Russian Federation is the sole shareholder of RVC, and its rights are exercised by the Federal Property Management Agency (Rosimushchestvo). Each year, the representatives of the interests of the Russian Federation (state-appointed directors) are elected to the RVC Board of Directors. This ensures that the interests of the shareholder and the goals of the state development institute are met. The Board of Directors also includes representatives of other Russian state development institutions and members of both science and business communities, which creates a positive synergy effect for the development of innovation infrastructure and the venture capital industry in Russia.

RVC’s corporate governance is based on the requirements of Russian legislation and Rosimushchestvo’s recommendations, and it also follows the recommendations of the Bank of Russia’s Corporate Governance Code.

The Board of Directors Committees include the members of the Board of Directors as well as the representatives of other development institutions, federal ministries, businesses, innovation and venture capital markets. Such structure ensures that issues in all areas of RVC’s activities are being worked out more effectively. The committees are headed by members of RVC’s Board of Directors.

The Management Board is the executive body of RVC in charge of day-to-day operations and strategic management; it oversees the activities of subsidiaries and ensures the implementation of RVC’s key strategic documents and decisions of the General Meeting of Shareholders and the Board of Directors. Management Board’s actions are governed by the Charter and the Regulation on the Management Board of RVC. RVC’s Management Board reports to the Board of Directors and the General Meeting of Shareholders.

Alexander Povalko (elected by decision of an extraordinary General Meeting of Shareholders of 22 December, 2016, Order No. 1046-r of Rosimushchestvo; powers extended by the decision of the extraordinary General Meeting of Shareholders of January 28, 2020, Rosimushchestvo Order No. 27-r). RVC’s CEO is elected by the General Meeting of Shareholders. The CEO’s term of office is established by the General Meeting of Shareholders and does not exceed three years.

The accuracy of RVC’s financial (accounting) statements is verified by an external independent auditor approved by the General Meeting of Shareholders based on the results of an open tender (conducted in accordance with legal requirements).

The Audit Commission controls RVC’s financial and economic activities in order to improve efficiency and protect the interests of shareholders. The Commission is elected by RVC’s General Meeting of Shareholders.

100% stock of RVC belong to the Russian Federation as represented by Rosimushchestvo.

In 2019, seven General Meetings of Shareholders were held (one annual and six extraordinary). In accordance with Federal Law No. 208-FZ on Joint-Stock Companies and RVC’s Charter, the General Meeting of Shareholders decided on the following issues:

• Approval of the annual report and annual financial statements
• Election of the members of the Board of Directors, the Management Board, and the Audit Commission
• Approval of the Auditor of the Company’s financial statements for 2019
• Approval of amendments to the Company’s regulatory documents governing the activities of its management bodies
• Increase in the Company’s authorized capital.

These include:
2 — independent directors
4 — civil servants
6 — state-appointed directors.

The Chairman of the Board of Directors is elected by the members of the Board of Directors by simple majority and can be re-elected at any time.

Members of the Board of Directors do not own shares in RVC.

The composition of RVC’s Board of Directors since 28 June 2019 (elected in accordance with Rosimushchestvo Order No. 401-r of 28 June 2019):

The functions of the Chairman of RVC’s Board of Directors were performed by Maxim Akimov, Deputy Prime Minister of the Russian Federation.

The composition of RVC’s Board of Directors in the first half of 2019 (elected in accordance with Rosimushchestvo Order No. 651-r of 19 September 2018) consisted of nine people (until 1 March 2019). At extraordinary General Meetings of RVC Shareholders held on 1 March 2019 (Rosimushchestvo Order No. 126-r) and 25 April 2019 (Rosimushchestvo Order No. 246-r), Ilya Torosov, Deputy Minister of Economic Development of the Russian Federation, and Oksana Tarasenko, Deputy Minister of Economic Development of the Russian Federation, were also elected to the Board of Directors.

The current list of RVC’s Board of Directors and their bios are available on the website.

