Anti-corruption Efforts

As a member of the anti-Corruption Charter of the Russian business, in 2019 the Company once again passed the assessment of the Russian Union of Industrialists and entrepreneurs of the completeness, adequacy and effectiveness of anti-corruption measures implemented in the Company and confirmed the compliance of the measures taken to combat corruption with the requirements of the Charter, as a result of which participation in the Charter was extended for two years.

Anti-corruption policy (basic principles, approaches, and areas)

The RusHydro Group conducts systematic work on preventing and detecting corruption offenses and eliminating (minimizing) the causes and conditions that give rise to corruption.

The fundamental documents of the RusHydro Group in the area of anti-corruption efforts are the Anti-Corruption Policy and the Code of Corporate Ethics, which contain a set of versatile, interrelated and consistent principles (including in the area of professional ethics), approaches and measures for preventing and eliminating (minimizing) the causes and conditions that give rise to corruption and for forming an anti-corruption consciousness characterized by the intolerance of employees, contractors, and the management bodies of the RusHydro Group toward manifestations of corruption.

In the Company, the Anti-Corruption Policy of RusHydro (the new version of the Anti-Corruption Policy was approved by minutes of the Board of Directors No. 263, dated December 28, 2017), which defines the main goals, objectives, principles and guidelines for preventing and combating corruption, and ensuring compliance with the anti-corruption legislation of the Russian Federation, is in effect.

According to the provisions of the Anti-Corruption Policy of RusHydro, all employees and members of the Board of Directors must comply with the norms of Russian legislation and international law in the area of anti-corruption efforts.

In addition, the employees of the Company holding posts that are subject to corruption risks must:

• refrain from actions that would lead or could potentially lead to a conflict between the interests of the employee and the interests of the company of the RusHydro Group where he/she works;
• give notice of known cases of corruption-related offenses and illegal actions, receipt of gifts, etc., and disclose information on commercial activities not related to the interests of the RusHydro Group;
• provide information in writing about the absence of conflicts of interest;
• provide information on income, property and property liabilities in relation to themselves, members of their families and close relatives.

The Code of Corporate Ethics of RusHydro (the first version of the Code was approved by minutes of the Board of Directors No. 152 dated May 21, 2012; the new version of the Corporate Ethics Code was approved by the minutes of Board of Directors No. 235 dated April 8, 2016) is in effect in the Company. It takes into account the current recommendations of the Corporate Governance Code approved by the Bank of Russia, as well as other requirements and recommendations issued by regulatory bodies to date.

The Code of Corporate Ethics sets out the obligation of the employees and the members of the Board of Directors to act in the interests of the companies within the RusHydro Group and to avoid conflicts of interest.

In accordance with the Code of Corporate Ethics, employees are required:

• not to give preference to any counterparties of the Company or organizations and to be independent of their influence;
• to exclude actions related to the influence of any personal, property/financial and other interests that impede the faithful performance of their work responsibilities;
• to maintain impartiality, which excludes the possibility of the influence of the decisions of political parties and public associations on their work activity;
• not to use their official position to influence the activities of state bodies, local self-government bodies, organizations, officials, state (municipal) employees and citizens when resolving personal matters;
• not to perform illegal actions;

In terms of conflict of interest prevention:

• to take measures to prevent the occurrence of conflicts of interest and resolve arising conflicts of interest;
• to refrain from part-time work at enterprises/in organizations that are not members of the RusHydro Group, with the exception of teaching, creative and scholarly activities, if this does not lead to a conflict of interest;
• not to resort directly or indirectly to any personal loan or service from any person or legal entity having business relations with the Company or seeking such relations. This does not apply to organizations offering such loans or services as part of their normal course of business.
• to declare the presence or the threat of personal interest which affects or may affect the proper performance of official duties.

The Code of Corporate Ethics also states that employees are prohibited from:

• giving gifts to state and municipal employees in connection with the performance of their job (official) duties;
• accepting remuneration (loans, cash and other remuneration, services, payment for entertainment, recreation, transportation costs) and gifts from individuals and legal entities;

In addition, the companies of the RusHydro Group adhere to the following policies for managing conflicts of interest:

• mandatory disclosure of information about a real or potential conflict of interest;
• individual consideration and assessment of reputational risks for the RusHydro Group when identifying and resolving each conflict of interest;
• confidentiality of the process of disclosure of information about a conflict of interest during its resolution;
• maintaining a balance of interests of the companies of the RusHydro Group and its employee when resolving conflict of interest;
• protection of an employee from prosecution in connection with his reporting of a conflict of interest which was promptly disclosed by the employee and resolved (prevented).

Thus, the Anti-Corruption Policy and the Code of Corporate Ethics reflect the Company's commitment to high ethical standards of doing open and honest business in order to improve corporate culture, follow the best practices of corporate governance, and maintain its business reputation at a proper level.