#1Russian Aquaculture INARCTICA GROWTH AND SUSTAINABILITY VECTOR 2021 Annual report#2Content ABOUT THE REPORT 04 MESSAGE FROM THE CHAIR OF THE BOARD OF DIRECTORS 06 ABOUT THE COMPANY INARCTICA 08 HISTORY OF THE COMPANY AND PRESENT DAYS. GEOGRAPHY. MARKET OVERVIEW. 2 PJSC Russian Aquaculture | Annual Report 2021 PERFORMANCE 18 INARCTICA The website of the INARCTICA brand of the Russian Aquaculture Group can be found at en.inarctica.com The website of PJSC Russian Aquaculture can be found at russaquaculture.ru/en CORPORATE GOVERNANCE SUSTAINABLE DEVELOPMENT AND RISK MANAGEMENT 26 64 VERTICALLY INTEGRATED 10 BUSINESS MODEL 12 FARMING TECHNOLOGY. 20 CORPORATE GOVERNANCE SYSTEM. 28 SUSTAINABLE DEVELOPMENT. 66 20 GENERAL MEETING 22 OF SHAREHOLDERS 33 SUSTAINABLE DEVELOPMENT MANAGEMENT SYSTEM. 67 14 PERFORMANCE BOARD OF DIRECTORS. 36 CARE FOR ENVIRONMENT 74 IN THE MURMANSK REGION. 23 WORK OF BOARD COMMITTEES. 44 HUMAN RESOURCE MANAGEMENT. 83 PERFORMANCE IN THE REPUBLIC OF KARELIA.. SMOLT PLANTS IN NORWAY. 225 24 CEO 54 OCCUPATIONAL HEALTH AND SAFETY 89 25 CONTROL AND AUDIT. 55 SUPPORT FOR LOCAL COMMUNITIES. 94 EQUITY STRUCTURE. 59 RISK MANAGEMENT. 96 www.russaquaculture.ru/en/ ANNEXES. 100 + G => 3#3PJSC Russian Aquaculture | Annual Report 2021 About the Report This Annual Report of Public Joint- Stock Company Russian Aquaculture (hereinafter, the "Company") for the reporting period from 1 January to 31 December 2021 gives an overview of the Company's, its subsidiaries' and affiliates' performance (hereinafter jointly referred to as the "Group" or the "Russian Aquaculture Group") in 2021. The subsidiaries and affiliates are domestic and foreign companies directly or indirectly controlled by PJSC Russian Aquaculture. The Report is based on the Group's consolidated financial statements prepared under the International Financial Reporting Standards (hereinafter, the "IFRS"), unless otherwise expressly specified in the text of the Report, and complies with the Russian law on securities and information disclosure regulations of the Bank of Russia. This Report provides insight into the audited IFRS consolidated financial statements for 2021 as well as the Auditor's Report thereto on page 113. The Draft Report is recommended for the approval by the Board of Directors of PJSC Russian Aquaculture (Minutes No. 374 dated 30 May 2022) and confirmed by the Company's Auditor. Scope and Content of the Report The Annual Report contains information on the Company's performance in 2021, available at the time of the Report generation. Information about the members of the Company's management and controlling bodies, as well as individual remuneration is disclosed subject to requirements of the Russian law on personal data. Details about employment of and positions held by members of the Board of Directors in other companies are presented according to the information they submitted to the Company as at the end of the reporting year. "At present" means 31 December 2021. The Report contains forecasts, statements of intent, opinions or current expectations of the Company's performance results, financial health, liquidity, growth prospects, strategy, and development of the industry where it operates. By their nature, forecasts address matters that involve risks and uncertainties, as they relate to events and are dependent on circumstances that may or may not occur in future. The words "intends," "seeks," "expects," "estimates," "plans," "believes," "assumes," "may," "shall," "will," "will continue" and other similar expressions generally indicate the predictive nature of a statement and suggest the risk of non-occurrence of said events or actions depending on various factors. The Company hereby informs that such forecasts do not guarantee any future performance indicators. The Company's actual performance, financial health and liquidity, as well as development of the industry in which it operates may differ materially from data given in the forward- looking statements made herein. In addition, even if the mentioned indicators are consistent with the forecasts presented in this Report, these results and events do not serve as a guarantee of similar results and events in the future. The Company does not make any express or implied representations or warranties and shall not bear any liability in the event of any loss that individuals or legal entities may directly or indirectly incur as a result of the use of the forecasts from this Annual Report for whatever reason. The said persons shall not fully rely on forecasts contained herein as they do not represent the only possible scenario. Except as required by the legislation of the Russian Federation, the Company undertakes no obligation to revise or confirm expectations and estimates or publish updates of and changes to the forecasts presented in this Report in connection with subsequent events or the receipt of new information. 1 The Report has been prepared in compliance with the Russian legislation, including: Federal Law No. 39-FZ "On the Securities Market" dated 22 April 1996; ⚫ Federal Law No. 208-FZ "On Joint-Stock Companies" dated 26 December 1995; ⚫ Corporate Governance Code recommended by the Bank of Russia for joint- stock companies by Letter of the Bank of Russia No: 06-52/2463 dated 10 April 2014; ⚫ Regulation of the Bank of Russia No. 714-P "On Information Disclosure by Issuers Securities" dated 27 March 2020. www.russaquaculture.ru/en/ = > 5#4Message from the Chair of the Board of Directors Dear reader, Ekaterina CHERNOVA¹ In 2021, PJSC Russian Aquaculture enjoyed strong operational and financial metrics. The Company shared this success with its shareholders: a total amount of RUB 1.5 billion was paid in dividends, a total amount of RUB 400 million was allocated for share buyback. In the year under review, we also focused on reinforcing the corporate governance system and interaction with shareholders and investors. For instance, the number of Board members increased to nine: six independent directors and three women, thus achieving the ratio and the balance of interest of various shareholder groups that we are proud of. Besides, the Company has completed the transition to quarterly IFRS financial reporting and introduced a practice of regular engagement with the investment community. Apart from that, our Board of Directors and managers took extensive and crucial measures in terms of sustainable development. A sustainability committee was established under the Board of Directors, and a roadmap for 2022-2023 was developed in cooperation with the management and adopted. It suggests activities aimed at improvement of the Company's efforts in the area, introduces best practices and discloses them to shareholders and other stakeholders. Many thanks to all employees, counterparties and shareholders of the Company who contributed to its development in the aquaculture industry throughout 2021! RUB 1.5 bln dividends paid to shareholders RUB 400 mln allocated for share buyback 9 members of the Board of Directors, of which six are independent directors and three are women 1 Elected as the Board of Director's Chair on 16 March 2022. 6 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ | || 10 N#5ABOUT THE COMPANY AlvaCenter so Panorama INARCTICA Content HISTORY OF THE COMPANY AND PRESENT DAYS. GEOGRAPHY. MARKET OVERVIEW. 10 121 12 14 ESG Making headway on ESG and certification. In April, the Company's fish processing plant was successfully audited for compliance with MSC and ASC international standards. The MSC standard ensures marine conservation, sustainability of fish stocks, and effective and sustainable management of fisheries, whereas ASC is aimed at sustainable development of the aquaculture industry and control of the impact on ecosystems. The Company has also achieved Halal and Kosher certifications. ← G III#6History of the Company and Present Days In 2021, more than 50% members of the Board of Directors were replaced 1997 The year of the Company's incorporation and development of the distribution segment. 1999 A state-of-the-art plant is opened in Noginsk to produce finished products. 2000 According to TNS Gallup Media, the Russian Sea brand is regarded as the most prominent one in the segment. 2006 Expansion of the sales geography for distribution and supply of finished products: At the end of the year, the distribution network comprises 40 branches and representative offices in big cities of the Russian Federation. 2007 Aquaculture activities are initiated: a trout farm located on Segozero Lake in Karelia is acquired. 2010 Ordinary shares of OJSC Russian Sea Group start trading on the MICEX and RTS stock exchanges, which was the first international IPO of a Russian company on the domestic stock market since 2007. About the Company 2012 The Company launches its first Atlantic salmon farm in the Barents Sea waters in the Murmansk region. The right to farm in the Murmansk region near the Rybachy Peninsula with a total cultivation potential of over 30 thousand t is obtained. 2013 On 28 February 2013, the sale of 100% of CJSC Russian Sea's shares (finished fish products manufacturing segment) to a group of strategic investors is completed. 2014 In September-October 2014, AK&M and Expert RA (RAEX) rating agencies assigns the "A" national scale credit rating to OJSC Russian Sea Group. 2015 A high level of biological risks in aquaculture is confirmed with the detection of critical diseases in the Atlantic salmon population at the Company's farms in the Titovka Bay of the Barents Sea. As a result, more than 70% of fish planned for harvest and sale in 2015-2016 has been lost. 2016 On 4 August 2016, the distribution segment is sold to CJSC Russian Fish Company for about RUB 1.8 billion. 2017 In July and October 2017, the Company completes acquisition of two smolt plants in Norway: Villa Smolt AS and Olden Oppdrettsanlegg AS. The plants are licensed for the production of 7 million pcs. of juvenile rainbow trout and Atlantic salmon smolt in aggregate per year. In December 2017, the Company makes a secondary public offering on Moscow Exchange: 8,338,998 shares with a par value of RUB 100 per share have been placed at a price of RUB 120 per share. 2018 First fish seeds come from the Villa Smolt AS and Olden Oppdrettsanlegg AS plants. The second bulk carrier is purchased. In November, the Company purchases a 40% stake in a fish processing plant in Murmansk. 2019 The first cage complex with 156-metre cages is put into operation in the Kildin Strait of the Barents Sea. 2020 Direct agreements are executed with all federal networks that operate distribution centres. Direct supplies of chilled fish to such cities as Nizhny Novgorod, Krasnodar, Perm, Ekaterinburg and Novosibirsk begin. The first dividends of RUB 430 million are paid. The free float goes up from 8 to 14%. 2021 • We win auctions and execute contracts for the use of three new fishing areas in the Barents Sea: Pitkov Bay, Kislaya Bay and Maly Oleny Zapadny. The third live fish carrier Veidnes (A. Ragulin) is purchased. • A fish processing plant in Murmansk is acquired. • The Setran smolt plant (Norway) with a capacity of 1.5 million pcs. of smolt is purchased. ⚫RUB 3 billion are raised in the debut bond issuance. • Concessional financing steps up under Resolution of the Russian Government No. 1528. "A-" rating is received (ACRA, NCR). • Dividends of about RUB 1.5 billion are paid out. Transition to quarterly IFRS reporting is completed. • A sustainability committee is first established under the Board of Directors and set to work. ⚫ The share buyback programme is prolonged and extended. Russian Aquaculture Today 27.9 thous. t products sold in 2021 9 Atlantic salmon and sea trout farms in the Barents Sea 3 rainbow trout cultivation sites on Segozero Lake 700 employees 10 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 11#7Geography Diversified approach to stocking and catching CLUSTERED STOCKING SYSTEM reduces the risk of disease spread and spares time for site recovery DIVERSIFICATION BY TYPE OF FARMED FISH (salmon/trout) lowers the overall level of biological risks Production assets 50-60 thous. t per year the Company's proven capacities Farms in Murmansk and Karelia Smolt plants Barents Sea in Norway Murmansk Petrozavodsk Oslo Nizhny Novgorod Moscow Saint Petersburg Kaliningrad Rostov-on-Don Krasnodar Location of sites Novosibirsk Perm Omsk Ekaterinburg Krasnoyarsk Motovsky Gulf Tri Ruchya processing plant Murmansk Stocked farms Farms used for stocking Farms under research Mussel sites The Company proved out that its production capacities exceed 32 thousand t per year and it is ready to reclaim 100% of areas suitable for commercial aquaculture. THE GLOBAL SUPPLY of Atlantic salmon is limited by the availability of marine sites protected from wind and waves THE MURMANSK REGION is the only Russian region suitable for salmon cultivation THE BARENTS SEA is a natural habitat for Atlantic salmon THE MAJORITY OF RIGHTS TO THE FISH SITES in the Murmansk region belong to the Company; the access of foreign players to the sites is restricted LOCATIONS ARE RELATIVELY CLOSE to the end buyer, which is important for the supply of fresh chilled fish 12 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ G = 13 About the Company#8Market Overview Global Salmon Fish Market According FAO¹, 80% of the planet's biodiversity is concentrated in the oceans, the Earth's largest ecosystem. Fish provides 20% of animal protein for nearly three billion people. Global consumption of fish and seafood per capita | kg Source: OECD-FAO Agriculture Outlook 2021-2030 20.8 20.3 20.5 20.6 20.8 21.0 21.0 21.1 21.1 21.2 21.3 21.4 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Salmon price behaviour | EUR/kg Source: Fish Pool To date, 56 million people are employed in fishing and aquaculture. Besides, even more are involved in associated activities such as loading, unloading, transporting, processing and selling of fish products. Fishing and fish farming together provide a livelihood for 660 to 880 million people, which account for up to 10% of the global population. According to FAO forecasts, the volume of global fish production will reach 200 million t a year by 2030. Aquaculture is expected to be instrumental in increasing the fish production. The portion of cultivated fish in the total production will go up from 48% in 2021 to 52% in 2030. Fish consumption per capita will rise as well. By 2030, aquaculture fish consumption will reach 57% compared to 53% in 2018-2020. The better the quality of aquaculture products is, the more confident are the customers, which results in higher industry average prices. In terms of industrialisation and risks inherent in fish cultivation, salmon farming is the most low-risk industrial area. However, a significant growth in salmon production is hampered by limitations related to the small number of water sites suitable for this purpose. 9.5 INARCTICA 8.5 7.5 6.5 5.5 Global fish production | mln t Source: OECD-FAO Agriculture Outlook 2021-2030 178 176 180 181 185 188 93 92 94 93 95 96 96 190 96 192 96 96 193 196 198 200 95 97 97 97 85 84 86 88 90 92 94 96 96 98 100 101 103 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Aquaculture Commercial catching 1 Food and Agriculture Organization of the United Nations. 14 PJSC Russian Aquaculture | Annual Report 2021 4.5 4.9 4.4 3.5 6.8 6.4 6.3 5.8 6.6 6.0 5.7 5.3 5.7 5.0 Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec 2017 2018 2019 2020 2021 200 mln t annual global fish production by 2030 according to FAO outlook up to 10% of the global population provides a livelihood of fisheries and fish farming www.russaquaculture.ru/en/ (%) About the Company ← = ⑦ 15#9Domestic Fish Market The monthly dynamics of imports and sales of Atlantic salmon in 2021 is in line with long- term market observations: significant part of imports and sales at the beginning of the year were followed by a subsequent decline from May to August and a peak by the New Year holidays. Harvesting (catch) of aquatic bioresources | thous. t Source: Rosrybolovstvo (Federal Agency for Fishery) Imports of fish products | thous. t In 2021, the salmon market in Russia saw an unprecedented increase of 29% against 2020. Given there are barriers for the purchase of chilled products from Norwegian producers, fisheries of the Faroe Islands remain exclusive on the Russian market and sell their products at a premium over the global average price. 1.5% 2021 2020 2019 2018 2017 Source: Rosrybolovstvo, Eurasian Economic Commission 16.4% 5,050 2021 4,975 2020 4,998 2019 5,054 2018 4,890 2017 575 494 534 492 515 152 thous. t 29% salmon fish market in the Russian Federation in 2021 According to the Federal Agency for Fishery, the volume of harvesting (catching) of aquatic biological resources in Russia totalled 5,050 thousand t in 2021. According to Rosrybolovstvo, imports of fish, fish products and seafood grew in 2021 year compares to the previous year and amounted to 575 thousand t. Salmon fish sales in the Russian Federation | thous. t Source: the Company Exports of fish products | thous. t Source: Rosrybolovstvo, Eurasian Economic Commission 7.3% 2021 2020 2019 2018 2017 Imports of fish products | USD mln Source: Rosrybolovstvo, Eurasian Economic Commission 25.6% 2,042 2021 2,202 2020 2,078 2019 2,217 2018 2,122 2017 17.6 15.2 14.2 13.3 12.7 12.3 11.4 13.1 11.7 10.5 11.2 10.4 10.3 10.0 8.8 9.1 8.7 8.0 7.9 6.6 6.0 5.0 19.8 15.2 2,113 Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec 1,682 2020 2021 1,797 1,802 1,626 PJSC Russian Aquaculture Import and other Russian producers (chilled) Import and other Russian producers (fresh-frozen) According to Rosrybolovstvo, exports of fish, fish products and seafood decreased by 160 thousand t (down by 7.3%) in 2021 year compared to 2020 and amounted to 2,042 thousand t. In monetary terms, the 2021 imports amounted to USD 2,113 million, an increase of 26% compared to 2020. Salmon fish market in the Russian Federation | thous. t Source: the Company 2021 27 2020 14 25 2019 16 20 2018 5 24 2017 9 22 PJSC Russian Aquaculture Import and other Russian producers (chilled) Import and other Russian producers (fresh-frozen) 16 PJSC Russian Aquaculture | Annual Report 2021 38 Average prices | RUB/kg (VAT excl.) Source: the Company 800 700 598 586 569 583 524 600 486 489 500 472 87 152 400 79 117 300 77 112 200 78 108 Jan Feb Mar Apr May June July 54 85 2020 601 600 546 513 518 506 500 488 639 603 597 595 601 610 618 677 Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec PJSC Russian Aquaculture Import and other Russian producers (chilled) Import and other Russian producers (fresh-frozen) FishPool www.russaquaculture.ru/en/ 2021 17 About the Company#10PERFORMANCE Content VERTICALLY INTEGRATED BUSINESS MODEL FARMING TECHNOLOGY. PERFORMANCE IN THE MURMANSK REGION. PERFORMANCE IN THE REPUBLIC OF KARELIA. SMOLT PLANTS IN NORWAY. ESG 20 220 22 23 24 225 At the end of 2021, the volume of fish farming rose to 30 thousand t becoming the best in the Company's history. A steadily increasing amount of cultivated fish reflects the Company's contribution to food security. <= >#11Vertically Integrated Business Model PJSC Russian Aquaculture keeps building a vertically integrated holding in the salmon fish aquaculture segment: from juvenile fish breeding to direct sales of products to the largest buyers processing enterprises. retail chains and fish 1 2 3 Growth of sales by 80% in 2021 1 SMOLT PLANTS 4 INARCTICA INARCTICA RUB 15,904 mlr revenue in 2021 2 CULTIVATION OF FISH TO REACH A COMMERCIAL WEIGHT 3 PROCESSING 4 SALES Purchase of caviar (external supplier) and cultivation of smolt up to 100-170 g • Smolt cultivation background Cultivation of fish in fish cages to reach an average weight of 4.5-5.5 kg • Continuous search for new promising sites Fish slaughtering, gutting and packing Selling through distributors and directly to retailers A processing plant in Murmansk and our own production facility in the Republic of Karelia Ability to increase the processing capacity without significant capital expenditures Agreements with leading chains and processing enterprises • Efficient logistics outsourcing Live fish carriers • Three live fish carriers with a capacity of up to 140 t of commercial fish Support vessels Infrastructure capacity for Atlantic salmon and sea trout breeding Feed carriers Two carriers with a monthly shipping capacity of up to 8.5 thousand t of feed Catamarans, passenger ships, workboats • Nine catamarans for installing farm equipment ⚫ Seven passenger ships for transporting people • Workboats for transferring people who work on farms from a tow boat to fish cages Delousing system FLS, four lines • . Repair department Maintenance and renovation of farm equipment Manufacture of workboats Support service Installation of farm equipment Operation of net cleaning equipment Diving service Biological service Three plants in Norway • Villa Smolt AS . Olden Oppdrettsanlegg AS Setran Settefisk AS 6 mln pcs. of smolt capacity MURMANSK 26 sites 5-11 thousand t of fish (live weight) can be produced on each site 9 stocked farms KARELIA 14 sites 3 stocked farms 60 thous. t potential cultivation in live weight 93 ta day average capacity 218 t a day maximum capacity 2-3 days fast delivery across the cities of sale in the Central Russia 20 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ G => Performance 21#12Farming Technology Proven technology of fish farming Cultivation stages Salmon JUNE 1st year JUNE Full cycle: 23-28 months 12th-16th month Stocking and smolt growth Growth to a commercial weight OCTOBER 17th-21st month Catching ° 0.12 kg 1.7 kg 4 kg Performance in the Murmansk Region MARCH 22nd-28th month Catching SEPTEMBER ☐ 5-6 kg ☐ 6.5 kg The Company held a number of activities in 2021 In 2021 the Company stocked four fish farms with Atlantic salmon smolt and juvenile rainbow trout in the amount of 6.9 million pcs. and an average weight of 172 g. By the end of the year the average weight of these fish was 1.9 kg per fish. It is planned to start catching and selling fish that have reached the commercial weight in August 2022. Commercial products in the Company's farms in the Murmansk Region were harvested and sold throughout the year. The harvest totalled 30.9 thousand t of commercial fish in live weight, and sales of gutted fish with head amounted to 26.5 thousand t. Plans for 2022 Stocking of five farms with juvenile salmon and trout smolt. Continuing efforts to maintain robust biological safety by strictly adhering to the existing strategy in this area, the strategy of combating salmon louse, and other regulatory procedures in the Company. Continuing the exploration and development of new sites in the Barents Sea, as well as preservation of stable stocking and harvest cycles. Using state measures of aquaculture support available to the Company, including loan financing at subsidised interest rates. 0.16 kg 1.9 kg 3.8 kg ○ 4.9 kg Trout Highly-effective fish production compared to meat production Feed conversion ratio¹ 1.3 1.9 3.9 8 Share of meat 73 74 73 57 for consumptiony², % Meat for consumption, 56 39 19 7 kg/100 kg of feed³ The maximum share of meat for consumption per 100 kg of feed due to high feed conversion and a high share of meat for consumption in total biomass. 1 Feed mass in kg required to obtain 1 kg of fish. 2 Share of meat for consumption in total biomass. 3 Mass of meat for consumption reared when consuming 100 kg of feed. 22 PJSC Russian Aquaculture | Annual Report 2021 1 Source: the Company. www.russaquaculture.ru/en/ Performance 23#13Performance in the Republic of Karelia The Company held a number of activities in 2021 In spring-summer 2021, the Company stocked more than 1 million pcs. of juvenile rainbow trout. Pursuant to the biological safety strategy, different generations of fish are further distributed to separate fishing grounds. According to the Company's strategy, all commercial fish are located at fishing grounds No. 2 and No. 6. The Company caught 1.6 thousand t of commercial fish in live weight and sold 1.3 thousand t of gutted fish with head and caviar. Plans for 2022 Commercial fishing of more than 1 thousand t and stocking of at least 1 million pcs. of juvenile rainbow trout. Improved biosafety. Signing of long-term agreements for fish seed suppliers. Using state measures of aquaculture support available to the Company, including loan financing at subsidised interest rates. 1 Source: the Company. 24 PJSC Russian Aquaculture | Annual Report 2021 Smolt Plants in Norway 3 1 2 Bergen Oslo Sweden Finland 1 2 3 Russia RESULTS AT VILLA SMOLT AS¹ RESULTS AT OLDEN OPPDRETTSANLEGG AS¹ The Company regularly monitors the health of juvenile fish in order to obtain quality seeds in 2022. RESULTS AT SETRAN SETTEFISK AS¹ In the year under review, the plant began to prepare its facilities for the shipment of first batch of juvenile fish to Russia. 3.1 mln pcs. of juvenile salmon and trout were supplied from the plant to the Company's farms in the Barents Sea in 2021 1.5 mln pcs. of juvenile salmon and trout were supplied from the plant to the Company's farms in the Barents Sea in 2021 1 In 2021. www.russaquaculture.ru/en/ Performance 25#14CORPORATE GOVERNANCE Content CORPORATE GOVERNANCE SYSTEM. 28 GENERAL MEETING OF SHAREHOLDERS. 33 BOARD OF DIRECTORS. 36 WORK OF BOARD COMMITTEES. 44 CEO 54 CONTROL AND AUDIT 55 EQUITY STRUCTURE. 59 ESG In 2021, the Company focused on continuing to improve its system of corporate governance being guided by the best Russian and international practices. The composition of the Company's Board of Directors has been renewed by more than half. A sustainability committee was established under the Board of Directors. At present, 6 out of 9 Board members are independent and women account for 1/3 of all Board members, which is well above the global average and demonstrates the Company's commitment to global trends and principles of sustainable development.#15Corporate Governance System Corporate governance is a system of interaction between stakeholders and a mechanism that allows for informed and sound decision-making, ensuring transparency of the Company's activities and effective control by shareholders and other stakeholders. Compliance with Corporate Governance Principles Corporate governance Corporate governance at PJSC Russian Aquaculture rests on the pillars of: • transparency; • accountability; • equality; • focus on compliance with laws and shareholder rights. The mission of corporate governance has always been and remains a successful development of the Company, while finding a reasonable balance of legitimate interests of its shareholders, chief executives and management. The Company's effective corporate governance is designed to contribute to reducing investment risks, increasing the investment attractiveness and strengthening the business reputation. The key objectives of corporate governance at PJSC Russian Aquaculture are as follows: • ensuring that legitimate rights and interests of all Company shareholders are fulfilled unconditionally, timely and in full; . growth in the Company's market capitalisation; increasing the transparency of decisions made by the Company's governing bodies; • continuous improvement of the Company's shareholder relations mechanisms. The Company's management regularly reviews the best corporate governance practices in Russia and abroad, enhances the corporate governance system and brings it in line with Russian and international standards. Corporate governance carried out in the Company is in conformity with Russian laws, the Company's Charter, and internal regulations developed for the Company's governing and control bodies, the Listing Rules of the Moscow Exchange, and the Corporate Governance Code recommended by the Bank of Russia for use by joint-stock companies whose securities are admitted to organised trading (hereinafter referred to also as the Corporate Governance Code). While strictly complying with Russian Federation legislation, PJSC Russian Aquaculture also strives to fully comply with the corporate governance standards reflected in the Corporate Governance Code. In recent years, the Company has consistently pursued a policy of improving and developing the corporate governance, and implementation of the Corporate Governance Code's recommendations were regarded to as one of its priorities. The Company continued on this course in 2021. PJSC Russian Aquaculture is guided by the Corporate Governance Code recommended by the Bank of Russia with an aim to regulate the work of its governing bodies and increase the number of principles observed. Thus, the Company observed 41 out of 79 principles in 2019 (63 in 2020). In 2021, the Company revised its approach to assessing compliance with the principles of the Corporate Governance Code as the regulator changed some of the assessment criteria and added new ones. But even then the level of corporate governance stayed high and harmonised with the best Russian and international practices. As the Bank of Russia has updated the criteria for assessing compliance with corporate governance principles, the Company took a different approach to some of them, which explains a decrease in the number principles that are fully observed. In 2021, the Company observed 57 principles, partially observed 16 principles, and did not observe six principles. Reporting year Observed Partially observed Not observed 2019 2020 41 26 12 63 11 5 2021 57 16 6 92% extent to which the Company fully or partially observed principles set out in the Corporate Governance Code > > > (%) In particular, the Company plans to launch an online voting system and to enable remote participation in General Meetings of Shareholders this year. Several internal documents are being prepared for approval, while the existing ones are periodically reviewed for compliance with Russian laws and best practices of corporate governance. In 2021, work was done to bring some of the Company's internal regulations up to date, including amendments were made to the Charter, the Regulation on Payment of Remunerations and Compensations to Members of the Board of Directors of PJSC Russian Aquaculture, the Regulation on the Strategy Committee of the Board of Directors, the Regulation on the Nomination and Remuneration Committee of the Board of Directors, as well as the Regulation on the Sustainable Development Committee of the Board of Directors was developed and approved and the list of insider information was updated. The highest level of compliance with corporate governance standards, execution of as many recommendations of the Corporate Governance Code as possible, continuous study of the best corporate governance practices and improvement of the Company's corporate governance system in accordance with them remain the Company's priorities. The Company is also looking to be more informative and willing to engage with shareholders and investors on an ongoing basis. 