REPORT ON MOSCOW EXCHANGE COMPLIANCE WITH THE PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE

1.1.1

The company should create most favourable conditions for its shareholders enabling them to participate in the general meeting and develop informed positions on issues on its agenda, as well as provide them with the opportunity to coordinate their actions and express their opinions on issues being discussed.

1. The Company provides an easy-to-access way to communicate with the community, such as the “hotline”, email or Internet forum that enables shareholders to express their opinion and to put forward issues to the agenda pending preparation for the General Meeting. These actions were taken by the Company the day before each general meeting held in the reporting period.

 complied with

partially complied with

not complied with

1.1.2

Procedures for notification of the general meeting and provision of materials for it should enable the shareholders to get properly prepared for participation therein.

1. The notice of the General Meeting of Shareholders was posted (published) on the website at least 30 days prior to the General Meeting date.

2. The notice of the meeting specifies the venue of the meeting and the documents required to get access to the premise.

3. Access to the information on the person who proposed the agenda items and the one who nominated candidates to the Board of Directors and the Internal Audit Commission of the Company was provided to shareholders.

 complied with

partially complied with

not complied with

1.1.3

During the preparation for and holding of the general meeting, the shareholders should be able to freely and timely receive information about the meeting and its materials, to pose questions to members of the company’s executive bodies and board of directors, and to communicate with each other.

1. The shareholders were enabled to ask members of the executive bodies and members of the Company’s Board of Directors before and during the annual General Meeting in the reporting period.

2. The standpoint of the Board of Directors (including any special opinions included into the minutes) on each agenda item of the General Meetings conducted during the reporting period was included into the materials of the General Meeting of Shareholders.

3. The Company provided the shareholders with the appropriate entitlement with the access to the list of persons eligible to attend the General Meeting, starting from the date of its receipt by the Company, in all cases of holding the General Meetings in the reporting period.

 complied with

partially complied with

not complied with

This recommendation concerning shareholders’ posing questions to members of executive bodies and members of the board of directors of the company in the course of the general meeting is not applicable was not applicable, as no general meetings were held in the form of joint attendance of shareholders in the reporting period.

1.1.4

There should be no unjustified difficulties preventing shareholders from exercising their right to demand that a general meeting be convened, nominate candidates to the company’s governing bodies, and to place proposals on its agenda.

1. In the reporting period, shareholders were entitled, within 60 days from the end of the respective calendar year a minimum, put forward proposals to be included into the agenda of the annual General Meeting.

 complied with

partially complied with

not complied with

2. In the reporting period, the Company did not refuse to accept proposals to the agenda or candidates to the Company’s bodies due to misprints and other insignificant defects in the shareholder’s proposal.

1.1.5

Each shareholder should be able to freely exercise his right to vote in a straightforward and most convenient way.

1. The Charter of the company includes provisions for filling in the electronic form of the ballot on the website specified in the notice of the General Meeting of Shareholders.

 complied with

partially complied with

not complied with

1.1.6

Procedures for holding a general meeting set by the company should provide equal opportunity to all persons present at the general meeting to express their opinions and ask questions that might be of interest to them.

1. When General Meetings of Shareholders are held in the reporting period in the form of a meeting (joint presence of shareholders), sufficient time is envisaged for the reports on agenda items and the time to discuss these issues, shareholders were provided with opportunity to express their opinion and ask questions on agenda issues that might be of interest to them.

2. The company invited candidates to the management and control bodies and took all necessary actions to ensure their participation in the general meeting of shareholders, where their candidacies were put to a vote. The candidates to the management and control bodies of the Company attending the general meeting of shareholders were available to answer shareholders’ questions.

3. The sole executive body, the person responsible for accounting, the chairman or other members of the audit committee of the board of directors were available to answer shareholders’ questions at the general meeting of shareholders held the reporting period..

