Main stages of the process and methods of risk management

The main document that determines the process of forming the register/plan/report on strategic risks management and the corresponding performance indicator (KPI) is the Regulation on Strategic Management of PJSC RusHydro.

Stages of risk management

The Company draws up a register of strategic risks with the determination of risk owners, which is approved by the Management Board on an annual basis. The register is used both to disclose information on risks to shareholders, rating agencies, the auditor, and to further develop and monitor the implementation of risk optimization measures as part of implementation of the strategy of PJSC RusHydro. For risks that fall into the category of critical and essential, the Management Board approves an action plan to manage strategic risks, in which the deadline, responsible for the implementation and the expected result at the end of the reporting period are determined for each activity.

The implementation of strategic risk management activities is taken into account in the approved performance indicators in accordance with the Strategy Implementation Plan of PJSC RusHydro. Reaching KPIs is taken into account when bonuses are paid to the employees. Independent monitoring of fulfilling the Plan and monitoring of its implementation is carried out by the Company's risk managers.

The report on the actual implementation of the strategic risk management action plan is prepared by the Risk Management and Control Department at the end of the reporting period and submitted to the Chairman of the Management Board for approval.

In addition, the Company's risk management cooperates with the Audit Committee under the Board of Directors on a regular basis while exercising its control over the functioning of the risk management system of PJSC RusHydro.

For technical support of the risk management process in connection with the need to process large data arrays and provision on-line monitoring of key risk indicators, the Automated Control System for Internal Control and Risk Management was put into operation in December 2014.

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