal audit at Aeroflot Group 4 CEO and management KPIs 4 IT development strategy compliance with relevant Committee Regulations 4 Auditors’ reports on the financial and business audit results under RAS and IFRS 4 Aeroflot Group’s Long-Term Development Programme KPIs 4 Development of subsidiary airlines approved by the Company’s Board of Directors. 4 Reports on audits conducted by the Internal Audit Department 4 The Company’s organisational structure 4 Results of Aeroflot Group’s Innovative Development Programme The Committees act as per the Board’s 4 Shareholder and investor relations 4 Consideration of proposals and preparation of recommendations on 4 Aircraft fleet expansion 4 Procurement nominees to PJSC Aeroflot’s Board of Directors and Revision Committee 4 Internal documents. resolutions and activity plans based on the 4 Transactions related to the aircraft fleet representing the interests of the state in 2020/2021 corporate year Board’s activity plan. 4 Extending and restructuring of loans 4 Assessment of independence of nominees to the Company’s Board of 4 Internal documents. Directors against the relevant criteria The Board of Directors’ Committees held 4 Internal documents. 11 meetings in person in 2019, including joint meetings, and two meetings in absentia, reviewed Membership of the Audit Committee matters related to Aeroflot Group’s business (elected by resolution of the Board of Directors on 8 August 2019) and prepared detailed recommendations and proposals to the Company’s Board of Directors 1. Vasily Sidorov – Head of the Committee, Independent Director 1. Maxim Sokolov – Head of the Committee, Non-Executive Director 1. Igor Kamenskoy – Head of the Committee, Independent Director and Management Board. 2. Igor Kamenskoy – Independent Director (Independent Director until December 2019) 2. Maxim Sokolov – Non-Executive Director (Independent Director 3. Maxim Sokolov – Non-Executive Director (Independent Director until 2. Igor Kamenskoy – Independent Director until December 2019) December 2019) 3. Vasily Sidorov – Independent Director 3. Vasily Sidorov – Independent Director 4. Alexander Galushka – Non-Executive Director 4. Dmitry Peskov – Non-Executive Director 5. Dmitry Peskov – Non-Executive Director 5. Alexander Galushka – Non-Executive Director 6. Yury Slyusar – Non-Executive Director 7. Andrey Panov – Deputy CEO for Strategy, Service and Marketing

8. Andrey Chikhanchin – member of the Management Board, Deputy CEO for Commerce and Finance 9. Roman Pakhomov – CEO of Avia Capital Services 10. Evgeny Stolyarov – Director of the Property Relations and Territorial Planning Department at the Ministry of Transport of the Russian Federation

Mikhail Voevodin, a member of the Board of Directors, and Vadim Zingman, Deputy PJSC Aeroflot PJSC Aeroflot Mikhail Voevodin was a member of the Personnel and Remuneration Committee until CEO for Customer Relations, were members of the Strategy Committee until 25 June Roman Pakhomov was a member of the Audit Committee until 25 June 2019. 25 June 2019. and 8 August 2019, respectively. 186 187

Corporate Governance System continued Annual Report 2019 Annual Report 2019 Management Board and CEO Membership of the Management Board

as at 31 December 2019

01 01

0201 0201

03 PJSC Aeroflot’s sole executive The CEO also acts as the Chairman 03 body, the CEO, and collective of the Management Board and executive body, the Management represents the interests of the Board, are charged with running Company without power of the Company’s day-to-day attorney, acting in compliance operations. The executive bodies with PJSC Aeroflot’s Articles of report directly to the Board of Association. The CEO is elected by Directors and the General Meeting the Board of Directors for a maximum of Shareholders. term of five years. Vitaly Saveliev Vladimir Antonov Vasily Avilov

Chairman of the Management Board, CEO First Deputy CEO for Operations Deputy CEO for Administrative Management CORPORATE GOVERNANCE CORPORATE GOVERNANCE CORPORATE

04 Born on 18 January 1954. Born in 1953. Born in 1954. 04 In 1977, graduated from Leningrad Polytechnic In 1975, graduated from Moscow Railway Graduated from Dzerzhinsky Higher Naval Engineering Institute (Saint Petersburg Polytechnic University). Engineering Institute. College. From 1971 to 1983, served in the armed In 1986, graduated from the Leningrad Institute of From 1977 to 1995, served in the armed forces. forces of the USSR. Engineering and Economics (the Saint Petersburg From 1995 to 2018, Deputy CEO for Economic From 1983 to 1994, worked at the Ministry of Foreign Vitaly Saveliev has been The scope of authority of State University of Economics). and Aviation Safety, Deputy CEO for Aviation Economic Relations of the USSR. PJSC Aeroflot’s CEO since April PJSC Aeroflot’s executive bodies PhD in Economics. Safety, Deputy CEO for Aviation and Operating From 1994 to 1997, worked at the Office of the 2009; in August 2018, the Board of covers all matters pertaining to From 1977, was engaged in the construction of the Safety, First Deputy CEO for Operations, and First Security Council of the Russian Federation. Deputy CEO for Aviation Safety at PJSC Aeroflot. Directors resolved to extend his term management of the Company’s Sayano–Shushenskaya HPP, worked his way up Captain 1st rank and a Third Class State Adviser of from an engineer to the chief structural engineer in Since 2018, First Deputy CEO for Operations at the Russian Federation. of office until 2023. day-to-day operations, except for one of the KrasnoyarskGESstroy associations. PJSC Aeroflot. From 1997 to 2013, Head of Administration, Deputy those reserved to the General Meeting From 1984, Deputy Head of All-Union Trust Awarded a Medal of the Order For Merit to CEO – Executive Director at PJSC Aeroflot. The Board of Directors is authorised of Shareholders or the Board of Sevzapmetallurgmontazh. the Fatherland, 2nd class, and the title of the Since 2013, Deputy CEO for Administrative to appoint members of the Directors. From 1987, Deputy Head of Chief Directorate at Distinguished Worker of Transport of Russia, Management at PJSC Aeroflot. Management Board and remove Glavleningradinzhstroy. received a Letter of Acknowledgement from the President of the Russian Federation, a Pavel Awarded Medals of the Order “For Merit to the them from office before the end Changes in the membership of From 1989, President of the US-Russian joint Melnikov Medal, a lapel badge of the Honoured Fatherland”, 1st class and 2nd class, a Medal of their term. The Management PJSC Aeroflot’s Management Board in venture DialogInvest. Worker of Transport of Russia, as well as other “For Battle Merit”, a Certificate of Honour and a Letter Board acts in compliance with the reporting period were as follows: From 1993, Chairman of the Management Board of government and industry awards. of Acknowledgement from the President of the BANK ROSSIYA. Russian Federation, and other ministry and industry PJSC Aeroflot’s Articles of Association 4 Vadim Zingman, Deputy CEO awards. and Regulations on the Management for Customer Relations, left the From 1995, Chairman of the Management Board of Bank MENATEP Saint Petersburg. Holds a 0.000425% shareholding in PJSC Aeroflot. Board of PJSC Aeroflot. Management Board on 8 August From 2001, Deputy Chairman of the Management Holds a 0.0000002% shareholding in PJSC Aeroflot. 2019 Board of Gazprom. 4 The size of the Management Board From 2004, Deputy Minister of Economic was reduced to nine members Development and Trade of the Russian Federation. From 2007, First Vice President of PJSFC Sistema. In the reporting period, members of Since 2009, current position.