4. In the reporting period the Company either used telecommunications tools to provide shareholders with remote access to participate in the General Meetings, or made decisions that it was not necessary (not possible) to use such tool in the reporting period. .

 complied with

partially complied with

not complied with

In the reporting period the Company did not hold general meetings of shareholders in the form of joint attendance of shareholders.

1.2.1

The company should develop and put in place a transparent and clear mechanism for determining the amount of dividends and their payment

1. The dividend policy provisions of the Company were developed, approved by the Board of Directors, and disclosed at the Company’s website.

2. If the Company produces consolidated financial statements and its dividend policy uses these financial statements to determine the amount of dividends, the relevant dividend policy provisions incorporate the consolidated measures of financial statements.

3, Rationale for the proposed net profit distribution, including for dividend payments and for the company’s own needs, along with compliance assessment in respect of the company’s dividend policy and explanations and economic substantiation of the need to allocate a certain portion of net profit for the company’s own needs in the reporting period were included in the materials for the general meeting of shareholders, where the agenda of the meeting included an item on profit distribution (including the payment (announcement) of dividends)

 complied with

partially complied with

not complied with

1.2.2

The company should not make a decision on the payment of dividends, if such decision, without formally violating limits set by law, is unjustified from the economic point of view and might lead to the formation of false assumptions about the company’s activity

1. In addition to statutory restrictions, the Company’s dividend policy clearly indicates financial/ economic circumstances when the Company should not pay dividends

 complied with

partially complied with

not complied with

1.2.3

The company should not allow deterioration of dividend rights of its existing shareholders

1. In the reporting period, the Company did not take steps that impaired the existing shareholders’ dividend rights

 complied with

partially complied with

not complied with

1.2.4

The company should strive to rule out any ways through which its shareholders can obtain any profit or gain at the company’s expense other than dividends and distributions of its liquidation value

1. During the reporting period, other ways of obtaining profit or gaining at the expense of the Company by persons controlling the company other than dividends (for example, through transfer pricing, unreasonable provision of services to the Company by the controlling person at higher prices, through internal loans substituted for dividends to the controlling persons and (or) controlled persons) were not used

 complied with

partially complied with

not complied with

1.3.1

The company should create conditions which would enable its governing bodies and controlling persons to treat each shareholder fairly, in particular, which would rule out the possibility of any abuse of minority shareholders by major shareholders

1. During the reporting period the persons, controlling the Company, did not abuse their authorities towards shareholder, no conflicts between controlling persons and shareholders existed, and, if such conflicts existed the Board of Directors paid enough attention to address them

 complied with

partially complied with

not complied with

1.3.2

The company should not perform any acts which will or might result in artificial reallocation of corporate control therein

1. Quasi-treasury shares are not available or were not used in the voting during the reporting period

 complied with

partially complied with

not complied with

1.4

The shareholders should be provided with reliable and efficient means of recording their rights in shares as well as with the opportunity to freely dispose of such shares in a non-onerous manner.

1. Quality and reliability of the business pursued by the Company’s registrar to keep the register of the securities’ holders meet the Company’s and its shareholders’ needs and ensure that shareholder rights are accounted for and exercised in the most efficient way

 complied with

partially complied with

not complied with

2.1.1

The board of directors should be responsible for decisions to appoint and remove [members] of executive bodies, including in connection with their failure to properly perform their duties. The board of directors should also procure that the company’s executive bodies act in accordance with an approved development strategy and main business goals of the company

1. The Board of Directors has the powers stipulated in the Charter to appoint, dismiss, and determine conditions of the contracts, with respect to members of executive bodies.

2. In the reporting period, the Nominations CommitteeHereinafter, the Nominations Committee considered how the professional qualifications, skills and experience of the members of the executive bodies meet the current and expected needs of the company, prompted 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 members of the collegial executive body on fulfilment of the Company’s strategy

 complied with

partially complied with

not complied with

2.1.2

The board of directors should establish basic long-term targets of the company’s activity, evaluate and approve its key performance indicators and principal business goals, as well as evaluate and approve its strategy and business plans in respect of its principal areas of operations

1. During the reporting period, meetings of the Board of Directors reviewed the progress of execution and updating the strategy, approval of the Company’s financial and business plan (budget), and the review of the criteria and measures (including intermediate) to implement the Company’s strategy and business plans

 complied with

partially complied with

not complied with

2.1.3

The board of directors should determine principles of and approaches to creation of the risk management and internal control system in the company

1 The principles of and approaches to the risk management and internal control system in the Company are set forth by the Board of Directors and documented in the Company’s internal regulations defining the risk management and internal control policy.