28 PJSC Russian Aquaculture | Annual Report 2021 The revision of certain compliance criteria by the regulator is a new challenge as part of improving the corporate governance which PJSC Russian Aquaculture has readily accepted and redoubled its efforts in order to implement and fully meet with them. Read the full Report on Compliance with Principles and Recommendations of the Corporate Governance Code in 2021 in Report on Compliance with the Principles and Recommendations of the Corporate Governance Code. www.russaquaculture.ru/en/ 29#1630 PJSC Russian Aquaculture | Annual Report 2021 The Company strictly complies with all basic and recognised principles of corporate governance. Corporate Governance Structure at PJSC Russian Aquaculture However, the following key principles prevail: Focus on compliance with laws and shareholder rights. The Company places a premium on strict compliance with corporate laws and regulators' recommendations as well as implementation of the best corporate practices for protection of shareholders' and other stakeholders' rights. Transparency. The Company ensures proper disclosure and free access for all interested parties to reliable information about the Company's operations, including about it financial and other transactions, social and environmental indicators, and the ownership and management structure. Accountability. The Board of Directors is responsible to shareholders for preparation and successful delivery of the Company's development strategy, as well as for management performance assessment. The executive bodies report to the Board of Directors and the General Meeting of Shareholders of the Company. Equality. The Company's corporate governance system is designed to protect the rights of shareholders and ensure that each of them is treated equally. In 2021, the Company's governance structure was as follows: GENERAL MEETING OF SHAREHOLDERS Auditing Commission Board of Directors External Independent Auditor election accountability → reports/recommendations Board Committees Internal Audit Service Chief Executive Officer Audit Committee Nomination and Remuneration Strategy Committee Sustainability Committee Committee Corporate governance The corporate governance is subject to: • Russian laws; • Charter of PJSC Russian Aquaculture; • • • • Listing Rules of the Moscow Exchange; Corporate Governance Code of the Bank of Russia; Regulation on the General Meeting of Shareholders of PJSC Russian Aquaculture; Regulation on the Board of Directors of PJSC Russian Aquaculture; Regulation on Payment of Remunerations and Compensations to Members of the Board of Directors of PJSC Russian Aquaculture; Regulation on the Dividend Policy of PJSC Russian Aquaculture; Regulation on the Strategy Committee of the Board of Directors of PJSC Russian Aquaculture; Regulation on the Audit Committee of the Board. of Directors of PJSC Russian Aquaculture; Regulation on the Nomination and Remuneration Committee of the Board of Directors of PJSC Russian Aquaculture; Regulation on the Sustainability Committee of the Board of Directors of PJSC Russian Aquaculture; Regulation on the Internal Audit Service of PJSC Russian Aquaculture; Regulation on the Corporate Secretary of PJSC Russian Aquaculture; Regulation on the Auditing Commission of PJSC Russian Aquaculture; Regulation on Insider Information of PJSC Russian Aquaculture; Regulation on the Information Policy of PJSC Russian Aquaculture; • Risk Management Policy of PJSC Russian Aquaculture; • Methods for Performance Assessment of the Board of Directors, Its Committees and Members at PJSC Russian Aquaculture. www.russaquaculture.ru/en/ 31#17General Meeting of Shareholders Corporate governance Key Corporate Governance Developments In 2021, the Company focused on continuing to improve the system of corporate governance for its better performance, being guided by the best Russian and international practices. The reporting year saw the following corporate developments of utmost importance: • The composition of the Company's Board of Directors was renewed by more than 50%. • The Sustainability Committee was established under the Board of Directors. • An e-voting system for the Board members was rolled out. • The Board of Directors held an extended off-site meeting in Murmansk in September 2021, so that all Board members could visit the Company's production sites and learn how everything works there. The Board of Directors unanimously re-elected Ilya Sosnov as the Company's CEO for another three-year period. The revised internal documents (Regulation on the Board of Directors, Regulation on the Committees of the Board of Directors, Regulation on Payment of Remunerations and Compensations to Members of the Board of Directors, etc.) were approved. Quarterly reports of both the Company and the Group were advanced to the IFRS. •The Company's share buyback programme was updated: the amount went up to RUB 900 million. • For the first time ever, the Company paid dividends on a regular (quarterly) basis. • The fish processing plant in Murmansk and smolt production company Setran AS (Norway) were put under corporate control and integrated in the Group to the fullest extent. Plans for 2022 PJSC Russian Aquaculture is keeping a close eye on global corporate governance trends and follows them. Our dedicated practice is aimed at observing legal rights and interests of shareholders, along with creating and presenting a positive image for Company investors. The following measures are scheduled for 2022 with a view to improving the corporate governance practice: • . introduction of an e-voting system for shareholders to express their opinion at general meetings regardless of the location and amount of shares; approval of the Company's revised Charter; aligning of the internal documents with applicable laws and recommendations of the Corporate Governance Code; • adoption of a number of internal documents devoted to legal relations with shareholders; ⚫ development of a new version of the Company's website. The General Meeting of Shareholders is the highest governing body at PJSC Russian Aquaculture, accountable for critical issues that cannot be delegated. It considers and decides on such fundamental issues as: • amendment of the Charter or approval of its new version; increase of the share capital by means of higher nominal value of shares; • election of members to the Board of Directors; • election of members to the Auditing Commission; approval of the Company's auditor; • review and approval of annual reports and accounting (financial) statements; profit distribution (including the payment (declaration) of dividends on shares); reorganisation/liquidation of the Company; and other matters as per the Charter. PJSC Russian Aquaculture makes sure that its shareholders are treated equally and fairly as they exercise their legal rights. During the reporting year, no shareholder rights were violated. All shareholders have equal rights that enable them to participate in the management of the Company and in the General Meeting of Shareholders, where they can vote without any hindrance and in the most straightforward and easiest way. According to the Russian laws and the Charter, Company shareholders may suggest agenda items of the General Meeting. Proxy solicitation materials are available at the office of PJSC Russian Aquaculture sole executive body, on the Company's website, or on the website of the agency proxy to disclose information on the Russian stock exchang - Interfax LLC - Corporate Information Disclosure Centre. 2021, quarterly reports of both the Company and the Group were advanced to the IFRS 32 PJSC Russian Aquaculture | Annual Report 2021 In 2021, the Company expects to launch the system of e-voting at the General Meetings of Shareholders www.russaquaculture.ru/en/ 33#1834 PJSC Russian Aquaculture | Annual Report 2021 General meeting notifications and materials to be provided for persons eligible for the meetings are made available on the PJSC Russian Aquaculture website at least 20 days prior to the date of the meeting in accordance with the Russian law. At the same time, the Company tries to inform shareholders about the next General Meeting and provide necessary materials at least 30 days in advance. To stay in touch with its shareholders, the Company operates a dedicated e-mail address ([email protected]), and indicates the phone number of the Corporate Secretary in notifications. In the reporting period, PJSC Russian Aquaculture neither prevented shareholders from access to proxy solicitation materials nor refused proposals on meeting agendas or a shareholder's entry to the list of nominees to a relevant Company body. Voting at General Meetings of Shareholders is based on the one-share-one-vote rule, except for the cumulative voting when members of the Company's Board of Directors are elected. Decisions at General Meetings of Shareholders are made by a majority vote of holders of the Company's voting shares attending the meeting. On certain matters listed in the Company's Charter, decisions shall be taken by a supermajority. The Company's independent registrar - Joint-stock Company Independent Registration Company R.O.S.T. (JSC NRK-R.O.S.T.) - undertakes the Vote Counting Commission's functions at the General Meeting of Shareholders. Voting results and decisions made at the General Meeting of Shareholders shall be disclosed in accordance with the requirements of Russian law and published on the Company's website. General Meetings of Shareholders in 2021 4 meetings were held and 16 items addressed in 2021 In 2021, the General Meeting of Shareholders decided to pay out dividends for 2020, Q1 2021, H1 2021, and 9M 2021. The quorum at the General Meetings of Shareholders in 2021 averaged 83.9337%. The Company plans to increase the number of participants in the General Meetings of Shareholders through an electronic voting system in 2022. The General Meetings of Shareholders held in 2021 featured a high level of shareholders' decision support regarding all the agenda items. Votes in favour of the agenda items ranged from 96.95 to 100%. 28 May 2021 Extraordinary General Meeting of Shareholders The following agenda decisions were made at the meeting: • • approval of amendments to the Charter of Public Joint-Stock Company Russian Aquaculture; approval of a related-party transaction. 30 June 2021 Annual General Meeting of Shareholders The following agenda decisions were made at the meeting: . • . approval of the Company's annual report for 2020; approval of the annual accounting (financial) statements for 2020; approval of the Company's dividend distribution 9 September 2021 Extraordinary General Meeting of Shareholders The following agenda decisions were made at the meeting: ⚫ on the amount, term, and procedure of dividend payment for Q2 2021 and approval of the record date; relocation of PJSC Russian Aquaculture and approval of the relevant amendments to the Charter; approval of a transaction. 9 December 2021 Extraordinary general meeting of Shareholders The following agenda decision was made at the meeting: ⚫ on the dividend payment (announcement) for 9M 2021. • • • • for 2020; on the amount, term, and procedure of dividend payment for 2020; approval of the Company's auditor; election of members to the Board of Directors; adoption of the updated Regulation on Payment of Remunerations and Compensations to Members of the Board of Directors of PJSC Russian Aquaculture; approval of the amount of remuneration for the Board of Directors; election of the Company's Auditing Commission; approval of the amount of remuneration for the Auditing Commission; on the amount, term, and procedure of dividend payment for Q1 2021 and approval of the record date. For more information on the voting results and decisions made at the General Meetings of Shareholders in 2021, please visit the Company's website. www.russaquaculture.ru/en/ 55 35 Corporate governance#19Board of Directors The Board of Directors by gender | % Trends in the number of independent members of the Board of Directors | pers. The Board of Directors is a collegial management body responsible for strategic management and overall governance of the Company, except for the issues assigned by Russian law and the Company's Charter to the competence of the General Meeting of Shareholders. Inter alia, Board's main objectives are developing and review of the Company's corporate strategy, overseeing its implementation, carrying out control and evaluation of executive bodies' performance, creating the Company's value, making and keeping the Company competitively viable and financially sound, increasing the its income, and protecting the rights and legitimate interests of its shareholders. The competence of the Board of Directors is set out in the Company's Charter and Russian law. The Board of Directors upholds the decisions of the Company's General Meeting of Shareholders and accepts them as binding. The Company's Board of Directors shall stick to the following principles: • making decisions based on reliable information about the Company's operations; . • safeguarding shareholders' rights to the Company management, dividends, and full and accurate information about the Company; balancing the interests of various shareholder groups and reaching the most objective decisions for the benefit of all Company shareholders; reaching the Board of Directors' continuity; ensuring the Board of Directors' succession. 67% of men 33% of women One-third of all Board members is women, well above the global average, demonstrating the Company's commitment to gender diversity and equality in line with global sustainability trends and principles. The average age of the Board members is 46 years. The members are fully competent and experienced for successful strategic management of the Company. In 2021, the Company established a new committee under the Board of Directors - the Sustainability Committee of PJSC Russian Aquaculture's Board of Directors - to meet international best corporate governance practices and reaffirm its anchor commitment to sustainable development principles. 2019 5 5 Independent members Non-executive members 6 2020 2021 Length of service on the Board of Directors | % 11 22 0 67 Composition of the Board of Directors The size of the Board of Directors is defined by the Company's Charter. Any individual who meets the following requirements may become a member of the Company's Board of Directors: • age of at least 30 years; • management experience of at least three years; . no economic criminal history; • allowed to hold managerial positions; • membership record in no more than five boards of directors of other companies exclusive of PJSC Russian Aquaculture. Nomination to the Board of Directors is compliant with the legislation of the Russian Federation, the Charter, and other internal documents of the Company. The Company reviews and evaluates nominees to the Board of Directors regardless of their age, gender, race, nationality, ethnicity, marital status, religious belief, language, political position, sexual orientation, pregnancy, maternity, paternity or disability. In 2021, the Annual General Meeting of Shareholders of PJSC Russian Aquaculture increased the size of the Board of Directors to nine members and overhauled more than half of its personnel. The number of independent members in the Board of Directors grew from five to six people, making up 67% of all Board members, to comply with international best practices in corporate governance and rank high among public Russian companies. Table of competences in the Board of Directors Member's full name Maksim Vorobyov Sayyora Ayupova Anna Vasilenko Dmitry Vasilkov Arne Geirulv Roman Kascheyev Andrey Marchenko Vladislav Pogulyaev Ekaterina Chernova Up to 3 years 3 to 5 years Over 5 years Strategy Finance/ audit Corporate governance IT Sector specialisation HR Risk management M&A IR/GR 36 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 54 37 Corporate governance#20Composition of the Board of Directors as at the end of 20211 Maksim VOROBYOV Sayyora YUPOVA Anna VASILENKO Dmitry VASILKOV Independent member of the Board of Directors • Member of the Strategy Committee of the Board of Directors • Chair of the Board of Directors² • Chair of the Strategy Committee of the Board of Directors • Independent member of the Board of Directors • Member of the Strategy Committee of the Board of Directors³ • Member of the Nomination and Remuneration Committee of the Board of Directors Independent member of the Board of Directors • Chair of the Nomination and Remuneration Committee of the Board of Directors • Member of the Sustainability Committee of the Board of Directors • Corporate governance Year of birth: 1976 Citizenship: Russia Education. Maksim Vorobyov graduated from the Faculty of Economics of Moscow State Institute of International Relations (University) of the Ministry of Foreign Affairs of the Russian Federation (MGIMO University), International Economic Relations with a Command of Foreign Language. He holds an Executive MBA IESE (Spain) and is a securities market professional with FFMS certificates. Professional background. In 2011-2013, Mr Vorobyov was a member of the Board of Directors of LLC Aquanika, IFSK ARKS LLC, and others. Starting from 2011, he is a member and the Chair of the Board of Directors of PJSC Russian Aquaculture. Ownership of shares: 47.7132% of the Company's shares. Maksim Vorobyov has experience and expertise in strategic management, finance, M&A, and risk management. Year of birth: 1978 Citizenship: Uzbekistan Education. Sayyora Ayupova graduated from Tashkent State University of Oriental Studies, Economics and Regional Studies. She is a certified loD Chartered Director (Institute of Directors, UK). In 2020-2021, she was a student at INSEAD (Building Digital Partnerships and Ecosystems; Strategy in the Age of Digital Disruption; FinTech). Professional background. In 1997-2015, Ms Ayupova held various positions in Procter&Gamble, Turkey, Central Asia, and Caucasus (in 2012-2015, CEO of Procter&Gamble, Central Asia). In 2015-2016, she was a CEO of Coca-Cola Hellenic BC, Armenia, and in 2016- 2018 served as a sales director in Coca-Cola Hellenic BC, Russia. Since 2019, she has been an independent director of the Board of Directors of Alfa-Bank Kazakhstan. Board member since 30 June 2021. Ownership of shares: did not hold any shares in the Company or interest in the share capitals of its subsidiaries and affiliates. Sayyora Ayupova has development and management competence in strategic business planning, business transformation and digitalisation, marketing brand building, organisational restructuring, and business models. Year of birth: 1973 Citizenship: Russia Education. Anna Vasilenko graduated from Lomonosov Moscow State University, Economics; SKOLKOVO School of Management. She is a certified loD Chartered Director (Institute of Directors, UK). Professional background. In 2014-2020, Ms Vasilenko held managerial positions in key account and issuer engagement at PJSC Moscow Exchange; since 2021, she has been a head of EM, an international financial, corporate and digital communications agency for emerging markets. Board member since 30 June 2021. Ownership of shares: did not hold any shares in the Company or interest in the share capitals of its subsidiaries and affiliates. Anna is competent in finance, corporate governance, strategy, PR and IR, and HR management.. Year of birth: 1981 Citizenship: Russia Education. Dmitry Vasilkov received his master's degree from Moscow State Institute of International Relations (University) of the Ministry of Foreign Affairs of the Russian Federation (MGIMO University), the World Economy Department. Professional background. He has been a CEO of EcoCapital LLC and Engaging Audience LLC since 2017. Since 2022, Mr Vasilkov is a CEO of QuScape (Quantum Systems LLC), a provider of process optimisation solutions based on quantum computing ideas. He also developed When Speak, a corporate communications software. Board member since 30 June 2021. Ownership of shares: he did not hold any shares in the Company or interest in the share capitals of its subsidiaries and affiliates. Mr Vasilkov is competent in set-up and managment of FMCG companies, business management strategy, production digitalisation (simulation modelling, optimisation, and quantitative production, business and finance), IT products development and implementation. 'Information on the members who left the Board of Directors in 2021 is provided in PJSC Russian Aquaculture's 2020 Annual Report. 2 Resigned from the Board of Directors since 4 April 2022. 3 Chair of the Strategy Committee since 7 April 2022. 4 As at the reporting date. 38 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 39#21Arne GEIRULV Roman KASHCHEYEV Andrey MARCHENKO Vladislav POGULYAYEV • Member of the Strategy Committee of the Board of Directors • Independent member of the Board of Directors • Member of the Audit Committee of the Board of Directors • Independent member of the Board of Directors • Member of the Sustainability Committee of the Board of Directors Independent member of the Board of Directors • Chair of the Audit Committee of the Board of Directors • Member of the Nomination and Remuneration Committee of the Board of Directors Corporate governance Year of birth: 1959 Citizenship: Norway Education. Arne Geirulv graduated from University of Bergen, Aquaculture Biology (Candidatus magisterii). Professional background. He has been a CEO of Aquaculture & Environmental Consulting AS since 2012 and the Chair of the boards of directors at Øyralaks AS, Villa Smolt AS, Oldenselskapene AS, and Olden Oppdrettsanlegg AS since 2018. Board member since 2011. Ownership of shares: he did not hold any shares in the Company or interest in share capitals of its subsidiaries and affiliates. Mr Geirulv is highly skilled in strategy and finance, and has over 30 years of experience in aquaculture. Year of birth: 1977 Citizenship: Russia Education. He holds a Master in Economics from Lomonosov Moscow State University (MSU) and ICA International Diploma in Governance, Risk and Compliance. Professional background. From 2000 to 2005, he was a project manager in management consulting, including IBM Consulting and IBS. He designed the Shareholder Value Management course and held it in MSU and RANEPA. In 2005-2017, Mr Kashcheev held various positions in corporate governance and compliance at the RUSAL Group, and was a member of the Supervisory Board of RUSAL Global Management B.V. from 2009 to 2017. In 2017-2019, he was a director for international corporate governance and compliance at En+ Group, and a board member of En+ Holding Limited from 2018 to 2019. Since 2019, Mr Kashcheev has been a compliance director at IPJSC Ingosstrakh. Board member since 30 June 2021. Ownership of shares: he did not hold any shares in the Company or interest in share capitals of its subsidiaries and affiliates. Roman Kashcheev has been building corporate governance models in large public companies for a long time, and is good at IT and risk management. Year of birth: 1982 Citizenship: Russia Education. Andrey Marchenko graduated from Moscow State Open University named after Viktor S. Chernomyrdin and Lomonosov Moscow State University, Public Administration. He holds a PhD in Economics, and is a professional securities market participant². Professional background. In 2011-2020, he was an executive director at United Capital Partners Advisory LLC, and a CEO of Northern Investments LLC from 2015 to 2020. Mr Marchenko is a member of the strategy and investments committee of the board of directors of Inter RAO PJSC since 2016. In 2019-2021, he was a member of the boards of directors of Geosplit Holding LLC, Cryogas M&T Poland S.A., Cryogas JSC, and Polus-Kholoda LLC. Since 2020, he has been a partner of an investment group Sinai Capital. Mr Marchenko is an expert of the ASI³ working group for monitoring the action plan (roadmap) Improving Corporate Governance, as well as of the Moscow Exchange working group for improving dividend policies of Russian companies. Board member since 29 December 2020. Ownership of shares: he did not hold any shares in the Company' or interest in share capitals of its subsidiaries and affiliates. Mr Marchenko has in-depth knowledge and significant experience in public markets, corporate finance, and sustainable strategy. Year of birth: 1978 Citizenship: Russia Education. Vladislav Pogulyayev graduated from Lomonosov Moscow State University (MSU), Economics. He holds an Executive MBA from the SKOLKOVO School of Management in Moscow, a PhD in Economics, a unified auditor qualification certificate, and a Certified Public Accountant (CPA) degree in the USA. Professional background. Mr Pogulyayev has been a CEO of BDO Unicon JSC (renamed into Unicon JSC in 2021) since 2014, and a CEO of Unicon Financial Consulting LLC since 2015. With over 20 years of professional management experience, he held executive positions in international audit companies and real economy business. Board member since 30 June 2021. Ownership of shares: he did not hold any shares in the Company1 or interest in share capitals of its subsidiaries and affiliates. Vladislav Pogulyayev has expertise in audit and finance, risk management, assessment, capital transaction support, and strategic management. 1 As at the reporting date. 2 FFMS Certificate 1.0. 3 Agency for Strategic Initiatives (ASI). 40 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 41#22Ekaterina CHERNOVA Board Outcomes in 2021 2021 marked 29 meetings of the Board of Directors, with three of them held in person (personal attendance of Board members), and 26 absentee votes. • Chair of the Sustainability Committee of the Board of Directors • Member of the Audit Committee of the Board of Directors 29 Board meetings in 2021 Year of birth: 1980 Citizenship: Russia Education. Ekaterina Chernova graduated from Finance Academy under the Government of the Russian Federation, World Economics (Economist). She also was a student of Harvard Business School (General Management Program) in 2012, has an ACCA Diploma, and is a member of the Independent Directors Association. Experience. From 2015 to 2018, she served as a CFO of CFC Management LLC, and is currently a CEO of the company. Ekaterina Chernova worked for an industrial holding company Access Industries and for an international audit firm PricewaterhouseCoopers. Board member since 2018. Ownership of shares: she held 12,090 ordinary shares of PJSC Russian Aquaculture (0.0138% of the share capital) and no interest in share capitals of its subsidiaries and affiliates. Ekaterina Chernova has been running an investment company for six years and serving as a financial expert in direct and venture investments in Russia for over 15 years. She is competent to handle strategic and business solutions in joint-stock holding companies, including M&A, restructuring, transformation, corporate governance, change management and HR strategies, crisis management, and has excellent leadership and communication skills. In-person meetings were related to the Company's development strategy and operations, business plan, performance of managers at Russian Aquaculture Group, their long-term incentives, and management reports on the execution of Board instructions. Absentee voting was mainly linked to convening of the General Meetings of Shareholders (47 items) and transactions approval (26 items). The reporting period saw no votes against proposals of the Board of Directors at the General Meetings of Shareholders. 109 items addressed 品 Structure of items addressed by the Board of Directors in 2021 | % 24 8 3 5 0 60 60 1 As at the reporting date. 42 PJSC Russian Aquaculture | Annual Report 2021 Corporate Governance Approval of transactions Approval of internal documents Strategy, finance, management performance Other 90 Corporate governance www.russaquaculture.ru/en/ +1=1 43#23Committees of the Board of Directors Strategy Committee of the Board of Directors Audit Committee of the Board of Directors Corporate governance Sayyora AYUPOVA Chair of the Strategy Committee¹ The Strategy Committee of PJSC Russian Aquaculture's Board of Directors met in 2021 to discuss the Group's development strategy for the next five years (2022-2026). As a result, the Board of Directors received detailed recommendations for the strategy implementation. In 2022, the Strategy Committee will monitor the state of the Company's work on current investment projects, the INARCTICA corporate brand development and promotion, and the pitching of a new product category-ready-to-eat products. The Company views these development vectors as key and most promising at the moment. The Strategy Committee's goal is to ensure the Board of Directors' efficient defining of priorities, strategic objectives, and general strategic principles of the Company, and control over the programmes and projects implementation, as well as to give recommendations to the Board of Directors to this effect. Committee's core competences: • • making recommendations to the Board of Directors on the priority business areas and the overall development strategy of the Company and its subsidiaries, and approval of an action plan for the strategy implementation and refinement; developing a corporate investment policy; advising on the Company's dividend policy and a profit and loss distribution procedure; developing the Company's KPI and a long-term assessment of its performance. The Strategy Committee of the Board of Directors as at 31 December 2021 was elected on 30 June 2021² to include four members: • Maksim Vorobyov, Chair of the Strategy Committee³; . Sayyora Ayupova; . Dmitry Vasilkov; . Arne Geirulv. The Strategy Committee of the Board of Directors had one meeting in 2021, held by videoconferencing. All members of the Committee joined the meeting, where the Russian Aquaculture Group's development strategy for 2022-2026 was reviewed and refined, and relevant recommendations were given to the Board of Directors. Vladislav POGULYAYEV Chair of the Audit Committee Newly elected members of the Audit Committee of the Company's Board of Directors held four meetings to address current agenda items, the existing risk map, and auditors' reports. The Audit Committee has set a goal for H1 2022 to review in detail how the Company handles key business risks, and to update the approach to risk mitigation. The Audit Committee aims to analyse the performance of the Company's internal control, risk management, and internal and external audit, as well as to put forward recommendations to the Board of Directors on the relevant decision-making. Also, the Audit Committee monitors the financial activity of the Company, analyses its financial statements (including interim ones), and makes recommendations for strict compliance with the applicable law of the Russian Federation. Committee's core competences: • • • monitoring completeness, accuracy, and reliability of accounting (financial) statements of the Company, which are compliant with RAS and the Company's consolidated financial statements under IFRS; monitoring the reliability and effectiveness of risk management, internal control and corporate governance, including the performance assessment of the Company's risk management, internal control, and corporate governance practices, and the development of proposals for their improvement; handling the employment (termination) and remuneration of the internal audit's head; assessing the internal audit performance and considering of proposals for its improvement; assessing independence, objectivity, and a fact of conflict of interest of external auditors, including potential auditors assessment, proposals for the external auditors employment, termination, remuneration, and the terms of their engagement. The Audit Committee of the Board of Directors is chaired by an independent member of the Board of Directors, meeting the recommendations of the Corporate Governance Code of the Bank of Russia. The Audit Committee of the Board of Directors was elected on 30 June 2021² to include three members: • Vladislav Pogulyayev (Chair); • Roman Kashcheyev; • Ekaterina Chernova. In 2021, the Audit Committee held six meetings in person and by videoconferencing, inter alia. Its members reviewed the Company's reporting under the International Financial Reporting Standards (IFRS), auditor candidates, a risk map, business plan, and other items within their remit. * Elected Chair of the Strategy Committee since 7 April 2022. 2 Board of Directors Meeting Minutes No. 348 dated 30 June 2021. 3 Until April 2022. 44 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ G => 45#24Nomination and Remuneration Committee of the Board of Directors Sustainability Committee of the Board of Directors Corporate governance Anna VASILENKO Chair of the Nomination and Remuneration Committee The newly elected Nomination and Remuneration Committee of the Board of Directors addressed a new incentive and KPI system as well as approaches to succession of the Company's key management. In 2022, the Committee will consider the elaboration of KPI and long-term incentives system for employees, conduct an external assessment of the Company's top management, and focus on HR matters affecting the Company's sustainable development. The Committee's primary objective is to ensure the high performance of the Board of Directors in handling corporate HR policy, standards and principles of selecting candidates to the management bodies of the Company as well as the attraction of the most qualified specialists to the subsidiaries and affiliates' management. Committee's core competences: . • • developing the Company's overall HR policy; elaborating the remuneration policy and various employee incentive programmes, overseeing their implementation and enforcement; evaluating the performance of the Company's executive bodies, including a preliminary review of reports on KPI fulfilment; planning key appointments and making recommendations to the Board of Directors on candidates for key positions within the Board competence; • analysing qualifications and independence of all candidates to the Board based on the information available to the Committee; • assessing the composition of the Board of Directors in expertise, experience, independence and involvement of its members in the Board activities, and identifying priority areas to make the Board stronger; • preparing recommendations on a performance evaluation system for the Company's Board of Directors and its Committees; • recommending to the Board of Directors that, • in certain cases, a candidate (or a member) be deemed independent, notwithstanding any formal affiliation with the Company, its material shareholder, counterparty or competitor; developing guidelines to create an introductory course for new Board members. The Committee is chaired by an independent member of the Board of Directors, as per the Corporate Governance Code of the Bank of Russia. The Nomination and Remuneration Committee as at 31 December 2021 was elected on 30 June 2021¹ to include three members: . Anna Vasilenko (Chair); . Sayyora Ayupova; . Vladislav Pogulyayev. 