Appendixes / Information on observance of the Code of Corporate Conduct
Provision of the Code of Corporate Conduct Observed or not observed Notes
General Meeting of Shareholders
  1. Shareholders shall be notified of holding of the general meeting of shareholders at least 30 days before the date when it is scheduled to be held, regardless of the nature of business included on its agenda, unless a longer notification period is required by law.
 Observed Clause 17.2 of the Company Charter
  1. Shareholders shall be able to acquaint themselves with the list of persons eligible to attend the general meeting of shareholders from the date when notice of the general meeting of shareholders is given and until the meeting is closed, or, in the case of a meeting in absentia, until the final date for acceptance of ballots.
 Observed In accordance with clause 16.4. of the Company Charter, the list of persons having the right to take part in the general meeting of shareholders is provided by the Company for purpose of acquaintance at the request of persons included in the list and owning at least one percent of votes
  1. Information (materials) that must be provided during the period of preparation for the general meeting of shareholders shall be available to shareholders via electronic communication facilities, including the Internet.
 Observed Obeyed in practice
  1. Any shareholder should be able to propose an item for inclusion in the agenda of a general meeting of shareholders or to request convening of a general meeting of shareholders without presentation of an excerpt from the shareholder register, if the shareholder’s title to stocks is recorded in the system for maintaining the shareholder register. If the shareholder’s title to stocks is recorded on a securities account, an excerpt from the securities account will be sufficient for exercise of the aforementioned title.
 Observed The Company itself requests confirmation from the register of shareholders when accepting agenda proposals for the general meeting of shareholders
  1. The charter or corporate documents of the joint stock company should require presence of the CEO, executive board members, members of the board of directors, members of the internal audit commission, and the auditor of the company at the general meeting of shareholders.
Observed in part Clause 11.3 of the Statute on the General Meeting of Shareholders.
  1. Candidates should be present when the general meeting of shareholders elects members of the board of directors, the CEO, members of the executive board, and members of the internal audit commission, and also the when auditor of the joint-stock company is appointed.
 Observed in part
  1. Internal documents of the joint-stock company should contain a procedure for registration of persons attending the general meeting of shareholders
Observed Article 7 of the Statute on the General Meeting of Shareholders
Board of Directors
  1. The charter of the joint-stock company should include authority of the board of directors to approve financial and business plan of the joint-stock company on an annual basis.
Observed Clause 19.2 of the Company Charter (sub-clauses 1 and 24)
  1. A risk management procedure for the joint-stock company, approved by the board of directors, should be in place.
 Observed Clause 5.5 of the Statute on the Audit Committee
  1. The charter of the joint-stock company should include the right of the board of directors to suspend the authority of the CEO, who was appointed by the general meeting of shareholders.
 Observed Clause 19.2 of the Company Charter (sub-clause 8)
  1. The charter of the joint-stock company should include the right of the board of directors to set requirements as to the level of qualifications and amount of remuneration payable to the CEO, members of the executive board, and managers of main structural divisions of the company.
 Observed in part Clause 19.2 of the Company Charter (sub-clauses 10 and 12)
  1. The charter of the joint-stock company should include the right of the board of directors to approve terms and conditions of contracts with the CEO and members of the executive board.
 Observed Clause 19.2 of the Company Charter (sub-clause 10)
  1. The charter or internal documents of the joint-stock company should require that board votes of the CEO (management organization, manager) and members of the executive board are not taken into account in voting to approve terms and conditions of contracts with the CEO and members of the executive board.
Not observed
  1. The board of directors of the joint-stock company should include at least three independent directors who meet requirements of the Code of Corporate Conduct.
 Observed
  1. Persons should be disqualified from serving on the board of directors of the joint-stock company, if they were ever found guilty of any economic crime or crime against government, the interests of government or local authorities, or if they have been subject to any administrative penalties for violations in the sphere of business and finance, taxation, or the securities market.
 Observed
  1. Persons should be disqualified from serving on the board of directors of the joint-stock company if they are a shareholder, CEO (manager), member of any management body or employee of a legal entity, which is a competitor of the joint-stock company.
 Observed
  1. The charter of the joint-stock company should require the board of directors to be elected by cumulative voting.
 Observed Clause 19.4 of the Company Charter
  1. Internal documents of the joint-stock company should require members of the board of directors to refrain from any actions that will or may potentially cause a conflict between their interests and interests of the company, and to disclose information to the board of directors concerning such a conflict, should it occur.