2. In the reporting period, the Board of Directors approved (revised) the acceptable level of risk (risk appetite) of the Company, or the Audit Committee and (or) Risk Committee (if any) considered the expediency of bringing the issue of risk appetite revision to the attention of the Board of Directors

 complied with

partially complied with

not complied with

2.1.4

The board of directors should determine the company’s policy on remuneration due to and/or reimbursement of costs incurred by its board members, members of its executive bodies and other key managers

1. The Company has developed and implemented the policy(-ies) approved by the Board of Directors on remuneration and reimbursement of costs incurred by the members of the Board of Directors, the Company’s executive bodies and other key managers of the Company.

2. The meetings of the Board of Directors reviewed issues related to the above policy (-ies) during the reporting period

 complied with

partially complied with

not complied with

2.1.5

The board of directors should play a key role in prevention, detection and resolution of internal conflicts between the company’s bodies, shareholders and employees

1. The Board of Directors plays a key part in prevention, detection, and settlement of internal conflicts.

2. The Company has established the system to identify transactions related to the conflict of interest and the system of efforts designed to settle such conflicts

 complied with

partially complied with

not complied with

2.1.6

The board of directors should play a key role in procuring that the company is transparent, discloses information in full and in due time, and provides its shareholders with unhindered access to its documents

1. Company’s internal documents list the persons responsible for information policy implementation

 complied with

partially complied with

not complied with

2.1.7

The board of directors should monitor the company’s corporate governance practices and play a key role in its material corporate events

1. During the reporting period, the Board of Directors reviewed self-assessment results and (or) external assessment in relation to the corporate governance practice in the Company

 complied with

partially complied with

not complied with

2.2.1

Information about the board of directors’ work should be disclosed and provided to the shareholders

1. The Company’s annual report for the reporting period includes information on the Board of Directors and committee meeting attendance by individual directors.

2. The annual report contains information on the principal findings of the Board of Directors’ performance self-assessment (assessment) in the reporting period

 complied with

partially complied with

not complied with

2.2.2

The chairman of the board of directors must be available to communicate with the company’s shareholders

1. The Company has a transparent procedure that enables shareholders to submit their questions and their standpoint thereon to the Chairman of the Board of Directors and, if applicable, to the senior independent director and get feedback from them

 complied with

partially complied with

not complied with

2.3.1

Only persons with impeccable business and personal reputation should be elected to the board of directors; such persons should also have knowledge, skills, and experience necessary to make decisions that fall within the jurisdiction of the board of directors and to perform its functions efficiently

1. In the reporting period, the Board of Directors (or its Nominations Committee) assessed the nominees to the Board of Directors in terms of the required experience, expertise goodwill, lack of the conflict of interests, etc.

 complied with

partially complied with

not complied with

2.3.2

Board members should be elected pursuant to a transparent procedure enabling the shareholders to obtain information about respective candidates sufficient for them to get an idea of the candidates’ personal and professional qualities

1. Where the agenda of the General Meeting of Shareholders held in the reporting period included election of the Board of Directors d, the Company provided shareholders with biographical data for all the nominees to the Board of Directors, results from assessment of whether the candidates’ professional qualifications, experience and skills meet the company’s current and expected needs performed by the Board of Directors or Nominations Committee, and information on conformity of the nominees to the independence criteria, according to the recommendations in paragraphs from 102 to 107 of the Code and the nominees’ written consent to be elected to the Board of Directors

 complied with

partially complied with

not complied with

2.3.3

The composition of board of directors should be balanced, in particular, in terms of qualifications, expertise, and business skills of its members. The board of directors should enjoy the confidence of the shareholders