the Management Board did not enter Awarded the Order “For Merit to the Fatherland”, into transactions with PJSC Aeroflot 4th class, the Order of Alexander Nevsky, the shares. Order of Honour, the Order of Friendship, a Letter of Acknowledgement from the President of the Russian Federation, numerous medals and industry awards. PJSC Aeroflot PJSC Aeroflot

Holds a 0.121% shareholding in PJSC Aeroflot. 188 189

Corporate Governance System continued Annual Report 2019 Annual Report 2019

01 01

0201 0201

03 03

Vladimir Aleksandrov Kirill Bogdanov Georgy Matveev Igor Parakhin Igor Chalik Andrey Chikhanchin

Deputy CEO for Legal and Property Matters Deputy CEO for Information Technologies Director of Safety Management Deputy CEO – Technical Director Deputy CEO – Commander of Flight Operations Deputy CEO for Commerce and Finance CORPORATE GOVERNANCE CORPORATE GOVERNANCE CORPORATE

04 Born in 1984. Born in 1963. Born in 1953. Born in 1961. Born in 1957. Born in 1982. 04 In 2005, graduated from Moscow State Law Graduated from Leningrad Polytechnic Institute. Graduated from the Academy of Civil Aviation. Graduated from the Moscow Institute of Civil Graduated from the Aktyubinsk Higher School of In 2004, graduated from the Academy of Budget University. In 2016, graduated from the Russian From 1992 to 1993, lead specialist at KredoBank. PhD in Technical Sciences. Aviation Engineers. Civil Aviation. and Treasury of the Russian Ministry of Finance. Presidential Academy of National Economy and From 1973 to 1991, co-pilot, pilot in command, From 1984 to 1991, worked at the Central After graduation, he was employed by a Syktyvkar PhD in Economics. Public Administration (RANEPA). From 1993 to 1995, lead programmer at BANK ROSSIYA. Deputy Air Squadron Commander, Acting Head Administration of International Air Traffic. airline where he flew the Tu-134 aircraft. From 2003 to 2008, held positions in finance and Held senior positions at the Prosecutor of Flight Management at the Latvian Civil Aviation From 1991 to 2001, worked at PJSC Aeroflot In 1983, joined the Central Administration of economic planning at several companies and General’s Office of the Russian Federation and From 1996 to 2002, Head of Industrial Control Department. organisations in various industries. System and Programming at Bank MENATEP starting from the position of an aircraft International Air Traffic (now Aeroflot). Flew the the Investigative Committee of the Russian From 1991 to 1995, chief pilot, Director for Flight maintenance technician. Tu-134, Il-86, A310, and A320 aircraft. From 2008 to 2009, project manager at State Federation. Saint Petersburg. Operations at Latvian Airlines. From 2001 to 2011, Deputy Director Since 2008, he has been flying the A330 aircraft, Corporation Bank for Development and Foreign Joined PJSC Aeroflot in 2013. In 2002, Head of the Department of Automation, Economic Affairs. Information Technology and Telecommunications From 1998 to 2001, pilot, B737 pilot in command, of the Aviabusiness Higher Commercial School. with flight hours totalling about 14 thousand Since July 2016, Deputy CEO for Legal and at Gazprom. pilot inspector at the Flight Safety Inspectorate Joined PJSC Aeroflot in 2011. hours. From 2009 to 2018, Deputy Director, Director Property Matters at PJSC Aeroflot. at Transaero Airlines. From 2003 to 2008, Commander of the A320 Air of the Corporate Finance Department at From 2002 to 2004, Adviser to the Vice President Awarded a Medal of the Order “For Merit PJSC Aeroflot. Awarded a Medal of the Order “For Merit at United Company GROS. Since 2001, he has been working at PJSC Aeroflot to the Fatherland”, 2nd class, and a Letter Squadron at PJSC Aeroflot. to the Fatherland”, 2nd class, and a Letter as Deputy Chief Flight Safety Inspector and Since September 2018, Deputy CEO for From 2004 to 2007, Executive Director at RAMAX of Acknowledgement from the President From 2008 to 2010, Commander of the A330 Air of Acknowledgement from the Minister Deputy Director of Safety Management. of the Russian Federation. Squadron at PJSC Aeroflot. Commerce and Finance at PJSC Aeroflot. of Transport of the Russian Federation. International. Since July 2012, Director of Safety Management. Since 2011, Deputy CEO – Commander of Flight Has a Letter of Acknowledgement from the From 2007 to 2009, Director of Development and Minister of Transport of the Russian Federation. Control, Telecom Assets, at PJSFC Sistema. Awarded a Medal of the Order “For Merit to Operations at PJSC Aeroflot. the Fatherland”, 2nd class, the honorary title of Holds a 0.000007% shareholding in PJSC Aeroflot. Owns no shares in PJSC Aeroflot. Holds 27 patents for IT solutions. Distinguished Pilot of the Russian Federation, the Distinguished Pilot of the Russian Federation, awarded a Medal “In Commemoration of Owns no shares in PJSC Aeroflot. Joined PJSC Aeroflot in 2009. an Air Transport Excellence lapel badge, and other the 850th Anniversary of Moscow” and Awarded a Medal of the Order “For Merit ministry and industry awards. a commemorative badge for the 85th Anniversary to the Fatherland”, 2nd class, a Letter of of Civil Aviation. Acknowledgement from the President of the Awarded the honorary title of the Distinguished Owns no shares in PJSC Aeroflot. Russian Federation, and a Pyotr Gubonin Medal. Pilot of the Russian Federation, a Nesterov Medal, and other ministry and industry awards.