2021 saw six meetings: four meetings were held by absentee vote and the rest was in person (a physical meeting of members). The Committee assessed the independence of the Board members, reviewed the Company's current incentive and KPI system for 2021, analysed continuity of functions by key staff of the Group, and addressed turnover. Later on, the Committee submitted its recommendations to the Board of Directors. Ekaterina CHERNOVA Chair of the Sustainability Committee The aquaculture industry has always been socially and environmentally minded. The Company offers healthy products and thus contributes a lot to food security in Russia. We create new jobs and apply the latest approaches to workplace safety, motivation, and development of our employees. PJSC Russian Aquaculture established the Sustainability Committee under the Board of Directors in 2021 to respond to the growing focus on sustainability aspects from investors and other stakeholders (banks, regulators, and its partners). The Committee members have a lot of challenging tasks to complete so 2021 marked more meetings than planned. We prepared a detailed sustainability action plan (roadmap) for 2022-2023 in collaboration with managers and external consultants. An emphasis is put on environmental and social responsibility measures, while non-financial reporting is subject to gradual settlement. The roadmap will ensure a higher level of sustainability management and disclosure to all stakeholders. The Committee is meant to guarantee a high performance of the Board of Directors to solve sustainability issues in the Company. PJSC Russian Aquaculture views sustainable development as a process of economic and social changes whereby natural resources, investments, sci-tech focus, personal development, and institutional change are aligned and bolster existing and future capacity to meet the human needs of both current and future generations. In the meantime, its sustainable development comprises such specific activity areas as environmental protection, natural resource condition, waste management, social issues, labour practices, gender and other diversity among employees, occupational safety, and corporate governance. The Sustainability Committee is consistent with the best corporate practices and sustainability trends. The Company's engagement in sustainability agenda enhances its business reputation and investment appeal. Committee's core competences: assessing compliance with the sustainable development goals; • identifying priority areas; developing the Company's sustainability, environmental, and social responsibility strategy and summarising its implementation; analysing compliance of the Company's existing sustainability policies and procedures with the interests of shareholders and investors, the strategy, and regulatory requirements; preparing recommendations on the improvement of such policies and procedures; considering material sustainability risks and plans to mitigate their adverse impacts; • control over the reinforcement of the Board's decisions on the Committee's tasks and functions; overseeing preparation and publication of the Company's sustainability report and a sustainability part of its annual report, providing guidelines for the sustainability report approval. The Sustainability Committee as at 31 December 2021 was elected on 30 June 2021¹ to include three members: Ekaterina Chernova (Chair); Anna Vasilenko; Andrey Marchenko. 2021 had two physical meetings of all Committee members². The Committee reviewed the Company's ESG audit report made by external consultants, discussed the prospects of its ESG rating, considered a roadmap for management and disclosure of sustainability aspects for 2022-2024, and gave relevant recommendations to the Board. 46 PJSC Russian Aquaculture | Annual Report 2021 1 Meeting Minutes of the Board of Directors No. 348 dated 30 June 2021. 2 Including videoconferencing. www.russaquaculture.ru/en/ G => 47 42#25Attendance at Meetings of the Board of Directors and Its Committees Member's full name Attendance at the Board's meetings Total from 1 January 2021 to 30 June 2021 In-person meetings Meetings Audit Committee in absentia Attendance at meetings of the Committees Strategy Committee Nomination and Remuneration Committee Sustainability Committee Maksim Vorobyov 16/16 1/1 15/15 Arne Geirulv 15/16 0/1 15/15 Azamat Kumykov 16/16 1/1 15/15 Andrey Marchenko 16/16 1/1 15/15 Denis Melnik 16/16 1/1 15/15 Lyudmila Mikhaylova 5/16 1/1 4/15 1/2 Sergey Sirotenko 9/16 1/1 8/15 2/2 Ekaterina Chernova 15/16 1/1 14/15 2/2 from 30 June 2021 to 31 December 2021 Maksim Vorobyov 13/13 2/2 11/11 1/1 Arne Geirulv 13/13 2/2 11/11 1/1 Sayyora Ayupova 13/13 2/2 11/11 555 Anna Vasilenko 12/13 2/2 10/11 Dmitry Vasilkov 13/13 2/2 11/11 1/1 Roman Kascheyev 13/13 2/2 11/11 4/4 Vladislav Pogulyaev 13/13 2/2 11/11 4/4 Andrey Marchenko 13/13 2/2 11/11 Ekaterina Chernova 12/13 2/2 10/11 4/4 3/3 - 3/3 3/3 1/1 3/3 - 3/3 2/2 3/3 2/2 2/2 Performance Assessment of the Board of Directors, Its Committees and Members The Board of Directors is a governing body that provides general management and monitors the implementation of decisions of General Meetings of Shareholders, so its high performance is essential. The Board of Directors is accountable for the management quality, while its decisions affect the market capitalisation of PJSC Russian Aquaculture. The Corporate Governance Code states that the Board of Directors shall assess the performance of the Board, its Committees and members within a formal procedure. Self-assessment may be done solely by the Board or involve an independent external organisation (consultant) with the necessary skills. The results are subject to consideration at an in-person meeting of the Board of Directors. The Board's self-assessment takes place annually using the Methods for Performance Assessment of the Board of Directors, Its Committees and Members at PJSC Russian Aquaculture, approved by the Company's Board of Directors on 11 May 2017 (Minutes No. 207 dated 15 May 2017). The Methods for Performance Assessment of the Board of Directors, Its Committees and Members (hereinafter, the Methods) is based on recommendations for Board activities enshrined in international and Russian standards of best corporate governance practice: G20/OECD Principles of Corporate Governance (2015); Corporate Governance Code (2014). Assessment subject: an atmosphere on the Board, competences, expertise and experience of its members, individual contribution, the Chair's leadership, preparing and holding the Board and Committees' meetings, information exchange, interaction with the executive bodies and the Corporate Secretary, completeness and quality of the Board and Committees' key functions. Assessment objects: performance of the Board as a whole; performance of each committee; performance of each Board member (individual assessment); performance of the Chair of the Board of Directors and the Corporate Secretary. Assessment tools: questionnaires to assess the Board of Directors, its Committees and members. Assessment targets: the Board's performance of key management roles; composition and structure of the Board of Directors; • workflow management, information support and interaction of the Board of Directors with the executive bodies; • an incentive system for Board members; management of conflicts of interest between Board members; interaction of the Board of Directors with its Committees; ⚫the committees' composition and practice; • the performance of the Chair and Secretary of the Board of Directors. Corporate governance 48 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 49#26Self-assessment of the Board of Directors, Its Committees and Members The assessment targets the Board of Directors and Committees' performance, compliance with the Company's needs, and activity areas to be refined. Given two thirds of the Board of Directors renewed from H2 2021, the assessment covered the period from 30 June 2021 to 31 December 2021. In 2021, self-assessment of the Board of Directors, its Committees and members showed their high performance. Board meetings were arranged and held to a high standard, and members and managers freely shared their opinions, while an e-voting system was high-grade as well. The Chair, independent members and the Company's Corporate Secretary received the highest assessment results. The report on the performance assessment of the Board of Directors, its members and Committees at PJSC Russian Aquaculture was considered at an in- person meeting of the Board of Directors on 22 March 2022 and made known to the Board. Board members also presented their proposals to the Company's management for further improvement of the Board of Directors and its Committees. It sets forth the amount and procedure for remuneration, reimbursement and compensation to all members of the Board of Directors at PJSC Russian Aquaculture. The annual base remuneration for members of the Board of Directors approved by the General Meeting of Shareholders: RUB 3 million for independent Board members, with additional RUB 1 million for participation in each committee they will belong to RUB 2,5 million for other Board members Liability Insurance for the Board of Directors Company management is a complex process that involves the possibility of reasonable and good faith decisions of governing bodies to be wrong and have adverse effects on the Company. In this regard, the Company finances liability insurance for members of the Board of Directors from its own funds. Liability insurance allows for the compensation for losses to the Company or third parties and significantly reduces the legal risks of participating in the Board of Directors. In 2021, the liability of members of the Company's Board of Directors was insured by JSC SOGAZ with a liability limit of RUB 1 billion. Payments to Board Members in 2021 RUB 1m million an increase in the annual base remuneration given an independent member is elected as the Chair of the Board of Directors RUB 1 billion liability limit of the Board members insured in 2021 No. Full name 1 Sayyora Ayupova 2 Anna Vasilenko 3 Dmitry Vasilkov 4 Maksim Vorobyov 5 Arne Geirulv 6 Roman Kascheyev 7 Azamat Kumykov 8 Andrey Marchenko 9 Denis Melnik 10 Lyudmila Mikhaylova 11 Vladislav Pogulyaev 12 Sergey Sirotenko 13 Ekaterina Chernova Remuneration for participation on the Board Reimbursement (RUB) 2,513,888.91 2,513,888.91 2,011,111.09 0 The Company pays sufficient remuneration to members of the Board of Directors to attract and motivate individuals with the skills needed. Remunerations, reimbursements and compensations to the Board members are accrued and paid under the Regulation on Payment of Remunerations and Compensations to Members of the Board 2,499,998.42 3,544,545.32 2,011,111.09 1,243,054.00 3,254,165.09 1,243,054.00 1,243,054.00 2,513,888.91 1,243,054.00 2,499,998.42 O of Directors of PJSC Russian Aquaculture approved by the decision of the General Meeting of Shareholders dated 30 June 2021 (Minutes No. 64 dated 30 June 2021). The Regulation provides for transparent ways of setting the remuneration amount and outlines cases and procedures for reimbursement. No bonuses are payable to members of the Board of Directors under the Regulation. The annual base remuneration is paid to Board members provided they participated in over 50% of meetings (in-person and remote ones) during the regular pay period. A member of the Board of Directors may refuse remuneration for participating in the Board. The Regulation sets out the cases of reimbursement of expenses associated with duties of members of the Board of Directors. The following expenditures are subject to reimbursement: . • • travel expenses to the venue of the meeting and back; accommodation costs; expenses not related to participation in meetings but rather to the Company's business; ⚫ expenses associated with consulting on agenda items considered at meetings of the Board of Directors. 50 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ Corporate governance 51#27Onboarding New Board Members Board Operations Plan for 2022 Corporate Secretary In 2021, more than half of PJSC Russian Aquaculture's Board of Directors was renewed. Newly elected members received a list of materials developed to help them learn about the Company's activities and the production specifics. It includes the Company's constituent documents, regulations on governing bodies, the Company's strategy, annual reports, basics of Atlantic salmon aquaculture, videos and articles about the Company's activity. For prompt communication between the Company's management and members of the Board of Directors, an electronic document management system has been established for the Board members to review materials of future Board meetings and materials and minutes of previous meetings, as well as to vote on agenda items at remote meetings, ask questions, and leave individual opinions. In September 2021, a Board of Directors held an offsite meeting in Murmansk - the city of the Company's core operations. Board members visited fish cages complexes and a processing plant, and went through the main production processes. At the end of 2021, the Board of Directors approved its timetable for 2022. A preliminary corporate action plan includes nine meetings of the Company's Board of Directors, with three of them to be held in person and the agenda items to be considered at in-person Board meetings. The items shall address a performance assessment report of the Board of Directors, Board members and Board committees, as well as a management performance report for 2021, IFRS statements for 2021, management reports on execution of Board instructions, a corporate action plan up to the end of 2022, a business plan for 2023, and long-term incentives for top management. The Board of Directors will convene five General Meetings of Shareholders to address the approval of the Company's internal documents, dividends payment, transactions, an annual report and annual accounting (financial) statements, an auditor, as well as the election and remuneration approval for participation in the Board of Directors and the Auditing Commission. 9 meetings of the Company's Board of Directors. in the corporate action plan FDA 3 in-person meetings 5 General Meetings of Shareholders planned by the Board of Directors The Company Secretary is a person who ensures effective communication with and between stakeholders, the Board of Directors, and the Company's management. Primarily, the Corporate Secretary undertakes the Company's compliance with Russian law, the Charter, and other internal corporate governance documents to protect the rights and interests of the Company's shareholders. The Corporate Secretary shall operate under the applicable laws of the Russian Federation, the Company's Charter and other internal documents, as well as decisions of General Meetings of Shareholders and the Board of Directors, and the Regulation on the Corporate Secretary of PJSC Russian Aquaculture approved by the Board of Directors on 29 September 20161 The Corporate Secretary participates in organising and holding meetings of the Board of Directors and General Meeting of Shareholders. The Corporate Secretary post requires a higher legal, economic or business education, at least three years of relevant professional experience, with at least two years of experience in corporate governance, impeccable reputation, and no criminal record. The Corporate Secretary reports to the Board of Directors functionally and to the Company's Chief Executive Officer administratively. Based on the Board of Directors' decision, the Corporate Secretary is appointed by the CEO. Corporate Secretary's key functions: connecting the Company with regulatory bodies, market operators, registrar, and other professional securities market participants within the Corporate Secretary's authority; acting as secretary of the Board of Directors and performing relevant functions; swiftly informing the Board of Directors of all detected breaches of Russian law and internal regulations of the Company; • ensuring the Company's interaction with its shareholders and participating in the prevention of corporate conflicts; providing the procedures set by law and the Company's internal documents are implemented, safeguarding and controlling the rights and legitimate interests of shareholders; participating in the organising and holding of the Company's General Meeting of Shareholders; participating in the implementation of the Company's information disclosure policy and storage of corporate documents; participating in the improvement of the Company's corporate governance system and practices by submitting relevant proposals to the responsible divisions of the Company; ensuring the operation of the Board of Directors' committees; performing corporate governance in subsidiaries and affiliates; interacting with insiders and recording affiliates of the Company. Corporate Secretary of PJSC Russian Aquaculture Year of birth: 1980 Citizenship: Russia Grigory MIRONENKO Education. Grigory Mironenko holds a Graduate Diploma in Law from Lomonosov Moscow State University (MSU). Professional background. Mr Mironenko has been the Corporate Secretary of PJSC Russian Aquaculture since 2017. Since 2015, he has also worked as a legal department director at Russian Sea Aquaculture LLC, a subsidiary of PJSC Russian Aquaculture. He has no criminal record, and has not been held administratively liable for any administrative offences in business, finance, taxes and duties, and securities market. 52 PJSC Russian Aquaculture | Annual Report 2021 1 Minutes No. 194 dated. www.russaquaculture.ru/en/ 53 55 Corporate governance#28Chief Executive Officer Control and Audit The Company's Chief Executive Officer is a sole executive body that is in charge of the Company's current activities, successful achievement of its goals and development strategy. The Company's risk management and internal control system is targeted at the Company's strategic objectives as well as gives a true and fair view of its current state and prospects, integrity and transparency of its reporting, reasonableness and acceptability of the risks taken. Corporate governance The CEO's remit is to consider day-to-day management of the Company's operations, planning, human resources, business strategy, legal, corporate and other matters not reserved to the Board of Directors and the General Meeting of Shareholders. The Chief Executive Officer is accountable to the General Meeting of Shareholders and the Board of Directors and regularly reports on achieving KPIs, implementing programmes and policies. The Company's CEO is guided by Russian laws, the Company's Charter, regulations and policies. The system of remuneration for the Chief Executive Officer is determined by the Board of Directors. It consists of permanent and variable parts, the latter depends on implementation of the KPI system by the Chief Executive Officer. Key performance indicators (KPIs) are financial and non-financial indicators affecting quantitative or qualitative changes in the Company's performance in relation to its strategic objectives. Chief Executive Officer of PJSC Russian Aquaculture Year of birth: 1978 Citizenship: Russia Ilya SOSNOV Education. Ilya Sosnov graduated from the Faculty of Economics of Lomonosov Moscow State University (MSU) with a degree in economics. Professional background. Mr Sosnov came to Russian Aquaculture Group from SIBUR - Russian Tyres Holding. Since 2011, he has served as Deputy CEO for Operations and CFO of Russian Fishery Company. In 2012-2013, he worked as a CFO at OJSC Russian Sea Group (2012-2013). Since 2015, Ilya Sosnov has been CEO at PJSC Russian Aquaculture and Russian Sea Aquaculture LLC; since 2021 - head of LLC Golfstrim- Invest and CEO of LLC Tri Ruchya. Mr Sosnov is the Company's Chief Executive Officer since 2015. In 2021, the Board of Directors again reappointed Ilya Sosnov for another three years by a solid vote. Ownership of shares: Mr Sosnov held 1,607,481 shares of PJSC Russian Aquaculture (1.8293% of the share capital). He holds no interest in the share capitals of any subsidiaries or affiliates of the Company. The Company aligns corporate governance with current needs and best global and domestic practices, and, therefore, demonstrates its intention to bring the internal audit function in line with the evolving nature of the Company, more complex and diversified operations. Elements of the control system interact in a way that makes it independent enough and thus effective, being compliant with the world's best practice in this area. Arranging the Risk Management and Internal Control System GENERAL MEETING OF SHAREHOLDERS Board of Directors Auditing Commission Independent Auditor Election Accountability Reporting line Performance assessment Reports/recommendations Audit Committee of the Board of Directors Internal Audit Service 1 As at 31 December 2021. 54 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 55#29Corporate governance Auditing Commission The Auditing Commission is a permanent elected body that provides internal control of the Company, its separate units, subsidiaries and management officers. It conducts documentary and factual audits of financial transactions. The Auditing Commission acts for the benefit of the Company's shareholders and reports to the General Meeting of Shareholders, being independent from other governing bodies. Audit of financial and business activities is based on the Company's performance for the year and may be initiated at any time by the Auditing Commission, General Meeting of Shareholders, Board of Directors or requested by a shareholder (shareholders) owning not less than 10% of the Company's voting shares in aggregate. Functions of the Auditing Commission: supervising financial and business activities; conducting an independent assessment of the data accuracy in the Company's annual report and accounting statements. The Auditing Commission was elected on 30 June 2021 by the Annual General Meeting of Shareholders . of PJSC Russian Aquaculture' as follows: Mariya Galkova; • Natalya Grigoryeva; Mariya Klimova. The Auditing Commission is guided by: Russian laws; • Charter of the Company; Regulation on the Auditing Commission of PJSC Russian Aquaculture (approved by the Extraordinary General Meeting of Shareholders on 5 October 2018, Minutes No. 56 dated 10 October 2018); • other internal documents approved by the General Meeting of Shareholders. Mariya GALKOVA Year of birth: 1984 Citizenship: Russia Education. Mariya Galkova graduated from the Moscow Aviation Institute (State Technical University) with a degree in business management. At the time of election to the Auditing Commission, she was the Chief Accountant at CFC Management LLC. Natalya GRIGORYEVA Year of birth: 1983 Citizenship: Russia Education. Natalya Grigoryeva graduated from the National Research University Higher School of Economics with a degree in economics. At the time of election to the Auditing Commission, she was Financial Advisor to Chief Executive Officer at LLC Nekrasovka-Invest. Mariya KLIMOVA Year of birth: 1980 Citizenship: Russia Education. Mariya Klimova graduated from the National Research University Higher School of Economics with a degree in banking and finance. At the time of election to the Auditing Commission, she was the Investment Manager at CFC Management LLC. Report of the Auditing Commission In May 2021, the Company's financial and business activities for 2020 were audited. The Auditing Commission identified no serious violations of the established accounting and reporting procedures that could materially affect the reliability of the accounting statements. Additionally, the Auditing Commission noted that the Company further proceeded and vastly improved its operating performance and financial position. External Audit For the annual audit of the accounting (financial) statements of PJSC Russian Aquaculture under Russian Accounting Standards (RAS) and consolidated financial statements of the Russian Aquaculture Group under International Financial Reporting Standards (IFRS), the General Meeting of Shareholders approves audit companies, based on the Board recommendations, that have no proprietary interests in the Company and its shareholders. Joint Stock Company Deloitte & Touche CIS was approved as the Auditor of the Company's 2021 consolidated financial statements (OGRN 1027700425444). Deloitte & Touche CIS has been the Independent Auditor of the Russian Aquaculture Group since 2011. On 20 January 2022, the Extraordinary General Meeting of Shareholders (Minutes No. 67 dated 20 January 2022) first approved LLC Atlas Audit (OGRN: 5147746074251) as the Company's auditor of the Company's 2021 accounting statements prepared under Russian standards. Furthermore, the Company operates and refines an internal control and audit system. An internal auditor carries out periodic control procedures and makes recommendations for business processes and individual components (elements) of internal control and accounting. The Company's shareholders consider the Auditing Commission's report on the financial and business activity audit at PJSC Russian Aquaculture, as part of the materials for the Annual General Meeting of Shareholders. Selecting Independent Auditors Auditors are reviewed by the Audit Committee of the Company's Board of Directors. When selecting candidates, the Audit Committee heeds the following: compliance with requirements for independence of audit organisations under Russian laws; ⚫ cost of audit services; • professional competence and reputation of an audit firm; • Russian legislation in relation to auditing activities and other criteria as deemed necessary by the Committee. The Audit Committee of the Board of Directors assessed the performance of the external auditing in the reporting year and recognised it as satisfactory. Remuneration to independent auditors for 2021 Company Deloitte & Touche CIS LLC Atlas Audit Remuneration (RUB, including VAT) 13,713,163.20 340,000 1 Minutes No. 64 dated 30 June 2021. PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 57 557#30Internal Audit Share Capital Structure Corporate governance The Internal Audit Service is a structural unit of the executive office at PJSC Russian Aquaculture. Its activity is governed by Russian laws, the Company's Charter, decisions of the General Meeting of Shareholders and the Board of Directors, the Regulations on the Internal Audit Service (approved by the Board on 29 September 2016, Minutes No. 194 dated 30 September 2016), as well as orders, instructions and other local acts of PJSC Russian Aquaculture. The Service reports to the Board of Directors on a functional level and to the Chief Executive Officer on an administrative one. The head of the Internal Audit Service manages its operations. The Company's Internal Audit Service has the following main functions: • planning, organising and conducting internal audits • . of business processes (lines of business) and functions, projects/plans/programmes, structural and separate units of the Company; reinforcing compliance with legislation, industry and internal regulations, standards, contractual obligations; checking the efficiency, cost-effectiveness and performance of the Company, its bodies and units; verifying accuracy of the accounting (financial) and management statements; monitoring safety of the Company's assets; conducting thematic audits on specific issues; carrying out audits and other assignments by order of the Board of Directors (Audit Committee), and (or) executive bodies of the Company on matters within the remit of the internal audit; informing the Board of Directors (Audit Committee) and the Company's executive bodies on the audit results, submitting recommendations to eliminate violations as well as proposals to improve efficiency and effectiveness of internal control, risk management and corporate governance systems. Principles of Internal Auditing Pursuant to the PJSC Russian Aquaculture's Internal Audit Policy, the Internal Audit Service stands for the following principles: • honesty; objectivity; confidentiality; • skills and competence; independence. The Audit Committee of the Board of Directors assessed the performance of the internal auditing in the reporting year and recognised it as satisfactory. The share capital of PJSC Russian Aquaculture amounts to RUB 8,787,664,900 and is divided into 87,876,649 ordinary shares with a par value of RUB 100 each. All shares give their holders the right to vote at General Meetings of Shareholders, based on the one-share-one- vote rule'. The Company has no preferred shares. The year under review reported no new shares issued by the Company. As at 31 December 2021, the Company's share register has personal accounts with the following non-zero balances: 44 legal entities Share capital structure | % 1.9 8.4 17 14,122 individuals 0 24.99 At the end of 2021, the Company's subsidiaries held 1.9346% of ordinary shares. According to Moscow Exchange, 14% of the Company's shares are in circulation as of 31 December 2021. Securities The Company is listed on the Moscow Exchange (MOEX) and the second quotation list.. Stock symbol (ticker) Listing date Quotation list AQUA 16 April 2010 2nd RUB 261.5 Price per share as at 31 December 2021 RUB 261.5 Price per share as at 01 January 2021 47.71 RUB 52,638,112,751 market capitalisation of PJSC Russian Aquaculture² Maksim Vorobyov Svinin and Partners LLC (in trust) Realty Capital (combined CEF) CFC Direct Investments LLC (in trust) Razvitiye (combined CEF) Subsidiaries Other shareholders Year-on-year increase in the market price per share Year-on-year increase in capitalisation In 2021, the Company grew by number of shareholders from 11,5 to 14 thousand legal entities and individuals. The Company did not repurchase its shares. 129% 129% The Company aims to push its shares in the first quotation list and the indices for mid- and small-cap stocks of MOEX. 58 PJSC Russian Aquaculture | Annual Report 2021 1The Company adheres to the principles of the Corporate Governance Code of the Bank of Russia, recognises best international corporate governance practices, and does not allow voting of quasi-treasury shares at General Meetings of Shareholders. 2 According to PJSC Moscow Exchange as of 31 December 2021. www.russaquaculture.ru/en/ 59#31Registrar The registrar of PJSC Russian Aquaculture is Joint-stock Independent Registration Company R.O.S.T. (JSC NRK- R.O.S.T.). 18 Stromynka str., bldg. 5B, Moscow +7 (495) 780-73-63; +7 (495) 989-76-50 @[email protected] https://rrost.ru Shareholder Engagement To swiftly inform shareholders of the Company's activity, its website has the For Shareholders and Investors section. There shareholders can find internal regulations for the Company and its management bodies, financial statements, quarterly reports, materials and voting reports of General Meetings of Shareholders, a link to the corporate disclosure centre, the Company's dividend policy and shareholder structure. Contacts of Moscow and Murmansk-based offices are also available on the Company's website. The information disclosed in 2021 compared to 2019-2020 2021 22 4 2020 17 2 2019 6 0 20 40 62 90 97 40 60 80 100 120 Corporate governance With JSC NRK-R.O.S.T., the Company's shareholders have access to the Shareholder's Personal Account service via the confirmed account on the state services portal (Gosuslugi). In Shareholder's Personal Account, users can quickly receive a copy of the share register, make share transactions, and vote at General Meetings of Shareholders. Bonds In 2021, the Company has successfully issued its debut bonds of series 001P-01. Type of security Amount Nominal value Term Coupon rate Listing date Maturity date Public offer listed, interest-bearing, non- convertible, book-entry bonds held in collective safe custody RUB 3 billion RUB 1,000 per 1 listed bond 3 years 9.5% per annum 10 March 2021 10 March 2024 Russian Sea Aquaculture LLC On compliance with PJSC Russian Aquaculture's information policy The Company's management seeks to continuously improve the quality, completeness and frequency of information disclosure on the activity of the Company and its subsidiaries. The Company uses the following main information resources for disclosures: • PJSC Russian Aquaculture's official website; PJSC Russian Aquaculture's profile on the website of Interfax LLC - Corporate Information Disclosure Centre, the agency authorised to disclose its information on the Russian securities market. In terms of disclosure, management aims to strike a reasonable balance between the interests of shareholders and the Company which is interested in the safety of confidential commercially sensitive information able to have an impact on its competitiveness. In 2021, the Company continued increasing the information to be disclosed through press releases and material facts. In 2021, amid the ongoing coronavirus pandemic, the Company's management held four conference calls with the Company's investors and shareholders. In the reporting year, material facts were more frequent than in 2019 and 2020. ■Reports of material facts ☐ Press releases ☐ Conference calls The Company transited to quarterly consolidated financial statements to comply with International Financial Reporting Standards (IFRS) and press releases with financial results. We published audit reports on its annual accounting statements under RAS for 2020 and annual consolidated financial statements under IFRS for 2020. The Company sought to post reports and information materials for General Meetings of Shareholders on the official website of PJSC Russian Aquaculture and on its profile on the Information Disclosure Centre 30 days prior to the date of the meeting to meet best corporate governance and information disclosure practices and recommendations of the Corporate Governance Code. We also were fully engaged in developing and promoting the INARCTICA brand on our social media. The Company duly and promptly responds to shareholders' requests for having corporate documents in accordance with the legislation of the Russian Federation. We avoid formalism in information disclosure and always disclose negative information about the Company if such information is material to shareholders, investors, and other stakeholders. Management is continually working to improve its transparency through regular meetings with analysts. from major investment banks, funds, including foreign ones, and representatives of rating agencies. Ratings In 2021, Analytical Credit Rating Agency (JSC ACRA) upgraded the Company's rating to A(RU); stable outlook. This is driven by an average assessment of our operating risk profile, low debt burden, very high profitability, and high liquidity. National Credit Ratings Limited (NCR) assigned A.ru rating (stable outlook) to the Company in 2021. 