The Strategic Planning and Investment Committee assists the Board of Directors in preparing resolutions on the Company’s strategic goals and priority areas of operations, preparing RVC’s development strategy and other strategy documents, as well as in consideration of investment issues, and prepares recommendations to RVC’s Board of Directors in this regard.

The composition of the Committee by the end of 2019 (elected by resolutions of RVC’s Board of Directors of 12 December 2019, minutes No. 18)

Chairman of the Committee:

Members of the Committee:

The RVC’s Board of Directors’ Strategic Planning Committee held 8 meetings in 2019. Six meetings were in-person, while two of them were organized as voting by correspondence.

During 2019, the Committee considered the following issues:

• RVC’s Business Plan and budget for 2019 and for the 2020‒2021 planning period;
• Updating the RVC Development Strategy for 2017–2030 and the RVC Long-Term Development Strategy;
• RVC’s key performance indicators in 2019;
• Issues related to creation of venture funds with RVC capital contribution.

Personnel and Compensation Committee assists the Board of Directors with the development of systems for staff incentivization (including for members of the Management Board) and bylaws describing the bonus system, as well as recommendations for amending the system.

Composition of the Committee as of the end of 2019 (elected by resolutions of RVC’s Board of Directors of 12 July 2019, minutes No. 10)

Members of the Committee:

In 2019, the RVC’s Board of Directors’ Personnel and Compensation Committee held no meetings.

Audit and Integrity Committee assists the Board of Directors in the issues related to non-financial reporting assurance, RVC’s key performance indicators’ calculation verification, as well as other issues related to internal control systems, audit, risk management and ethics.

Members of the Committee:

The RVC’s Board of Directors’ Audit and Integrity Committee held 6 meetings in 2019. One meeting was in-person, while 5 of them were organized as voting by correspondence.

During 2019, the Committee considered the following issues:

• the results of the implementation of the Business Plan (key performance indicators and budget implementation) in 2018;
• documents regulating the RVC’s key performance indicators’ system;
• information on the functioning of the internal audit, internal control and risk analysis systems;
• the results of the Audit Commission’s audit for 2018 and the information on planned measures to implement the Audit Commission’s recommendations;
• bylaws governing the work of RVC’s risk management systems.

The members of RVC’s Management Board are elected from among RVC employees by resolution of the General Meeting of Shareholders on the basis of a recommendation from the Board of Directors. The Management Board must be made up of no fewer than five members. The term of office of members of the Management Board is determined by resolution of the General Meeting of Shareholders and may not exceed three years.

The function of the Chairman of the Management Board is performed by RVC’s CEO. The members of the Management Board as of the end of 2019 were elected by Rosimushchestvo Order No. 385-r of 30 June 2017, Order No. 727-r of 10 October 2017, Order No. 878-r of 20 November 2017, Order No. 651-r of 19 September 2018, and Order No. 301-r of 6 June 2019. The Management Board consists of eight members.

RVC’s main control, audit and risk management bodies are the Board of Directors, the Audit and Integrity Committee of the Board of Directors, the Audit Commission, the CEO, the Risk Analysis and Internal Control Department and the Internal Audit Department. RVC’s financial (accounting) statements are audited by an external independent auditor approved by the General Meeting of Shareholders based on the results of an open competitive selection process. RVC applies comprehensive efforts to develop its internal control, audit and risk management system in line with best corporate governance practices.

The members of the Audit Commission are elected by the General Meeting of Shareholders. The Commission consists of at least three people. Members of the Audit Commission cannot simultaneously be members of the Board of Directors or hold other positions within RVC’s management bodies.

The composition of the Audit Commission (elected by decision of the Extraordinary General Meeting of Shareholders of 20 November 2019):

The functions of the Chairman of the Audit Commission are performed by Nikolay Starchenko (elected by Decision No. 2-2019 of the Audit Commission of 29 November 2019).

The RVC Audit Commission that operated in the first half of 2019 (from 29 June 2018 to 20 November 2019) consisted of five members.