Owns no shares in PJSC Aeroflot.

Holds a 0.000117% shareholding in PJSC Aeroflot.

PJSC Aeroflot PJSC Aeroflot 190 191

Corporate Governance System continued Annual Report 2019 Annual Report 2019 Management Board report for 2019 Remuneration of members of the Board of Directors and the management

01 To develop recommendations and The Company has in place a structured by Aeroflot Group’s Strategy 2023 and the Long-Term Incentive Programme 01 proposals for the Management Board remuneration system for members of the Aeroflot Group’s Long-Term Development determined based on the achievement 0201 0201 aimed at boosting the Company’s governing bodies designed to link the Programme for 2019–2023. of targets set by the Long-Term 03 performance, PJSC Aeroflot has in place In 2019, the Management Board of PJSC Aeroflot held a total remuneration amount to the achievement Incentive Programme at the end of 03 a number of collective advisory bodies: of 40 meetings, including 17 meetings in absentia, and discussed of short-term targets, and align the The Long-Term Incentive Programme for the Long-Term Incentive Programme’s over 300 matters related to the Company’s day-to-day operations, long-term interests of the Company’s members of PJSC Aeroflot’s Board of period. 4 The Committee including: shareholders and management. Directors for the period from 1 January for Finance and Investments Short-term incentive is provided in the 2019 to 31 December 2020 is aimed at Management remuneration is responsible for planning and form of quarterly and annual bonuses aligning the interests of the Company 4 flight safety 4 implementation of the Growth rational use of financial resources, while long-term incentive implies and its shareholders with the interests The remuneration system designed for the Strategy, Long-Term Development including budgeting, investments, M&A 4 route network expansion payments based on the achievement of of Board members by entitling Board management and the other staff enables Programme, and Innovative transactions, and risk management 4 fleet development the Company’s strategic goals in line with members participating in the Long-Term the Company to engage and retain highly Development Programme 4 IT development current long-term incentive programmes Incentive Programme to a bonus linked qualified professionals. Remuneration for 4 Aeroflot Group’s consolidated budget

CORPORATE GOVERNANCE CORPORATE 4 The Committee for members of the Board of Directors and directly to the achievement of strategic the management is comprised of the fixed GOVERNANCE CORPORATE 4 customer service enhancement for Innovative Development 4 charitable support for a number the Company’s management. targets and delivery on targets set by component (basic salary) and the variable 4 04 is responsible for implementation on-time performance of institutions Aeroflot Group’s Strategy 2023 and component (current bonuses and long- 04 and evaluation of innovative solutions 4 sponsorship and cooperation Remuneration of members Aeroflot Group’s Long-Term Development term incentives). and intellectual property rights initiatives. of the Board of Directors Programme for 2019–2023. management Current bonuses depend on the Group- Guidelines for Board remuneration The Long-Term Incentive Programme wide performance and are calculated 4 The Committee calculation and payouts are set forth in for 2019–2020 is based on reaching in accordance with the Company’s for Digital Technologies the Regulations on Remuneration and the target levels across the following KPI-based employee bonus system. is responsible for analysis of strategic Compensations Payable to Members of indicators: The KPI-based employee bonus system areas and projects related to digital the Board of Directors of PJSC Aeroflot, 4 Aeroflot Group’s passenger traffic is formalised by the Regulations on technologies, including data security developed in line with the Federal Law On 4 The share of international transfer Bonus Payments to the Managers projects Joint Stock Companies, other applicable traffic in Aeroflot Group’s total and Specialists of PJSC Aeroflot. regulations of the Russian Federation, passenger traffic The Regulations stipulate that the 4 The Committee and the Company’s internal documents. 4 Aeroflot Group’s RASK. bonus component of the management for Revenue Contracts The Regulations were approved by compensation amount shall depend on is responsible for ensuring the PJSC Aeroflot’s General Meeting of The Long-Term Incentive Programme their quarterly and annual performance economic efficiency of new revenue Shareholders on 25 June 2019. covers two periods: against the KPIs approved for the relevant contracts (agency agreements for 4 The interim period – one calendar year, reporting period. ticket sales) The Board remuneration system from 1 January to 31 December 2019 comprises a fixed component and 4 The period of the Long-Term Incentive To provide long-term incentives for the Long-Term Incentive Programme Programme – two calendar years from PJSC Aeroflot’s management, the (a variable component). The size 1 January 2019 to 31 December 2020. Long-Term Incentive Programme for of the fixed component depends 2019–2020 was approved by the on the involvement of members of Remuneration procedure: Board of Directors on 28 November PJSC Aeroflot’s Board of Directors 4 2/3 of the remuneration for the interim 2019. The Programme covers the CEO,

