Information for Shareholders

Structure of Company Share Capital

As of 31 December 2017, the authorized capital of OR Public Joint-Stock Company was 11,305,600,000 (Eleven billion three hundred and five million six hundred thousand) rubles, consisting of 113,056,000 (One hundred thirteen million fifty-six thousand) placed ordinary registered shares of the Company with a nominal value of 100 (One hundred) rubles each.

The Company may place the following authorized shares in addition to the placed shares: 100,000,000 (One hundred million) ordinary registered shares with a nominal value of 100 (One hundred) rubles each. The authorized shares of the Company referred to in this paragraph provide to the shareholders the same amount of rights and shares as the placed shares of the Company.

The Company has the right to place ordinary shares, as well as one or more types of preferred shares. The nominal value of all ordinary shares has to be the same.

THE GENERAL STRUCTURE OF THE SHARE CAPITAL ON 31 DECEMBER 2017 IS AS FOLLOWS:

Dividend Policy of the Company

In accordance with the existing Regulation on the dividend policy of OR PJSC developed in accordance with the current legislation of the Russian Federation, the Articles of Association of OR PJSC and the corporate governance code, the dividend policy of OR PJSC is based on the strict observance of the legitimate rights and interests of shareholders, is consistent with the mission and strategic objectives aimed at increasing the capitalization of OR PJSC and the level of dividend yield on the invested capital as a result of effective management of the assets of the shareholders and follows the principles of:

• compliance with the norms of the current legislation of the Russian Federation, of the Articles of Association of OR PJSC, and local normative acts when paying (declaring) dividends on shares of OR PJSC;
• respect for shareholder rights stipulated by the current legislation of the Russian Federation, the Articles of Association of OR PJSC and local normative acts;
• constant improvement of the investment attractiveness of OR PJSC;
• the priority of dividend pay-outs before investment and other costs in the distribution of the profits of OR PJSC with due account for the need to maintain financial sustainability;
• the principle of the transparency of the procedure and conditions for the adoption of a decision on payment and amount of dividends;
• the principle of timeliness of payment of OR PJSC’s dividends;
• the decision to pay and the amount of dividends may be made only if OR PJSC achieves positive financial result, considering the development plans and investment programmes;
• strict compliance with procedures and principles of the dividend policy;
• ensuring equal rights of shareholders to receive information about decisions on the payment, amount and timing of dividend payment;
• continuous improvement of the dividend policy in the context of improving corporate governance procedures and revision of its provisions in connection with changes of OR PJSC’s strategic goals, as well as the desire to increase
• dividend values based on sustained revenue growth.

The Company provides equal conditions for all shareholders, regardless of the size of their holding and the location of the shareholders, and equal treatment by OR PJSC in their ability to participate in the Company’s profit by obtaining dividends.

The decision to pay (declare) dividends shall be adopted by the general meeting of shareholders of OR PJSC. This decision has to determine the size of dividends on shares of each category (type), the form of payment, the timing of payment of non-monetary dividends, the date on which persons who have the right to receive dividends are determined. The decision about the date on which persons having the right to receive dividends are determined is made only on the proposal of the Company’s Board of Directors. The dividend size cannot be larger than the dividend size recommended by the Company’s Board of Directors.

Report on payment of dividends declared (accrued) on shares of the joint stock company: According to the results of 2017, no dividends of OR PJSC were accrued or paid.

Company’s Net Assets

Remuneration to Members of the Board of Directors and Members of the Executive Bodies of the Company

Remunerations or compensations to the members of the Board of Directors of OR PJSC are regulated by the current Articles of Association of OR PJSC, and by the Regulation on the Board of Directors of OR Public Joint Stock Company. In accordance with the Articles of Association of OR PJSC, decision concerning the payment of remuneration and/or compensation of expenses to members of the Board of Directors fall within the competence of the general meeting of shareholders. In 2017, the general meeting of shareholders of OR PJSC made the following decisions:

Information of Company’s Observance of Corporate Governance Code

The Company has not officially approved the Code of corporate governance or another analogical document; however, OR PJSC provides for to shareholders all the opportunities to participate in company governance as well as to get familiarised with the information on company operations under Federal Law On JointStock Companies, under Federal Law On securities market as well as under regulatory acts of the Bank of Russia.

The basic principle of company’s building the relationships with shareholders and investors is reasonable balance of interests of the company as the economic agent and as the joint-stock company, interested in protection of rights and legal interests of its shareholders.

Report on observance of principles and recommendations of the corporate governance code

This report on observance of principles and recommendations of the Code of corporate governance was considered by the Board of Directors of OR Public Joint-Stock Company at its meeting dated 23 May 2018, Minutes of the Meeting No.СД2018-5 dated 24 May 2018. The Board of Directors confirms that data provided herein contain complete and true information regarding company’s observance of principles and recommendations of the Code of corporate governance for year 2017.

