ANNUAL REPORT 2013 RECOGNISED LEADERSHIP 1 Contents 1. 2. 4. 5. ABOUT THE COMPANY LETTERS TO CORPORATE RISK SHAREHOLDERS GOVERNANCE MANAGEMENT AND SECURITIES 5 22 81 109 1.1. Aeroflot Today ...............................................................................6 2.1. Letter from the Chairman of the Board of Directors................ 22 4.1. Corporate Governance ............................................................. 82 1.2. A Year of Confident Growth......................................................... 8 2.2. Letter from the Chief Executive Officer.................................... 24 Corporate Governance Principles ............................................ 82 1.3. Main Events in 2013................................................................... 10 Structure of Corporate Governance ......................................... 83 1.4. Aircraft Fleet and Route Network.............................................. 14 General Meeting of Shareholders ............................................ 83 1.5. Acclaim for the Company from Passengers and Professionals .20 Board of Directors ..................................................................... 83 Committees of the Board of Directors .....................................91 Executive Board ........................................................................ 93 3. Committees ............................................................................ 100 Internal Control and Audit ........................................................101 DESCRIPTION OF THE Information Disclosure ........................................................... 103 BUSINESS 4.2. Securities ................................................................................ 104 Share Capital ........................................................................... 104 Bonds .......................................................................................107 Online version of 27 the Annual Report Dividend Policy.........................................................................107 3.1. Market Position of the Group ................................................... 28 3.4. Corporate Social Responsibility ................................................70 The International Air Transport Market .................................... 28 HR Policy ....................................................................................70 6. 7. The Russian Air Transport Market ........................................... 29 Charity and Social Programmes ................................................75 The Air Cargo Market ................................................................31 Supporting Russian Sport ........................................................ 77 FINANCIAL APPENDIXES 3.2. Strategy ..................................................................................... 32 Protecting the Environment ..................................................... 78 RESULTS Strategy Overview .................................................................... 32 Multi-brand Platform................................................................. 36 New Projects: Aurora and Dobrolet ......................................... 36 115 166 New Technologies and Innovation ........................................... 38 3.3. Business Overview ................................................................... 40 Group Structure ........................................................................ 40 6.1. Letter from the Deputy CEO for Finance and Network Main Subsidiaries and Affiliates...................................................... 168 Operating Results ......................................................................41 and Revenue Management ..................................................... 116 Information on the Results of the President and Government of Business of Subsidiary Airlines ................................................ 44 6.2. Review of IFRS Financial Results ........................................... 117 Russian Federation Assignments Execution in 2013 .................... 171 Cargo and Mail Carrying .......................................................... .49 6.3. Statement of Management’s Responsibilities for the Information on Large Transactions Safety ........................................................................................ 50 Preparation and Approval of the Consolidated Financial and Related Party Transactions ......................................................... 174 Route Network.......................................................................... 52 Statements for the Year Ended 31 December 2013 ..............123 Information on Observance of the Code of Corporate Conduct... 174 Aircraft Fleet.............................................................................. 57 6.4. Independent Auditor’s Report................................................. 124 Transactions for Sale and Purchase of Shares of JSC Aeroflot, Maintenance and Repair Operations ....................................... 59 6.5. IFRS Consolidated Financial Statements Carried out by Members of Governing Bodies of JSC Aeroflot in 2013 179.. Brand and Service Quality ........................................................ 60 for the year ended 31 December 2013................................... 125 Terms and Abbreviations Used in this Annual Report................... 180 Sales .......................................................................................... 64 List of Aeroflot Offices ....................................................................181 Procurement ............................................................................. 68 Contact Information ........................................................................186 See fleet presentation and route network map in augmented reality on next page 1 AEROFLOT GROUP FLEET AEROFLOT GROUP ROUTE NETWORK IN AUGMENTED REALITY IN AUGMENTED REALITY 4. 5. CORPORATE RISK GOVERNANCE MANAGEMENT AND SECURITIES 81 109 4.1. Corporate Governance ............................................................. 82 Corporate Governance Principles ............................................ 82 Structure of Corporate Governance ......................................... 83 General Meeting of Shareholders ............................................ 83 Board of Directors ..................................................................... 83 Committees of the Board of Directors .....................................91 Executive Board ........................................................................ 93 Committees ............................................................................ 100 Internal Control and Audit ........................................................101 Information Disclosure ........................................................... 103 4.2. Securities ................................................................................ 104 Share Capital ........................................................................... 104 Bonds .......................................................................................107 Online version of the Annual Report Dividend Policy.........................................................................107 6. 7. FINANCIAL APPENDIXES RESULTS 115 166 6.1. Letter from the Deputy CEO for Finance and Network Main Subsidiaries and Affiliates...................................................... 168 and Revenue Management ..................................................... 116 Information on the Results of the President and Government of 6.2. Review of IFRS Financial Results ........................................... 117 Russian Federation Assignments Execution in 2013 .................... 171 6.3. Statement of Management’s Responsibilities for the Information on Large Transactions Preparation and Approval of the Consolidated Financial and Related Party Transactions ......................................................... 174 Statements for the Year Ended 31 December 2013 ..............123 Information on Observance of the Code of Corporate Conduct... 174 6.4. Independent Auditor’s Report................................................. 124 Transactions for Sale and Purchase of Shares of JSC Aeroflot, 6.5. IFRS Consolidated Financial Statements Carried out by Members of Governing Bodies of JSC Aeroflot in 2013 179.. for the year ended 31 December 2013................................... 125 Terms and Abbreviations Used in this Annual Report................... 180 List of Aeroflot Offices ....................................................................181 Download the app for augmented Download the app for augmented reality view, move the tablet on reality view, move the tablet on Contact Information ........................................................................186 airplane image the globe 1 ABOUT THE COMPANY LETTERS TO SHAREHOLDERS DESCRIPTION OF THE BUSINESS CORPORATE GOVERNANCE RISK MANAGEMENT FINANCIAL RESULTS APPENDIXES AEROFLOT | ANNUAL REPORT 2013 AND SECURITIES Key Highlights 2013 37% TOP 5 31.4 85.3 109.1 2.86 AEROFLOT GROUP HELD AEROFLOT ENTERED THE MILLION PASSENGERS BILLION — REVENUE PASSENGER BILLION AVAILABLE SEAT USD BILLION – 37% OF THE RUSSIAN MARKET TOP 5 EUROPEAN AIRLINES CARRIED BY AEROFLOT GROUP KILOMETERS OF AEROFLOT KILOMETERS OF AEROFLOT MARKET CAPITALISATION FOR PASSENGER TRAFFIC BY REVENUE AND AVAILABLE GROUP GROUP OF JSC AEROFLOT AT THE END AND 23% OF THE MARKET