 Observed in part Clause 22.1 of the Company Charter; Article 8 of the Statute on the Board of Directors
  1. The internal documents of the joint-stock company should require members of the board of directors to notify the board in writing of their intention to close any transactions with securities of the company or of its subsidiaries (affiliates), and to disclose any information on transactions closed by them with such securities.
Observed The procedure for members of the Board of Directors to declare any interest in transactions by the Company is regulated by clause 22.7 of the Company Charter and by articles 81 and 82 of the Law on Joint-Stock Companies.
  1. The internal documents of the joint-stock company should require the board of directors to hold meetings at least once every six weeks.
Observed Article 5 of the Statute on the Board of Directors.
  1. The board of directors of the joint-stock company should meet at least once every six weeks in any year, for which a company annual report is compiled.
Observed Article 5 of the Statute on the Board of Directors.
  1. The internal documents of the joint-stock company should contain procedures to be followed at meetings of the board of directors.
Observed Article 5 of the Statute on the Board of Directors; procedural rules for meetings of the Board of Directors of JSC Aeroflot.
  1. Internal documents of the joint-stock company should stipulate that any transactions by the company with value in excess of 10 percent of company assets should be approved by the board of directors, except for transactions in the normal course of business.
Observed Clause 19.2 of the Company Charter (sub-clause 21)
  1. Internal documents of the joint-stock company should include the right of members of the board of directors to receive information from executive bodies and managers of structural divisions of the company, which is necessary for them to discharge their functions, as well as sanctions for failure to provide such information
 Observed in part Article 8 of the Statute on the Board of Directors
  1. There should be a committee of the board of directors in charge of strategic planning, or the function of such a committee should be vested in another committee (other than the audit committee and personnel and remuneration committee)
 Observed Sub-clause 11.2 of article 11 of the Statute on the Board of Directors; Statute on the Strategy Committee
  1. A committee of the board of directors in charge of audit (audit committee) should be created, which makes recommendations to the board of directors on choice of an auditor for the joint-stock company and liaises with the auditor and with the internal audit commission of the company
Observed Sub-clause 11.2 of article 11 of the Statute on the Board of Directors; Statute on the Audit Committee
  1. The audit committee should include only independent and non-executive directors
 Observed in part
  1. The audit committee should be headed by an independent director
 Not observed
  1. The internal documents of the joint-stock company should stipulate right of access for all members of the audit committee to any company documents and information, on condition that they do not disclose confidential information.
 Observed Clauses 3.4 and 4.11 of the Statute on the Audit Committee.
  1. A committee of the board of directors for personnel and remuneration should be created, with the functions of identifying criteria for selection of candidates to the board of directors and developing a remuneration policy
Observed Sub-clause 11.2 of article 11 of the Statute on the Board of Directors; Statute on the Personnel and Remuneration Committee.
  1. The personnel and remuneration committee should be headed by an independent director
 Not observed
  1. No officers of the joint-stock company should serve on the personnel and remuneration committee
Not observed
  1. A committee of the board of directors in charge of risk should be created or the functions of such a committee should be vested in another committee (other than the audit committee and the personnel and remunerations committee).
 Observed in part In accordance with sub-clause 11.1 of article 11 of the Statute on the Board of Directors, the Board of Directors can create permanent and temporary committees.
  1. A committee of the board of directors should be created for settlement of corporate conflicts or the functions of such a committee should be vested in another committee (other than the audit committee and the personnel and remuneration committee).
 Observed in part There have been no corporate conflicts since July 28, 1992 (the date of creation of JSC Aeroflot). If situations of conflict arise, the Board of Directors has the right to create a committee for resolution of corporate conflicts (sub-clause 11.1 of article 11 of the Statute on the Board of Directors).
  1. No officers of the joint-stock company should serve on the committee for settlement of corporate conflicts.
Not observed A committee of the Board of Directors for resolution of corporate conflicts has not been created
  1. The committee for settlement of corporate conflicts should be managed by an independent director.
 Not observed A committee of the Board of Directors for resolution of corporate conflicts has not been created
  1. There should be internal documents approved by the board of directors of the joint-stock company, setting out a procedure for creation and functioning of committees of the board of directors.
 Observed Separate statutes for each committee of the Board of Directors
  1. The charter of the joint-stock company should define a quorum of the board of directors in such a way that attendance of independent directors at meetings of the board of directors is required.
Not observed
Executive Bodies
  1. There should be a collegiate executive body (executive board) of the joint-stock company.
 Observed Clause 21.1 of the Company Charter.
