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    NLMK   US67011E2046

NOVOLIPETSK STEEL

(NLMK)
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Novolipetsk Steel : Corporate Governance Code

07/22/2021 | 08:28am EDT

NOVOLIPETSK STEEL

APPROVED

by the Board of Directors

of Public Joint Stock Company

"Novolipetsk Steel"

Minutes of Meeting No. 282 of 22 July 2021

CORPORATE

GOVERNANCE CODE

of Novolipetsk Steel

(revised)

Lipetsk

2021

CONTENTS

INTRODUCTION .........................................................................................................................................

3

CHAPTER 1. PRINCIPLES OF CORPORATE GOVERNANCE APPLICABLE IN THE COMPANY......................

3

CHAPTER 2. STRUCTURE OF THE COMPANY'S CORPORATE GOVERNANCE...........................................

3

2.1. GENERAL SHAREHOLDERS' MEETING, SHAREHOLDERS' RIGHTS ............................

3

2.2. BOARD OF DIRECTORS OF THE COMPANY ..............................................................

4

2.3. EXECUTIVE BODIES OF THE COMPANY ....................................................................

6

2.4. CORPORATE SECRETARY OF THE COMPANY ...........................................................

6

CHAPTER 3.

DISCLOSURE OF INFORMATION ON ACTIVITIES OF THE COMPANY...................................

7

CHAPTER 4.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM OF THE COMPANY .....................

7

CHAPTER 5.

CONTROL OVER FINANCIAL AND ECONOMIC ACTIVITIES OF THE COMPANY....................

7

CHAPTER 6.

CONCLUSIONS .....................................................................................................................

8

2

INTRODUCTION

The Corporate Governance Code (hereinafter referred to as the Code) introduces the general notions of the corporate governance (corporate behaviour) standards at Public Joint-Stock Company Novolipetsk Steel (hereinafter referred to as the Company), the purpose of which is the protection and the observation of rights and interests of the shareholders.

This Code is developed according to the main principles recommended by the Organization for Economic Cooperation and Development and provisions of the Corporate Governance Code recommended for application by the Bank of Russia.

Corporate behaviour standards given in this Code are not comprehensive and are contained in the Charter, Regulations on the Board of Directors and Management Board as well as in other corporate documents of the Company.

CHAPTER 1. PRINCIPLES OF CORPORATE GOVERNANCE APPLICABLE IN THE COMPANY

The Company, being one of the largest steel-making companies with shares owned by thousands of shareholders, confirms the necessity to comply with the following major principles of corporate governance:

  1. The Company commits to ensure equal and fair treatment of all shareholders exercising their right to be involved in management processes, receive dividends from the Company, participate in meetings, vote on items on the agenda, and getup-to-date information on the Company's activities and its governing bodies.
  2. The Company regards the increase of market value of its shares (capitalization) as one of main purposes.
  3. The Company enforces the principle of equal treatment of all shareholders, including minority and foreign ones.
  4. The Company shall provide for reliable and efficient registration procedures for shareholders' rights for shares and guarantee the possibility for free and easy disposal of shares owned by shareholders.
  5. The Company enforces a policy of observing third party rights, including its creditors and employees, as stipulated by the legislation, the Charter and other regulatory documents.
  6. The Company observes the common corporate policy in respect of the subsidiaries and affiliates and other legal entities in which the Company is the founder, a participant or a member.
  7. The Company enforces the police of information disclosure and transparency including in terms of disclosure of complete and updated information on the Company in order to provide for the possibility to take reasonable decisions by shareholders and investors as well as in terms submission of documents (information) of the Company upon its shareholders' request.
  8. The Company enforces the policy of observance of business ethics in conducting its business.
  9. The Company seeks to ensure compliance with applicable legislation norms, principles of Corporate Governance Code and international corporate governance standards.

CHAPTER 2. STRUCTURE OF THE COMPANY'S CORPORATE GOVERNANCE

2.1. GENERAL SHAREHOLDERS' MEETING, SHAREHOLDERS' RIGHTS

Shareholders of the Company have the rights which are exercised both by shareholders and through their proxys by means of participation in the work of general meetings of shareholders with the right to vote on all items referred to their competence.

3

The Company commits to:

  • provide equal and fair treatment to all shareholders exercising their right for participation in its governance;
  • create the most favourable conditions for shareholders for participation in GSM, elaboration of the stand in terms of GSM agenda items, coordination of their actions and expressing their opinions in relation to the items under consideration.

The procedure of GSM holding and submission of materials for the GSM shall provide shareholders with the possibility to get properly prepared for participation therein.