No.	Principles of corporate governance	Evaluation criteria for observance of the principle of corporate governance	Status <1> of compliance with the principle of corporate governance	Explanations <2> for deviation from evaluation criteria for observance of the principle of corporate governance
1.1	The Company must ensure equal and just attitude towards all the shareholders when exercising their right to participate in company governance.
1.1.1	The Company shall provide for shareholders with maximally favourable conditions for their participation in the General Meeting, basis for working out a substantiated position on the issues of the agenda of the general meeting, for coordinating their acts, as well as an opportunity to express their opinion on the issues in question.	1. The Company’s corporate document as approved by the General Meeting of shareholders and which regulates procedures for the General meeting is in the public domain. 2. The Company shall provide an accessible way for communication with the Company, such as hot line, e-mail account or chat in the Internet which allows to shareholders to express their opinion as well as to send issues regarding the agenda within the process of preparation to the General Meeting. The said actions would be undertaken by the Company on the eve of each General Meeting which was held within the reporting period.	Partly observed	Company’s corporate documents are provided in the Internet: http://www.e-disclosure.ru/portal/company.aspx?id=33614
1.1.2	The procedure of notification on holding the General Meeting and the procedure of provision of materials thereto enables shareholders to get properly prepared to participation in the same.	1. A notice of the General Meeting of shareholders is placed (posted) on the web-site in the Internet at least 30 days prior to the date of the General meeting. 2. The notice of the meeting specifies the place of meeting holding and the documents necessary for admission to the premises.	Partly observed
1.1.3	Within the process of preparation and holding of the General Meeting shareholders had an opportunity to unrestrictedly and timely obtain information about the meeting and materials thereto, to ask questions to executive bodies and to members of the Board of Company Directors, to communicate with each other.	1. During the reporting period shareholders had an opportunity to ask questions to members of executive bodies and to members of the Board of Company Directors on the eve of and during the Annual General Meeting. 2. Position of the Board of Directors (including special opinions entered into the Minutes) upon each issue of the agenda of general meetings held during the reporting period, was included into materials to the General Meeting of Shareholders. 3. The Company provided to shareholders having the right thereto, access to the list of individuals having the right to participate in the General Meeting, starting from the date when the Company obtained it, in all the cases of holding general meetings during the reporting period.	Partly observed
1.1.4	Exercise of shareholder’s right to demand convening of the General Meeting, to nominate candidates to governing bodies as well as to make proposals as to entering into agenda of the General Meeting was not accompanied by unreasonable difficulties.	1. Within the reporting period shareholders had an opportunity during at least 60 days after the end of the respective calendar year, to make proposals to be entered into agenda of the Annual General Meeting. 2. Within the reporting period the Company did not reject accepting proposals into agenda or accepting nominees into Company’s bodies due to errors and other non-material faults in shareholder’s proposal.	Observed
1.1.5	Each shareholder had an opportunity to exercise his right of vote by the simplest and the most convenient way, at his choice.	1. Company’s corporate document (corporate policies) contains provisions according to which each participant of the General Meeting may, prior to completion of the respective meeting, require a copy of the bulletin filled-in by him and certified by the tallying commission.	Observed
1.1.6	The general meeting holding procedure as established by the Company ensures equal opportunity to all the individuals attending the meeting to deliver their opinion and to ask the questions they are interested in.	1. When holding during reporting period General Meetings of shareholders in the form of a meeting (joint attendance of shareholders) sufficient time for reports on agenda issues and time for discussing those issues was provided. 2. Nominees to company’s governing and administration bodies were available for answers to shareholders’ questions at the meeting at which their candidatures were put to the vote. 3. When making decisions relating to preparation and holding of General Meetings of shareholders, the Board of Directors considered an issue about using telecommunication equipment to provide for remote access to shareholders to participate in general meetings during the reporting period.	Partly observed
1.2	Shareholders were provided with an equal and fair opportunity to participate in Company’s profit by way of receiving dividends.
1.2.1	The Company developed and introduced a transparent and comprehensive gear to define the amount of dividends and their payment.	introduced a transparent and comprehensive gear to define the amount of dividends and their payment. 1. In the Company, a dividend policy was developed, approved by the Board of Directors and revealed. 2. If Company’s dividend policy uses Company’s reporting indices to determine the amount of dividends, the respective provisions of the dividend policy account for consolidated indices of financial statements.	Observed
1.2.2	The Company shall not make a decision to pay out dividends if such decision, formally not violating restrictions as established by the Law, is economically unjustified and may result in forming up misrepresentation concerning Company’s operations.	1. Company’s dividend policy contains definite instructions concerning financial/economic circumstances, under which the Company should not pay out dividends.	Observed
1.2.3	The Company shall ensure absence of impairment of dividend rights of existing shareholders.	1. Within the reporting period, the Company did not undertake the actions resulting in impairment of dividend rights of existing shareholders.	Observed
1.2.4	The Company aims to exclude the use by shareholders of other ways to receive income (profit) for Company’s account, in addition to dividends and to disposal value.	1. For the purposes to exclude the use by shareholders of other ways to receive income (profit) for Company’s account, in addition to dividends and to disposal value, in Company’s corporate documents there are control gears which ensure timely detection and the procedure of approval for deals with the individuals affiliated with (related to) substantial shareholders (the individuals having the right to dispose of votes covering voting shares) in the cases when the Law formally does not recognise such deals as interested party transactions.	Partly observed
1.3	Corporate governance system and practice ensure equality of conditions for all the shareholders — holders of shares of the same class (type), including minority shareholders and foreign shareholders and equal attitude towards them from the Company.