in the activities of the Board and its period are paid out no later than members of the Management Board, committees, and includes the fixed 30 days after the General Meeting of Deputy CEOs, department heads, Chief base pay and additional payments for Shareholders that resolved to pay the Accountant, and other employees of the discharging extra duties. The variable remuneration Company, as resolved by the CEO. remuneration component is directly linked 4 1/3 is set aside until the end of the to the achievement of the Company’s Long-Term Incentive Programme and

PJSC Aeroflot strategic goals and delivery on targets set is included in the final payment under PJSC Aeroflot 192 193

Corporate Governance System continued Annual Report 2019 Annual Report 2019 Directors and officers Internal control and audit liability insurance

01 The 2019–2020 Long-Term Management Remuneration of the Board of Directors As part of its efforts to provide insurance Aeroflot Group has a centralised internal Audit Committee and its role 01 Incentive Programme draws on protection, PJSC Aeroflot has signed an audit function headed by the Director 0201 and the Management Board in 2019 0201 the following underlying metrics: agreement for liability insurance of the of the Internal Audit Department who The Audit Committee of PJSC Aeroflot’s 03 Aeroflot Group’s passenger traffic; the On 25 June 2019, the Annual General Meeting of Shareholders resolved to approve Company’s directors and officers, as functionally reports to PJSC Aeroflot’s Board of Directors is intended to enhance 03 share of international transfer traffic in the amount of remuneration payable to members of PJSC Aeroflot’s Board of well as representatives of PJSC Aeroflot Board of Directors and its Audit supervision over financial and business Aeroflot Group’s total passenger traffic; Directors. serving on governing bodies of its Committee. operations to optimise capital expenditure, development of regional traffic. subsidiaries, providing for reimbursement protect shareholder interests and support Remuneration payable to members of PJSC Aeroflot’s Board of Directors following for loss caused to third parties, arising The Company’s controlled entities either the growth of Aeroflot Group’s assets. The Long-Term Incentive Programme the completion of the Long-Term Incentive Programme for the period from 1 January from claims filed by third parties against rely for internal audit on PJSC Aeroflot’s covers two periods: 2016 to 30 September 2018 totalled RUB 186,381,100. the insured due to their wrongful acts Internal Audit Department or have their Coordinating with PJSC Aeroflot’s 4 The interim period – one calendar year, committed in their management roles. own internal audit unit or a permanent executive bodies, the Revision Committee from 1 January to 31 December 2019 The amount of individual fixed remuneration payable to members of PJSC Aeroflot’s A securities claim filed against the internal auditor, depending on the scale and the Internal Audit Department, the 4 The period of the Long-Term Incentive Board of Directors under the Regulations on Remuneration and Compensations Company also constitutes an insured of their business and related risks. Audit Committee prepares and submits for

CORPORATE GOVERNANCE CORPORATE Programme – two calendar years from Payable to Members of the Board of Directors of PJSC Aeroflot for the period from event. Heads of such units and internal auditors consideration by the Board of Directors GOVERNANCE CORPORATE 1 January 2019 to 31 December 2020. 1 July 2018 to 30 June 2019 totalled RUB 76,198,909. of the controlled entities functionally recommendations and proposals to: 04 report to the Director of the Internal Audit 4 develop and ensure the implementation 04 Remuneration procedure: The remuneration (salary, additional compensations, and bonuses) paid to members Department of PJSC Aeroflot. of the business plan 4 2/3 of the remuneration for the interim of PJSC Aeroflot’s Management Board in 2019 totalled RUB 675,142,648 (in 2018, 4 establish and ensure compliance with period are paid out no later than the remuneration totalled RUB 1,428,162,020, including payments under the profit- The internal control systems are effective internal controls 60 days after the Board of Directors sharing plan, unavailable in the reporting period). designed to maximise Aeroflot Group’s 4 ensure effective and transparent approves the Company’s interim results transparency, economic efficiency and governance at Aeroflot Group, including 4 1/3 is set aside until the end of the compliance with applicable laws in all prevention and termination of abuse by Long-Term Incentive Programme and aspects of operations. executive bodies and officers Remuneration of members of PJSC Aeroflot’s Board of Directors is included in the final payment under for the period from 1 July 2018 to 30 June 2019 4 prevent, identify and control conditions the Long-Term Incentive Programme giving rise to financial and operational

determined based on the achievement Member of the Board of Directors Amount, RUB risks of targets set by the Long-Term 4 ensure fairness of financial data used or Incentive Programme at the end of Lars Erik Bergstrom 2,436,000 disclosed by PJSC Aeroflot the Long-Term Incentive Programme’s Mikhail Voevodin 8,400,000 4 other matters, as may be resolved by period. Alexey Germanovich 2,436,000 PJSC Aeroflot’s Board of Directors. Igor Kamenskoy 10,380,000 Dmitry Peskov 7,596,000 Evgeny Ditrich Not applicable Remuneration paid to members of Mikhail Poluboyarinov 7,080,000 PJSC Aeroflot’s Management Board in 2019 Vitaly Saveliev Not applicable Roman Pakhomov 9,144,000 Remuneration type Amount, RUB Vasily Sidorov 10,380,000 Salary and additional