1. As part of the assessment of the Board of Directors in the reporting period, the Board of Directors reviewed its own needs in professional qualifications, experience, and business skills, and identified competencies required for the Board of Directors in the short and long term

 complied with

partially complied with

not complied with

2.3.4

The membership of the board of directors of the company must enable the board to organize its activities in a most efficient way, in particular, to create committees of the board of directors, as well as to enable substantial minority shareholders of the company to elect a candidate to the board of directors for whom they would vote

1. In the reporting period, the Board of Directors reviewed whether the size of the Board of Directors met the company’s needs and the interests of the shareholders

 complied with

partially complied with

not complied with

2.4.1

An independent director should mean any person who has required professional skills and expertise and is sufficiently able to have his/her own position and make objective and bona fide judgments, free from the influence of the company’s executive bodies, any individual group of its shareholders or other stakeholders. It should be noted that, under normal circumstances, a candidate (or an elected director) may not be deemed to be independent, if he/she is associated with the company, any of its substantial shareholders, material trading partners or competitors, or the government.

1. During the reporting period, all independent members of the Board of Directors met the independence criteria specified in recommendations 102 to 107 of the Code or were recognized as such by resolution of the Board of Directors.

 complied with

partially complied with

not complied with

2.4.2

It is recommended to evaluate whether candidates nominated to the board of directors meet the independence criteria as well as to review, on a regular basis, whether or not independent board members meet the independence criteria. When carrying out such evaluation, substance should take precedence over form.

1. In the reporting period, the Board of Directors (or the Nominations Committee of the Board of Directors) formed the estimate of independence of each nominee to the Board of Directors and submitted the relevant opinion to shareholders.

2. In the reporting period, the Board of Directors (or the Nominations Committee of the Board of Directors) reviewed the independence of the existing members of the Board of Directors (after their election) at least once.

3. The Company has drafted the procedures that determine the necessary actions to be taken by a member of the Board of Directors, if he/she loses his/her independence, including the obligations to timely notify the Board of Directors accordingly.

 complied with

partially complied with

not complied with

2.4.3

Independent directors should account for at least one-third of all directors elected to the board of directors.

1. Independent directors account for at least one third of the Board of Directors.

 complied with

partially complied with

not complied with

2.4.4

Independent directors should play a key role in prevention of internal conflicts in the company and performance by the latter of material corporate actions.

1. Independent directors (who do not have any conflicts of interest) preliminarily estimate the substantial corporate actions related to a potential conflict of interests, and the findings of such assessment are submitted to the Board of Directors.

 complied with

partially complied with

not complied with

In the reporting year 2021, the Company did not record any material corporate actions related to a potential conflict of interest.

2.5.1

It is recommended to either elect an independent director to the position of the chairman of the board of directors or identify the senior independent director among the company’s independent directors who would coordinate work of the independent directors and liaise with the chairman of the board of directors.

1. The Chairman of the Board of Director is an independent director, or a senior independent director is identified among independent directorsPlease specify, which of the two alternative approaches admitted by the principle is implemented in the Company and explain the reasons for the selection made

2. The role, rights and duties of the Chairman of the Board of Directors (and, if applicable, the senior independent director) are duly determined in the Company’s internal documents.

 complied with

partially complied with

not complied with

2.5.2

The board chairman should ensure that board meetings are held in a constructive atmosphere and that any items on the meeting agenda are discussed freely. The chairman should also monitor fulfilment of decisions made by the board of directors.

1. Performance of the Chairman of the Board of Directors was estimated as part of the BoD efficiency assessment procedure in the reporting period.

 complied with

partially complied with

not complied with

2.5.3

The chairman of the board of directors should take any and all measures as may be required to provide the board members in a timely fashion with information required to make decisions on issues on the agenda.