1.3.1	The Company formed up conditions for fair relation towards each shareholder from Company’s governing bodies and company’s controllers, including conditions which ensure inadmissibility of abusive acts on part of majority shareholders towards minority shareholders.	1. During the reporting period the management procedure for potential conflicts of interests with substantial shareholders are effective, whereas, the Board of Directors paid proper attention to conflicts between shareholders, if such were available.	Observed	During the reporting period there were no conflicts between shareholders
1.3.2	The Company does not undertake the actions, which result in or might result in non-natural re-distribution of corporate control.	1. Quasi-treasury shares are absent or did not participate in voting during the reporting period.	Observed	Quasi-treasury shares are absent
1.4	To the shareholders, reliable and effective ways to account rights to stock, as well as a possibility of free and unencumbered carve-out of the shares they hold are provided.
1.4	To the shareholders, reliable and effective ways to account rights to stock, as well as a possibility of free and unencumbered carve-out of the shares they hold are provided.	1. Quality and reliability of the activity as to record keeping of securities holders as undertaken by Company’s registrar, correspond with needs of the Company and of its shareholders.	Observed
2.1	The Board of Directors carries out strategic management of the Company, it sets out basic principles and approaches as to organisation of the system of risk management and corporate control within the Company; it controls activities of company’s executive bodies, as well it realises other key functions.
2.1.1	The Board of Directors is responsible for making decisions relating to charging to and discharging from positions taken in executive bodies, including caused by improper performance of obligations by them. As well, the Board of Directors controls that Company’s executive bodies act in compliance with the approved development strategy and with main areas of company activities.	1. The Board of Directors has authorities as to charging, discharging from the position occupied and as to setting out terms and conditions with respect to members of executive bodies, as stipulated in the Charter. 2. The Board of Directors has considered a report (reports) of the sole executive body and members of the collegiate executive body as to performance of Company strategy.	Partly observed
2.1.2	The Board of Directors sets out principle focus in Company activities for a long-term perspective, it evaluates and approves key factors of performance and main businesspurposes of the Company; it evaluates and approves the strategy and business-plans on main spheres of Company activities.	1. During the reporting period t meetings of the Board of Directors there were considered the matters relating to the progress in and update of the strategy, approval of company’s financial and economic plan (budget), as well as consideration of criteria and indices (including, interim ones) of realisation of Company’s strategy and economic plans.	Observed
2.1.3	The Board of Directors sets out principles and approaches as to organisation of the system of risk management and corporate control within the Company.	1. The Board of Directors has set out principles and approaches as to organisation of the system of risk management and corporate control within the Company. 2. The Board of Directors has assessed the system of risk management and corporate control within the Company during the reporting period.	Observed
2.1.4	The Board of Directors sets out the company policies as to reward and (or) reimbursement of expenditures (compensations) to members of the Board of Directors, of the executive bodies or to other key managers of the Company.	1. The Company has developed and implemented policy (policies) as approved by the Board of Directors as to reward and reimbursement of expenditures (compensations) to members of the Board of Directors, of the executive bodies or to other key managers of the Company. 2. During the reporting period, issues relating to the specified policy (policies) were considered at meetings of the Board of Directors.	Not observed
2.1.5	The Board of Directors plays a key role in prevention, detection and regulation of corporate conflicts between bodies of the Company, Company shareholders and Company workers.	1. The Board of Directors plays a key role in prevention, detection and regulation of corporate conflicts. 2. The Company has established a system of identification of the transactions connected with the conflict of interests and a system of measures aimed at resolution of such conflicts.	Partly observed
2.1.6	The Board of Directors plays a key role in ensuring Company transparency, timeliness and completeness of information disclosure by the Company, unhindered access of shareholders to Company documents.	1. The Board of Directors has approved regulations on information policy. 2. In the Company, the individuals responsible for implementation of information policy are determined.	Not observed
2.1.7	The Board of Directors carries out control over the practice of corporate governance in the Company and plays a key role in essential corporate affairs of the Company.	1. During the reporting period, the Board of Directors has considered an issue of practice of corporate governance in the Company.	Not observed
2.2	The Board of Directors is subjected to Company shareholders.
2.2.1	Information about work of the Board of Directors is disclosed and is provided to shareholders.	1. The Company’s annual report for the reporting period includes information about attendance of meetings of the Board of Directors and committees by individual directors. 2. The annual report contains information about principle results of evaluation of work of the Board of Directors as performed in the reporting period.	Partly observed
2.2.2	The Chairman of the Board of Directors is available for communication with Company shareholders.	1. The Company has a transparent procedure, which ensures a possibility for shareholders to send questions and their position thereupon to the Chairman of the Board of Directors.	Partly observed
2.3	The Board of Directors is an effective and professional body of Company governance, which is able to exercise independent judgements and to make decisions corresponding to interests of the Company and its shareholders.
2.3.1	Only the individuals having unblemished business and personal reputation and possessing knowledge, skills and experience as necessary for making decisions relating to competence of the Board of Directors and which are required for effective carrying out of its functions, are elected by members of the Board of Directors.	1. The procedure of Board of Directors performance evaluation as adopted in the Company, includes evaluation of professional qualification of members of the Board of Directors. 2. During the reporting period the Board of Directors (or its committee on nominations) has evaluated candidates to the Board of Directors in terms of their possession of necessary experience, knowledge, business reputation, absence of conflicts of interests, etc.	Partly observed
2.3.2	Members of the Board of Directors are elected through a transparent procedure which allows shareholders to obtain information about candidates as sufficient to get a picture of their personal and professional properties.	1. In all the cases of holding the General Meeting of shareholders within the reporting period, which agenda contained issues regarding election of the Board of Directors, the Company provided shareholders with biographic data of all the candidates to members of the Board of Directors, findings of assessment of such candidates performed by the Board of Directors (or by its nomination committee), as well as with information of candidate compliance with criteria of independence, according to recommendations contained in p.102 — 107 of the Code and a written consent of candidates to be elected to the panel of the Board of Directors.	Partly observed