60 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 61#32Dividend Policy The Company's Dividend Policy aims to increase the transparency of the profit distribution and protect the rights and interests of shareholders. The Company has a Regulation on Dividend Policy approved by the Board of Directors on 29 March 2019 (Minutes No. 266 dated 1 April 2019). The Policy is meant to provide sustainable dividend payments to shareholders. It rests on the following principles: . . • respecting shareholders' rights and interests, while striking a balance with the Company's interests; strengthening the Company's investment attractiveness; seeking to make cost-effective dividend decisions to balance shareholders' short-term and long-term interests and the Company's investment needs; ensuring that the growth of the Company's net profit contributes to the positive dynamics of dividend payments; . making the information on the Company's Dividend Policy available. The recommended amount of dividends to be paid is determined by the Company's Board of Directors, based on the Company's financial performance. And the final decision shall be made by the Company's General Meeting of Shareholders. In 2021, the Company made the first payments of interim dividends for three, six and nine months of 2021 under the resolution of the General Meeting of Shareholders (Minutes no. 64 dated 30 June 2021; Minutes no. 65 dated 9 September 2021; Minutes no. 66 dated 9 December 2021). In 2021, the Company also paid dividends for 2020 (Minutes No. 64 dated 30 June 2021) at a rate of RUB 5 per ordinary share. Share Buyback On 2 July 2021, the Company announced the expansion of its share buyback programme (the "Programme"). Within the updated Programme, PJSC Russian Aquaculture can repurchase its shares in the amount not to exceed RUB 900 million. The Programme will be valid until 30 June 2022 or until the above maximum is reached, whichever is the earliest. The share buyback is carried out by PJSC Russian Aquaculture's subsidiary - Russian Sea Aquaculture LLC. The repurchased shares are planned for general corporate needs, including a long-term employee incentive programme. Contacts for investors and shareholders Dividend period 2017 2018 Dividend amount per ordinary Dividend type share, RUB No dividends accrued or paid No dividends accrued or paid Record date Total dividends paid, RUB 2019 No dividends accrued or paid 6M 2020 5 cash 11/09/2020 2020 5 cash 11/07/2021 3M 2021 4 cash 11/07/2021 351,506,596 6M 2021 4 cash 21/09/2021 351,506,596 9M 2021 4 cash 20/12/2021 351,506,596 @ 439,383,245 439,383,245 Andrey BARANOV Deputy CEO for Economics and Finance 4 Belovezhskaya str., 121353, Moscow, Russia +7 (495) 258-99-28 [email protected] Dividend history over the past five years Grigory MIRONENKO Corporate Secretary 4 Belovezhskaya str., 121353, Moscow, Russia ☑+7 (495) 258-99-28 @[email protected] www.russaquaculture.ru/en/ 62 PJSC Russian Aquaculture | Annual Report 2021 AkvaCenter as Panama Corporate governance INARCTI AG=> 63 65#33SUSTAINABLE DEVELOPMENT AND RISK MANAGEMENT Content SUSTAINABLE DEVELOPMENT. SUSTAINABLE DEVELOPMENT MANAGEMENT SYSTEM.. 66 66 67 CARE FOR ENVIRONMENT. 74 HUMAN RESOURCE MANAGEMENT. 83 OCCUPATIONAL HEALTH AND SAFETY.. 89 SUPPORT FOR LOCAL COMMUNITIES. 94 RISK MANAGEMENT 96 ESG The average rate of fish survival in the Group's cages stood at 87.5% in 2021, which is higher than the global industry average. + G =>#34Sustainable Development As part of being a global business, the Russian Aquaculture Group recognises the importance of conserving and enhancing the world's available resources for future generations. Sustainable Development Management System The Group's main contribution to the long-term economic and environmental resilience is the evaluation of economic, environmental and social factors and how they are integrated into decision-making at every step of management processes. ESG priorities set by the Russian Aquaculture Group¹ • E Environmental Care Striking the balance between the carrying capacity of water resources used for fish farming and the farms' impact on these ecosystems; purchasing certified fish feed produced in accordance with sustainability principles; S Social Responsibility Producing food products that are safe and healthy; ensuring that Group employees are treated fairly and responsibly; ⚫ offering competitive salaries and a transparent remuneration system; • creating a comfortable working environment; • ensuring occupational health and safety in the workplace; • caring for local communities by providing necessary information, interacting and supporting them, • and running social projects; interacting with industry associations; cooperating with educational organisations. The Russian Aquaculture Group takes a responsible approach to managing various aspects of sustainable development, such as reducing the negative impact on the environment, employee development, equal opportunities and quality working conditions. Structure of governing bodies responsible for sustainability issues Board of Directors Defines strategic priorities for sustainable development and approves relevant corporate policies and programmes Sustainability Committee Nomination and Remuneration Strategy Committee Audit Committee Committee • being conscious about how the feed is used G • • . and avoiding feed spillage; making sure our fish do not escape fish cages; studying the biology, genetics, health and migration pathways of the wild salmon population of the Kola Peninsula in order to maintain and increase the natural population; keeping our fish in fish cages healthy in order to avoid the spread of diseases and ectoparasites to the wild stock; increasing the coverage of our clean-up programmes for coastal areas close to the fish farms; improving the Group divisions' energy efficiency on an ongoing basis; processing all production waste (offal and trimmings) to make alternative products (fish oil, protein concentrate, hydrolysate); improving fresh water recirculation at the Group's fry plants; • collecting and disposing of plastic and other waste in a timely manner. Corporate Governance Being honest and transparent with our shareholders and other stakeholders; • ensuring equal and fair treatment of all Company shareholders as well as strict observance of their rights; having the Board of Directors that is independent of the management; . publishing full quarterly reports on a regular basis, reflecting the actual state of affairs of the Russian Aquaculture Group; carrying out activities in full compliance with the applicable corporate governance legislation; operating a system of controls and regulations that rules out corruption and inappropriate behaviour; abiding by the principles of the Corporate Governance Code and other recommendations of the Bank of Russia. Chief Executive Officer Oversees corporate sustainability policies and commitments, sets performance targets and evaluates their achievement, and monitors the work of core business divisions Specialised structural divisions (services) Responsible for specific areas of sustainable development at the operational level HR Management Service Research Department Corporate Secretary Biological Service Legal Department Environmental Service Health and Safety Service 66 PJSC Russian Aquaculture | Annual Report 2021 1 Environmental, Social and Governance, aspects that promote commitment to environmental issues, social responsibility and corporate governance. www.russaquaculture.ru/en/ Sustainable Development = > 67#35Sustainability Committee of the Board of Directors The Company invests heavily in the system of sustainability management: In 2021, the Sustainability Committee was established under the Board of Directors and a corresponding regulation was approved. Key decisions taken by the Committee in the year under review: • an external consultant was engaged for a comprehensive ESG assessment of the Group, and a subsequent report was reviewed and then approved; • a roadmap of sustainability activities was approved for 2022-2023; • objectives of development in the governance and disclosure of sustainability aspects were approved for 2022-2023. Group's Contribution to SDGs The Russian Aquaculture Group share the responsibility of commitment to 17 Sustainable Development Goals (SDGs) of the United Nations. ZERO HUNGER SSS SDG 2: End hunger, achieve food security and improved nutrition and promote sustainable agriculture Abuse of the world ocean, wild fisheries and overfishing may result for the ever-growing human population in insufficient fish. Fish farming (aquaculture) helps to ensure food security. Experts note that fish is an essential healthy product in every food basket, a source of high-value animal protein and multiple micronutrients. Compared to other foods, it makes more sense to cultivate salmon due to high feed conversion ratio. Thanks in no small part to aquaculture, the growing population is provided with a healthy and protein-rich diet. 13 ACTION CLIMATE Carbon footprint¹ in aquaculture salmon production compared to livestock² Salmon Chicken Pork Beef 0.60 0.88 1.30 5.92 14 LIFE BELOW WATER SDG 14: Conserve and sustainably use the oceans, seas and marine resources for sustainable development Aquaculture plays an important part in sustainable use of marine resources. Salmon farming is one of the most sustainable food productions offering significant benefits such as freshwater economy and greenhouse gas emissions abatement. SUSTAINABLE DEVELOPMENT GOALS Each SDG is a call for action to eradicate poverty, give protection, improve quality of life and prospects for people worldwide. These goals were adopted by UN Member States in 2015 as part of the 2030 Agenda for Sustainable Development. People today use far more resources than the Earth can produce, whereas food production has serious effects on both the environment and the climate. In this regard, it's time to find new ways of producing food with minimal environmental footprint. Given the nature of its business, the Russian Aquaculture Group contributes to individual goals of sustainable development. SDG 13: Take urgent action to combat climate change and its impacts Let's consider the effects of food production on climate. Global Salmon Initiative Sustainability Report cites scientific research to estimate the carbon footprint of aquaculture salmon production compared to livestock. Thus, the footprint of fish is three to seven times lower than that of beef and almost two times lower compared to pork or chicken, depending on the production method. The Group develops aquaculture and produces food with the minimal carbon footprint among protein products. The latest fish farming techniques and modern energy-efficient equipment put the Group's products on a par with many plant foods in this respect. Preserving the Arctic marine ecosystems is of the Group's greatest environmental goals. The Russian Aquaculture Group is alleviating its impact on the environment by monitoring ecosystems, applying best practices, and adhering to the strictest environmental standards. 20.5 kg of fish products for a person per year globally CEED In recent decades, the world has been experiencing a rapidly increasing demand for fish and other seafood. Today, everyone on the planet consumes 20.5 kg of fish products compared to less than 10 kg 60 years ago. According to the Food and Agriculture Organization (FAO) of the United Nations, world fish and fish products production will total 204 million tonnes by 2030, exceeding the 2020 figure by 15%. 68 PJSC Russian Aquaculture | Annual Report 2021 1The carbon footprint is a total of greenhouse gas emissions generated 2 by production both directly and indirectly. It is measured in kg CO₂-eq per 40 g of food protein. According to the Global Salmon Initiative Sustainability Report. www.russaquaculture.ru Sustainable Development 69#36Product Quality The Russian Aquaculture Group's produces high- quality products out of environmentally friendly raw materials. The Group sees to the quality along every step of production before delivering its products to retailers and other customers. The Group's production units rely on a HACCP1-based food safety management system (ISO-22000) and a production control programme for operational and laboratory control of production and end products. The Company takes responsibility for the health and safety of its customers. Its products are certified to comply with the strictest international requirements and recommendations for sustainable aquaculture, including by Aquaculture Stewardship Council (ASC) and Halal & Kosher. In 2022, the Group plans to get the FSSC 22000 certification. Salmon meat is highly rich in nutrients, Omega-3 polyunsaturated fatty acids, protein, vitamin D, and selenium. Regular consumption of salmon fish helps to build muscle mass, strengthen bones, reduce joint pain, and prevent eye disorders as well as such viral diseases as flu. Salmon reduces the risk of developing type 1 diabetes, lowers blood sugar, stimulates testosterone, and protects against heart problems. Moreover, it positively affect our brain, thyroid body, and skin. Products by Russian Aquaculture Group Antibiotic-free Growth hormone-free GMO-free IXII The products are MSC/ASC, Halal and Kosher certified. The Russian Aquaculture Group's products are of Arctic origin. The Arctic region is a unique eco-friendly natural ecosystem. Fish grow and develop in cold, clean sea water, brimming with health and nutrients. State-of-the- art production and refrigeration technologies enable the immediate post-capture procedure and prompt delivery of fresh and chilled fish to shop shelves across most regions of Russia. In 2021, jointly with Federal State Budgetary Institution The Russian State Center For Animal Feed And Drug Standardization And Quality (Rosselkhoznadzor), the Group compared the chemical composition of its salmon and sea trout with products of other Russian fishery companies. The results have shown a higher content of Omega-3 and Vitamin D3 in the Group's salmon and sea trout versus the competitors and compliance with world-class protein rates. Salmon meat | % Vitamin D3 mcg/100 g Omega 3 Protein The Group's biologists and fish farmers carry out regular visual inspections of fish, use the latest monitoring systems at its fish cages complexes, and check products for antibiotics, GMOs, and growth hormones. For the results, go to our website. 0 5 TT 07 43 DUCE1 RUSS PJSC Russian Aquaculture Faroe Islands ☐ Chile Trout meat | % Vitamin D3 mcg/100 g Omega 3 Protein PJSC Russian Aquaculture Turkey 1 HACCP (Hazard Analysis and Critical Control Points) is a food safety management system that ensures control at every point of the production and safe storage and sale of products in potentially hazardous situations. 70 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ MIMMI 10 15 20 25 Sustainable Development 10 € 15 20 25 <= > 71#3772 Sustainable Development Stakeholder Engagement The Group seeks to ensure timely and efficient response to requests, expectations and needs of stakeholders. The Russian Aquaculture Group maintains an active dialogue with all stakeholders, including shareholders and investors, employees, customers and suppliers, public authorities and representatives of local communities, through meetings, disclosure of information in accordance with legislation and best practices, use of media and internet resources, implementation of social and cultural programmes, participation in conferences and other events. Principles of stakeholder engagement: • prompt reporting; • cooperation; • transparency of the Company's operations; • regular interaction; ⚫ commitments fulfilled. The Group interacts with existing and potential investors and observes a greater interest in responsible investment². As responsible investing spreads globally, disclosure of non-financial information of that kind has become increasingly relevant to public joint-stock companies. Additionally, disclosure of non-financial information is an important motivator for companies to align their business models and strategies with relevant stakeholder requests. ESG-FACTORS to Deal with Suppliers and Contractors The Russian Aquaculture Group adheres to fair competition and market transparency and cooperates with official and reputable sustainable suppliers only, as per all legal and sanitary requirements, helping to combat poaching and other irregularities in the fish market. Stakeholders Shareholders and investors Employees Customers Expectations and interests ⚫ capitalisation growth in the long term; ⚫ transparent dividend policy and regular dividend payments; ⚫ information transparency; • observance of shareholders' rights. Ways of communication • . participation in management through the General Meeting of Shareholders; individual and group meetings, conference calls; industry events; ⚫ disclosure of information on the corporate website and other sources; • corporate reporting. stable employment; ⚫ fair remuneration and decent social package; ⚫ comfortable working environment; ⚫ occupational health and safety as a priority; ⚫ training and development; • feedback channels; ⚫ system of internal corporate communications; • meetings of the workforce and management; forums, conferences, cultural and sporting events; corporate website. zero discrimination. • product quality; • environmental profile of products; high-level service and efficient sales channels; ⚫ transparent pricing. Suppliers • responsible fulfilment of all contractual obligations; ⚫ contractual work; ⚫ certification; ⚫ feedback system and services; ⚫ business meetings, conferences and forums; . information disclosure. ⚫ competitive events (tenders); PJSC Russian Aquaculture | Annual Report 2021 1 Stakeholders are individuals, or groups of individuals, whose interests are most closely linked to the Company's business and may have a significant impact on the Company's ability to achieve its strategic goals. 2 Responsible investment is a conceptual approach based, among other things, on incorporating ESG factors into investment activities, evaluating and monitoring investees. Public authorities transparent, open and competitive choice . of contractors; • adherence to business ethics; • anti-corruption. ⚫ compliance with laws and standards, including environmental, industrial safety and labour legislation; ⚫ payment of all applicable taxes and levies; ⚫ social activities. . improvement of the quality of life and support for the local population; creating jobs for local population; ⚫ human capital development in the territories where the Company operates; ⚫ development of local industries and suppliers; industrial and environmental safety; • contractual work; • business meetings, conferences and exhibitions; information disclosure. providing information on the Group's activities to regulators; • agreements on socio-economic cooperation with regional authorities; • implementation of social and cultural programmes. • social projects in the regions of operation; • • support for health and education; consultations with authorities; needs of local communities considered; public hearings, round tables and dialogues. Local communities in the regions of operation . information openness and transparent activities. www.russaquaculture.ru/en/ 73 75#38Environmental Care For the Russian Aquaculture Group, rational use of natural resources and minimisation of the negative environmental impact in the regions of operation are major drivers of business sustainability. Air pollutant emissions, by region of operation | t¹ Republic of Karelia Murmansk region Total for the Group Nitrogen oxides (NOx) 2.06 33.24 Carbon monoxide (CO) 1.75 23.33 35.30 25.08 Sulphur dioxide (SO2) 0.25 6.16 6.41 Other 1.02 14.41 5.08 77.14 15.43 82.22 Companies of the Group strictly comply with Russian and international environmental laws. the negative environmental impact. As a result, the Federal Service for Supervision of Natural Resources makes a positive conclusion for the operations at each fish farm. Total emissions To implement programmes for the commercial cultivation of Atlantic salmon, rainbow trout and mussels at fish farms in the Barents Sea, the Group obtains approvals from the Federal Agency for Fishery and its territorial bodies for activities that affect aquatic biological resources and their habitats. All of the Group's environmental documentation for economic activities planned undergoes a federal environmental expertise to determine its compliance with the requirements established by environmental legislation and technical regulations to prevent As part of Article 67 of Federal Law No. 7 "On Environmental Protection" dated 10 January 2002 and Order No. 74 of the Ministry of Natural Resources and Environment of the Russian Federation "On Approval of Requirements to the Content of Industrial Environmental Control Programme, Procedure and Terms of Reporting on the Organisation and Results of Industrial Environmental Control" dated 28 February 2018, companies of the Group approve industrial environmental control and monitoring programmes for each production facility. Impact on the Atmosphere -82 t total air pollutant emissions in 2021 Structure of emissions by pollutant type | % 8 19 0 31 42 Assessment of the impact on the atmosphere is an integral part of the industrial environmental control system and is carried out on an annual basis for all facilities of the Russian Aquaculture Group. In the course of the Group's production activities, the negative impact on atmospheric air is caused by pollutants from stationary and mobile emission sources (diesel generators, engines, production units and equipment). When installing and operating the Russian Aquaculture Group facilities, maximum concentrations of pollutants in the atmosphere do not exceed hygienic standards for air quality or permissible levels. In 2021, to clarify the environmental impact of the Russian Aquaculture Group's facilities, an inventory of air pollution sources was taken. Nitrogen oxides (NOx) Carbon monoxide (CO) Sulphur dioxide (SO2) Other To control and reduce emissions into the atmosphere, the Russian Aquaculture Group is taking the following measures, inter alia: ⚫ cost-effective and procedural operation of diesel generators, vehicles, equipment and other units; • • compliance with environmental requirements; use of fuels (diesel, petrol) which meet relevant standards and specifications; control, metering and cost-effective consumption of fuel and electricity; optimisation of ship logistics. 1 Excluding the Group's foreign assets. 74 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ The Group has implemented an industrial environmental control and monitoring programme as part of its air impact mitigation measures. In 2021, the Russian Aquaculture Group has evaluated GHG emissions for the first time. They amounted to 12.8 thousand t of CO₂- equivalent (Scope 1). The main sources of greenhouse gases are power plants, machinery and transport that burn different types of fuel. 75 Sustainable Development#39Sustainable Development Energy consumption and Efficiency Efficient use of energy resources contributes to reducing the overall environmental impact of the Russian Aquaculture Group's operations, including climate change. Fuel Consumption Despite the Company's significantly expanded technological infrastructure in 2021 (about 40%), diesel consumption went up by 26.5% - not as much as in 2020. The consumption of petrol decreased by 20%. The growth in fuel consumption, with a significant increase in the number of consumers, has been kept in check by the Russian Aquaculture Group's gradual implementation of an energy efficiency policy. Fuel consumption by type | thous. I 2020 г. 2021 r. Diesel fuel Petrol 3,722.0 4,709.1 264.1 214.8 In 2021, the total electricity consumption of the Group's facilities was 2,279.2 thousand kWh. Distribution of electricity consumption in 2021 by facility thousand kWh 233.4 287.4 21.9 236.7 725.3 142.0 17.9 415.0 Division in Popov Porog settlement in the Republic of Karelia Tri Ruchya fish processing plant Support service Net repair service - In 2021, the Group conducted a comprehensive energy examination of its facilities in cooperation with an independent expert organisation LLC Prommash Test. The survey resulted in a report' with recommendations for energy-saving measures. According to the report, the effect of energy saving measures in cost terms (at tariff rates at the time of reporting) could be about RUB 1 million per year. Energy saving measures are integrated and aim to replace obsolete equipment, reduce maintenance costs, and ensure reliable energy supply. Among the recommended activities are the following: insulation of the rooms with equipment; • modernisation of the lighting system (lamps change); ⚫ installation of motion, proximity, and light sensors to control indoor/outdoor lighting; • installation of an automatic controller for electric boilers; • installation of mechanical and automatic controllers on heating radiators. In the reporting year, the Group started implementing most of the activities and continued in 2022. Water Use The Russian Aquaculture Group prioritises the sustainable use of water resources, efficient wastewater treatment, and the prevention of pollutants in natural water bodies. The capacity of wastewater treatment facility at the fish processing plant is over 50 m³ per day In 2021, the Group used 22,2 thousand m³ of fresh water. The Murmansk region had the main volume of water consumption. Water intake (thous. m³) Murmansk region Republic Total of Karelia for the Group 13.7 8.5 22.2 Murmansk region-based facilities primarily use centralised water supply through utility pipelines (water service contracts). The Group generates domestic sewage, which is mainly disposed into municipal water supply systems. The service is provided by housing and public utilities of the districts of the Murmansk Region. Wastewater disposal at the fish processing plant is operating through the treatment facilities located at the site, with a capacity of over 50 m³ per day. In the Republic of Karelia, water is taken from the lake Ozero Norus-Lambi (Baltic Sea basin). To this end, we signed a water use agreement with the Ministry of Natural Resources and Environment, Republic of Karelia. All wastewater and domestic and industrial wastewater, in particular, are disposed of and taken to the public utility Vodootvedeniye, Republic of Karelia. Key factors affecting the marine environment at fish farms are: ⚫ use of the water area for ship traffic; ⚫ use of seawater for production purposes, namely in fish farming (no withdrawal or disposal). The water used for general economic purposes on the tow boats is imported. Wastewater is collected on tow boats and sent to specialised organisations for treatment. Water Quality Control and Assessment of Impacts on Water Resources For any treated effluents, water quality control and regular monitoring of water bodies and water protection zones is provided by the basin water authorities at a sub- national level under the natural and effluent water quality measurement programmes. The Group is implementing an industrial environmental control programme, where the sampling is taken at required intervals to control the water chemistry. The research of fish farm areas carried out by the Centre for Laboratory Analysis and Technical Measurements in the Central Federal District showed that the water contaminant did not exceed the maximum level. The regions of the Group's operation had no areas with water scarcity, and water intake from the Group's water bodies had no significant impact on water sources. Measures for Sustainable Use and Water Bodies Protection • record of wastewater disposal and consumption; implementation of a programme for environmental control and monitoring of surface water and wastewater; high-quality maintenance of water and sewerage systems, as well as machinery and equipment; strict compliance with Russian and international laws. Engineers (base) Engineers (hostel) Packaging factory ■Shipbuilding department 76 PJSC Russian Aquaculture | Annual Report 2021 1 Under the requirements of Order of the Ministry of Economic Development of the Russian Federation No. 310 dated 25 May 2020 "On Approval of Requirements for Energy Audit and Results (Energy Performance Certificate and Energy Audit Report)". www.russaquaculture.ru/en/ 77#40Sustainable Development Waste Management The Russian Aquaculture Group generates production and consumption wastes of hazard classes 1-5. The bulk of the Group's waste (over 98%) is Class 4 and Class 5- the least hazardous. -RUB 1,3 mill million waste removal and disposal costs in 2021 The Group is compliant with environmental and sanitary requirements for waste management. Waste treatment, reuse of materials, and the sale of recyclables (cardboard, different types of containers, feed bags, etc.) are the Group's key production targets. Fish waste is used to produce fish silage and fish oil - valuable raw materials for making feed and food supplements, fertilisers, and other products. Waste generation by hazard class and region for 2021 | t Waste is disposed of at facilities included in the State Register of Waste Placement Facilities. The Group signed contracts with waste receipt and transfer companies. Waste transfers shall be documented (certificates, invoices). To tackle waste management, the Group adopted an Industrial Environmental Control Programme and took the following measures: ⚫ waste inventory and update of waste profile sheets; ⚫ waste record; ⚫ waste sorting; timely removal of waste by specialised licensed organisations. To limit the possible adverse impact of production and consumption waste on the environment, the Group provides: production and consumption waste optimisation and sale of recyclables; disposal of waste produced; Republic Murmansk Total of Karelia region for the Group • Class 1 0.036 0.075 0.111 Class 2 0.001 0.000 0.001 focus on reuse of materials in production; Class 3 0.000 9.820 9.820 Class 4 81.005 149.999 231.004 Class 5 Total waste 0.000 81.042 231.954 391.848 231.954 472.890 striving for zero waste production. By-products The Russian Aquaculture Group generates such by-products as fish oil and fish silage - valuable and marketable raw materials. Fish Oil The gutting produces offal that are subsequently used to make oil. High-purity fish oil is sold to companies that make and produce dietary supplements, organic cosmetics, and animal (including pet) food. Low-purity trimmings are used in the leather industry and lubricant production. These can also be used in the production of biodiesel or as a diesel fuel additive, minimising the toxicity of exhaust gases while slightly reducing engine efficiency. Fish Hydrolysate (Silage) In 2021, the total technical fish waste in cages was 12.5%, making a meaningful result in line with the world's largest salmon producers. Every day we take dead fish out of the water and process it into silage (adding highly anti-bacterial formic acid to greatly reduce formation of putrefactive microorganisms and bacteria). Several agricultural enterprises receive the product for soil application, as it helps to significantly improve the soil yielding ability. By-products 2021 marked state tests of an organic fertiliser based on fish hydrolysate. According to the reports, tests on potatoes and wheat showed an increase in crop yields and higher nutritional quality. The Company is going to register fish protein hydrolysate as an agrochemical Reuse The Russian Aquaculture Group uses recyclable materials for packaging, which are subsequently used in the production of building insulation. Moreover, the Group sells empty feed bags, which are then recycled. They are shredded and melted down into pellets to make various plastic products. Clean-up Programme for Inby Coastal Areas As part of the corporate environmental programme Clean Shores, volunteers regularly clean up the Murmansk region coastline from unauthorised landfill sites. The Group provides the volunteers with everything they need, including equipment and waste removal vehicles. The fish farms installation and operation result in the generation of the following solid wastes: • mercury, quartz-mercury and fluorescent lamps with no consumer properties; • waste mineral oils; ⚫ waste oil, fuel, and air filters; ⚫ waste cloth; ⚫ waste cordages; • solid municipal waste (SMW); • contaminated containers and others. As waste accumulates, it is transferred to specialised licensed organisations for transportation, treatment, and disposal in landfills. 