1. The duty of the Chairman of the Board of Directors to take efforts to ensure timely filing of documents to members of the Board of Directors on agenda items of the meeting of the Board of Directors is legitimized in the Company’s internal documents.

 complied with

partially complied with

not complied with

2.6.1

Acting reasonably and in good faith means that board members should make decisions considering all available information, in the absence of a conflict of interest, treating shareholders of the company equally, and assuming normal business risks

1. The Company’s internal documents require that a member of the Board of Directors should notify the Board of Directors if he/she has a conflict of interests with respect to any agenda item of the 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 Company’s internal documents envisage that a member of the Board of Directors should refrain from voting on any item where he/she has a conflict of interests.

3. The Company has establishes the procedure that enables the Board of Directors to obtain professional advice on issues falling within its competence, at the Company’s expense.

 complied with

partially complied with

not complied with

2.6.2

Rights and duties of board members should be clearly stated and documented in the company’s internal documents

1. The Company adopted and published the internal document that clearly determines rights and duties of members of the Board of Directors

 complied with

partially complied with

not complied with

2.6.3

Board members should have sufficient time to perform their duties

1. Individual attendance of meetings of the Board and committees as well as the time spent on preparation for participation in the meetings was taken into account as part of the assessment (self-assessment) procedure of the Board of Directors in the reporting period

2. According to the Company’s internal documents, members of the Board of Directors are obliged to notify the Board of Directors of their intention to join management bodies of other companies (except for the Company’s affiliates and dependent companies) and about such actual appointment

 complied with

partially complied with

not complied with

2.6.4

All board members should have equal opportunity to access the company’s documents and information. Newly elected board members should be provided with sufficient information about the company and work of its board of directors as soon as practicable

1. According to the Company’s internal documents, members of the Board of Directors are free to gain access to information and documents necessary for them to perform their duties, pertaining to the Company and its affiliates, and the Company’s executive bodies are obliged to provide the relevant information and documents

2. The Company implements a formalized onboarding program for newly elected members of the Board of Directors

 complied with

partially complied with

not complied with

2.7.1

It is recommended to hold meetings of the board of directors as needed, with due account of the company’s scope of activities and its then current goals

1. The Board of Directors held at least six meetings in the reporting year

 complied with

partially complied with

not complied with

2.7.2

It is recommended to develop a procedure for preparing for and holding meetings of the board of directors and set it out in the company’s internal documents. The above procedure should enable the shareholders to get prepared properly for such meetings

1. The Company approved the internal document that governs the procedure for preparation for and holding of meetings of the Board of Directors, which, in particular, stipulates that the notice of the meeting should be normally made at least five (5) days prior to the meeting

2. In the reporting period, members of the Board of Directors who were not in attendance at the meeting were given the opportunity to participate in the discussion of the agenda items and voting remotely via conference and videoconference calls

 complied with

partially complied with

not complied with

2.7.3

The form of a meeting of the board of directors should be determined with due account of importance of issues on the agenda of the meeting. Most important issues should be decided at the meetings held in person

1. The Charter or the internal document of the Company envisage that the most significant issues (according to the list in Recommendation 168 of the Code) should be considered at the personal meetings of the Board

 complied with

partially complied with

not complied with

According to the Charter, the issues listed in Recommendation 168 of the Code (except for material related party transactions and placing the issue of delegating the CEO’s powers to the asset management company for the AGM for consideration) are decided at the meetings held in person.

Issues of material related party transactions are not included on the said list since the Company’s Code of Corporate Governance does not classify related party transactions as a specific material transaction criterion.

The Company has set materiality thresholds in terms of amount and subject of a transaction, regardless of parties to the transaction.

Therefore, interested-party transactions shall be considered at in-person meetings of the Supervisory Board if the amount and/or subject matter of such transactions meet the established materiality criteria.