The tasks of the Audit Commission include:

• Checking the accuracy of information contained in the Company’s annual report and annual financial statements;
• Auditing the Company’s financial and economic activities, in particular, checking the procedures for maintaining accounting records and providing financial statements for compliance with the legislation of the Russian Federation, the Charter, internal and other documents;
• Monitoring Company’s compliance with the legislation and other regulatory legal acts governing its activities, the legality of operations performed by the Company, the status of the cash register and assets;
• Controlling the creation and use of the Company’s reserve and other special funds;
• Checking the accuracy and promptness of accrual and payment of dividends on the Company’s shares, interest on bonds, and income from other securities;
• Controlling the implementation of previously issued recommendations of the Audit Commission based on the results of the audit of the Company’s financial and economic activities;
• Implementing other actions (measures) related to the audit of the Company’s financial and economic activities.

In accordance with the Regulation on the Committees of RVC’s Board of Directors, approved by the Board of Directors (minutes No. 18 of 12 December, 2019), the Audit and Integrity Committee was established for the preliminary consideration of the most important issues that, according to the Company’s Charter, fall within the remit of the Board of Directors, including consideration of issues concerning the systems of internal control, audit, risk management, and ethics.

In compliance with the applicable legal requirements, RVC conducts an annual mandatory audit of its financial (accounting) statements. The auditor is selected on a competitive basis in accordance with the requirements of Federal Law of the Russian Federation No. 307-FZ of December 30, 2008 on Auditing and in the manner prescribed by Federal Law No. 44-FZ of April 5, 2013 on the Contract System for the Procurement of Goods, Works and Services for State and Municipal needs.

HRB Vneshaudit JSC was elected as RVC’s auditor in 2019.

RVC’s Anti-Corruption Policy reflects a commitment to high ethical standards of business conduct, the Company’s desire to improve its corporate culture and follow best practices in corporate governance, as well as concern for RVC’s business reputation. RVC is included in the Consolidated Register of Participants in the Anti-Corruption Charter of Russian Business.

Every two years RVC completes the procedure for declaring its compliance with the provisions of the Anti-Corruption Charter of Russian Business and an assessment of measures to prevent and combat corruption. The сompany, within the framework of its competence, is initiating the introduction of anti-corruption policies in its subsidiaries and affiliates that are analogous with RVC’s anti-corruption policy, as well as making efforts to comply with the provisions of this document in joint companies and associations, as well as by contractors.

In an effort to prevent and combat corruption in 2019, the Company implemented its Anti-Corruption Action Plan, approved by RVC Order No. 02/16 dated January 19, 2016.

The Company’s main activities aimed at preventing corruption included the following:

• Unifying the corporate Anti-Corruption Policy;
• Improving interaction between business divisions;
• Maintaining the operation of RVC’s hotline;
• Improving the procedure for conducting workplace inspections;
• Updating the register of persons required to provide information on their interest in transactions concluded by RVC;
• Ensuring the inclusion of anti-corruption conditions (reservations) in all contracts with counterparties (when approving draft contracts and when concluding contracts);
• Anti-corruption monitoring (analysis of RVC’s statutory and operational activities);
• Analysis of reports and negative media publications about RVC’s activities.

In order to improve the organizational and legal framework for combating corruption, measures were taken in 2019 to improve the risk management, internal control and internal audit systems.

Activities aimed at the formation of common approaches to ensuring work on the prevention and enhancement of the effectiveness of the Company’s anti-corruption efforts are carried out on an ongoing basis.

Part of RVC’s corporate governance practice includes identifying and responding to risks. Risk management is a continuous, systematic process that affects all of RVC’s operations.

RVC established and operates a risk management system based on legislative requirements, government standards and best practices in risk management.