  1. The charter or internal documents of the joint-stock company should require that any transactions with real estate and obtaining of loans by the company must be approved by the executive board, unless such transactions are classified as large transactions and treated as normal business of the company.
 Observed Paragraph 2 of the Statute on the Executive Board; Clause 21.4 of article 21 of the Company Charter.
  1. Internal documents of the joint-stock company should contain a procedure for approval of operations, which are beyond the bounds of the company’s business plan.
 Observed Sub-clauses 19-21 of clause 19.2 of article 19 of the Company Charter, and sub-clause 12 of clause 21.5 of article 21 of the Company Charter.
  1. Executive bodies should not include any person who is a shareholder, CEO (manager), member of any management body, or employee of a legal entity, which is a competitor of the joint-stock company.
 Observed
  1. Executive bodies of the joint-stock company should not include any person who has been found guilty of any economic crime or crime against government, the interests of government or local authorities, or if they have been subject to any administrative penalties for violations in the sphere of business and finance, taxation, or the securities market. If the office of the sole executive body is executed by a management organization or a manager, the CEO and executive board members of the management organization or the manager should meet the aforementioned requirements for the CEO and members of the executive board of the joint-stock company itself.
 Observed
  1. The Charter or internal documents of the joint-stock company should prohibit any management organization (manager) from exercising analogous functions in a competitor company or from being involved in any property relationships with the company, other than providing management services
Not observed
  1. Internal documents of the joint-stock company should include the obligation of executive bodies to avoid any acts, which will or may cause a conflict between their interests and interests of the company, as well as the obligation to notify the Board of Directors should such a conflict arise.
 Observed Article 22 of the Company Charter
  1. The charter or internal documents of the joint-stock company should include criteria for selection of a management organization (a manager)
 Not observed The Company Charter does not envisage any statute on a managing organization or manager.
  1. Executive bodies of the joint-stock company shall provide monthly reports on their work to the board of directors
Observed in part Sub-clauses 5 of clause 21.4 of article 21 of the Company Charter
  1. Agreements between the joint-stock company, on one hand, and the CEO (management organization, manager) and members of the executive board, on the other hand, should assign liability for violation of regulations concerning use of confidential and official information.
 Observed Sub-clause 11 of clause 2.3 of the CEO Employment Contract; Sub-clause 6.2 of the Standard Employment Contract.
Company Secretary
  1. The joint-stock company should have a special officer (company secretary), whose job is to ensure compliance of bodies and officers of the company with procedural requirements that guarantee exercise of rights and lawful interests of company shareholders
 Observed Article 10 of the Statute on the Board of Directors; Clause 19.8 of the Company Charter.
  1. The charter or internal documents of the joint-stock company should include a procedure for appointment (election) and specify responsibilities of the company secretary
Observed Clause 19.8 of the Company Charter
  1. The charter of the joint-stock company should specify requirements for any candidate to the post of company secretary
Not observed
Major Corporate Actions
  1. The charter or internal documents of the joint-stock company should require approval of any major transaction prior to execution thereof.
 Not observed
  1. It should be obligatory for the joint-stock company to hire an independent appraiser to assess the market value of property, which is the object of a major transaction.
 Observed
  1. The charter of the joint-stock company should prohibit any actions during the process of acquisition of large share stakes in the company (takeover), which aim to protect the interests of executive bodies (members thereof) and members of the board of directors, and should also prohibit any actions that tend to worsen the situation of shareholders. In particular, the board of directors should not be allowed to issue any additional stocks, securities convertible into stocks, or to purchase stocks or securities granting the right to purchase stocks of the company, until the proposed final date for acquisition of stocks or securities, even if the right to take such a decision is granted to the board by the charter.
 Not observed
  1. The charter of the joint-stock company should require an independent appraiser to be hired for assessment of current market value of stocks and possible changes in their market value that may result from any merger.
 Not observed
  1. The charter of the joint-stock company should not exempt the purchaser from the obligation to make an offer to shareholders to sell ordinary stocks of the company held by them (and securities convertible into ordinary stocks) in the case of a merger.
 Observed
  1. The charter or internal documents of the joint stock company should include a requirement to engage an independent appraiser to determine the conversion rate of stocks in case of reorganization.
 Not observed
Information Disclosure
  1. There should be an internal document approved by the board of directors that determines rules and approaches of the joint-stock company to disclosure of information (a statute on information policy).
 Observed Statute on Corporate Information Policy.
  1. Internal documents of the joint-stock company should require disclosure of information concerning the purpose of stock placements, persons intending to purchase the stocks, including large shareholdings, and information as to whether senior executive officers of the company will take part in acquisition of the stocks to be placed.