However, the Company is considering whether to determine the materiality criteria for interested-party transactions in its internal documents and add the approval of such transactions to the scope of issues to review at in-person meetings of the Supervisory Board.Placing the issue of delegating the sole executive body’s powers to the asset management company before the AGM does not fall within the Supervisory Board competence, since, in pursuance with the Federal Law on Organised Trading, (1) the Company’s sole executive body is elected by the Supervisory Board, and (2) the Organiser of Trading is no authorised to delegate the powers of the sole executive body to other entity (asset manager, asset management company).

However, the Company is considering whether to determine the materiality criteria for interested-party transactions in its internal documents and add the approval of such transactions to the scope of issues to review at in-person meetings of the Supervisory Board.

Placing the issue of delegating the sole executive body’s powers to the asset management company before the AGM is not within the Supervisory Board competence, since, in pursuance with the Federal Law on Organised Trading, (1) the Company’s sole executive body is elected by the Supervisory Board, and (2) the Organiser of Trading is no authorised to delegate the powers of the sole executive body to other entity (asset manager, asset management company)

2.7.4

Decisions on most important issues relating to the company’s business should be made at a meeting of the board of directors by a qualified majority vote or by a majority vote of all elected board members

1. The Charter of the Company envisages that resolutions on the most critical issues set forth in Recommendation 170 of the Code, shall be adopted at the meeting of the Board of Directors, by a qualified, at least three fourths majority of votes, or by a majority of votes of all elected members of the Board of Directors

 complied with

partially complied with

not complied with

Partly compiled with.

Most issues listed in Recommendation 170 of the Code, are included on the list of issues that should be decided by a three fourths majority vote of directors participating in the meeting, or by a majority of all votes

The list did not include the matters regarding (1) approval of priority activities, 2) placing listing issues before the AGM.

The Company has no plans to include approval of priorities to such issues, since priorities are normally described in the strategy approved by a three fourths majority vote of all Supervisory Board members attending the meeting.

According to the Company, a preliminary and thorough discussion of most issues including those specified above, by the relevant ad-hoc committees, as a rule, allows the Supervisory Board to make decisions unanimously and helps reduce risks related to non-compliance with the principle specified above.

Submitting issues on listing to the consideration by the AGM is not on the list as these listing issues are referred to the Supervisory Board competency (3/4 majority vote), but not to the AGM

2.8.1

For the purpose of preliminary consideration of any matters of control over the company’s financial and business activities, it is recommended to form an audit committee comprised of independent directors

1. The Board of Directors established the Audit Committee comprising independent directors only

2. The Company’s internal documents determine the objectives for the Audit Committee, including, in particular, the objectives contained in Recommendation 172 of the Code

3. At least one member of the Audit Committee, which is an independent director, has experience and expertise in drafting, reviewing, assessment and audit of financial statements (accounts)

4. Meetings of the Audit Committee were held at least quarterly during the reporting period

 complied with

partially complied with

not complied with

2.8.2

For the purpose of preliminary consideration of any matters of development of efficient and transparent remuneration practices, it is recommended to form a remuneration committee comprised of independent directors and chaired by an independent director who should not concurrently be the board chairman

1. The Board of Directors set up the Remuneration Committee consisting of independent directors only.

2. Chairman of the Remunerations Committee is an independent director, who is not concurrently the Chairman of the Board of Directors.

3. The Company’s internal documents determine the objectives of the Remunerations Committee, including those contained in Recommendation 180 of the Code and the circumstances (events), upon the occurrence of which the Remuneration Committee shall consider revising the Company’s remuneration policy with respect to members of the Board of Directors, executive bodies, and other key executives

complied with

 partially complied with

not complied with

1. Complied with

2. Complied with

3. Partly complied with

At present, the Company’s internal documents do not set forth the circumstances (events), upon the occurrence of which the Remuneration Committee shall consider revising the Company’s remuneration policy with respect to members of the Board of Directors, executive bodies, and other key executives.

The company will shortly determine in the internal documents of the Exchange the circumstances (events) which, when they occur, will require the Remuneration Committee to consider reviewing the company’s policy on remuneration for members of the Board of Directors, executive bodies and other key executives.