Maxim Sokolov 5,256,000 compensations 434,388,747 Yury Slyusar 7,090,909 Bonuses 240,753,901 Sergey Chemezov 6,000,000 TOTAL 675,142,648 TOTAL 76,198,909 PJSC Aeroflot PJSC Aeroflot 194 195

Corporate Governance System continued Annual Report 2019 Annual Report 2019

01 PJSC Aeroflot’s Board of Directors approves Hotline Internal and external audit Internal Audit Department 01 internal documents regulating its general 0201 performance assessment 0201 policy on risk management and internal PJSC Aeroflot has the Hotline, The Hotline is supported by the by the Audit Committee in 2019 The Internal Audit Department is an In its activities, the Department is 03 controls and establishes the principles of, a corporate vehicle of confidential Internal Audit Department which independent business unit established to guided by the International Standards 03 and approaches to, the risk management and reporting to the Board of Directors accumulates and processes the The Internal Audit Department regularly provide PJSC Aeroflot’s governing bodies for the Professional Practice of Internal internal control system in Aeroflot Group. (its Audit Committee). The Hotline reports, conducts investigations and reports to the Audit Committee of with independent and reliable assurance Auditing and the underlying principles operates on a confidential and inspections, with expert support where PJSC Aeroflot’s Board of Directors on the and advice to enhance the operations of independence, objectivity, proficiency Risk management and internal control anonymous basis. necessary, reviews proposals for progress under its activities plan, audits of PJSC Aeroflot and Aeroflot Group and professional care. The purpose of the systems performance assessment is regularly improving internal control procedures, conducted, execution of the Department’s companies by applying a holistic and Internal Audit Department is to support discussed by the Audit Committee of the The Hotline is used to: involving other business units if recommendations and operation of the consistent approach to the assessment the economic efficiency and effectiveness Board of Directors based on the reports by 4 report violations of applicable needed, informs the stakeholders Hotline. and improvement of risk management, of PJSC Aeroflot, achievement of the Company’s Internal Audit Department. laws or Aeroflot Group’s executive about the investigation and inspection internal control and corporate governance financial and operational targets, asset When conducting audits, the Internal Audit documents and regulations on outcomes and prepares consolidated The Audit Committee reviews, on an processes performance. integrity, fair presentation of information

CORPORATE GOVERNANCE CORPORATE Department draws conclusions on the insider information and antifraud reports for the Audit Committee of the annual basis, the results of external audit on the Company’s financial and business GOVERNANCE CORPORATE performance of the risk management and and anti-corruption policies by any Board of Directors and the CEO of of PJSC Aeroflot’s accounting (financial) Aeroflot Group ensures independence and operations and compliance with applicable 04 internal control systems for each audited employee and/or any member of PJSC Aeroflot. statements prepared under the RAS, and, objectivity of its internal audit by managing laws. 04 entity. To make risk management across the governing bodies or the body on a quarterly basis, of the consolidated its reporting lines: the Director of the PJSC Aeroflot’s key business processes more that supervises Aeroflot Group’s financial statements prepared under Internal Audit Department functionally effective, reports on the Company’s key risks financial and business operations the IFRS. reports to PJSC Aeroflot’s Board of are submitted to the Audit Committee of the 4 report violations of the Corporate Directors and its Audit Committee, and Board of Directors on a monthly basis. Conduct Code of PJSC Aeroflot A report on these matters can be administratively reports to PJSC Aeroflot’s 4 make proposals on the submitted through the Feedback section CEO. improvement of internal controls of the Company website (including anti-corruption aeroflot.ru/feedback?_ procedures). preferredLanguage=en

PJSC Aeroflot’s Internal Audit Department won the Internal Auditor of the Year national award as 4 The Internal Audit Service of the Year A total of 373 Hotline reports were reviewed by the Internal 4 Head of Internal Audit Service of the Year

Audit Department in 2019. Where required, internal 4 Internal Auditor of the Year. investigations were conducted and measures taken to prevent offences and enhance Aeroflot Group’s internal controls. It was for the first time in the history of the award that the same company was a winner in all categories. The award has been established by the Institute of Internal Auditors and co-founded by the Russian Union of Industrialists and Entrepreneurs and Moscow Exchange. PJSC Aeroflot PJSC Aeroflot 196 197

Corporate Governance System continued Annual Report 2019 Annual Report 2019

01 PJSC Aeroflot carried out the following initiatives in 2019 to optimise auditing PJSC Aeroflot’s Internal Audit Department Revision Committee 01 and ensure compliance with the International Standards for the Professional Practice fulfilled all of its 2019 activities plan 0201 0201 of Internal Auditing: approved by the Board of Directors. The Revision Committee supervises Based on the review of compliance 4 Ekaterina Nikitina – Deputy Executive 03 The plan had 77 activities, including: PJSC Aeroflot’s financial and business with applicable laws, the Committee Director of the Civil Society Foundation 03 4 Developed and obtained approval 4 Updated the audit model, including operations to provide reasonable developed recommendations on further NGO by the Audit Committee of risk reassessment following the 4 risk-oriented audits assurance that the Company’s business improving the Company’s performance to 4 Mikhail Sorokin – Head of Division PJSC Aeroflot’s Board of Directors changes in the Company’s Strategy 4 audits of controlled entities and fully meets the interests of its shareholders increase profitability and reduce costs. at the Federal Agency for State Property of Internal Audit Department’s and processes, changes in the standalone business units and requirements set forth in applicable Management Development Strategy 2020–2024. Company’s Risk Map, Hotline statistics 4 support of the Hotline, a corporate Russian laws. The Committee operates In its report, the Revision Committee 4 Sergey Ubugunov – Head of Division The Strategy formulates the mission, analysis and the findings of previous vehicle of confidential reporting to on the basis of PJSC Aeroflot’s Articles of gave a positive opinion regarding the at the Russian Ministry of Transport key development areas and the internal audits the Board of Directors (its Audit Association and the Regulations on the general fairness of the Company’s 4 Vasily Shipilov – Head of Division Department’s goals for the next five 4 Updated the assurance map and Committee) Revision Committee. financial statements with no reasonable at the Russian Ministry of Economic years performed an assessment of key 4 activities aimed at improving the grounds to challenge the information Development.