In the course of preparation to the GSM and holding it, the Company seeks to ensure that shareholders could receive information on the meeting and materials therefor freely and on a timely basis.

The procedure of the GSM holding established by the Company shall provide for equal possibility for all persons present at the meeting to express their opinions and ask relative questions.

In the course of the meeting the Company's shareholders have the right to put forward questions to members of the Company's governing bodies, the person responsible for the Company's accounting, representatives of the Company's auditor, and nominees to the Company's governing bodies, who are recommended to participate in the work of the Company's General Shareholders' Meeting. The Company's shareholders (GSM participants) shall be entitled to freely contact and consult each other on items on the Meeting's agenda without violating the meeting procedure (regulations).

Shareholders are entitled for regular and timely receipt of the information on the Company's business to the extent sufficient for decision-making on shares disposal, including:

  • transactions which might significantly influence financial performance of the Company;
  • material facts and events;
  • occurrence of obligations of the Company to third parties,non-performance of which might result in the Company's share value reduction;
  • increase or reduction of the Company's authorized capital.

Shareholders are entitled for regular and timely receipt of information on remuneration amount to be received by the Company's directors (members of the Board of Directors, Management Board) according to the resolutions of the HR, Remunerations and Social Policy Committee including on the procedure and criteria of determination of such remuneration amount, cash incentive system and provision of directors with options for the Company's shares.

Shareholders are entitled to receive net profit of the Company as dividends.

Shareholders shall not exert pressure on the Board of Directors and executive bodies of the Company, use insider information in the course of transactions with shares of the Company and its subsidiaries.

Shareholders recognize the necessity to disclose information on their owners and affiliates.

2.2. BOARD OF DIRECTORS OF THE COMPANY

Board of Directors performs general administration of the operations of the Company with the exception of issues referred to the competence of the General Shareholders' Meeting by the Federal law "On Joint Stock Companies", defines priority directions for the Company's business and basic principles and approaches to the Company's arrangement of risk management and internal control system as well as supervises over the activity of the Management Board and the President (Chairman of the Management Board) of the Company.

The objectives of the Board of Directors' operation are: to provide maximum profit and increase the Company's assets, protect the rights and lawful interests of shareholders, provide permanent control

4

over executive bodies of the Company, provide completeness, reliability and impartiality of public information concerning the Company.

The Board of Directors shall comply with the following principles in order to reach its objectives:

  • prevent prejudice of shareholders' lawful right to participate in the management of the Company;
  • balance the interests of different shareholder groups and maximum impartiality of decisions made by the Board of Directors in the interests of all shareholders of the Company;
  • make decisions based on reliable information on the Company activities.

Board of Directors:

  • defines the priority directions of the Company's business;
  • approveslong-term plans and major activities programs of the Company, the Company's budget;
  • defines the structure, the number and the persons of the Management Board, etc..

Executive directors may be members of the Board of Directors and their number must not exceed one fourth of the total number of the Company's BoD members.

The President (Chairman of the Management Board) of the Company may not hold the office of the Chairman of the Board of Directors of the Company at the same time.

To avoid domination of any individual person or a group of persons in the course of decision-making by the Board of Directors, the Company intends to include at least 3 (three) independent directors into the Board of Directors.

At that, an independent director shall mean a person complying with independence criteria stated in the Regulations on the Board of Directors of the Company.

The Board of Directors shall ensure quality assessment of its activities, as well as operation of committees with the Board of Directors and each member of the Board of Directors individually according to the Russian and international corporate governance principles.

Conditions and procedure of remuneration payment and expenses reimbursement to the Board of Directors members shall be established by the Regulations on the Board of Directors members' remuneration of the Company approved by the General Shareholders' Meeting of the Company.

A member of the Board of Directors shall:

  • be efficient and professional, capable of making objective and professional judgements, taking respective decisions, carrying out its functions in an honest and responsible way in the interests of all shareholders and the Company as a whole;
  • have professional qualification (knowledge, experience, skills) for a requireddecision-making and have unblemished reputation;
  • have sufficient amount of time for efficient fulfilment of obligations by a member of the Board of Directors;
  • disclose information on its interest in concluding transactions by the Company in full.

The Board of Directors shall establish permanent committees to address certain tasks of the Company (preliminary review of the most important issues).

The targets, tasks and functions of each committee, organization procedure and regulations of its activities shall be determined by the appropriate Regulations subject to approval by the Board of Directors and binding for all subdivisions and officers of the Company.

5

Disclaimer

OAO NLMK - Novolipetskiy Metallurgicheskiy Kombinat published this content on 22 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 July 2021 12:27:12 UTC.


© Publicnow 2021
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