78 PJSC Russian Aquaculture | Annual Report 2021 1. Report on the results of registration tests to assess the biological effect of agrochemical AGROMORE on spring wheat, Zone 1 (Federal State Funded Research Institution Pryanishnikov Institute Of Agrochemistry, 2021); • Report on the results of registration tests to assess the biological effect of agrochemical AGROMORE on potatoes, Zone 1 (Federal State Funded Research Institution Pryanishnikov Institute Of Agrochemistry, 2021): www.russaquaculture.ru/en/ * = ⑦ 19 79#41Biodiversity Conservation Rearing Conditions, Biological and Veterinary Safety Sustainable Development The conservation of marine ecosystems and the maintenance of biological diversity are one of the most important tasks of Russian Aquaculture Group. The Group mainly operates in water areas of sea water bodies. In this regard, all programmes for the commercial rearing of Atlantic salmon, rainbow trout and mussels in the Group's fish-farming areas are subject to approval from the Federal Agency for Fishery for activities that affect aquatic biological resources and their habitats. The Barents Sea water area is characterized by the presence of cetaceans and pinnipeds, some of which are classified as protected species. One of the main ways to conserve biodiversity in the areas of the Company's activities is the implementation of the Industrial Environmental Monitoring Programme ensuring the comprehensive monitoring of the state of the environment, including the components of the natural environment, natural ecological systems, processes and phenomena occurring in them, as well as the assessment and forecast of changes in the state of the environment. The Programme is implemented by the Company in all fish-farming areas. Fish-farming areas are located in water areas of bays and reservoirs, outside the boundaries of specially protected natural areas, but they are not adjacent to high biodiversity areas or protected natural areas. When implementing the principle of caring for the ecosystem and constantly improving approaches to its use the Company interacts with the leading universities of the Russian Federation, including those in the regions where the Company operates. In 2021, together with the Polar Branch of Federal State Budgetary Institution "Russian Federal Research Institute Of Fisheries and Oceanography", the study of routes and periods for the migration of wild Atlantic salmon in the areas within the location of the fish cages complexes of the Group, was performed, while the project for monitoring the occurrence of aquacultured salmon in the rivers of the Kola Peninsula was launched. In 2020, as part of the activities to recover aquatic biological resources, the Group released juvenile Atlantic salmon into the Onega River in the White Sea basin. In 2021, whitefish underyearlings were released into the Vyg River in the White Sea basin. Biodiversity Conservation Activities The Group regularly takes environmental measures • to reduce and prevent any negative impacts on aquatic biological resources and their habitat, which include: Compliance with the applicable veterinary requirements and hygienic standards when using stocking materials, as well as compliance with the biological engineering standards of fish farming by ensuring vaccination and physical treatment of fish from sea louses, as well as other measures to ensure a favourable ichthyopathological environment; • Implementation of the fallowing process' in order to ensure a favourable ichthyopathological environment; • Use of high-quality fish products (without any signs of diseases) for rearing purposes, prohibition of using transgenic forms of fish; • Implementation of the industrial and environmental monitoring of risks of infectious and/or parasitic diseases, risks of contamination of water areas and bottoms with excess feeds, waste products and decomposition of farmed fish; Quarterly epizootic and ichthyopathological examination of the fish cages complex performed together with specialists from the State Veterinary Service of the Murmansk Region; Quarterly sampling of fish from all fish cages complexes and their study at Federal State Budget Scientific Institution "All-Russian Research Institute of Experimental Veterinary Medicine named after K.I. Scriabin and Y.R. Kovalenko". Russian Aquaculture Group complies with the best modern standards in the field of fish rearing and reducing risks of diseases. All fish cages complexes are equipped with modern high-technology equipment and comply with the highest level of biological safety. The Group implements the following approaches and practices in order to maintain the health of farmed fish: Fallowing: it is kept without fish for at least 2 months after the completion of catching fish from the fish cages complex Monitoring of stocking materials: salmon smolts and trout juveniles are monitored by an independent veterinary laboratory at the fish-rearing station and subject to additional testing for a range of pathogens prior to shipment. Vaccination: in the rearing process implemented at the fish-rearing station, all stocking materials are vaccinated against the most dangerous diseases Separation of year classes: only fish of one year class may be in each fish cages complex Observations and examinations during the rearing process: fish of each fish cages complex is periodically examined in independent laboratories, regardless of the presence of signs of any disease Proper waste management: all process waste is removed from all fish cages on a daily basis (every two days during the cold season) Disinfection: in the fish rearing process, the equipment used is subject to regular disinfection. Then, following the completion of the cycle, all equipment of the fish cages complex is thoroughly cleaned and disinfected Vessel and personnel assignment: workboats of fish farmers and fish-farmer watches are assigned to each fish cages complex, while personnel and equipment are not rearranged between fish cages complexes Fish cages complexes are located in water areas with the most favourable conditions for fish in terms of water flow, temperature, wave-impact load and ice conditions. In fish cages complexes located in such areas, each fish may feel itself as comfortable as wild fish in natural conditions. The depth of arrangement of separation nets reaches 35 meters, which allows the fish to choose the most comfortable depth. The number of fish in each fish cage is determined in order to prevent a high density in case of further growth. The high-quality feeding of fish is the most important element of ensuring biological safety. The relevant feeding process is implemented depending on palatability: underwater cameras are installed in each cage, and the fish farmer, who manages the feeding system, visually monitors the saturation of the entire population in the cage. It ensures the regular and complete feeding of fish and reduces competition between individual fish. In its activities, Russian Aquaculture Group uses non-GMO feeds that comply with the principles of sustainable production and are certified according to the international quality standards (ISO 9001, ISO 14001, ISO 22000, GLOBALG.A.P, ASC COMPLIANT, ORGANIC, GLOBALG.A.P NON-GMO). 1 Fallowing: keeping the fish cages complex without fish for at least 2 months after the end of catching. 80 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 81#42Human resource management Sustainable Development The Group is focused on its efforts on preventing the leave (escape) of fish from fish cages. Such efforts are mainly based on ensuring the relevant checking of separation nets before they are arranged in cages and during their use. In the fish rearing process, the integrity of separation nets is constantly monitored on a monthly basis, and each cage is inspected by divers, as well as with the help of underwater robots. The Group has its own production site for the checking and repair of separation nets. After each use at sea, separation nets are moved to the separation station where they are disinfected, washed, tested for strength and repaired. For each separation net, the instrumental measurement of tensile strength is performed in at least 10 different places, and if a decrease in strength is below the allowable threshold, the separation net may be written-off. For the entire period of its activity, the Group has no cases of fish leaving fish cages. Since the rearing of fish takes place in natural marine conditions that are not monitored by humans (except for the choice of water area), any losses almost completely depend on natural factors. The natural selection of fish takes place in fish cages, while a certain number of the weakest individuals die. At the same time, a disproportionately larger number of fish survive under fish farming conditions compared to wild nature. While complying the requirements of international conventions, the Company constantly monitors risks of infectious and/or parasitic diseases. In 2021, the average survivability of fish in the Group's fish cages was 87.5% It is a good result and may be compared to the global industry average results. Parasite Control Sea louse is a widespread ectoparasite and may be found on both wild salmon and aquacultured salmon and trout during the warm season. The presence of any parasite as such is not a threat to fish stock. The active reproduction of sea louses begins after reaching high values of the intensity of invasion among adult females. The development of parasites depends on the temperature regime. In the conditions of cold water areas of the Murmansk region, it is much slower than in warm water areas of Norway. In this regard, the need for cleaning fish from parasites arises up to 1-2 times during the rearing period. The Company implements the system of constant counting of the number of salmon louses during the warm season. In order to deal with parasites, the equipment for the mechanical cleaning of fish from ectoparasites is actively used in case of reaching threshold values of invasion intensity (0.5 adult females per fish). During the cleaning process, all fish is pumped from the cage, passes through the water jet cleaning system and is released into another cage, and thus any louses are separated from fish and remain in a special filter. According to the requirements of the the Williamsburg Resolution of the Parties to the Convention for the Conservation of Salmon in the North Atlantic Ocean dated March 2, 1982, the Company monitors sea louses and fish leaving (escape). Additionally, it is planned to implement the study of sea louses on wild salmon and the monitoring of rivers in order to identify left individuals from fish cages complexes together with the Polar Branch of Federal State Budgetary Institution "Russian Federal Research Institute Of Fisheries and Oceanography". The Russian Aquaculture Group pays great attention to creating a comfortable environment for its employees. The Group's corporate culture aims to foster an atmosphere of support, cooperation and commitment to results. There is a huge emphasis on team development. The fundamental principle of the recruitment policy is engagement of the best talent, however, it gives ample development opportunities to young professionals without much work experience. Human resource policy The Group's human resource policy is based on compliance with the principles and standards of Russian and international labour law, mutual respect and a focus on the achievement of established strategic goals. The priority areas of the Group's human resource policy are as follows: ⚫ continuous staff training and development; • safe working conditions; transparent remuneration system; ⚫ comfortable corporate culture. The Russian Aquaculture Group respects human rights when it comes to human resource management and ensures equal opportunities and employment non- discrimination. The Group does not use forced or child labour. The respective principles are set out in the Anti- Discrimination Policy of the Company. All employees have an equal and unrestricted opportunity to form or join trade unions and to bargain collectively. The basic principles of and approaches to human resource management are set out in the following internal documents of the Company: . Corporate Code of Conduct; . Regulation on Corporate Ethics; Regulations on Business Travel; Regulation on Holiday Entitlement; • Free Association Policy; Anti-Discrimination Policy. The Human Resource Department is responsible for the overall human resource management. It performs the following functions: ⚫ development of human resource management strategy, programmes and projects; • control over the implementation of strategic human resource management programmes and projects; implementation of the best human resource management practices. TT1474 51 82 PJSC Russian Aquaculture | Annual Report 2021 • Regulation on Remuneration, Bonuses and Fringe Benefits to Employees; Training Policy; Regulation on Testing of Employees; www.russaquaculture.ru/en/ 83#43Plans for the development of the human resource policy Remuneration system and human resource costs The Group's strategic objectives in human resource management are as follows: ⚫ to be the best employer in the industry; ⚫ to attract the younger generation to interesting work in the Arctic; to introduce international aquaculture experience into secondary vocational and higher education and raise the interest of schoolchildren and students in the industry; • to attract and retain working-age population in the Arctic zone. The main development areas of the Group's human resource policy: • emphasis on employees with multiple competences; • continuous advancement of knowledge aimed at Company development; • annual human resource evaluations. In order to support the development of the Arctic territories and taking into account the outflow of the local population from the region, the Company organises relocation programmes, which include: . employee compensation package (rent of housing, reimbursement of costs of relocation and regular trips to the "home region"); • work under a rotation system, including temporary shifts during the "high season"; low-interest loans. Human resource characteristics In 2021, the average headcount of the Russian Aquaculture Group was 550 people. The numbers increased due to the expansion of production, purchase of new vessels and acquisition of a fish-processing plant in Murmansk by the Company. Headcount as of 31 December 2021, split by categories Headcount (people), including: Average headcount | people Murmansk region Republic Moscow Total of Karelia 528 93 35 656 853 220 women 65 18 17 100 men 463 75 18 556 550 under 30 years 143 13 4 160 of age 445 aged 30-50 311 70 29 410 387 over 50 years 77 10 2 89 of age specialists 74 14 110 managers 37 6 12 55 workers 367 69 436 Other 50 4 1 55 employees Permanent contract 494 42 62 36 592 2019 2020 2021 of employment Fixed-term contract 34 29 63 of employment The Russian Aquaculture Group provides decent remuneration and social security for its employees, counting on long-term and effective cooperation. Human resource costs¹ in 2021: RUB 1.1 bln increase as compared A 35% to 2020 The Company has a competitive transparent labour remuneration and financial motivation system. All financial obligations to the staff are met, which gives each employee and his or her family confidence in the future. The salary calculation and payment procedure along with the list and terms of other payments (severance allowance, compensations, financial assistance, fringe benefits and bonuses) are set out in the Regulation on Remuneration, Bonuses and Fringe Benefits to Employees in effect in the Company. Employee remuneration is paid according to a simple time-based compensation system (salary calculation by day/hour). In addition, the motivation system includes annual and project bonuses, an option programme, and one-off bonuses (for specific achievements). The annual bonus is paid if key performance indicators (KPIs) are met in the annual reporting period. KPIs, their weight ratios and the list of positions subject to annual bonuses are set out in the Regulation on Remuneration, Bonuses and Fringe Benefits to Employees in effect in the Company. Average salary | RUB. 133,308 In 2021, the average salary at the Russian Aquaculture Group amounted to RUB 133,308. The average salary increased by 9% as compared to 2020. The basic salary of women and men is the same. In order to maintain and ensure adequate salary, the Company regularly analyses the labour market in the regions of presence and conducts annual performance reviews. The Russian Aquaculture Group continues to implement its development strategy that provides for a 12% target average increase in annual employee earnings, maintenance of transparency standards in performance measurement and establishment of transparent and fair calculation algorithms and methods. Human resource costs | million RUB 812 685 1 095 656 people were employed by the Russian Aquaculture Group as of the end of 2021 Labour turnover rate: 2019 = 19%, 2020 = 12%, 2021 = 21% The labour turnover rate slowed down in 2020 due to the onset of the coronavirus pandemic (the employees sought to avoid change, focused on health). In 2021, the fluctuation on the labour market resumed as epidemiological constraints decreased. Intense competition among employers for workers became the trend of 2021. 84 PJSC Russian Aquaculture | Annual Report 2021 122,250 118,463 2019 2020 2021 2019 2020 2021 'Include salary, insurance premiums and VHI costs. www.russaquaculture.ru/en/ 85 55 Sustainable Development#44Sustainable Development Intangible motivation In order to retain qualified specialists, the Russian Aquaculture Group pays attention to internal social programmes and intangible employee motivation programmes. The following programmes are in effect in the Group: • system of benefits (voluntary health and accident insurance, corporate transport and housing, valuable gifts for holidays to employees and their children, organisation of social and corporate events, annual best employee awards); programmes to support employees in difficult life situations; • programmes to involve the younger generation in environmental issues (children's competitions and other events). All employees working in the Far North (subdivisions in the Murmansk region and the Republic of Karelia) are covered by the Dark Nights corporate programme, which aims to ease the psychological condition of employees during winter months and particularly during the polar night. The project includes: • social and cultural events (tickets to theatres, concerts and other events are purchased following an analysis of employees' interests); • sports events (swimming pool and sports club memberships are purchased for employees, team games such as football, hockey and various marathons are sponsored); • weekly supply of fresh vegetables, fruit and vitamins to workers and their families; . improvement of amenities in remote locations. Human resource training and development The Russian Aquaculture Group focuses on improvement of professional knowledge, skills and abilities of its employees to effectively solve the tasks within the Company strategy. The Group's business is specific; we employ highly qualified specialists in various fields, and many of them are required to periodically confirm their qualifications and undergo further training. This primarily implies safety of the employees as they perform high-risk operations on water and underwater, and the responsibility of the business. RUB >7 mln invested in staff development and training in 2021 Key Competencies in Fish Farming Norwegian VAL college has been a Company's partner in the development of key competencies in fish farming for more than four years; new fish cages complex employees are annually sent there in March-April to obtain theoretical and practical skills. Employees of the Company's Biological Service receive annual training from Norwegian partners as well as at Russian educational institutions, gaining theoretical and practical knowledge in biological safety, health prevention and fish disease diagnosis. Drawings by children from the Murmansk region, who have taken part in the Underwater World competition organised by the Company The following types of training are used in the Group: • • Core external: mandatory refresher courses for certain positions, health and safety and environmental training. Additional external: developing staff competences, gaining new knowledge. • Additional internal: training is provided by employees with the best competencies in certain areas. For the external training programmes, the Company cooperates with higher education institutions: Skolkovo Innovation Centre, Northern Federal University named after M. V. Lomonosov, Moscow State Institute of International Relations (MGIMO), Bauman Moscow State Technical University, as well as various consulting companies. All employee training is organised centrally by the Human Resource Department in accordance with the current training plan within the set budget. Development of Managerial Competencies and Professional Skills The present-day business processes are permanently changing, and as new technologies appear, competencies and managerial skills of the employees shall constantly improve. The Company actively cooperates with the Skolkovo School of Management, large training centres in Russia and abroad. This is an investment in the future of employees and the Company as a whole. Training Effectiveness Evaluation The following tools are used to evaluate the effectiveness of the training provided: assessment of the participant's satisfaction with the training; • assessment of the training material assimilation; • assessment of the dynamics of the trainee's working behaviour, including competences (within one month of training by observation of the employee by the line manager); assessment of the dynamics of the trainee's performance changes; • assessment of the dynamics of the Company's performance changes and the financial effect of the training. Based on the results of the training effectiveness evaluation, the content of the programme may be revised, the training provider and other parameters may be changed. 86 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 87 62#45Occupational Health and Safety Sustainable Development Younger Generation Engagement The Russian Aquaculture Group promotes the Group's professions to young people. The Company holds meetings with schoolchildren and full-time and other students of Russian universities, subsidises the education of gifted schoolchildren in colleges and universities, organises internships and work placements for students at Group companies and creates training programmes for teachers. Talent Management The Group has developed and implemented the following ways of managing talents: preferred filling vacancies with internal resources/ candidates; attracting and training young professionals (mostly applicable for fish cages complex employees); forming a talent pool consisting of the most successful and competent employees of the Company. -30% share of internal hiring in the Russian Aquaculture Group Corporate Ethics The Russian Aquaculture Group has approved and implemented the Regulation on Corporate Ethics (Code of Corporate Ethics). This document is a set of ethical and moral standards and rules of conduct accepted and shared by every employee of Group companies, regardless of the level of their position. Employees and heads of structural divisions may not make decisions or take actions that are contrary to corporate values and that may damage the reputation and interests of the Group. The Regulation, inter alia, sets forth: ⚫the actions of employees when interacting . with the media and social media; the principles of respect for the Company's property; prohibition of the use of insider information by employees, disclosure of confidential information; • restrictions on the receipt of gifts from third parties in the performance of official duties; • a ban on commercial bribery; • avoiding conflicts of interest with clients, between clients and between employees of Group companies; ⚫ the general principles and rules of internal corporate conduct for employees. The Russian Aquaculture Group pays special attention to health and safety at work. Protecting the life and health of employees is an absolute priority for the Company. The Russian Aquaculture Group aims to completely eliminate workplace injuries and devotes a significant portion of its efforts to ensuring workplace safety. Safe working conditions are working conditions in which exposure of employees to harmful and/or dangerous production factors is eliminated, or their exposure levels do not exceed the established standards. By providing a safe working environment, the Company promotes respect for basic human rights (the right to health and the right to life). The Russian Aquaculture Group seeks to incorporate the health and safety provisions of the International Labour Organisation (ILO), the Organisation for Economic Co-operation and Development (OECD) and the World Health Organisation (WHO) into its operations. The Company develops the health and safety (HSE) management system following the most current legal requirements, taking into account industry best practices and continuously improving the relevant competencies of its staff. Health and Safety Management The Russian Aquaculture Group's HSE management system complies with Russian Federation legislation. • The main HSE management tasks in Group companies include: • organising and coordinating health and safety work across the Group; ensuring and monitoring employee compliance with regulatory and corporate health and safety requirements; creating a safe working environment for employees of Group companies, improving the working conditions and prevention of occupational injuries and diseases; advising and informing employees on health and safety issues and fostering a safety culture in Group companies. The Company has the Health and Safety Policy, which sets out the basic principles and objectives for health and safety, and the Regulation on the Health and Safety Management System, which sets out the HSE management structure, duties and responsibilities of all employees on health and safety issues. Overall management of health and safety at the Russian Aquaculture Group is the responsibility of the Company's Chief Executive Officer. CEO's functions include monitoring compliance with applicable labour legislation and compliance with the prescriptions of supervisory authorities by all Group companies, approving internal documents on labour protection, organising work to prevent injuries and reduce employee morbidity, rewarding or disciplining employees for actions related to ensuring a healthy and safe working environment, as well as other functions. The Russian Aquaculture Group has established and operates the Health and Safety Service. 88 PJSC Russian Aquaculture | Annual Report 2021 1 According to Order of the Russian Ministry of Labour No. 438n dated 19 August 2016 "On Approval of the Standard Regulation for the Health and Safety Management System". www.russaquaculture.ru/en/ 89#46Sustainable Development Interaction with regulatory bodies takes place through scheduled and unscheduled inspections by Federal Service for the Oversight of Consumer Protection and Welfare (Rospotrebnadzor) and State Labour Inspectorate. Short-Term Health and Safety Objectives Involvement of the Group's senior management in HSE issues and the development of a culture of occupational safety Informing employees about ways and means of ensuring safety (personal and others) in the workplace Occupational risk assessments for 100% of the Group's workplaces Conducting the necessary health and safety training for 100% of the Group's employees Timely maintenance of equipment, appliances and machinery Conducting regular HSE compliance audits In 2021, 16 internal audits and one external health and safety compliance audit have been carried out in the Company. incorporation of health and safety measures into the annual business planning process; • management review of 100% of internal and external health. and safety audit reports; ⚫ rewarding employees who comply with health and safety requirements; • protecting employees against possible punishment when reporting incidents, hazards and risks. ⚫ reviewing (developing) 100% of job descriptions which include health and safety requirements. ⚫ further ongoing risk control; • . developing and implementing preventive occupational safety measures; tracking possible risks that have been avoided through the developed preventive measures. preventing from working without undergoing health and safety training (developing and implementing local regulations governing the suspension procedure); ⚫ monitoring the effectiveness of HSE training: development of monitoring checklists (tests) for all staff positions (100%). • 100% of the activities included in the annual maintenance plan implemented. ⚫ internal audits: at least 12 per year; Injury Rates In 2021, there were no fatal accidents involving employees of Group companies. One injury with temporary disability has been recorded. A mechanic on a dry cargo vessel was injured when a heavy sack with fodder fell. According to the scheme for determining the severity of injuries in occupational accidents, the injury is categorised as "light". 1.10 in 2021 LTIFR¹ occupational injury rate per million man-hours worked Number of accidents Number of Lost Time Injuries (LTI)² Number of severe injuries (not including fatalities)³ 2021 2020 о о Occupational Safety Measures In 2021, The Company took the following measures for health and safety management: ⚫ 15 sets of fire safety rules were developed and approved for the Company and its divisions; four fire safety briefing programmes were developed and approved for all divisions; 39 occupational safety briefing programmes were developed and approved for all positions; • boarding safety briefing programmes for passengers and the Rules of Conduct on Board of Small Vessels were developed and approved; • standards for issuing personal protective equipment to employees at divisions in the Murmansk region were developed and approved; two induction video briefings are developed; training will be held on an ongoing basis; • laboratory tests (measurements) of compliance with sanitary standards were organised and carried out on the vessels of the Marine Department at the fish processing plant; • a special assessment of working conditions was organised and made for the ship named Aleksander Gusev; pre-employment (fish processing plant) and periodic medical examinations of employees are organised and carried out; • an automated pre-voyage medical examination of shipping drivers was tested and implemented. Long-Term Health and Safety Objectives Increase of the Health and Safety Service staff (at least 4 employees) Development and implementation of a unified health and safety management system Certification of workplace compliance with international health and safety standards Determination of the list of hazardous work for which a permit is required Development of local regulations governing the procedure for carrying out work in accordance with a permit 90 PJSC Russian Aquaculture | Annual Report 2021 external audits: at least 1 per year. Number of fatalities Occupational injury rates О 1 2021 2020 Lost Time Injury Frequency Rate (LTIFR)1 1.10 Severe injury rate (not including fatalities)4 Fatality rates о о 0 1.35 RUB 22.2 million health and safety costs in 2020 RUB 35.4 million health and safety costs in 2021 59% by 2021 'Lost Time Injury Frequency Rate (LTIFR) = Number of Lost Time Injuries / Number of man-hours worked x 1,000,000 man-hours. 2 Excluding fatalities. 3 A severe injury is a work-related injury resulting in death or more than six months for a full recovery. 4 Rate of High-Consequence1 Work-Related Injuries = Number of severe work-related injuries (excluding fatalities) / Number of man-hours worked x 1,000,000 man- hours. 