2.3.3	The panel of the Board of Directors is balanced, including in terms of its members’ qualification, their experience, knowledge and business qualities. In addition, they enjoy trust of shareholders.	1. Within the frames of procedure of evaluation of performance of the Board of Directors, which work was performed within the reporting period, the Board of Directors has analysed its needs in the area of professional qualification, experience and business competence.	Partly observed
2.3.4	The quantitative composition of the Company Board of Directors enables to arrange activity of the Board of Directors in a maximally effective manner, including a possibility to form up committees of the Board of Directors; as well it provides for substantive minority shareholders of the Company an opportunity to be elected to the panel of the Board of Directors for the candidate they vote for.	1. Within the frames of procedure of evaluation of performance of the Board of Directors, which work was performed within the reporting period, the Board of Directors considered an issue of compliance of the Board of Directors in terms of quantity with needs of the Company as well as with shareholders’ interests.	Partly observed
2.4	The panel of the Board of Directors includes a sufficient number of independent Directors
2.4.1	An individual is recognised an independent Director if he possesses sufficient competence, experience and independence to form up its own position, he is able to exercise objective and faithful judgements, which are independent of influence of Company’s executive bodies, separate groups of shareholders or other interested parties. Whereas, the following must be taken into account: under ordinary conditions a candidate (an elected member of the Board of Directors) cannot be considered independent if he is related to the Company, its substantial shareholder, substantial contractor or a rival of the Company or is related to the state.	1. During the reporting period all the independent members of the Board of Directors complied with all the independence criteria as specified in recommendations 102 — 107 of the Code, or were recognised as independent upon decision of the Board of Directors.	Observed
2.4.2	Compliance of a candidate to members of the Board of Directors to independence criteria is evaluated, as well regular analysis of compliance of independent members of the Board of Directors to independence criteria is carried out. When performing such evaluation the content must prevail the form.	1. During the reporting period, the Board of Directors (or nomination committee of the Board of Directors) formed an estimate as to independence of each candidate to the Board of Directors and provided a respective opinion to shareholders. 2. During the reporting period, the Board of Directors (or nomination committee of the Board of Directors) at least once considered independence of acting members of the Board of Directors who are specified by the Company in the annual report as independent directors. 3. The Company has developed procedures which identify necessary acts of a member of the Board of Directors in case if he ceases to be independent, including obligations as to timely notifying the Board of Directors thereof.	Partly observed
2.4.3	Independent directors constitute at least one third of the elected panel of the Board of Directors.	1. Independent directors constitute at least one third of the panel of the Board of Directors.	Observed
2.4.4	Independent directors play a key role in preventing corporate conflicts in the Company as well as in performing substantial corporate acts by the Company.	1. Independent directors (who have no conflict of interests) in advance assess substantial corporate acts connected with possible conflict of interests and findings of such assessment are provided to the Board of Directors.	Observed
2.5	The Chairman of the Board of Directors facilitates the most efficient carrying out of functions vested in the Board of Directors.
2.5.1	An independent director is elected as the Chairman of the Board of Directors, or out of the elected independent directors the senior independent director is defined who coordinates the work of independent directors and interacts with the Chairman of the Board of Directors.	1. The Chairman of the Board of Directors is an independent director, or among independent directors the senior independent director is defined. 2. The role, rights and obligations of the Chairman of the Board of Directors (and, where applicable, of the senior independent director) are properly defined in Company’s corporate documents.	Not observed
2.5.2	The Chairman of the Board of Directors provides for positive atmosphere of meetings, free discussion of the issues included into agenda of the session, control over performance of the decisions made by the Board of Directors.	1. Performance of the Chairman of the Board of Directors was evaluated within the frames of procedure of evaluation of performance of the Board of Directors in the reporting period.	Not observed
2.5.3	The Chairman of the Board of Directors undertakes necessary measures for timely provision to members of the Board of Directors of information necessary to make decisions on agenda issues.	1. Obligation of the Chairman of the Board of Directors to undertake measures as to ensuring timely provision to members of the Board of Directors of materials on agenda issues of a meeting of the Board of Directors is set forth in Company’s corporate documents.	Observed
2.6	Members of the Board of Directors act in good faith and reasonably in the interests of the Company and its shareholders, on the basis of sufficient awareness, with due care and diligence.
2.6.1	Members of the Board of Directors make decisions subject to all the information available, in the absence of the conflict of interest, subject to equal attitude towards Company shareholders, within the course of ordinary entrepreneurial risk.	1. Company’s corporate documents determine that a member of the Board of Directors is obliged to notify the Board of Directors if he starts to have a conflict of interest with respect to any issue of agenda of a meeting of the Board of Directors or of the committee of the Board of Directors, prior to start of discussion of a respective issue of agenda. 2. Company corporate documents provide that a member of the Board of Directors must abstain from voting on any issue in which he has a conflict of interest. 3. In the Company a procedure is established which allows to the Board of Directors to receive professional advice on the matters relating to its competence, for Company’s account.	Partly observed
2.6.2	Rights and obligations of members of the Board of Directors are definitely set out and entrenched in Company corporate documents.	1. The Company has approved and published a corporate document which definitely sets out rights and obligations of members of the Board of Directors.	Observed