The following measures were taken during the reporting period in order to improve the risk management system:

• The risk management section has been updated in terms of consolidating the approach to the qualitative characterization of risk appetite (in the RVC Development Strategy until 2030);
• The Company’s management was informed about the current state of the risk management system;
• RVC Risk Committee continued its activities, it held 15 meetings during which it carried out comprehensive assessments of risks to RVC and discussed measures aimed at minimizing those risks;
• Company employees received training on the methodology for risk identification and assessment and for the development of risk management measures;
• The functioning of the risk management and internal control systems was secured, as was their integration into the corporate management processes of NTI projects in order to implement NTI action plans (road maps)

An integral element of risk management at RVC is providing methodological assistance for subsidiaries’ risk management and internal control systems, as well as monitoring their performance.

In 2019, within the framework of its digital strategy for 2018-2021 "Digital RVC project" — RVC achieved the following results and milestones:

∙ creation of "Fund of funds" — the first release of an automated system for monitoring the investment portfolio of funds with the participation of RVC. The system is fully operational;

∙ the creation and implementation of "CRM" — the first release of the automated funnel management system for companies, projects and teams supported by RVC, including the following modules: "TechUp", "National Champions", "NTI. Infrastructure", "NTI. Export", "NTI. Spin-off", "NTI. Technological breakthrough", "NTI. Kruzhok movement", "NTI. Up Great Technology Contests";

∙ creation of the first release of the "GenerationS" automated corporate accelerator management (control) system, its launch is scheduled for 2020;

∙ creation and implementation of the first release of the "Corporate Portal" automated system that provides management of internal corporate content and personnel services;

∙ a number of tasks were completed within the framework of digitalization of management, business and tax accounting, corporate governance, procurement and contractual activities of RVC.

As it is not a public company, RVC discloses information on a voluntary basis. The disclosure procedure is governed by RVC’s Regulation on Disclosure, which requires the publication of:

This information is disclosed on RVC’s website

In addition, RVC, in accordance with legal requirements, discloses information in the Unified Federal Register of Information about the Activities of Legal Entities.

In accordance with decrees of the Government of the Russian Federation and the directives of the Federal Agency for State Property Management, RVC allocates 25% of its net profit at year end for the payout of dividends. In the absence of profit, dividends are not paid.

A decision on profit allocation, including dividend payments for 2019, will be made at the Annual General Meeting of Shareholders in June 2020.

Information on the company’s procurement is available in the unified procurement information system www.zakupki.gov.ru, on the RVC website https://www.rvc.ru/about/purchase/, and also on the unified trading system’s electronic trading platform www.rts-tender.ru, in the case of purchases in electronic form.

This Annual Report was prepared for the period from 1 January 2019 through 31 December 2019 using information available to the RVC. Financial indicators are based on financial statements audited in accordance with Russian Accounting Standards.

Operating indicators are disclosed taking into account the following requirements:
• Bank of Russia Regulation No. 454-P of 30 December 2014 on the Disclosure of Information by Issuers of Equity Securities ;
• Corporate Governance Code (recommended for use by Letter No. 06-52/2463 of the Central Bank of the Russian Federation of 10 April 2014).

The present RVC Public Annual Report for 2019 was prepared using information available to the company at the time of its preparation. The report contains information on the results of the company’s activities in 2019 and forecast data, statements regarding the intentions, opinions or current expectations of the company regarding the results of its activities, financial position, liquidity, growth prospects, strategy and the development of the industry in which RVC operates.

Such forward-looking statements are characterized by risks and uncertainties, since they depend on circumstances that may change in the future. RVC does not give any direct or implied assurances or guarantees, nor does it bear any responsibility in the event of damages that may be incurred by individuals or legal entities as a result of using the forward-looking statements contained in this report, for any reason, directly or indirectly. These individuals should not fully rely on the forward-looking statements contained in this document, as they are not the only possible scenario that may occur.

With the exception of cases stipulated by the legislation of the Russian Federation, RVC does not undertake obligations to revise or confirm expectations and estimates or to publish updates and changes to the forward-looking statements presented in this report in connection with subsequent events or the receipt of new information.