5 Rate of Fatalities as a Result of Work-Related Injury = Number of work-related fatalities / Number of man-hours worked x 1,000,000 man-hours. www.russaquaculture.ru/en/ L = > 91#4792 Sustainable Development Educational events, training courses, and briefings Staff members of the Russian Aquaculture Group of Companies pass training courses on health and safety issues, and their knowledge of labour protection requirements is regularly assessed. An annual plan for mandatory OHS training is drawn up. All external (in third-party organizations) training is done remotely (in service, at any time convenient for the employee). Mandatory training in third-party training organizations on labour protection is provided for heads of departments and top management, as those in charge of labour protection in departments. Training takes place in the Group's companies based on the approved programs in Russian and is financed by the Group's companies. In 2021, external mandatory training was provided: • on labour protection at the end of the year); 50 persons (8% of the payroll ⚫ on fire safety - 48 persons (7%); ⚫ on electrical safety - 20 persons (3%); on industrial worker jobs (slinger, crane driver, excavator driver, loader driver) - 67 persons (10%); • on first aid - 11 persons (2%). Employee health care The Company has a program of voluntary health insurance (VHI) for all staff member categories. This program is valid for all employees of the Group companies and is fully funded by the employer. The program grants employees access to a wide range of medical services, including dental services, and aims to maintain and promote the health of all employees and their families. Measures to counter the spread of COVID-19 During the period of increased COVID-19 incidence, the Company applies the following security measures: • a minimum number of employees present on the work site, as per the production needs; ⚫ the use of a predominantly remote format • for the performance of labour duties by employees; holding corporate events remotely through electronic means of communication; reducing the number of business trips of staff members; ⚫ while at the workplace, all employees are required to minimize any bodily contact and use personal respiratory protection equipment (medical face masks); daily non-contact monitoring of the employees' body temperature is mandatory; masks, skin antiseptics, non-contact thermometers are purchased by the Company and issued without restrictions; employees who do not have private cars are required to commute by corporate taxi at the Company's expense. 306 Company employees were vaccinated or received a medical exemption from vaccination in 2021 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ Personal protective equipment (masks, skin antiseptics, non-contact thermometers) is purchased by the Company and issued to employees without restrictions. 93 35#48Local community support Sustainable Development The activities of the Russian Aquaculture Group of Companies may have significant economic, environmental, and social impacts on local communities. The Group strives to identify and prevent potential negative impacts in a timely manner and provide support to local communities in the regions of operation. Local communities are individuals or groups of individuals living or working in areas that are affected or may be affected by the organization's activities. The Russian Aquaculture group of companies maintains social stability in the areas of its operation and invests significant resources in activities that improve the quality of life of the people living there. The Group conducts ongoing consultations with local communities to identify the most important aspects and areas of interaction. The Group allocates significant resources to cities and towns redevelopment, finances the operation of social infrastructure facilities: roads, educational and sports facilities, cultural and healthcare facilities. The priorities of charitable activities involve programs aimed at comprehensive support of younger generations (children's health, sports, education, leisure). The Russian Aquaculture group of companies takes an active part in local community development, putting special focus on vulnerable groups of the population, supports veterans, motherhood and childhood, children's, and youth sports. The Group keeps on monitoring ongoing projects and assesses the impact of its activities on local communities. At the same time, social partnership is being developed on a systematic basis and cooperation with regional and municipal authorities, and public organizations is being enhanced. The heads of the Group's corresponding regional divisions are in charge of the management of social investments and the implementation of corporate charitable projects. Charity events The Group's charitable projects are aimed at social support for the local population, including the development of social infrastructure in the regions, support for medicine, a healthy lifestyle, education, and culture. In 2021, the amount of funding for social programs and charitable projects amounted to RUB 13 million. Of these, RUB 3.9 million allocated to procuring personal protective equipment, disinfectants and equipment to counter the spread of COVID-19. Priority areas of charity projects Health and sports Social infrastructure Education and culture Special emphasis In the Group's charity activities is placed on supporting disadvantaged population groups. The particularly important charity areas involve children caring (financing the construction of playgrounds, a children's clinic, supporting a children's football team). The Group also provides support to veterans of the Great Patriotic War (WWII) in the Republic of Karelia. The main charity projects of the Russian Aquaculture Group of Companies in 2021: . playground installation in Olenya Guba, Murmansk Oblast; • creation of a health-improving and naturotherapeutic "Salt Cave" suite with the holosuite installation in Gadzhiyevo, Murmansk Oblast; repair and re-equipment of a computer class, as well as the purchase of necessary equipment and household appliances for the Severomorsk Cadet Corps, Severomorsk, Murmansk Oblast; • premise reconstruction (including the Salt Room complex and the waiting area) of Children's Polyclinic No. 1, Murmansk; • . • procuring a sports uniform for the children's football team of the Olymp Centre for Children's Education, ZATO Vidyaevo, Murmansk Oblast; purchasing furniture for the secondary school in Ura- guba, Murmansk Oblast; co-financing the construction of the hockey rink of the HC "Tavr", Murmansk; financing various festive events in Ura-guba, Murmansk Oblast; Overhauling outdoor pavilions in a kindergarten in Nadvoitsy, the Republic of Karelia; ⚫ financial support of the Boxing Federation of the Republic of Karelia; ⚫ financial aid for veterans of the Second World War living in the Republic of Karelia - purchasing products, celebratory gunfire, and other events. Hiring the locals Some of the Group's production assets are located in the northern regions at a considerable distance from regional centres, which establishes unique employment opportunities for small town residents. In 2021, the Russian Aquaculture Group of Companies employed 280 people living in Ura-Guba, Murmansk Oblast (only about 400 people live in this village). The Group also employs a significant number of residents of Popov Porog, Murmashi, and other settlements. Respect for human rights in the regions of operation The Company strictly complies with the Russian laws in matters of guarantees and respect for the rights of local communities, indigenous and small peoples living in the regions of the Company's operation, including the rights to protect their original habitat, traditional way of life, economic activities, and crafts. The Company provides an opportunity for representatives of local communities to get involved in making decisions that can have an effect on their interests at the stages of environmental impact assessment and public environmental review. 94 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ G => 95#49Risk management The Company devotes significant resources to identifying, assessing and accounting of risks in business decisions making. To reach stable and sustainable business development, achieve strategic goals and ensure the safety of the Company's assets, the Company puts specific focus on establishing an efficient risk management system, which main elements involve: identification and assessment of risks, development and implementation of measures to eliminate risks, risk management reporting and evaluating the risk management system efficiency. The risk management system has always been one of the key priorities of the Company's management, however, it has become even more important due to the increased level of uncertainty and instability in world markets. their sufficiency and performance, monitors the Company's management compliance with policies and procedures in risk management activities. It further assesses how the risk management system corresponds to the risks faced by the Company. In the reporting period, the Audit Committee of the Board of Directors has twice reviewed the risk management system in place in the Company. The efficiency of the system was considered satisfactory by the Audit Committee. In order to further improve the system, appropriate recommendations were given to management. Pathogenic risks, epizootic outbreaks Risk description Pathogenic risks, epizootic outbreaks Biological risks Risk mitigation Complying with generally recommended volumes of cultivation; locating areas at a sufficient distance from one another; concentrating big biomass volumes in large depth areas • Conducting regular internal and external veterinary inspections of the farms • Stocking volumes and densities are justified by research institutions • Neighbouring farms have fish from the same generation Farm resting after killing each generation of the fish • Insuring fish Risk management The Audit Committee of the Board of Directors reviews the Company's risk management and internal control systems on a regular basis, analyses and evaluates Operational risks The Company identifies nine main types of risks that have the greatest impact on its performance. • Risk description Risk of disease transmission from wildlife fish Risk of intrusion of foreign pathogenic organisms Risk of genetic modifications in fish populations naturally inhabiting the water due to aquaculture salmon leaking out of cages Risk mitigation Performing ongoing production control • Analysing standard indicators of water quality and the amount of natural waste • Installing an innovative purification system Using special protection nets and anti-seal ultrasound repelling devices Risk description Poor planning Poor design Risk of failure to reach the target capacity and low production efficiency Risk of predation Risk of potential spoilage or failure of main equipment that may significantly affect the production process Risk mitigation • Analysing and considering past experience when planning • Working out alternatives during the planning stage . Carefully considering all possible project options; identifying both the upsides and downsides • Allowing for project adjustment . Training of personnel at the cage farms in Norway Focusing on process optimisation using the best practices Procedures and regulations for core production processes • Bidding procedures for all major purchases • Planning the scope of production with regard to all factors that influence the result; timely revising plans; informing customers on changes in production volumes. Installing anti-seal equipment • Only trained staff members can have work permit • Insuring equipment; purchasing equipment with long-term warranty periods only • The availability of a spare parts kit, especially of components of bearing structures and fasteners, is mandatory 96 PJSC Russian Aquaculture | Annual Report 2021 Environmental risks Risk description • Risk of abnormal weather phenomena in winter or summer Risk of change in oceanic currents Risk mitigation Risk occurrence is very low. The existing changes in climatic conditions and oceanic currents present no threat. In case of significant changes in water temperature and routes of undercurrents, the existence of not only the Company's farm, but of the whole fishery industry of the region will be unlikely www.russaquaculture.ru 97 97#50Financial risks Marketing Risks Risk description . Change in the market environment A slump in the selling price of products due to the prevailing position of a foreign salmon supplier in the Russian market • Inadequate funding • Currency rate fluctuations Risk mitigation • It is possible to secure against the risks of this group by reducing dependence on foreign suppliers • Considering an alternative to domestic feed producers • Planning the budget with regard to a possible increase in costs of basic materials as well as with regard to forecasts of currency rate fluctuations Risk description Absence of expected or forecast demand Risks connected with underestimation of the competition level (dissemination of false or distorted information that can cause damage to the Company or harm its business reputation as well as misleading in respect of the nature, method and site of manufacture, customer performance and quality of the Company's products) Negative image Risk mitigation Signing long-term contracts with customers for delivery of the products. Therefore, it facilitates the planning of production volumes and minimises the risks related to the sales of finished products Establishing and maintaining the most friendly or partnership relations with other companies in the industry Social Risks Risk description . Lack of skilled employees • Enticement of key employees by competitors On-the-job injuries Risk of product theft, poaching, deliberate spoilage of cages Legal Risks Risk mitigation • Performance incentives for the most responsible and distinguished employees • Extending the duration of employment agreements and increasing salaries for well-performing employees • Training personnel on safety and compliance Ensuring that only well-trained employees aware of the technology are authorised to work on the production sites Production designing with account for personnel safety Setting up a security service • 24/7 monitoring in all areas • Installing video surveillance equipment Risk description Legislative amendments (including changes in tax rates, increase in various duties and levies) Risk mitigation • Monitoring and active participation in discussing the legislative initiatives • Increasing financial soundness Probability of occurrence The results of the risk assessment and prioritisation are as follows: 0.4 0.35 0.3 0.25 L C F 0.2 S O P 0.15 0.1 0.05 M B E 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 Significance for the company Assess- Rank ment 0.14 4 о Operational risks 0.16 2 P Pathogenic risks Commercial Risks 0.05 6 B Biological risks Risk description Risk mitigation 0.04 7 E Environmental risks Violation of obligations or failure to perform the obligations on part of raw materials and stock suppliers • Stipulating penalties in contracts with suppliers 0.18 1 F Financial risks • Making up an alternative list of suppliers in advance 0.08 5 S Social risks 0.16 2 L Legal risks 0.15 3 C Commercial risks 0.015 8 M Marketing risks 98 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru Promoting the importance of aquaculture and the technologies it uses • Paying special attention to the environmental friendliness of the production • Actively cooperating with local farmers and principal companies in the region, determining common problems and issues • Initiating and participating in conferences on the importance and necessity of the aquaculture development The most probable and serious risks, in terms of the amount of consequences, for an aquaculture company are financial and pathogenic risks. First of all, attention should be paid to the quality of work with suppliers to exclude disruption of supplies as well as to perform careful planning and budgeting with regard to all possible financial market fluctuations and price increases. The major threatening risk for the entire commercial Atlantic salmon cultivation industry is epizootic disease development. This is the main point to which much attention is paid in this area. Therefore, every year even more efficient and at the same time cost-effective disease control methods are developed. It helps prevent the risk of diseases and excludes the application of chemicals which produces less impact on the environment. The Company is also focused on operational risks. It is important to comply with the rules and methods of execution of all production operations and apply the practices of the leading companies in the industry. Designing requires special attention which should be paid to forecasting based on the experience available as well as on the experience of co-producers, including foreign counterparts. It is necessary to ensure high- quality training for the personnel on how to work in fish cages complexes where high endurance and accuracy in operations are simultaneously required. Social, marketing and legal risks may cause less damage for the company. However, they are more likely to occur as they are connected with external factors hard to foresee. 99 Risk management#51INA RCTICA ANNEXES Content REPORT ON COMPLIANCE WITH THE PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE ...... 102 COMPANY DISCLAIMER.. 127#52Report on Compliance with the Principles and Recommendations of the Corporate Governance Code This Report on Compliance with the Principles and Recommendations of the Corporate Governance Code was reviewed by the Board of Directors of PJSC Russian Aquaculture on the meeting of 30 May 2022 (Minutes No. 374 dated 30 May 2022). Following the results of the review, the Board of Directors confirms that the data contained in this Report represent complete and reliable information on the Company's compliance with the principles and recommendations of the Corporate Governance Code in 2021. Assessment methodology: compliance with the corporate governance principles recognised in the Corporate Governance Code has been assessed in accordance with the template proposed in the recommendations on the preparation of a report on compliance with the principles and recommendations of the Corporate Governance Code (Letter of the Bank of Russia No. IN-06-28/102 dated 27 December 2021). Annexes No. Corporate governance principles 1.1.3 1.1.4 During the preparation and holding of a general meeting, shareholders had an opportunity to receive information about the meeting and files of the meeting in a free and timely manner, ask questions to the executive bodies and members of the board of directors of the company, communicate with each other. Shareholders came across no unjustified difficulties in exercising of the right to demand convention of a general meeting, nominate candidates to the management bodies and propose agenda items of a general meeting. Each shareholder had an opportunity to exercise the right to vote in the easiest and most convenient way without any obstacles. Criteria for assessing compliance with the corporate governance principle 1. In the reporting period, shareholders were given an opportunity to ask questions to members of the executive bodies and the board of directors of the company when preparing and in the course of the general meeting. 2. The position of the board of directors (including dissenting opinions entered in the minutes, if any) on each agenda item of the general meetings held in the reporting period was included in the files of the general meeting of shareholders. 3. The company granted eligible shareholders access to the list of persons entitled to participate in the general meeting from the date of its receipt by the company, in all cases of holding of general meetings in the reporting period. 1. The company's charter provides for a period for shareholders to propose agenda items of the annual general meeting within at least 60 days from the end of the relevant calendar year. 2. In the reporting period, the company did not refuse to accept proposals related to the agenda items or candidates to the company bodies due to misprints and other insignificant shortcomings in the shareholder's proposal. 1. The company's charter provides for an electronic ballot to be filled in on the website given in the message on the general meeting of shareholders. Status of compliance with the corporate governance principle Partially observed Observed Not observed Explanations of deviation from criteria for assessing compliance with the corporate governance principle Criterion No. 1 is not observed. Since the General Meetings of Shareholders were held in the form. of an absentee vote in the year under review, shareholders had no opportunity to ask questions to members of executive bodies and the Board of Directors in the course of the General Meeting. However, the Company's messages announcing the General Meeting always contain a telephone number for shareholders to contact the Company's management and members of the Board of Directors, among other things. Criterion No. 1 is not observed. The Company's Charter does not provide for an electronic ballot to be filled in on the website given in the message on the General Meeting of Shareholders. The Company is committed to implementing the recommendations of the Code and plans to adopt a new version of the Charter which will include a provision on the possibility of filling in an electronic ballot on the website. No. Corporate governance principles Criteria for assessing compliance with the corporate governance principle Status of compliance with the corporate governance principle Explanations of deviation from criteria for assessing compliance with the corporate governance principle 1.1.5 1.1 1.1.1 1.1.2 The company has to ensure equal and fair treatment of all shareholders in exercising their right to take part in the company management The company creates the most favourable conditions for shareholders to participate in the general meeting, develop a justified position on the agenda items of a general meeting, coordinate their actions, as well as an opportunity to express their views. on the items considered. The procedure for informing about holding of a general meeting and providing files to a general meeting gives shareholders an opportunity to prepare properly for the participation therein. 1. The company ensures easy communication, such as via a hotline, email or an internet forum allowing shareholders to express their opinion and submit agenda items in the course of the preparation for a general meeting. These ways of communication were prepared by the company and made available to shareholders for each general meeting during the reporting period. In the reporting period, a message on holding of a general meeting of shareholders is posted (published) on the company's website at least 30 days before the date of the general meeting, unless a longer period is stipulated by law. The message on the meeting indicates the place of the meeting and the documents necessary for admission to the premises. Shareholders were provided with access to the information about the person proposing the agenda items and nominating candidates to the board of directors and the auditing commission (in case the commission shall be formed as per the company's charter). Observed Observed 102 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 103#53No. Corporate governance principles Criteria for assessing compliance with the corporate governance principle Status of compliance with the corporate governance principle Explanations of deviation from criteria for assessing compliance with the corporate governance principle 1.1.6 The procedure established by the company for holding of a general meeting gives all persons present at a meeting an equal opportunity to express their opinion and ask questions 1. Sufficient time was provided for reports on the agenda items and discussion of those items at general meetings of shareholders held in the format of face-to- face meetings (joint attendance of shareholders) in the reporting period. Shareholders were given the opportunity to express their opinion and ask questions on the agenda. 2. The company has invited nominees to the management and control bodies and has taken all necessary steps to ensure their participation in the general meeting of shareholders, at which their nominations were put to a vote. The nominees to the management and control bodies of the company present at the general meeting were available to answer questions from shareholders. 3. The sole executive body, the accounting officer, the chairperson or other members of the board's audit committee were available to answer questions from shareholders at general meetings of shareholders held during the reporting period. 4. In the reporting period, the company used telecommunication means for remote access of shareholders to participate in general meetings or the board of directors took a reasoned decision that it was not necessary (possible) to use such means in the reporting period. Not observed Criteria 1, 2, 3 and 4 are not observed. The recommendations considered were not complied with by the Company due to the holding of General Meetings in the form of absentee voting during the reporting period. The Company's messages announcing the General Meeting always contain a telephone number for shareholders to contact the Company's management and members of the Board of Directors, among other things. Furthermore, the Company did not use telecommunication means to provide remote access for shareholders to participate in the General Meetings during the reporting period, as the Company has not developed technical requirements for such access or approved the relevant documents. The Company is committed to implementing the recommendations of the Code. The Company's Board of Directors will take a reasoned decision on the use or non-use of such means when making decisions related to the preparation and holding of the General Meetings of Shareholders. Annexes No. Corporate governance principles Criteria for assessing compliance with the corporate governance principle Status of compliance with the corporate governance principle Explanations of deviation from criteria for assessing compliance with the corporate governance principle Shareholders are given an equal and fair opportunity to share profits of the company through the receipt of dividends 1.2 1.2.1 The company developed and implemented 1.2.2 1.2.3 1.2.4 a transparent and easily understandable mechanism for the determination of the amount of dividends and the dividend payment procedure. The company makes no dividend payment decision if such decision, although it formally violates no legal restrictions, is unreasonable from the financial standpoint and may lead to the forming of false perceptions about the company's operations. The company prevents any adverse impact on the dividend rights of existing shareholders.. The company is committed to excluding any other ways of obtaining profit (income) by shareholders at the expense of the company except for dividends and the liquidation value. 1. The dividend policy Partially observed of the company was approved by the board of directors and disclosed on the company's website. 2. If the dividend policy of the company, making up the consolidated financial statements, uses the company's reporting indicators to determine the amount of dividends, the relevant provisions of the dividend policy take into account consolidated financial reporting indicators. 3. Justification of the proposed distribution of net profit, including payment of dividends and the company's own needs, and assessment of its compliance with the dividend policy, explanations and economic justification of the need to direct a certain part of net profit to its own needs in the reporting period were included in the materials for the general meeting of shareholders, the agenda of which includes the item of profit distribution (including the payment (declaration) of dividends). 1. The company's provisions on the dividend policy, in addition to the restrictions imposed by law, define the financial/economic circumstances where the Company should not decide to pay dividends. Observed 1. In the reporting period, the company Observed took no actions resulting in an adverse impact on the dividend rights of existing shareholders. 1. In the reporting period, there were no other ways for the persons controlling the company to receive profit (income) at the company's expense other than dividends (e.g. through transfer pricing, unjustified provision of services by the controlling person at inflated prices, through internal loans substituting dividends to the controlling person and (or) its controlled persons). Observed Criterion No. 3 is not observed. In the reporting period, the Company did not include in the materials for the General Meeting of Shareholders a justification for the proposed distribution of net profit (including for the payment of dividends and the Company's own needs) and an assessment of its compliance with the dividend policy adopted by the Company. The Company is committed to complying with the recommendations of the Code and plans to include this information in the materials for the General Meetings of Shareholders in the new reporting period. 104 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 105#54No. Corporate governance principles Criteria for assessing compliance with the corporate governance principle Status of compliance Explanations of deviation No. Corporate governance principles with the corporate governance principle from criteria for assessing compliance with the corporate governance principle Criteria for assessing compliance with the corporate governance principle Status of compliance with the corporate governance principle Explanations of deviation from criteria for assessing compliance with the corporate governance principle Annexes 1.3 The system and practice of corporate governance ensure equal conditions for all shareholders that own shares of the same category (type) including minority (small) shareholders and foreign shareholders, as well as equal treatment of such shareholders by the company 1.3.1 The company created conditions for fair treatment of each shareholder by the management bodies and controlling persons of the company including conditions that ensure inadmissibility of application of any abusive practices by large shareholders 1. In the reporting period, the company's controlling persons have not abused their rights in relation to the company's shareholders, there were no conflicts between the company's controlling persons and the company's shareholders and, if any, the board of directors gave them due consideration. Observed in respect of minority shareholders. 1.3.2 The company does not take actions that result or did not participate in voting or may result in the artificial redistribution of corporate control. 1.4 1. Quasi-treasury shares were absent in the reporting period. Observed Shareholders are provided with reliable and effective means of keeping record of the rights to shares and an opportunity to dispose of held shares in a free and easy manner 1.4 Shareholders are provided with reliable and effective means of keeping record of the rights to shares and an opportunity to dispose of held shares in a free and easy manner. 2.1 2.1.1 1. The technology and terms of service used by the company's registrar meet the needs of the company and its shareholders and ensure that shareholder rights are recorded and exercised in the most efficient way. Observed The board of directors carries out strategic management of the company, defines the basic principles of and approaches to setting up the risk management and internal control system in the company, controls the activities of the executive bodies of the company and performs other key functions The board of directors is responsible for making decisions related to the appointment to and dismissal from positions in the executive bodies, including in connection with improper performance of duties. The board. of directors also controls that the executive bodies of the company act in accordance with the approved development strategy and the main directions of the company's operations. 1. The board of directors has determined in the charter the powers. of appointment, removal, dismissal and determining the terms and conditions of contracts in relation to members of the executive bodies. 2. In the reporting period, the nominations (appointments, human resources) committee considered the suitability of professional qualifications, skills and experience of the members of the executive bodies to the current and anticipated needs of the company as dictated by the approved strategy of the company. 3. In the reporting period, the board of directors reviewed the report(s) of the sole executive body and the collegial executive body (if any) on the implementation of the company's strategy. Partially observed Criterion No. 2 is not observed. In the reporting period, the Nomination and Remuneration Committee did not consider whether the professional qualifications, skills and experience of the members of the executive bodies met the current and anticipated needs of the Company as dictated by the approved Company strategy. The Company strives to implement the recommendations of the Code and plans to review whether the professional qualifications, skills and experience of the members of executive bodies meet the current and expected needs of the Company, in the next reporting period. 