2.6.3	Members of the Board of Directors have sufficient time for fulfilling their obligations.	1. Individual attendance of meetings of the Board and committees, as well as the time being spent to get prepared to participation in meetings, was taken into account within the frames of evaluation procedure of the Board of Directors, in the reporting period. 2. In accordance with Company’s corporate documents members of the Board of Directors are obliged to notify the Board of Directors of their intent to enter management bodies of other organisations (in addition to organisations controlled by and dependent of the Company), as well of the fact of such assignment.	Partly observed
2.6.4	All the members of the Board of Directors have equal possibility to access to company documents and information. Newly elected members of the Board of Directors within the shortest possible term are provided with sufficient information about the Company and about work of the Board of Directors.	1. In compliance with Company corporate documents, members of the Board of Directors are entitled to get access to documents and to make requests which concern the Company and Company controlled organisations, and Company’s executive bodies are obliged to provide respective information and documents. 2. The Company has a formalised program of informative activities for newly elected members of the Board of Directors.	Observed
2.7	Meetings of the Board of Directors, preparation thereto and participation therein of members of the Board of Directors secure good performance of the Board of Directors.
2.7.1	Meetings of the Board of Directors are held when necessary, subject to the scale of operations and the tasks which the Company faces at a certain period.	1. The Board of Directors had at least six meetings for the reporting year.	Observed
2.7.2	Company corporate documents formalise the procedure of preparation and holding of meetings of the Board of Directors. Such procedure guarantees to members of the Board of Directors an opportunity to properly prepare to its holding.	1. The Company has approved a corporate document which defines the procedure of preparation and holding of meetings of the Board of Directors. Among others, it sets out that a notice of meeting holding must be made, as a rule, at least 5 days prior to its holding.
2.7.3	The holding form of the meeting of the Board of Directors is defined subject to importance of agenda issues. The most important issues are resolved at the meetings to be held in person.	1. Company’s Articles of association or corporate document provides that the most important issues (according to the list provided in recommendation 168 of the Code) must be considered at Board meetings in presentia.	Observed
2.7.4	Resolutions on the most important matters of Company operations are made at the meeting of the Board of Directors by qualified majority or by majority of votes of all the elected members of the Board of Directors.	1. Company Articles of association provide that resolutions on the most important matters as set out in recommendation 170 of the Code, must be made at the meeting of the Board of Directors by qualified majority, at least by three fourth of the votes or by majority of votes of all the elected members of the Board of Directors.	Observed
2.8	The Board of Directors forms committees for preliminary consideration of the most important matters of Company operation.
2.8.1	For advance consideration of the matters relating to control of financial and economic operation of the Company, a committee on auditing consisting of independent directors was created.	1. The Board of Directors has formed a committee on auditing consisting exclusively of independent directors. 2. Company’s corporate documents determine tasks of the committee on auditing, including the tasks contained in recommendation 172 of the Code. 3. At least one member of the committee on auditing who is an independent director, possesses experience and knowledge in the area of preparation, analysis, evaluation and audit of accounting (financial) statements. 4. Meetings of the committee on auditing were held at least once quarterly during the reporting period.	Partly observed
2.8.2	For preliminary consideration of the matters relating to forming up of the effective and transparent practice of rewarding, a committee on rewards consisting of independent directors and headed by an independent director who is not the Chairman of the Board of Directors was created.	1. The Board of Directors created a committee on rewards consisting only of independent directors. 2. The Chairman of the committee on rewards is an independent director who is not the Chairman of the Board of Directors. 3. Company’s corporate documents determine tasks of the committee on rewards, including the tasks contained in recommendation 180 of the Code.	Partly observed
2.8.3	For preliminary consideration of the matters connected with carrying out of personnel planning (planning of succession), professional composition and performance of the Board of Directors, a committee on nominations (assignments, personnel), majority of which members are independent directors.	1. The Board of Directors has created a committee on nominations (or its tasks as specified in recommendations 186 of the Code are implemented within the frames of another committee <4>) majority of which members are independent directors. 2. Company’s corporate documents define tasks of the committee on nominations (or a respective committee with combined functions), including tasks contained in recommendations 186 of the Code.	Not observed
2.8.4	Subject to scales of operation and risk level the Company Board of Directors has made sure that the panel of its committees fully corresponds to purposes of company operation. Additional committees were either formed or were not recognised as necessary (committee on strategy, committee on corporate governance, committee on ethics, committee on risk management, committee on budget, committee on health, safety and environment, etc.).	1. In the reporting period the Company Board of Directors considered a question of compliance of the composition of its committees with tasks of the Board of Directors and with aims of Company operations. Additional committees were either formed or were not recognised as necessary	Partly observed
2.8.5	The composition of committees is defined in such a manner that it allows to carry out omni- faceted discussion of the issues being preliminary considered subject to various opinions.	1. Committees of the Board of Directors are headed by independent directors. 2. Company corporate documents (policies) provide provisions according to which the individuals not being members of the committee on audit, committee on nominations and committee on rewards, may attend meetings of committees only at invitation of the Chairman of a respective committee.	Partly observed
2.8.6	Chairmen of committees on a regular basis inform the Board of Directors and its chairman of the operation of their committees.	1. During the reporting period, Chairmen of committees on a regular basis reported to the Board of Directors about operation of their committees.	Partly observed
2.9	The Board of Directors ensures carrying out of performance assessment of the Board of Directors, its committees and members of the Board of Directors.
2.9.1	Carrying out of performance assessment of the Board of Directors is aimed at determination of the level of effectiveness of the work of the Board of Directors, of committees and members of the Board of Directors, compliance of their operation with needs of Company development, actualisation of operation of the Board of Directors and detection of the areas where their operation may be improved.	1. Self-assessment or external assessment of performance of the Board of Directors as carried out in the reporting period, included assessment of performance of committees, individual members of the Board of Directors as well as of the Board of Directors in general. 2. Results of self-assessment or external assessment of the Board of Directors which was carried out during the reporting period, were considered at a meeting inpresentia of the Board of Directors.	Not observed