At the same time, the Company implements this principle on a regular basis. Thus, every three years, with the assistance of an independent consultant engaged for this purpose, the Company revises the remuneration system for members of the Supervisory Board.

Between these cycles, remuneration due to members of the Supervisory will be adjusted for inflation in accordance with the Regulations on Remuneration and Compensation due to Members of the Supervisory Board of the Moscow Exchange. Once a year, and where appropriate, more frequently, while formulating the Key Performance Indicators for the executive bodies and other key executives of the Company for the following year, the Nominations and Remuneration Committee reviews the executive remuneration policy principles and rules for the executive bodies and other key executives of the Company

2.8.3

For the purpose of preliminary consideration of any matters relating to human resources planning (making plans regarding successor directors), professional composition and efficiency of the board of directors, it is recommended to form a nominating committee (a committee on nominations, appointments and human resources) with a majority of its members being independent directors

1. The Board of Directors established the Nominations Committee (or its objectives specified in Recommendation 186 of the Code are implemented as part of another committeeIf the objectives of the Nominations Committee are only implemented as part of another committee, indicate its name.), a majority of which are independent directors.

2. The Company’s internal documents determine the objectives of the Nominations Committee (or the relevant committee with a combined functionality), including those contained in Recommendation 186 of the Code

3. For the purposes of forming the board of directors that best meets the Company’s goals and objectives, during the reporting period the Nominations Committee independently or jointly with other committees of the board of directors or the authorised division of the Company for shareholder relations arranged for interactions with shareholders, including but not limited to the major shareholders, in the context of selecting candidates for the Company’s Board of Directors

 complied with

partially complied with

not complied with

2.8.4

Taking account of its scope of activities and levels of related risks, the company should form other committees of its board of directors, in particular, a strategy committee, a corporate governance committee, an ethics committee, a risk management committee, a budget committee or a committee on health, security and environment, etc.

1. In the reporting period, the Company’s Board of Directors reviewed the conformity of membership in its committees to the objectives assigned to the Board of Directors and to the Company’s operating goals. Additional committees were either established or were not recognized as necessary

 complied with

partially complied with

not complied with

2.8.5

The composition of the committees should be determined in such a way that it would allow a comprehensive discussion of issues being considered on a preliminary basis with due account of differing opinions

1. In the reporting period the Committees of the Board of Directors (Audit Committee, Nominations Committee, or a committee which combines the functions) were headed by independent directors

2. The Company’s internal documents (policies) contain the provisions, whereby persons not included into the Audit Committee, the Nominations Committee (or a committee which combines the functions), may attend meetings of the committees upon invitation of the Chairman of the respective committee only

 complied with

partially complied with

not complied with

2.8.6

The chairmen of the committees should inform the board of directors and its chairman of the work of their committees on a regular basis

1. During the reporting period, the chairmen of the committees reported on the committees’ operations to the Board of Directors on a regular basis

 complied with

partially complied with

not complied with

2.9.1

Evaluation of quality of the board of directors’ work should be aimed at determining how efficiently the board of directors, its committees and board members work and whether their work meets the company’s needs, as well as at making their work more intensive and identifying areas of improvement

1. The internal documents of the Company set out procedures for assessment (self-assessment) of quality of the Board of Director’s work

2. Self-assessment or external assessment of the Board of Directors’ performance conducted in the reporting period included the assessment of operations of the committees, individual members of the Board of Directors and the entire Board of Directors

3. The findings of assessment (self-assessment) of the Board of Directors in the reporting period were reviewed at the personal meeting of the Board of Directors

 complied with

partially complied with

not complied with

2.9.2

Quality of work of the board of directors, its committees and board members should be evaluated on a regular basis, at least once a year. To carry out an independent evaluation of the quality of the board of directors’ work, it is recommended to retain a third-party entity (consultant) on a regular basis, at least once every three years

