General Information on Corporate Governance

Principles of Corporate Governance of Rosseti Kuban, PJSC

Key Documents Regulating Corporate Governance in the CompanyThe documents mentioned herein and other internal corporate governance documents of the Company are published on the website of Rosseti Kuban, PJSC in the About the Company / Constitutive and Internal Documents section.

• Articles of Association
• Provisions regulating the activities of the Company’s management bodies (General Meeting of Shareholders, Board of Directors, Management Board)
• Regulations on Committees under the Board of Directors
• Methodology for assessing the performance of the Board of Directors and Committees under the Board of Directors
• Corporate Governance Code
• Auditing Commission Regulations
• Regulations on the Dividend Policy
• Provisions on Insider Information and Information Policy
• Regulations on the Corporate Secretary of the Company
• Protocol for Liaison between the Company and Business Entities with Shares (Stakes) held by Rosseti Kuban, PJSC
• Policy of Holding Shares of the Company and its subsidiaries and affiliates by members of the Board of Directors, etc.

The Company has a Corporate Governance Code in place in order to ensure and protect the rights and interests of all of its shareholders, to improve corporate governance practices, to ensure transparency of the Company’s management efficiency and to confirm its commitment to following the recommendations and advanced principles of corporate governanceThe current version was approved by the decision of the Board of Directors of Rosseti Kuban, PJSC dated 2 December 2021 (Minutes No. 456/2021 dated 3 December 2021)..

Rosseti Kuban, PJSC abides by the principles and recommendations of the Corporate Governance Code of the Bank of Russia as well. The report on compliance with Corporate Governance Code in 2023 is available in Appendix 1. The Board of Directors certifies that all report data contain full and reliable information on the Company’s compliance with the principles and recommendations of the Corporate Governance Code of the Bank of Russia.

Promotion of Corporate Governance System in 2023

The Company continued to improve its corporate governance in the reporting year.

In 2023, in accordance with Russian law, the annual General Meeting of Shareholders was held in the form of absentee voting, with shareholders being given the opportunity to vote by filling out electronic ballot forms on the official website of the registrar — IRC — R.O.S.T., JSC.

The Board of Directors of the Company approved:

• Policy of Holding Shares of the Company and its subsidiaries and affiliates by members of the Board of Directors of the Company, etc.
• Sustainable Development Policy and Climate Policy of Rosseti, PJSC as the Company’s internal documents
• New versions of the Risk Management and Internal Control Policy, Internal Audit Policy, and Regulations on the Protection of Insider Information of Rosseti Kuban, PJSC

The Board of Directors and its committees conducted a self‑assessment of their performance for the 2022–2023 corporate year during the reporting year, and they gave their work and organisation a relatively high rating (with a maximum score of 5 and an overall average score of 4.9).

A total of 162 corporate events were held in 2023, including:

• one General Meeting of Shareholders
• 38 meetings of the Board of Directors, with 99.7% attendance by members of this governing body, up 0.5% p.p. year‑on‑year
• 80 meetings of the committees under the Board of Directors
• 43 meetings of the Management Board

Plans for 2024

The Company will continue to work towards improving corporate governance in 2024 based on an analysis of best practices in the field, the findings of the corporate governance assessment, and an assessment (self‑assessment) of the Board of Directors’ and its committees’ operations, including:

• To update the Articles of Association and internal documents of the Company in line with the recommendations of the Corporate Governance Code of the Bank of Russia
• To ensure that the Company’s activities comply with the requirements of by‑laws and conducting the necessary corporate procedures
• To conduct a self‑assessment of the performance efficiency of the Board of Directors and its committees
• To plan and deliver the corrective action plans based on the results of the corporate governance assessment carried out by the internal audit function
• To supervise the timely and proper implementation of decisions of the Company’s governing bodies
• To disclose information about the Company in full and timely manner as required by the laws on joint stock companies and the stock market

Corporate Governance Level Assessment

In the reporting year, the Company’s internal audit function conducted an assessment of corporate governance at the end of the 2022–2023 corporate year in the light of its compliance with the laws of the Russian Federation, principles and recommendations of the Corporate Governance Code of the Bank of Russia, Listing Regulations of the Moscow Exchange and the best corporate practices. The assessment followed the Company’s methodology that complies with the standard methodology for assessing the corporate governance of Rosseti’ S&As approved by Rosseti’s Order No. 342 dated 5 August 2020 “On Approval of the Standard Methodology for Assessing Corporate Governance in Rossti’s S&As”.

Objectives of the assessment:

• To provide the Board of Directors of the Company, the Audit Committee of the Board of Directors of the Company, and the executive bodies of the Company with objective and independent information on the state of corporate governance in the Company and its efficiency
• To make recommendations to improve the Company’s corporate governance

Following the results, the internal audit recognised the Company’s corporate governance as corresponding to the developed practice level; it also noted that the potential for improvement on a number of issues depends on the standing of the main shareholder and other external factors that the Company cannot have influence on.