2.9.2	Performance of the Board of Directors, of committees and members of the Board of Directors is assessed on a regular basis, at least once per year. To carry out an independent assessment of performance of the Board of Directors, at least once in three years, an outside organisation (consultant) is employed.	1. For carrying out an independent assessment of performance of the Board of Directors during the last three reporting periods, at least once an outside organisation (consultant) was employed.	Not observed
3.1	Company’s corporate secretary carries out effective current interaction with shareholders, coordination of Company’s actions as to protection of rights and interests of shareholders, support of effective operation of the Board of Directors.
3.1.1	The corporate secretary possesses knowledge, experience and qualification, sufficient for performance of obligations laid upon him, unblemished reputation and enjoys trust of shareholders.	1. The Company has adopted and formalised a corporate document — Regulations on corporate secretary. 2. Company’s web-site and annual report present biographical information about the corporate secretary; with the same detail level as with members of the Board of Directors and executive management of the Company.	Observed
3.1.2	The corporate secretary enjoys sufficient independence of Company’s executive bodies and has necessary authorities and resources for fulfilling the tasks set in front of him.	1. The Board of Directors approves assignment, discharge from office and additional reward of the corporate secretary	Observed
4.1	The level of the reward to be paid by the Company is sufficient to involve, motivate and retain the individuals possessing competence and qualification necessary for the Company. Reward to members of the Board of Directors, to executive bodies and other key managers of the Company is paid according to the reward policy as accepted in the Company.
4.1.1	The level of reward to be provided by the Company to members of the Board of Directors, to executive bodies and other key managers of the Company, creates sufficient motivation for their effective work, allowing to the Company to involve and to retain competent and qualified specialists. Whereas, the Company avoids the level of reward higher than necessary, as well unjustifiably large difference between levels of reward of the specified individuals and Company workers.	1. The Company has accepted a corporate document (documents) — policy (policies) as to remuneration of members of the Board of Directors, executive bodies and other key managers of the Company, which definitely sets out approaches to remuneration of the specified individuals.	Not observed
4.1.2	Company policy with respect to remuneration was developed by the committee on rewards and was approved by the Board of Company Directors. The Board of Directors supported by the committee on rewards ensures control over implementation and realisation in the Company of reward policy, and where necessary — it reviews and makes amendments into the policy.	1. During the reporting period the reward committee considered policy (policies) on rewards and practice of its (their) implementation and where necessary it presented respective recommendations to the Board of Directors.	Not observed
4.1.3	Company policy on reward contains transparent mechanisms to define the amount of reward of members of the Board of Directors, of the executive bodies and of other key managers of the Company; it also regulates all the types of payouts andbenefits provided to specified persons.	1. Company policy (policies) on reward contains (contain) transparent mechanisms to define the amount of reward of members of the Board of Directors, of the executive bodies and of other key managers of the Company; as well it regulates (regulate) all the types of payouts, perquisites being provided to specified persons.	Not observed
4.1.4	The Company determines the policy of expense reimbursement (compensations), such policy details the list of expenses subject to reimbursement as well as the level of servicing to which may pretend members of the Board of Directors, executive bodies and other key managers of the Company. Such policy may become an integral part of Company policy on reward.	1. The policy (policies) on reward or other corporate documents of the Company set forth rules of remuneration of expenditures of members of the Board of Directors, executive bodies and other key managers of the Company.	Not observed
4.2	The remuneration system for members of the Board of Directors ensures convergence of directors’ financial interests with long-term shareholders’ financial interests.
4.2.1	The Company pays out fixed annual remuneration to members of the Board of Directors. The Company does not pay out remuneration for participation in separate meetings of the Board or committees of the Board of Directors. The Company does not apply forms of short-term motivation and additional material incentives with respect to members of the Board of Directors.	1. Fixed annual remuneration was the only monetary form of remuneration of members of the Board of Directors for work in the Board of Directors during the reporting period.	Partly observed
4.2.2	Long-term owning of Company shares mostly fosters convergence of financial interests of members of the Board of Directors with long-term shareholders’ financial interests. Whereas, the Company does not precondition rights of sale of shares by achieving certain performance indices; and members of the Board of Directors do not participate in optional programs.	1. If a corporate document (documents) — policy (policies) on Company reward provide granting of Company shares to members of the Board of Directors, definite rules for owning of shares by members of the Board of Directors, which are aimed at stimulation of long-term owning of such shares must be provided and revealed.	Not observed
4.2.3	The Company has not provided any additional payouts or compensations in case of early termination of powers of members of the Board of Directors due to transfer of control over the Company or due to other circumstances.	1. The Company has not provided any additional payouts or compensations in case of early termination of powers of members of the Board of Directors due to transfer of control over the Company or due to other circumstances.	Partly observed
4.3	The system of rewarding for members of executive bodies and other key managers of the Company provides dependence of the reward on Company performance as well as on their personal input into achievement of that result.
4.3.1	Rewarding for members of executive bodies and other key managers of the Company is defined so that reasonable and justified proportion of reward fixed part and reward variable part, which depends on Company performance as well as on employee’s personal (individual) input into the final result, is ensured.	1. During the reporting period, annual figures of performance were used when establishing the amount of the variable reward for members of executive bodies and other key managers of the Company. 2. Within the course of the latest assessment of rewarding system for members of executive bodies and other key managers of the Company, the Board of Directors (reward committee) has made sure that the Company applies effective balance of reward fixed part and reward variable part. 3. The Company provides a procedure, which ensures return to the Company of premium payments wrongfully obtained by members of executive bodies and other key managers of the Company.	Not observed