CORPORATE GOVERNANCE CORPORATE 4 Developed a methodology of applying internal and external assurance Department’s performance. The Revision Committee comprises five provided in the balance sheet and GOVERNANCE CORPORATE Agile in audit projects by planning providers. This tool helped streamline members who are elected by the Annual income statement of PJSC Aeroflot as Remuneration to Revision Committee 04 and conducting audits or advisory PJSC Aeroflot’s provision of assurance General Meeting of Shareholders for at 31 December 2019. The report also members is paid upon resolution of the 04 projects in an agile manner to ensure process as well as optimise and a period until the next Annual Meeting. listed the Committee’s recommendations General Meeting of Shareholders. The total maximum utility of the outcome for prioritise future Internal Audit on the Company’s financial and business annual remuneration paid to the members the management of the audited entity Department’s agenda while reducing As prescribed by the Regulations, performance and legal compliance. of the Revision Committee in 2019 and/or other stakeholders. All auditors overall workload. the Revision Committee reviewed the amounted to RUB 4 514 336. successfully completed training in information contained in the RAS annual The Annual General Meeting of applying this approach financial statements for 2019, including Shareholders held on 25 June 2019 4 Developed a continuous auditing the income statement and other elected the following members of methodology. A number of the documents submitted to the Annual PJSC Aeroflot’s Revision Committee: Company’s key business processes General Meeting of Shareholders. 4 Igor Belikov – Director of the Russian were selected to pilot the continuous The Committee carried out a comparative Institute of Directors and Chairman of auditing analysis of the Company’s financial PJSC Aeroflot’s Revision Committee and business performance metrics in 2013–2019 and a review of its compliance Remuneration of PJSC Aeroflot’s Revision Committee in 2019 with applicable laws in 2019. Revision Committee member Remuneration, RUB Based on these reviews, the Revision Igor Belikov 2,528,028 Committee prepared and approved a report on the balance sheet and Ekaterina Nikitina 1,986,308 financial performance assessment results. The Committee’s report reflected changes Mikhail Sorokin None in the balance sheet structure and key Sergey Ubugunov None change drivers, and assessed some areas of the Company’s financial and business Vasily Shipilov None

operations, including risk management, TOTAL 4,514,336 internal control and compliance. PJSC Aeroflot PJSC Aeroflot 198 199

Corporate Governance System continued Annual Report 2019 Annual Report 2019 Anti-corruption policy, preventing and resolving conflicts of interest

01 External audit 01

0201 0201 As required by law, PJSC Aeroflot’s The total fees paid to HLB Vneshaudit Aeroflot Group openly states zero tolerance for unfair and illegal Anti-corruption documents are publicly 03 annual accounting statements are subject under the contract for audit services business practices and takes additional voluntary anti-corruption available in the Anti-Corruption Practices 03 section of the Company’s official website at to statutory audit to confirm their fairness. and the contract for advisory services commitments recommended by international and Russian laws. aeroflot.ru/ru-ru/about/anticorruption External auditors are engaged for three amounted to RUB 2,550,000 (net of years through public tenders which ensure VAT). The contracted scope of services PJSC Aeroflot is committed to public anti-corruption measures, transparent an unbiased selection of the successful rendered by HLB Vneshaudit included the and open procurement processes and rejection of illicit benefits; it creates bidder based on auditing experience, the audit of interim and annual statements effective feedback channels, runs anti-corruption training programmes for proposed audit scope and timeline, and for 2019, as well as accounting and tax its employees, fights corruption by sharing information and takes measures the nature of PJSC Aeroflot’s operations. advisory services. to prevent and resolve conflicts of interest. The audit firm that wins the public tender for conducting an audit of the Company’s The total fees paid to