2.1.2 2.1.3 The board of directors establishes the main benchmarks of the company's operations over a long- term horizon, evaluates and approves the key performance indicators and the key business objectives of the company, evaluates and approves the strategy and business plans related to the main. operations of the company. The board of directors. determines the principles of and the approaches. to setting up the risk management and internal control system in the company. 2.1.4 The board of directors determines the company's policy on remuneration and (or) reimbursement of expenses (compensation) to members of the board of directors, the executive bodies and other key employees of the company. 2.1.5 The board. 2.1.6 of directors plays the key role in preventing, identifying and resolving internal conflicts between bodies of the company, shareholders of the company and employees of the company. The board of directors plays the key role in ensuring transparency of the company, timeliness and completeness of disclosure of information by the company and easy access of shareholders to documents of the company. 1. In the reporting period, the issues related to the implementation and updating of the strategy, the approval of the financial and economic plan (budget design) of the company, as well as the criteria and indicators (including intermediate ones) of the implementation of the company's strategy and business plans were reviewed at meetings of the board of directors. 1. The principles and approaches to the organisation of the risk management and internal control. system in the company are defined by the board of directors and included in the company's internal documents defining the risk management and internal control policy. 2. In the reporting period, the board of directors approved (revised) an acceptable amount of risks (risk appetite) of the company or the audit committee and (or) risk committee (if any) considered the viability of submitting the issue of revising the risk appetite of the company for the consideration of the board of directors. 1. The company developed, approved and implemented a policy(ies) on remuneration and (or) reimbursement of expenses (compensation) to members of the board of directors, the executive bodies and other key employees of the company, approved by the board of directors. 2. In the reporting period, the issues related to the mentioned policy(ies) were reviewed by the board of directors. 1. The board of directors plays the key role in preventing, identifying and resolving internal conflicts. 2. The company developed a system of identification of transactions involving conflicts of interest and a system of measures aimed at solution of such conflicts. 1. The company's internal documents define the persons responsible for implementing the information policy. Observed Partially observed Observed Observed Observed Criterion No. 2 is not observed. The Company's Board of Directors has not set an acceptable amount of risks (risk appetite) for the Company. The Company is committed to complying with the recommendations of the Code and plans to adopt an acceptable amount of risks for the Company in the next reporting period. 106 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 107#55Annexes No. Corporate governance principles Criteria for assessing compliance with the corporate governance principle Status of compliance with the corporate governance principle 2.1.7 The board 1. In the reporting period, of directors exercises control 2.2 2.2.1 over the corporate governance practice in the company and plays the key role in significant corporate events of the company. the board of directors reviewed the results of a self-assessment and/or an external evaluation of the company's corporate governance practices. The board of directors is accountable to the company's shareholders The information about the work of the board of directors is disclosed and provided to shareholders. 2.2.2 The chairman of the board 2.3 of directors is available for communication with the company's shareholders. 1. The annual report of the company for the reporting period includes information on the attendance of board and committee meetings by each board member. 2. The annual report contains the information on the main results of the performance assessment (self- assessment) of the board of directors. carried out in the reporting period. 1. The company has a transparent procedure in place to ensure that shareholders are able to present inquiries to the chairmen and receive feedback (and, where applicable, to and from the senior independent director). Observed Observed Partially observed 2.3.2 Explanations of deviation No. Corporate governance principles from criteria for assessing compliance with the corporate governance principle Members of the board of directors of the company are elected through a transparent procedure allowing shareholders. to obtain information about the candidates sufficient to form an idea about their personal and professional qualities. Criteria for assessing compliance with the corporate governance principle 1. In all cases when a general meeting of shareholders was held in the reporting period and its agenda included items concerning the election of the board of directors, the company presented shareholders with biographical data of all candidates for members of the board of directors, the results of assessment of the candidates on their professional expertise, experience and skills regarding current and expected needs of the company by the board of directors (or its nomination committee), as well as the information on the compliance of the candidate with the independence criteria in accordance with recommendations 102-107 of the Code and the acquired written consent of candidates for election Status of compliance with the corporate governance principle Partially observed Explanations of deviation from criteria for assessing compliance with the corporate governance principle Criterion No. 1 is partially observed. The Company provides shareholders with the curriculum vitae of all candidates for the Board of Directors. However, during the reporting period, information materials did not include the results of the assessment of candidates' professional qualifications, experience and skills against the current and expected needs of the Company carried out by the Board of Directors or the Nomination and Remuneration Committee. The Company is committed to implementing the recommendations of the Code and plans to include this information in materials for the General Meeting of Shareholders. Criterion No. 1 is partially observed. There is no formalised procedure for shareholders to approach the Chair of the Board of Directors. In practice, this procedure is performed by the Corporate Secretary or the person responsible for shareholder and investor relations. In the reporting period, shareholders took the opportunity to ask questions by writing to the email address listed on the Company's website and received answers to their questions. In the future reporting period, the company plans to formalise its shareholder relations procedure and ensure a transparent procedure for contacting the Chair of the Board of Directors and communicating it to shareholders.. The board of directors is an effective and professional management body of the company capable of making objective independent judgements and taking decisions in the interests of the company and its shareholders 2.3.1 Only persons having an impeccable business and personal reputation along with the knowledge, skills to make decisions falling and experience necessary within the jurisdiction of the board of directors and required for the effective performance of its functions, are elected to the board of directors. 1. In the reporting period, the board of directors (or its nomination committee) assessed candidates for the board of directors from the standpoint of the necessary experience, knowledge, business reputation, absence of conflict. of interest, etc. Observed 2.3.3 2.3.4 The composition of the board of directors is balanced, including in terms of the qualification of its members, their experience, knowledge and business qualities, and enjoys the trust of shareholders. The quantitative composition of the board of directors of the company makes it possible to organise the activities of the board of directors in the most effective way including the possibility of creating committees of the board of directors, and gives substantial minority shareholders of the company an opportunity to get the candidate they vote for to be elected to the board of directors. to the board of directors 1. In the reporting period, the board of directors analysed its own needs in terms of professional qualifications, experience and skills and identified. the competencies required by the board of directors in the short and long term. 1. In the reporting period, the board of directors considered whether the number of members of the board of directors meets the needs of the company and the interests of the shareholders. Observed Observed 108 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 109#56No. Corporate governance principles Criteria for assessing compliance with the corporate governance principle Status of compliance with the corporate Explanations of deviation No. Corporate governance principles from criteria for assessing compliance governance principle with the corporate governance principle The board of directors includes a sufficient number of independent directors 2.4 2.4.1 An independent director is a person who has sufficient 2.4.2 professionalism, experience and autonomy to form his or her own position and who is able to judge objectively and good faith judgement, independent of the influence of the company's executive bodies, individual shareholder groups or other stakeholders. It should be borne in mind that in normal conditions, a candidate (an elected member of the board of directors) related to the society, a substantial shareholder, substantial contractor or competitor of the company or related to the state cannot be considered independent. The company assesses whether candidates to members of the board of directors comply with the independence criteria and regularly analyses whether independent members of the board of directors comply with the independence criteria. In such an assessment, content should prevail over form. 1. In the reporting period, all independent members of the board of directors met all independence criteria specified in recommendations 102-107 of the Code or were acknowledged independent by resolution of the board of directors. 1. In the reporting period, the board of directors (or the nomination committee of the board of directors) drew up an opinion on the independence of each candidate to the board of directors and presented a relevant conclusion to shareholders. 2. During the reporting period, the board of directors (or the nomination committee of the board of directors) reviewed the independence of the current board members at least once (following their election). 3. The company developed procedures to determine the necessary actions of a member of the board of directors Observed Observed in the event that he or she ceases to be independent including the obligations to inform the board. 2.4.3 2.4.4 Independent directors make up at least one third of the elected composition of the board of directors. Independent directors play the key role in preventing of internal conflicts in the company and making of significant corporate actions by the company. of directors thereof in a timely manner. 1. Independent directors make up at least one third of the composition of the board of directors. 1. In the reporting period, independent directors (who had no conflict of interest) performed a preliminary assessment of significant corporate actions related to a possible conflict of interest and presented the results of such assessment to the board of directors. Observed Observed 110 PJSC Russian Aquaculture | Annual Report 2021 Annexes Criteria for assessing compliance with the corporate governance principle Status of compliance with the corporate governance principle Explanations of deviation from criteria for assessing compliance with the corporate governance principle The chairman of the board of directors promotes the most effective performance of functions assigned to the board of directors 2.5 2.5.1 An independent director is elected the chairman of the board of directors, or a senior independent director is appointed from the number of the elected independent directors to coordinate the work of independent directors and interact with the chairman of the board of directors. 2.5.2 The chairman of the board of directors creates a constructive atmosphere during meetings, ensures free discussion of the meeting agenda issues, control over the execution of decisions made 1. The chairman of the board of directors is an independent director or a senior independent director is appointed from the number of independent directors. 2. The role, rights and obligations of the chairman of the board of directors (and a senior independent director where applicable) are duly defined in the company's internal documents. 1. Performance of the chairman of the board of directors was assessed within the framework of the assessment of performance of the board of directors in the reporting period. Partially observed Observed Criterion No. 1 is not observed. As of the reporting date, the Chairman of the Board of Directors was not an Independent Director, no Senior Independent Director was appointed. The Chairman of the Board of Directors cannot always be an Independent Director. In accordance with the internal documents and the established practice of the Company, the Chairman of the Board of Directors is elected by members. of the Board of Directors of the Company from among them by the majority of the total number of votes of members of the Board of Directors; the Board of Directors may at any time to re-elect the Chairman of the Board of Directors by the majority of the total number of votes of members of the Board of Directors of the Company. The Company is committed to implementing the recommendation of the Code and therefore informs Independent Directors of the possibility to elect a Senior Independent Director. Subsequent to the end of the reporting period, the Company's General Meeting of Shareholders approved new Regulations on the Board. of Directors, which included the right of independent members. of the Board of Directors to elect a senior independent director. The new version of the Regulations on the Board. of Directors also establishes the role of the senior independent director, his or her rights and responsibilities in the activities. of the Board of Directors of the Company. by the board of directors. 2.5.3 The chairman of the board of directors takes the required measures for the timely provision of members of the board of directors with the information necessary to make decisions on the agenda issues. 1. The responsibility of the chairman of the board of directors to take measures for the timely provision of members of the board of directors with files on the issues on the agenda of a meeting of the board of directors is recognised in the internal documents of the company. www.russaquaculture.ru/en/ Observed 111#57Criteria for assessing compliance with the corporate governance principle Status of compliance with the corporate governance principle Explanations of deviation from criteria for assessing compliance with the corporate governance principle Meetings of the board of directors, preparation for and participation of members of the board of directors in such meetings ensure effective performance of the board of directors No. Corporate governance principles Criteria for assessing compliance with the corporate governance principle Status of compliance Explanations of deviation No. Corporate governance principles with the corporate governance principle from criteria for assessing compliance with the corporate governance principle 2.6 Members of the board of directors act in good faith and reasonably in the interests of the company and its shareholders, being duly informed, with due care and diligence 2.6.1 Members of the board of directors make decisions taking into account all 2.6.2 1. The internal documents of the company stipulate that Observed available information, in the absence of a conflict of interest, based on the principles of equal treatment of shareholders of the company, within the limits of usual business risk. Rights and obligations of members of the board of directors are clearly formulated and enshrined in the internal documents of the company. a member of the board of directors is obliged to notify the board of directors if they have a conflict of interest in relation to any issue on the agenda of a meeting of the board of directors or a committee of the board of directors before the start of the discussion of the relevant agenda item. 2. The internal documents of the company state that a member of the board of directors shall refrain from voting on any issue in respect of which they have a conflict of interest. 3. The company has a procedure that enables the board of directors to receive professional advice on matters within its jurisdiction at the expense of the company. 1. The company adopted and published Observed an internal document clearly defining rights and obligations of members. of the board of directors. 2.6.3 Members of the board of directors have sufficient time to carry out their duties. 2.6.4 All members of the board of directors have equal access to the documents and information of the company. Newly elected members of the board of directors are provided with sufficient information about the company and operations of the board of directors as soon as possible. 1. Individual attendance of the board and committee meetings, as well as sufficient time for work on the board of directors, including its committees, is analysed as part of the board of directors' performance evaluation (self-evaluation) procedure in the reporting period. 2. In accordance with the internal documents of the company, members of the board of directors are required to notify the board of directors of their intention to enter management bodies of other companies (apart from companies controlled by the company) as well as of the fact of such appointment. 1. In accordance with the company's internal documents, members of the board of directors have the right to obtain information and documents necessary for the members of the company's board of directors to perform their duties in relation to the company and its controlled entities, and the company's executive bodies are obliged to ensure that the relevant information and documents are provided. 2. The company implemented a formalized familiarization programme for newly elected members of the board of directors. Observed Observed 112 PJSC Russian Aquaculture | Annual Report 2021 2.7 2.7.1 Meetings of the board of directors 1. The board of directors held at least six meetings in the reporting year. Observed are held as necessary, taking into account the scope of activities and objectives of the Company at a particular point in time. 2.7.2 The internal documents of the company enshrine a procedure for the preparation and holding of meetings of the board of directors providing members of the board of directors with an opportunity to prepare properly for such meetings. 2.7.3 The form of a meeting of the board of directors 2.7.4 is determined depending on the importance of the issues on the agenda. The most important issues are resolved at the meetings held in praesentia. Decisions on the most important issues of the company's activities of the board of directors are made at a meeting by a qualified majority or a majority of votes of all elected members of the board of directors. 1. The Company approved an internal document defining the procedure for the preparation and holding of meetings of the board of directors, which, among other things, established that a notification of a meeting should be normally made at least five days before the meeting. 2. In the reporting period, members of the board of directors who were absent from the venue of the meeting were given the opportunity to participate in the discussion of agenda items and vote remotely: via conference and video conferencing. 1. The company's articles of association or internal documents stipulate that the most important matters (including those listed in Recommendation 168 of the Code) should be considered at meetings of the board of directors held in person. 1. The charter of the company stipulates that decisions on the most important issues including those set out in recommendation 170 of the Code must be made at a meeting of the board of directors by a qualified majority of at least 3/4 of votes or by a majority of votes of all elected members of the board of directors. Partially observed Observed Observed Criterion No. 1 is partially observed. The Company has adopted the Regulations on the Board of Directors, which set out the procedure for preparing and holding Board meetings. These regulations stipulate that members of the Board of Directors must be given at least 3 calendar days' notice prior to a meeting. In practice, however, the Board of Directors is notified 5 or more calendar days in advance of a meeting. Annexes www.russaquaculture.ru/en/ + G = ⑦ 113#58Annexes No. Corporate governance principles Criteria for assessing compliance with the corporate governance principle Status of compliance Explanations of deviation No. Corporate governance principles with the corporate governance principle from criteria for assessing compliance with the corporate governance principle Criteria for assessing compliance with the corporate governance principle The board of directors forms committees for preliminary consideration of the most important issues of the company's activities 2.8 2.8.1 The audit committee consisting of independent directors was formed for preliminary consideration of the issues related to control over financial and economic operations of the company. 1. The board of directors formed Partially observed the audit committee consisting solely of independent directors. 2. The internal documents of the company define the objectives of the audit committee including those contained in recommendation 172 of the Code. 3. At least one member of the audit committee, who is an independent director, has experience and knowledge in the preparation, analysis, assessment and audit of accounting (financial) statements. 4. Meetings of the audit committee were held at least once a quarter in the reporting period. Criterion No. 1 is not observed. The Audit Committee consisted of 2 (two) Independent Directors in the reporting year. As of the reporting date, the Audit Committee was not consist solely of Independent Directors. The Audit Committee consisted of two Independent Directors with experience and knowledge in the preparation, analysis, assessment and audit of accounting (financial) statements, one of which is the Chairman of the Audit Committee, and the second is a non-independent member of the Committee. However, qualifications and competencies in audit, finance and risk management, and an impressive working experience in senior management positions enable this member of the Audit Committee to effectively perform the functions set out in the Regulations on the Audit Committee of the Board of Directors of PJSC Russian Aquaculture and to organise the Audit Committee to work effectively for the Board of Directors' performance and in the interests. of shareholders. The Company is committed to implementing the recommendations of the Code and notifies members of the Board of Directors (before election to the Committee) of the recommendations of the Code and the requirements of the Listing Rules of PJSC Moscow Exchange. 2.8.2 2.8.3 A remuneration committee consisting of independent directors and headed by an independent director who is not the chairman of the board of directors is formed for the preliminary consideration of the issues related to the development of the effective and transparent remuneration practice. The company formed the nomination (appointment, human resources) committee with the majority of members being independent directors for the preliminary consideration of issues related to human resources planning (succession planning), professional composition and efficiency of performance of the board of directors. 1. he board of directors formed the remuneration committee that consists solely of independent directors. 2. The chairman of the remuneration committee is an independent director who is not the chairman of the board of directors. 3. The company's internal documents set out the tasks of the remuneration committee, including but not limited to the tasks contained in recommendation 180 of the Code, as well as the conditions (events), upon the occurrence of which the remuneration committee considers reviewing the company's remuneration policy for members of the board of directors, executive bodies and other key executives. 1. The board of directors formed the nomination committee with the majority of members being independent directors (or its objectives specified in recommendation 186 of the Code are accomplished by another committee). 2. The internal documents of the company define the objectives of the nomination committee (or a corresponding committee with combined functions) including the ones contained in recommendation 186 of the Code. 3. In order to form the board of directors that best meets the company's goals and objectives. The nomination committee organised shareholder relations, not limited to the major shareholders, in the context of selecting candidates to the company's board of directors in the reporting period, either independently or jointly with other committees of the board of directors or the company's authorised shareholder relations unit. Status of compliance with the corporate governance principle Partially observed Partially observed Explanations of deviation from criteria for assessing compliance with the corporate governance principle Criterion No. 3 is not observed. The Regulations on the Nomination and Remuneration Committee of the Board of Directors set out the tasks of the Nomination and Remuneration Committee, including those contained in recommendation 180 of the Code. However, the Regulations do not define the conditions (events) upon the occurrence of which the Nomination and Remuneration Committee of the Board of Directors considers reviewing the Company's policy on remuneration of members of the Board of Directors, executive bodies and other key executives. The Company strives to comply with the recommendations of the Code and plans to revise the Regulations on the Nomination and Remuneration Committee of the Company's Board of Directors in the future reporting period, adding conditions for reviewing the Company's remuneration policy for members of the Board of Directors, executive bodies and other key executives. Criterion No. 3 is not observed. The Company's Board of Directors is formed from candidates proposed by all shareholders who have the right to nominate candidates for election to the Board. of Directors. The Nomination and Remuneration Committee of the Board of Directors did not take part in the selection of candidates to the Company's Board of Directors in the reporting period. The Company is committed to complying with the recommendations of the Code and plans to arrange for the Nomination and Remuneration Committee to work together with shareholders, not limited to the major shareholders, to select candidates to the Board of Directors in the future reporting period. 114 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 115#59No. Corporate governance principles Criteria for assessing compliance with the corporate governance principle Status of compliance with the corporate governance principle 2.8.4 The board of directors 2.8.5 of the company made sure that the composition of its committees fully met the purposes of the company taking into account the scope of operations and the level of risk. Additional committees were either formed or not recognised as necessary (the strategy committee, the corporate governance committee, the ethics committee, the risk management committee, the budget committee, the health, safety and environment committee, etc.). The composition of the committees is determined in such a way as to allow for a comprehensive discussion of the preliminary considered issues taking into account different views. Committee chairmen regularly inform the board 1. In the reporting period, the board of directors of the company considered whether the structure of the board of directors is appropriate to the scope and nature, business goals and needs, and risk profile of the company. Additional committees were either formed. or not recognised as necessary. 1. The audit committee, the remuneration committee, and the nomination committee (or the relevant committee of a combined nature) were chaired by independent directors in the reporting period. 2. The internal documents (policies). of the company include provisions stipulating that persons not entering the audit committee, the nomination committee (or the relevant committe of a combined nature) and the remuneration committee may attend committee meetings only at the invitation of the chairman: of the relevant committee. 1. In the reporting period, committees chairmen regularly reported 2.8.6 of directors and its chairman on the operations of the committees of the operations to the board of directors. of their committees. 2.9 Observed Observed Observed Annexes Explanations of deviation No. Corporate governance principles from criteria for assessing compliance with the corporate governance principle Criteria for assessing compliance with the corporate governance principle 2.9.2 3.1 The performance of the board of directors, committees and members of the board of directors is assessed on a regular basis at least once a year. an external company (consultant) is engaged at least once every three years to conduct an independent assessment of the quality of the performance of the board of directors. 1. The company engaged an external company (consultant) to conduct an independent assessment of the quality of the performance of the board of directors at least once for the three last reporting periods. Status of compliance with the corporate governance principle Not observed Explanations of deviation from criteria for assessing compliance with the corporate governance principle Criterion No. 1 is not observed. In accordance with Art. 2.9.2 of the Code, the performance of the Board of Directors, Committees and members of the Board of Directors. should be assessed on a regular basis at least once a year. It is recommended to engage an external company (consultant) on an occasional basis (at least once every three years) to conduct an independent assessment of the quality of the performance of the Board of Directors. In view of the fact that the Board of Directors changed more than half of its members in the reporting period, and taking into account the term of office of the Board of Directors in the renewed composition, the Company does not consider it appropriate to conduct an external evaluation of the Board of Directors in the reporting period. The Company is committed to implementing the recommendations of the Code, thus, the Methodology for Assessing the Performance of the Board of Directors and Committees of the Board of Directors of the Company was developed and approved in 2017. The Company plans to perform an assessment using this Methodology. It is planned to consider engaging external organisations to carry out an independent assessment of the performance the Board of Directors for 2022. The corporate secretary of the company is effectively interacting with shareholders, coordinates the actions of the company to protect the rights and interests of shareholders, supports the effective performance of the board of directors 3.1.1 The corporate secretary has the knowledge, experience and qualification sufficient for performing his/her duties, an impeccable reputation 1. The company's website is committed to complying with the recommendations of the Code and the Board of Directors plans to review the results of the Board's self- assessment in an in-person meeting at the end of the reporting period. 3.1.2 and enjoys the trust of shareholders. and the annual report contain curriculum vitae of the corporate secretary (including information on age, education, qualifications, experience) as well as information. on the positions held by the corporate secretary in the management bodies of other legal entities for at least the last five years. Observed Observed The board of directors ensures the assessment of the quality of performance of the board of directors, committees and members of the board of directors Assessment 2.9.1 of the quality of performance of the board of directors is aimed at determination of the effectiveness of performance of the board of directors, committees and members of the board of directors, the degree of compliance of their operations with the company development needs, activation of operations of the board of directors. and identification of areas where their operations can be improved. 