4.3.2	The Company has introduced a long-term motivation program for members of executive bodies and other key managers of the Company with the use of Company shares (options or other derivatives, which underlying asset is Company shares	1. The Company has introduced a longterm motivation program for members of executive bodies and other key managers of the Company with the use of Company shares (financial instruments, which underlying asset is Company shares). 2. The long-term motivation program for members of executive bodies and other key managers of the Company provides that the right of sale of shares and other financial instruments to be used in such program occurs at the earliest three years after they are provided. Whereas, the right for their sale is stipulated by achievement of certain figures of Company performance.	Not observed
4.3.3	The amount of compensation (golden parachute) to be paid out by the Company in case of early termination of powers to members of executive bodies and other key managers of the Company upon Company initiative and at absence of wrongful acts on their side, shall not exceed double amount of the fixed part of annual reward.	1. The amount of compensation (golden parachute) to be paid out by the Company in case of early termination of powers to members of executive bodies and other key managers of the Company upon Company initiative and at absence of wrongful acts on their side, during the reporting period did not exceed double amount of the fixed part of annual reward.	Not observed
5.1	The Company has created an effectively functioning risk management system and internal control system, aimed at ensuring reasonable confidence in reaching the targets set before the Company.
5.1.1	The Company Board of Directors has set out principles and approaches as to organisation of the system of risk management and corporate control within the Company.	1. Functions of various administrative bodies and units of the Company in the risk management system and in internal control are definitely identified in Company’s corporate documents/respective policy as approved by the Board of Directors.	Observed
5.1.2	Company’s executive bodies provide for creation and maintenance of functioning of the effective system of risk management and corporate control within the Company.	1. Company’s executive bodies have provided for distribution of functions and authorities with respect to risk management and corporate control between chief executive officers (heads) of units and departments, subjected to them.	Observed
5.1.3	The system of risk management and corporate control within the Company provides for objective, fair and clear picture about Company’s current state and perspectives, integrity and transparency of Company statements, reasonableness and acceptability of the risks assumed by the Company	1. The Company has approved policy on corruption counter-acting. 2. The Company has arranged for an accessible way to inform the Board of Directors or audit committee of the Board of Directors about facts of infringement of the Law, corporate procedures, Code of ethics of the Company.	Partly observed
5.1.4	The Company Board of Directors undertakes necessary measures to make sure that the system of risk management and corporate control as introduced in the Company, complies with principles and approaches as established by the Board of Directors as to its organisation and effectively functions.	1. During the reporting period, the Board of Directors or the audit committee of the Board of Directors has assessed performance of the system of risk management and corporate control of the Company. Information about main findings of such assessment is a part of Company’s annual report.	Not observed
5.2	For systematic independent assessment of reliability and effectiveness of the system of risk management and corporate control, as well as of corporate governance practices, the Company organises corporate auditing.
5.2.1	For the purposes of performing internal audit the Company organised a separate structural unit or an independent outsourced company is employed. Functional and administrative accountability of the corporate audit unit is separated. In terms of functionality, the internal audit unit is subordinate to the Board of Directors.	1. For the purposes of performing internal audit the Company organised a separate structural unit for internal audit which is functionally subordinated to the Board of Directors or to audit committee, or an independent outsourced company with the same accountability principle is employed.	Observed
5.2.2	Internal audit unit assesses performance of corporate control system, it assesses performance of the system of risk management and corporate control system. The Company applies generally accepted standards of operation in the area of internal audit.	1. During the reporting period within the frames of internal audit, evaluation of performance of internal-control and risk management system is provided. 2. The Company applies generally accepted approaches to internal control and risk management.	Partly observed
6.1	The Company and its operation are transparent for shareholders, investors and other interested persons.
6.1.1	The Company has developed and implemented information policy, which ensures efficient informational interaction of the Company, shareholders, investors and other concerned persons.	1. The Company Board of Directors has approved information policy of the Company as developed subject to recommendations in the Code. 2. The Board of Directors (or one of its committees) considered issues connected with Company’s observance of its informational policy at least once per the reporting period.	Not observed
6.1.2	The Company discloses information about the system and practices of corporate governance, including detailed information on observance of principles and recommendations of the Code.	1. The Company discloses information about the system of corporate governance in the Company and general principles of corporate governance being applied in the Company, including on Company’s web-site in the Internet. 2. The Company discloses information about composition of executive bodies and the Board of Directors, independence of members of the Board and about their membership in committees of the Board of Directors (according to definition of the Code). 3. In case of availability of a person exercising control over the Company, the Company publishes a Memo of the controller with respect to plans of such person concerning corporate governance in the Company.	Partly observed
6.2	The Company timely discloses complete, actual and true information about the Company to ensure an opportunity to make substantiated decisions by Company shareholders and investors.
6.2.1	The Company discloses information in accordance with principles of regularity, succession and operative response, as well as accessibility, trustworthiness, completeness and comparability of data being disclosed.	1. In its informational policy the Company has decided on approaches and criteria to identify information which can exercise substantial impact upon assessment of the Company and the price of its securities; as well as procedures ensuring timely disclosure of such information. 2. In case if Company’s securities are traded in foreign organised markets, disclosure of substantive information in the Russian Federation and in such markets is carried out simultaneously and equivalently during the reporting year. 3. If foreign shareholders own a substantial number of Company stocks, during the reporting year information was disclosed not only in Russian, but also in one of mostly wide-spread foreign languages.	Partly observed