 Observed in part Clause 3.2.1 of the Statute on Corporate Information Policy.
  1. Internal documents of the joint-stock company should contain a list of information, documents, and materials, to be provided to shareholders for transaction of business included on the agenda of the general meeting of shareholders.
Observed Sub-clauses 5.5.1, 5.5.2, 5.5.3, 5.5.4 of clause 5.5 of the Statute on the General Meeting of Shareholders.
  1. The joint-stock company should have a web site in the Internet and disclose information about itself on this site on a regular basis.
 Observed Generally available corporate information and documents, which must be provided to all interested parties, are placed in open access on the corporate site, www.aeroflot.ru and www.disclosure.skrin.ru/disclosure/7712040126
  1. Internal documents of the joint-stock company should require disclosure of information on transactions by the company with persons who are, pursuant to the charter, senior executive officers of the company, as well as on transactions of the company with organizations, in which senior executive officers of the company directly or indirectly hold 20 or more percent of authorized capital or which can be otherwise significantly influenced by such persons
 Observed in part Clause 3.2.1 of the Statute on Corporate Information Policy.
  1. Internal documents of the joint stock company should require disclosure of information on all transactions, which may affect the market value of stocks of the company
 Observed in part Clause 3 of the Code of Corporate Conduct of JSC Aeroflot.
  1. There should be an internal document approved by the board of directors related to use of significant information on activities of the joint stock company, stocks, and other securities of the company and transactions therewith, if such information is not in the public domain and its disclosure may materially affect the market value of the company’s stocks and other securities
Observed in part Clause 3.2.3 of the Statute on Corporate Information Policy.
Control over Financial and Business Operations
  1. There should be procedures, approved by the board of directors. for internal control over financial and business activities of the joint-stock company.
Observed Statute on the Internal Audit Department.
  1. There should be a special division of the joint-stock company (the internal control and audit service), which ensures that internal control procedures are complied with.
Observed Statute on the Internal Audit Department.
  1. Internal documents of the joint-stock company should require the board of directors to define the structure and content of the company’s internal control and audit service.
Observed Statute on the Internal Audit Department.
  1. The internal control and audit service should not include any person who has been found guilty of any economic crime or crime against government, the interests of government or local authorities, or who has been subject to any administrative penalties for violations in the sphere of business and finance, taxation, or the securities market.
Observed
  1. The internal control and audit service should not include any persons who serve on executive bodies of the joint-stock company or persons who are shareholders, the CEO (manager), members of management bodies, or employees of a legal entity, which is a competitor of the company
Observed
  1. Internal documents of the joint-stock company should specify a time limit for presentation of documents and materials to the internal control and audit service for appraisal of any completed financial or business transaction, and should also specify liability of company officers and employees for failure to present such documents and materials within the prescribed time.
Observed in part Statute on the Revision Commission.
  1. Internal documents of the joint-stock company should oblige the internal control and audit service to notify the audit committee of any violations that may be discovered and, if there is no such committee, to notify the board of directors
Observed Statute on the Internal Audit Department.
  1. The Charter of the joint-stock company should oblige the internal control and audit service to make a preliminary appraisal of advisedness of operations that were not foreseen in the financial and business plan of the joint-stock company (non-standard operations).
 Not observed
  1. Internal documents of the joint-stock company should include a procedure for approval of any non-standard operation by the board of directors.
Observed in part Part of authorities of the Board of Directors
  1. There should be an internal document approved by the board of directors defining the procedure for audit of financial and business activities of the joint-stock company by the internal audit commission.
Observed Clause 3.1 of article 3 of the Statute on the Revision Commission.
  1. The audit committee should give an assessment of the opinion of the auditor prior to its presentation to shareholders at the general meeting of shareholders
Observed Clause 5.9 of the Statute on the Audit Committee.
Dividends
  1. There should be an internal document approved by the board of directors, by which the board of directors is governed when making recommendations on the amount of dividends to be paid (statute on dividend policy).
 Observed in part Statute on dividend policy
  1. The statute on dividend policy should include a procedure for determining a minimum share of net profit of the joint-stock company to be applied in payment of dividends, and should define the conditions, in which dividends on preference stocks, as prescribed in the company charter, are not paid or are paid only in part.
Observed in part The Company Charter does not refer to preferred shares
  1. Information on dividend policy of the joint stock company and changes to it should be published in a periodical, indicated by the company charter for publishing of announcements of general meetings of shareholders, and should also be placed on the company web site in the Internet.
 Not observed