CORPORATE GOVERNANCE CORPORATE accounting (financial) statements is PricewaterhouseCoopers International GOVERNANCE CORPORATE approved annually by the Annual General Limited for audit, audit-related and 04 Meeting of Shareholders in accordance other services in 2019 amounted to 04 with applicable laws. RUB 65,755,000 (net of VAT). The key scope of services rendered under In 2019, PJSC Aeroflot again declared its PJSC Aeroflot’s Board of Directors As part of ongoing anti-corruption efforts, The Annual General Meeting of the 2019 contract included a general adherence to the Anti-Corruption Charter approved a new version of the Corporate PJSC Aeroflot carries out investigations Shareholders held on 25 June 2019 review of the IFRS interim condensed of Russian Business, extending the period Conduct Code of PJSC Aeroflot which and inspections on: approved HLB Vneshaudit as the auditor consolidated financial statements for 3M, of adherence to 28 March 2021. Aeroflot brings together the ethical and moral 4 reports by Aeroflot Group’s customers, of PJSC Aeroflot’s 2019 accounting 6M and 9M 2019, audit of the IFRS first signed up to the Charter in 2014. standards supported and shared by the business partners and other parties (financial) statements prepared under the consolidated financial statements for A number of Aeroflot Group companies Board members and Company employees through the Hotline, a corporate vehicle Russian Accounting Standards (RAS). 2019, as well as methodology support, also signed up to the Charter in 2019. regardless of their job title. Similar of confidential reporting to the Board of PricewaterhouseCoopers Audit was information and consulting services, conduct codes have been adopted by Directors (its Audit Committee) approved as the auditor of the Company’s methodology guidance for targeted The Company has the Anti-Corruption Aeroflot Group companies. 4 reports by PJSC Aeroflot’s employees consolidated financial statements for 2019 procurement processes for other services, Policy approved by PJSC Aeroflot’s Board on attempts to lead them into corrupt prepared under the International Financial budget control and document verification of Directors and designed to create PJSC Aeroflot has other anti-corruption practices Reporting Standards (IFRS). for accounts payable, and tax advisory a uniform approach to implementing internal regulations developed and 4 reports, including anonymous services. Federal Law No. 273-FZ On Countering approved which establish the procedure ones, submitted under the Corruption dated 25 December 2008, for resolving conflicts of interest, including “Corruption complaints” request which provides for development and by reporting to the management on any type through the Feedback adoption of measures to prevent and personal interest that leads or may lead section of the Company’s official counter corruption. to a conflict of interest, and the procedure website at aeroflot.ru/feedback?_ of reporting to the management on preferredLanguage=en. all attempts by any persons to lead employees into corrupt practices.

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Corporate Governance System continued Annual Report 2019 Annual Report 2019

01 According to the National Anti-Corruption and required by the anti-corruption laws Preventing and resolving Provisions aimed at preventing and 01 Plan for 2018–2020 (approved by Decree and internal regulations. Particular focus resolving conflicts of interest are 0201 conflicts of interest 0201 of the President of the Russian Federation is placed on prevention of corruption contained in the Regulations on the Board The Company has the Anti-Corruption and Conflict of Interest 03 No. 378 dated 29 June 2019), the offences by PJSC Aeroflot employees Department for Economic Security’s of Directors, the Corporate Conduct Commission of PJSC Aeroflot chaired by Department for Economic 03 Company: related to the giving, offering or promising First Deputy Director for Preventing and Code, the Regulations on Procurement of Security’s First Deputy Director for Preventing and Countering 4 ensures compliance with the Russian to a public official on behalf or in the Countering Corruption, who reports Goods, Works, and Services, as well as Corruption. The Commission’s mandate is to: laws on counteracting corruption to interests of PJSC Aeroflot of money, gifts, directly to Deputy CEO for Legal and other documents governing procurement prevent and resolve conflicts of interest securities, other assets, the rendering Property Matters, is in charge of anti- and other business processes. 4 implements measures to raise public to them or persons affiliated with them corruption compliance management. 4 review the findings of internal 4 protect PJSC Aeroflot’s employees awareness about PJSC Aeroflot’s of property-related services, granting Situations where direct or indirect investigations of corruption in connection with corruption efforts to prevent corruption property rights for any action (or omission) In 2019, PJSC Aeroflot took additional personal interest of employees affects or offences and agree proposed reports and potential or real conflict 4 arranges for PJSC Aeroflot employees in the interests of PJSC Aeroflot by virtue measures to ensure compliance with the may affect the due, objective and impartial measures to hold the offenders of interest participation in conferences and other of their official position. requirements of Russian anti-corruption performance of their duties (a conflict accountable

CORPORATE GOVERNANCE CORPORATE events on the implementation of the laws to prevent and resolve conflicts of of interest) are identified both through GOVERNANCE CORPORATE government anti-corruption policy held The Company also informs its interest. due reporting of such situations by the 04 by the Government of the Russian counterparties about its programmes, employees to their management and 04 Federation, the Prosecutor General’s standards of conduct, procedures and To promote a common understanding through internal inspections, measures in 4 review matters related 4 review the Programme to Develop, Office, the Ministry of Labour and rules aimed at countering corruption. by the Company’s employees of the response to reports by PJSC Aeroflot’s to compliance with Implement and Ensure the Social Protection and other federal A standard anti-corruption clause procedure and methods of resolving employees, counterparties, partners PJSC Aeroflot’s requirements Effectiveness of Initiatives Aimed authorities and organisations is incorporated in all contracts and conflicts of interest, the Regulations and other persons, as well as through on preventing or resolving at Preventing and Countering 4 organises anti-corruption training for agreements signed by the Company with on Resolving Conflicts of Interest at counterparty reliability and business conflicts of interest and Corruption at PJSC Aeroflot, as top management counterparties. PJSC Aeroflot was approved that sets reputation checks (due diligence and sanctions for failure to comply well as proposals for its update and 4 provides annual professional forth the key principles, the procedure for KYC procedures). reports on its implementation development training for employees PJSC Aeroflot will not offer to its identification, prevention and resolution of involved in anti-corruption efforts. counterparties’ employees any incentives conflicts of interest. An employee conflict that would in any way oblige them of interest declaration template was also 4 formulate recommendations PJSC Aeroflot interacts with law and encourage such counterparties’ approved. to develop and amend internal enforcement authorities and other employees to take any action for the regulations aimed at preventing government authorities on matters related benefit of the Company, including by and countering corruption at to countering corruption within the giving money and gifts, performing works PJSC Aeroflot Company. (or services) free of charge and other means. The Company has a set of awareness measures to promote anti-corruption PJSC Aeroflot’s business units take practices, create a zero-tolerance attitude comprehensive efforts to identify and by the employees to corrupt conduct, assess corruption risks. and explain what is prohibited, restricted

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Corporate Governance System continued Annual Report 2019 Annual Report 2019 Information Disclosure Risk Management