1. The Company's internal documents set out the procedures for assessing (self-assessing) the board of directors' performance. 2. The assessment (self-assessment) of the performance of the Board of Directors carried out in the reporting period included an assessment of the performance of the committees, an individual assessment of each member of the board of directors and the board of directors as a whole. 3. The results of the assessment (self-assessment) of the board of directors' performance carried out in the reporting period were reviewed at an in-person meeting of the board of directors. Partially observed Criterion No. 3 is not observed. Consideration of the results of the Board's self-assessment took place at an in-person meeting after the reporting date. The Company 116 PJSC Russian Aquaculture | Annual Report 2021 The corporate secretary has sufficient independence from the executive bodies of the company and has the necessary powers and resources for fulfilling the tasks assigned to him/her. 1. BThe company adopted and disclosed an internal document - the provision on the corporate secretary. 2. The board of directors approves the candidate for the position of the corporate secretary and terminates his/ her powers as well as considers the payment of additional remuneration. 3. The company's internal documents stipulate the corporate secretary's right to request and receive company documents and information from management bodies, structural divisions and officials of the company. www.russaquaculture.ru/en/ ← = > 117#60Annexes No. Corporate governance principles 4.1 4.1.2 Criteria for assessing compliance with the corporate governance principle Status of compliance Explanations of deviation No. Corporate governance principles with the corporate governance principle from criteria for assessing compliance with the corporate governance principle The level of remuneration paid by the company is sufficient to attract, motivate and retain persons who have the competence and qualification necessary for the company. Remuneration is paid to members of the board of directors, the executive bodies and other key executives of the company in accordance with the remuneration policy adopted in the company 4.1.1 The level of remuneration provided by the company to members of the board of directors, the executive bodies and other key executives creates sufficient motivation for their effective work, enables the company to attract and retain competent and qualified. professionals. At the same time, the company avoids greater than necessary levels of remuneration, as well as an unjustified big gap between the rates of remuneration of the mentioned persons and the company employees. The company's remuneration policy is developed by the remuneration committee and approved by the board of directors of the company. The board of directors together with the remuneration committee ensures control over the introduction and implementation of the remuneration policy in the company, and revises and amends it if necessary. 4.1.3 The company's remuneration policy contains transparent mechanisms for the determination of the amount of remuneration of members of the board of directors, the executive bodies and other key executives of the company and regulates all types of payments, benefits and privileges granted to the mentioned persons. The company determines the policy of expense compensation (compensations) that specifies a list of expenses to be compensated for and the level of service that the members of the board of directors, of the executive bodies and other key managers of the company can count on. Such policy may be a component of the company's 1. The remuneration of members of the board of directors, executive bodies and other key executives of the company is determined taking into account the results of a comparative analysis of remuneration levels in comparable companies. 1. In the reporting period, the remuneration committee reviewed the remuneration policy(-ies) and (or) practices of its (their) implementation, assessed their efficiency and transparency, and, if necessary, submitted respective recommendations to the board of directors on the revision of the said policy(-ies). 1. The company's remuneration policy (policies) contains (contain) transparent mechanisms for determining the amount of remuneration to the members of the board of directors, the executive bodies and other key managers of the company, as well as regulates (regulate) all types of payments, benefits and privileges provided to these persons. 1. The remuneration policy (policies) or in other internal documents of the company establish the rules for compensation of expenses to the members of the board of directors, the executive bodies and other key managers of the company. Observed Observed Observed Observed 4.1.4 remuneration policy. 4.2 Criteria for assessing compliance with the corporate governance principle Status of compliance with the corporate governance principle Explanations of deviation from criteria for assessing compliance with the corporate governance principle The system of remuneration to the members of the board of directors ensures convergence of financial interests of the directors with long-term financial interests of the shareholders 4.2.1 The company pays a fixed annual remuneration 4.2.2 4.2.3 to the members of the board of directors. The company does not pay any remuneration for participation in individual meetings of the board. of directors or its committees. The company does not apply any types of short-term motivation or additional financial incentives to members of the board of directors. The long-term ownership of the company's shares mostly contributes to convergence of financial interests of the members of the board of directors with long-term interests of the shareholders. In doing so, the company does not precondition the right of realisation of shares by achieving certain performance indicators and the members of the board of directors do not participate in stock option plans. The company does not provide for any additional payments or compensations in case of early termination of the powers of the members of the board of directors in connection resulting 1. In the reporting period, the company paid remuneration to the members of the board of directors in accordance with the remuneration policy adopted by the company. 2. In the reporting period, the company did not apply any forms of short-term motivation or additional financial incentives to the members of the board of directors, the payment of which depends on the results (indicators) of the company's operations. No. remuneration was paid for participation in individual meetings of the Board or Board committees. 1. If the internal document (documents) the company's remuneration policy (policies) - stipulates (stipulate) the provision of the shares of the company to the members of the board of directors, clear rules of ownership of shares by the members of the board of directors aimed at encouraging long-term ownership of such shares shall be envisaged and disclosed. 1. The company does not provide for any additional payments or compensations in case of early termination of the powers of the members of the board of directors resulting from the change of control over the company Observed Observed Observed 4.3 from the change of control over the company or otherwise. or otherwise. The system of remuneration to the members of the executive bodies and other key managers of the company stipulates the depen- dence of remuneration on the company's performance and their contribution to achieving this result 4.3.1 The remuneration to the members of the executive bodies and other key managers of the company is determined in such a way as to ensure reasonable and justified correlation between the fixed and variable portions of the remuneration which depends on the company's performance and personal (individual) contribution of the employee to the outcome. 1. In the reporting period, the annual performance indicators approved by the board of directors were used to determine the variable remuneration of members of the executive bodies and other key executives of the company. 2. In the course of the last assessment of the remuneration system for the members of the executive bodies and other key managers of the company performed, the board. of directors (the remuneration committee) made sure that the company uses an effective ratio between the fixed and variable portions of the remuneration. 3. In determining the remuneration payable to members of executive bodies and other key executives of the company, The Company accounts for the risks borne by the Company to avoid creating incentives for excessively risky management decisions. Observed 118 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ < & = 119#61No. Corporate governance principles Criteria for assessing compliance with the corporate governance principle Status of compliance with the corporate governance principle Explanations of deviation No. Corporate governance principles from criteria for assessing compliance with the corporate governance principle Criteria for assessing compliance with the corporate governance principle Status of compliance with the corporate governance principle Explanations of deviation from criteria for assessing compliance with the corporate governance principle Annexes 4.3.2 4.3.3. The company implemented the programme of long-term motivation for the members of the executive bodies and other key managers of the company using the shares of the company (options or other derivative financial instruments, the underlying asset for which are the shares of the company). The amount of compensation (golden parachute) that the company pays in case of early termination of their powers to the members of the executive bodies or key managers, as initiated by the company, and in the absence of unfair acts on their part, shall amount of the fixed portion not exceed a twofold. of the annual remuneration. 5.1 1. If the company has introduced a long-term incentive scheme for members of executive bodies and other key executives of the company using company shares (financial instruments based on company shares), the scheme implies that the right to sell such shares and other financial instruments is gained not earlier than three years from the date of acquiring them. At the same time, the right of their realisation is dependent on the achievement of certain performance indicators of the company. 1. The amount of compensation (golden parachute) that the company pays in case of early termination of their powers to the members of the executive bodies or key managers, as initiated by the company, and in the absence of unfair acts on their part, did not exceed a twofold amount of the fixed portion of the annual remuneration during the reporting period. Observed Observed The company has established an effective risk management and internal control system aimed at providing reasonable assurance that the company's purposes will be accomplished 5.1.1 The board of directors determined the principles 5.1.2 5.1.3 of and the approaches to setting up the risk. management and internal control system in the company. The executive bodies of the company ensure establishing and continuous functioning of the effective risk management and internal control system in the company. The risk management and internal control system of the company provides an objective, fair and clear view of the current state and prospects of the company, integrity and transparency of the company's reporting, reasonableness and acceptability of the risks taken by the company. 1. The functions of various corporate bodies and units of the company in the risk management and internal control system are clearly defined in internal documents/respective policy of the company approved by the board of directors. 1. The executive bodies of the company ensured distribution of obligations, powers and responsibilities in respect of risk management and internal control between the heads (chiefs) of the units and departments accountable to them. 1. The company has an approved anti- corruption policy. 2. The company ensured a safe, confidential and easy-to-use way (hotline) of informing the board of directors or the audit committee under the board of directors on the facts of violation of the legislation, the internal procedures and the ethical code. of the company. Observed Observed Partially observed 5.1.4 5.2 Observed The board of directors of the company takes necessary measures to make sure that the risk management and internal control system of the company is consistent with the principles of and approaches to its organisation defined by the board of directors and is functioning effectively. 1. In the reporting period, the board of directors (audit committee and/ or risk committee, if any) organised an assessment of the reliability and effectiveness of the risk management and internal control. system. 2. In the reporting period the board of directors reviewed the results of the assessment of the reliability and effectiveness of the company's risk management and internal control system, and the details of the review are included in the company's annual report. In order to ensure a systematic independent assessment of reliability and efficiency of the risk management and internal control system and of the corporate governance practice, the company arranges for internal audit 5.2.1 The company has a separate structural unit or engages 1. To conduct an internal audit, an independent external 5.2.2 6.1 Criterion No. 1 is not observed. The Company does not have an approved anti-corruption policy. The Company aims to implement the recommendations of the Code and is in the process of agreeing the provisions of the Company's Anti-Corruption Policy with the Company's Board of Directors. The approval of the Anti- Corruption Policy by the Board is expected in 2022. company to conduct an internal audit. The functional and administrative accountability of the internal audit unit is differentiated. Functionally, the internal audit unit reports to the board of directors. The internal audit unit assesses the reliability and effectiveness of the risk management and internal control system, as well as the corporate governance, and applies generally accepted standards of internal audit. the company established a separate structural internal audit unit functionally reporting to the board of directors or engaged an independent external company following the same accountability principle. 1. In the reporting period, internal audit assessed the reliability and effectiveness of the risk management and internal control system. 2. In the reporting period, internal audit assessed corporate governance practices (individual practices), including communication procedures (including those related to internal control and risk management) at all management levels of the company, as well as stakeholders relations. Observed Observed The company and its activities are transparent for shareholders, investors and other interested persons 6.1.1 The company has developed and implemented an information policy that ensures effective information exchange between the company, shareholders, investors and other interested persons.. 1. The board of directors of the company approved the company's information policy developed with regard to the recommendations of the Code.. 2. In the reporting period, the board of directors (or one of its committees) reviewed the efficiency of communication between the company, shareholders, investors and other stakeholders and the advisability (necessity) to revise the company's information policy. Observed 120 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 121#62No. Corporate governance principles Criteria for assessing compliance with the corporate governance principle Status of compliance with the corporate governance principle Annexes Explanations of deviation No. Corporate governance principles from criteria for assessing compliance with the corporate governance principle 6.2.2 The company avoids a formal approach to disclosing information and discloses the substantial information on its business, even if the disclosure of such information is not stipulated by the law. Criteria for assessing compliance with the corporate governance principle 1. The company's information policy defines approaches to the disclosure of information on other events (actions) that have a significant impact on the value or quotation of its securities, the disclosure of which is not required by law. 2. The company discloses complete information on the structure of the company's capital in the annual report and on the company's website. in accordance with recommendation 290 of the Code. 3. The company discloses information on controlled entities that are material to it, including key areas of their activities, mechanisms for ensuring accountability of controlled entities, the authority of the company's board of directors to determine strategy and assess performance of controlled entities. 4. The company discloses a non- financial report - a sustainability report, environmental report, corporate social responsibility report or any other report containing non-financial information, including factors related to the environment (including environmental and climate change-related factors), society (social factors) and corporate governance, except for the equity issuer's report and the annual report of a joint stock company. Status of compliance with the corporate governance principle Partially observed Explanations of deviation from criteria for assessing compliance with the corporate governance principle Criterion No. 4 is not observed. The Company has not disclosed a separate non-financial report relating to sustainability issues. Information on the Company's sustainable development has been included in the Annual Report. The Company plans to prepare and disclose a separate sustainability report, including an environmental report, a social report and a corporate governance report, in 2023. 6.1.2 The company discloses the information 6.2 on the corporate governance system and practice, including detailed information on the compliance with the principles and recommendations of the Code. 1. The company discloses information. on the company's corporate governance system and general principles of corporate governance applicable to the company, including on the company's website. 2. The company discloses information on the composition of the executive bodies and the board of directors, independence of members of the board of directors and their membership in the committees of the board of directors (in accordance with the definition given in the Code). 3. If there is a person controlling the company, the company publishes a controlling person memorandum concerning the plans of such person in respect of corporate governance in the company. Observed The company timely discloses complete, up-to-date and reliable information about the company to ensure opportunities for making justified decisions by the company's shareholders and investors 6.2.1 The company discloses information in accordance with the principles of regularity, consistency, efficiency, accessibility, reliability, completeness and comparability of the information disclosed. 1. The company has established a procedure to ensure that all structural divisions and employees of the company who are involved in the disclosure of information or whose activities may lead to the need to disclose information coordinate their work. 2. If the company's securities are traded in foreign securities markets, the disclosure of substantial information in the Russian Federation and in such markets shall be performed simultaneously and equivalently during the reporting year. 3. If foreign shareholders hold a significant number of the company's shares, the disclosure of information during the reporting year was performed not only in Russian but also in one of the most widespread foreign languages. Observed 6.2.3. As one of the most important tools for the exchange of information between shareholders and other stakeholders, the annual report contains information enabling assessment of the company's performance for the year. 1. The company's annual report contains information on the audit committee's assessment of the effectiveness of the external and internal audit processes. 2. The company's annual report contains information on the company's environmental and social policies. Observed 122 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 123#63Annexes No. Corporate governance principles Criteria for assessing compliance with the corporate governance principle Status of compliance Explanations of deviation No. Corporate governance principles with the corporate governance principle from criteria for assessing compliance with the corporate governance principle Criteria for assessing compliance with the corporate governance principle 6.3 6.3.1 6.3.2 7.1 7.1.1 The company provides information and documents as requested by the shareholders in accordance with principles of fairness and convenience. There are no unreasonable difficulties for shareholders in exercising their right of access to the company's documents and information. When the company provides information to shareholders, it maintains a reasonable balance between the interests of individual shareholders and the interests of the company itself seeking to protect the confidentiality of important commercial information, which can have a significant impact on the company's competitiveness. 1. The company's information policy (internal documents defining the information policy) defines a non- onerous procedure for providing access to the company's information. and documents upon shareholders' request. 2. The information policy (internal documents defining the information policy) contains provisions stipulating that, if a shareholder requests information on organisations controlled by the company, the company shall make the necessary efforts to obtain such information from the relevant organisations controlled by the company. 1. During the reporting period, the company did not refuse to satisfy the shareholders' requests for information, or such refusals were justified. 2. In cases provided for by the information policy of the company, shareholders are warned of the confidential nature of information and undertake to keep it confidential. Observed Observed The actions that significantly influence or may influence the structure of the share capital and financial standing of the company and, accordingly, the shareholders' state (material corporate actions), are performed on equitable conditions that ensure compliance with the rights and interests of the shareholders as well as of other stakeholders Material corporate actions include reorganisation of the company, acquisition of 30 percent and more of the voting shares of the company (acquisition), the performance of material transactions by the company, increase or decrease of the share capital of the company, listing and delisting of shares of the company and other actions that may lead to a significant change in the shareholders' rights or infringe upon their interests. The charter of the company defines a list (criteria) of transactions or other actions that are recognised as material corporate actions, and such actions refer to the competence of the company's board. of directors. 1. The company's charter define the list(criteria) of transactions or other actions that constitute material corporate actions. Decision-making in respect of material corporate actions refers to the competence of the board of directors as stated in the charter. When these corporate actions are directly referred by the legislation to the competence of the general meeting of shareholders. The board of directors makes recommendations to shareholders accordingly Not observed Criterion No. 1 is not observed. The Charter of the Company has no concept of material corporate action. The mandatory competence of the Board of Directors of the Company, stipulated in the Law on Joint-Stock Companies has been substantially extended, particularly, due to the issues that may influence the structure of the Company's share capital and financial standing and therefore the standing of the shareholders.. The Company is committed to implementing the recommendations of the Code and plans to develop and approve amendments to the Company's internal documents in 2022, which, among other things, will define the list of transactions and other actions that constitute material corporate actions. 7.1.2 The board of directors plays a key role in making decisions or developing recommendations concerning material corporate actions; the board of directors relies on the position of independent directors of the company. 1. The company has a procedure whereby independent directors express their position on material corporate actions prior to their approval. 7.1.3 The company ensures equal conditions for all of its shareholders if material corporate actions affect the rights and legal interests of shareholders, and implements additional measures protecting the rights and legal interests of shareholders of the company if the legal mechanisms aimed at protecting the rights and legal interests of shareholders are insufficient. The company is guided not only by formal legal requirements but also by the corporate governance principles set forth in the Code. 1. Given the nature of the company's business, the board of directors is authorised by the company's charter to approve other transactions that are material to the company, in addition to those provided for by law. 2. During the reporting period, all the material corporate actions went through the procedure of approval prior to their execution. Status of compliance with the corporate governance principle Not observed Partially observed Explanations of deviation from criteria for assessing compliance with the corporate governance principle Criterion No. 1 is not observed. The Charter of the Company has no concept of material corporate action. However, in practice, the independent directors declare their position on the corporate actions they deem material prior to their approval. The Company is committed to implementing the recommendations of the Code and plans to develop and approve amendments to the Company's internal documents in 2022, which, among other things, will define the list of transactions and other actions that constitute material corporate actions. Criterion No. 2 is not observed. The Charter of the Company has no concept of material corporate action. The Company is committed to implementing the recommendations of the Code and plans to develop and approve amendments to the Company's internal documents in 2022, which, among other things, will define the list of transactions and other actions that constitute material corporate actions. The Company aims to ensure that all transactions of the Company requiring approval from the governing bodies are approved before they take place. In the reporting period, there were several transactions approved by way of subsequent approval. Interested party transactions, large-scale transactions, resolutions on the participation in investment projects, disposal of assets, etc. undergo the procedure of approval by the General Meeting of Shareholders / prior approval by the Board of Directors (with mandatory account for the position of the relevant Committee). 124 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 125#64Company Disclaimer Annexes No. Corporate governance principles 7.2 Criteria for assessing compliance with the corporate governance principle Status of compliance with the corporate governance principle Explanations of deviation from criteria for assessing compliance with the corporate governance principle The company provides a procedure for performing material corporate actions that allows the shareholders to obtain in due time complete information on such actions and gives them an opportunity to influence the performance of such actions and guarantees compliance with the appropriate level of protection of their rights as such actions are performed 7.2.1 The information 7.2.2 on performance of material corporate actions is disclosed with an explanation of the reasons, conditions and consequences of such actions. The rules and procedures associated with the company's performance of material corporate actions are enshrined in the internal documents of the company. 1. If material corporate actions have been taken by the Company in the reporting period, the company disclosed such actions in a timely and detailed manner, including the reasoning behind them, the conditions under which the actions were taken and the consequences of such actions for shareholders. 1. The internal documents of the company define the cases and the procedure for involving an appraiser to estimate the value of the property, alienated or purchased through a major transaction or an interested party transaction. 2. The internal documents of the Company stipulate the procedure for involving an appraiser to estimate the value of purchase and redemption of the company's shares. 3. If there is no formal interest of a member of the board of directors, the sole executive body, a member of the collegial executive body of the company, a person who is a controlling person of the company or a person entitled to give instructions binding to the company, in the company's transactions, but there is a conflict of interest or other actual interest, the internal documents of the company provide that such persons shall not participate in voting on the approval of such transaction. Not observed Partially observed Criterion No. 1 is not observed. The Charter of the Company has no concept of material corporate action. The Company is committed to implementing the recommendations of the Code and plans to develop and approve amendments to the Company's internal documents in 2022, which, among other things, will define the list of transactions and other actions that constitute material corporate actions. The Company will also disclose all required information on such transactions in an appropriate manner. Criterion No. 1 is not observed. The internal documents of the Company stipulate the procedures for involving an independent appraiser to estimate the value of the property. The Company is committed to implementing the recommendations of the Code and plans to develop and approve amendments to the Company's internal documents in 2022, which, among other things, will define the list of transactions and other actions that constitute material corporate actions. The Annual Report contains information about the Company's performance in 2021 and its forward-looking data, statements of intent, opinions or current expectations of performance results, financial position, liquidity, growth prospects, strategy, and development of the industry in which the Company operates. Forward-looking statements by their nature address matters that involve risks and uncertainties, as they relate to events and are dependent on circumstances that may or may not occur in future. The words "intends," "seeks," "expects," "estimates," "plans," "believes," "assumes," "may," "shall," "will," "will continue" and other similar expressions generally indicate the predictive nature of a statement and suggest the risk of non-occurrence of said events or actions depending on various factors. The Company hereby informs that forward- looking statements do not guarantee any future performance indicators. The actual performance results of the Company, its financial position and liquidity, as well as the development of the industry in which it operates may differ materially from the data given in the forward-looking statements contained herein. In addition, even if the mentioned ratios are consistent with the forward-looking statements presented in this Report, these results and events do not serve as indicators of similar results and events in the future. The Company does not make any express or implied representations or warranties and shall not bear any liability in the event of any loss that individuals or legal entities may directly or indirectly incur as a result of the use of forward-looking statements of this Annual Report for whatever reason. The said persons shall not fully rely on the forward-looking statements contained herein as they do not represent the only possible scenario. Except as required by the legislation of the Russian Federation, the Company undertakes no obligation to revise or confirm expectations and estimates or publish updates of and changes to the forward-looking statements presented in this Annual Report in connection with subsequent events or the receipt of new information. 126 PJSC Russian Aquaculture | Annual Report 2021 www.russaquaculture.ru/en/ 127#65Russian Aquaculture 4 Belovezhskaya str., Moscow, 121353 +7 (495) 258-99-28 @[email protected] russaquaculture.ru/en INARCTICA INARCTICA Group brand Russian Aquaculture en.inarctica.com ReportDesign Design and preparation of the Annual Report www.reportdesign.ru