6.2.2	The Company avoids formal approach when disclosing information and discloses substantial information of its operation, even if disclosure of such information is not stipulated by the Law.	1. During the reporting period, the Company disclosed year- and six-month financial statements as made according to IFRS. Company’s annual report for the reporting period includes yearly financial statements as drawn under IFRS standards, along with auditor’s opinion. 2. The Company discloses comprehensive information about structure of Company capital in accordance with Recommendation 290 of the Code in the annual report and on Company web-site in the Internet.	Observed
6.2.3	The annual report as one of the most important tools of informational communication with shareholders and other concerned parties, contains information which allows to assess Company performance for the year.	1. Company’s annual report contains information of key aspects of Company operating activities and its financial performance. 2. Company’s annual report contains information about ecologic and social aspects of Company operation.	Partly observed
6.3	The Company provides information and documents upon shareholders’ requests in compliance with principles of equal and unhindered access.
6.3.1	Provision by the Company of information and documents upon shareholders’ requests is carried out in compliance with principles of equal and unhindered access.	1. Company’s informational policy defines unhindered procedure for granting shareholders access to information, including information about legal entities under Company’s control, upon shareholders’ request.	Partly observed
6.3.2	When the Company provides information to shareholders it secures reasonable balance between interests of individual shareholders and interests of the Company which is concerned about preserving confidentiality of important commercial information which may exercise substantial influence upon its competitiveness.	1. During the reporting period, the Company did not refuse to satisfy shareholders’ requests concerning provision of information, or such refusals were grounded. 2. In cases, established by Company’s information policy, shareholders are warned about confidential character of information and assume an obligation to preserve its confidentiality.	Partly observed
7.1	The actions which considerably affect or may affect the structure of the equity capital and financial status of the Company and, respectively, may affect the position of shareholders (substantial corporate actions) are performed on fair conditions which ensure observance of rights and interests of shareholders, as well as of other concerned parties.
7.1.1	As substantial corporate actions such actions are recognised as: reorganisation of the Company, purchase of 30 and more percent of Company’s voting shares (acquisition), carrying out substantial transactions by the Company, increase or reduction in Company’s authorised capital, listing and delisting of Company stock, as well as other actions which may result in substantial change in shareholders’ rights and infringement of their interests. Company’s Charter sets out a list (criteria) of transactions or other actions which are substantial corporate actions and such actions are referred to competence of the Board of Company Directors.	1. Company Charter has defined the list of transactions or other actions, which are substantial corporate actions and criteria for their definition. Making decisions with respect to substantial corporate actions is related to competence of the Board of Directors. In the cases where carrying out of such corporate actions is directly related by the Law to competence of the General meeting of shareholders, the Board of Directors provides respective recommendations to shareholders. 2. Company Charter relates to substantial corporate actions, as minimum as follows: reorganisation of the Company, purchase of 30 and more percent of Company’s voting shares (acquisition), carrying out substantial transactions by the Company, increase or reduction in Company’s authorised capital, listing and delisting of Company stock.	Partly observed
7.1.2	The Board of Directors plays the key role in making decisions or elaboration of recommendations with respect to substantial corporate actions, the Board of Directors backs on position of Company’s independent directors.	1. The Company provides a procedure according to which independent directors declare about their position on substantial corporate actions prior to their approval	Not observed
7.1.3	When performing substantial corporate actions, which concern rights and lawful interests of shareholders, equal conditions,are provided for to all the Company shareholders; where mechanisms as provided by the Law, aimed at protection of shareholders’ rights are insufficient — additional measures, which protect rights, and lawful interests of Company shareholders, are provided for. Whereas, the Company is guided not only by observance of formal requirements of the Law, but as well by principles of corporate governance as set out in the Code.	1. The Company Charter, subject to peculiarities of its operation, establishes lower (than those provided by the Law) minimal criteria for relating Company transactions to substantial corporate actions. 2. During the reporting period, all the substantial corporate actions underwent the procedure of approval prior to their performance.	Partly observed
7.2	The Company provides for such procedure for performance of substantial corporate actions, which allows to shareholders to timely receive complete information about such actions, it provides for an opportunity to affect performance of such actions and guarantees observance and adequate protection level of their rights when performing such actions.
7.2.1	Information about performance of substantial corporate actions is disclosed with explanation of reasons, conditions and consequences of performance of such actions.	1. During the reporting period the Company timely and in detail disclosed information about substantial corporate actions of the Company, including grounds for and terms for performance of such actions	Partly observed
7.2.2	Rules and procedures relating to performance of substantial corporate actions by the Company are formalised in Company’s corporate documents.	1. Company’s corporate documents provide the procedure for engaging an independent appraiser to establish the price of the property to be alienated or purchased under a major transaction or under an interested party transaction. 2. Company’s corporate documents provide the procedure for engaging an independent appraiser to establish the price of purchase and repurchase of Company stock. 3. Company’s corporate documents provide an extended list of grounds under which members of the Board of Directors and other individuals as provided by the Law, are recognised as interested in Company transactions.	Not observed

Information About Major Transactions Carried out by OR PJSC in the Reporting Year

Information About Interested Party Transactions as Concluded by the Company in the Reporting Year