Risk management system

01 To enhance its corporate transparency Information on PJSC Aeroflot is promptly Internal regulations guiding Aeroflot Group’s risk management policy, 01 and equity story, the Company aims at communicated to the widest possible including corruption risk management, 0201 the Annual Report 0201 ensuring timely disclosure of complete audience through publication of relevant is aimed at building a comprehensive Risk management, including corruption risk management, is 03 and accurate material information on its messages, press and news releases on Key internal regulations used to prepare system that helps promptly identify risks applied across all management levels and functional and project 03 operations. The Company’s disclosure PJSC Aeroflot’s disclosure page in the this Annual Report, including key internal that affect the Company, assess their areas. The respective functions are distributed among the Board is guided by the requirements and news feed updated in real time: regulations governing the internal audit, materiality and take measures to minimise of Directors, the Audit Committee, the Management Board and recommendations of federal laws, the disclosure.skrin.ru/disclosure/7712040126; as well as the risk management and both the likelihood of risks being realised business units of PJSC Aeroflot. The Company has set up the Risk Bank of Russia, Russian and international and in the Shareholders and Investors internal control system, are: and losses they can lead to. Management Department to: exchanges where the Company’s section of PJSC Aeroflot’s official website: 4 Articles of Association of PJSC Aeroflot securities are listed, as well as corporate ir.aeroflot.com. 4 Corporate Governance Code Aeroflot Group’s risk management documents such as the Regulations on of PJSC Aeroflot procedures are governed by the 4 provide overall coordination of the 4 prepare consolidated risk reports 4 Corporate Conduct Code of PJSC Aeroflot the Corporate Information Policy and Regulations on Aeroflot Group’s Risk risk management processes 4 Regulations on the General Meeting 4 perform day-to-day monitoring of the Regulations on Providing Access Management System approved in 2015 For more details on information disclosure see the of Shareholders of PJSC Aeroflot 4 develop guidelines to govern the the risk management process in the

CORPORATE GOVERNANCE CORPORATE to Insider Information. and updated in 2017. GOVERNANCE CORPORATE Information for Shareholders and Investors 4 Regulations on the Board of Directors risk management processes Company’s business units and in its section of this Annual Report. of PJSC Aeroflot controlled entities 04 4 Regulations on the Management Board The document lays down the framework 4 arrange personnel training in risk 04 4 of PJSC Aeroflot for a unified risk assessment and management and internal control prepare information and inform the 4 Regulations on the Executive Secretary Board of Directors and executive management methodology: goals, tasks, 4 review the risk portfolio and develop and the Office of the Board of Directors bodies on the effectiveness of the principles of organisation and operation proposals on the response strategy of PJSC Aeroflot risk management process. 4 Regulations on the Personnel and of the corporate risk management and reallocation of resources to The main objectives of PJSC Aeroflot’s corporate Remuneration Committee of the Board system (CRMS), and approaches to, manage respective risks information policy are to: of Directors of PJSC Aeroflot and principles of, the distribution of 4 Regulations on the Audit Committee rights, obligations and responsibilities 4 ensure compliance with the 4 honour shareholders’ rights of the Board of Directors of PJSC Aeroflot of participants of the risk management law and the requirements of to obtain material information 4 Regulations on the Strategy Committee system at PJSC Aeroflot and its controlled securities market regulators required to exercise their of the Board of Directors of PJSC Aeroflot entities. 4 Regulations on the Revision Committee corporate governance rights of PJSC Aeroflot 4 Regulations on Internal Audit PJSC Aeroflot’s business units and the Control over PJSC Aeroflot’s financial business units and at PJSC Aeroflot’s 4 enhance information transparency at Aeroflot Group Risk Management Department take and business activities is exercised controlled entities. Aeroflot Group and trust in communications with 4 maintain professional and 4 Regulations on Aeroflot Group’s Risk comprehensive efforts to identify and by the Audit Committee of the Board conducts employee training in risk the Company’s shareholders, trust-based relationships Management System assess risks, as well as prepare a Risk of Directors, the Revision Committee, management on a regular basis. Risk security holders, investors, of the Company with mass 4 Dividend Policy of PJSC Aeroflot Register and a Risk Map. The Board of the Internal Audit Department, and identification and analysis involves relevant creditors and other stakeholders, media underpinned by free 4 Regulations on the Corporate Information Directors of PJSC Aeroflot reviews and the Risk Management Department. business units. Application of a risk- Policy and ensure protection of their sharing of reliable information, approves the Risk Register, the Risk An independent auditor is engaged based approach promotes the corporate 4 Regulations on Providing Access to Insider rights and legitimate interests without prejudice to the rights Information Map and the Risk Appetite Statement of to audit PJSC Aeroflot’s accounting risk management culture and overall and legitimate interests of 4 Aeroflot Group’s Anti-Corruption Policy Aeroflot Group. statements prepared under the Russian CRMS effectiveness. Risk management shareholders, investors and 4 Regulations on the System of Disclosure Accounting Standards (RAS) and and internal control are governed by the 4 address as fully as possible other parties of Confidential Information to the Board The Risk Map is a map of the most the International Financial Reporting Regulations on Aeroflot Group’s Risk the demand of shareholders, of Directors (Audit Committee of the Board significant risks which covers risks of Standards (IFRS). Management System.

of Directors) – Hotline

investors, professional security underperformance against budgeted market participants and other 4 protect insider information. 4 Environmental Policy of PJSC Aeroflot. targets, including due to changes in Within the CRMS, prompt communication stakeholders for fair disclosures market risk factors, and operational procedures were set up to support about the Company and its risks directly associated with availability/ interaction between the Risk Management business airworthiness of aircraft, customer service Department and risk coordinators in all quality and customer safety. PJSC Aeroflot PJSC Aeroflot