1. For independent quality assessment of the Board of Directors’ performance, an external company (advisor) was engaged by the Company at least once in three recent reporting periods

 complied with

partially complied with

not complied with

3.1.1

The corporate secretary should have knowledge, experience, and qualifications sufficient for performance of his/her duties, as well as an impeccable reputation and should enjoy the trust of the shareholders

1. The Company’s website and the annual report include biographical information about the corporate secretary (including age, education, qualifications, experience), as well as information about the positions in the management bodies of other legal entities held by the corporate secretary during at least the last five years

 complied with

partially complied with

not complied with

3.1.2

The corporate secretary should be sufficiently independent of the company’s executive bodies and be vested with powers and resources required to perform his/her tasks

1. The Company adopted and disclosed an internal document, the Regulation on the Corporate Secretary

2, The Board of Directors approves a candidate for the role of Corporate and terminates Corporate Secretary’s powers, considers the matter of extra remuneration due to the Corporate Secretary

3. Company’s internal documents secure the Corporate Secretary’s right to request and obtain documents and information from the Company’s management bodies, divisions and officials

 complied with

partially complied with

not complied with

4.1.1

It is recommended that the level of remuneration paid by the company to its board members, executive bodies, and other key managers should be sufficient to motivate them to work efficiently and enable the company to attract and retain knowledgeable, skilled, and duly qualified persons. The company should avoid setting the level of remuneration any higher than necessary, as well as an excessively large gap between the level of remuneration of any of the above persons and that of the company’s employees

1. The level of remuneration due to members of the Board of Directors, executive bodies and to other key managers is set based on remuneration level benchmarking among peer companies

 complied with

partially complied with

not complied with

4.1.2

The company’s remuneration policy should be developed by its remuneration committee and approved by the board of directors. With the help of its remuneration committee, the board of directors should monitor implementation of and compliance with the remuneration policy by the company and, should this be necessary, review and amend the same

1. In the reporting period, the Remunerations Committee reviewed the remuneration policy(-ies) and the practice of its/their implementation, assessed whether they were efficient and transparent, and, where it was necessary, submitted the relevant recommendations to the Board of Directors

 complied with

partially complied with

not complied with

4.1.3

The company’s remuneration policy should provide for transparent mechanisms to be used to determine the amount of remuneration due to members of the board of directors, the executive bodies, and other key managers of the company, as well as to regulate any and all types of payments, benefits, and privileges provided to any of the above persons

1. The Company’s remuneration policy(-ies) contain(s) transparent arrangements on determining the amount of the remuneration of members of the Board of Directors, executive bodies and other key managers of the Company and govern(s) all types of fees, benefits and advantages provided to these persons

 complied with

partially complied with

not complied with

4.1.4

The company is recommended to develop a policy on reimbursement of expenses which would contain a list of reimbursable expenses and specify service levels provided to members of the board of directors, the executive bodies, and other key managers of the company. Such policy can form part of the company’s policy on compensations

1. The remuneration policy(-ies) or other internal documents of the Company establish(-es) the rules on reimbursement of expenses to the members of the Board of Directors, executive bodies and other key employees of the Company

 complied with

partially complied with

not complied with

4.2.1

A fixed annual fee shall be a preferred form of monetary remuneration of the board members. It is not advisable to pay a fee for participation in individual meetings of the board of directors or its committees. It is not advisable to use any form of short-term incentives or additional financial incentives in respect of board members

1. In the reporting period the Company paid remuneration due to members of the Board of Directors pursuant to the Company’s remuneration policy

2. In the reporting period the Company did no use short-term incentives based on the company’s performance indicators, neither the Company paid a fee for participation in individual meetings of the Board of Directors or its committees

 complied with

partially complied with

not complied with

4.2.2

Long-term ownership of shares in the company contributes most to aligning financial interests of board members with long-term interests of the company’s shareholders. However, it is not recommended to make the right to dispose of shares dependent on the achievement by the company of certain performance results; nor should board members take part in the company’s option plans

1. If the Company’s internal document(s), such as the remuneration policy(-ies), envisage(s) granting of shares to members of the Board of Directors, clear rules for holding shares by members of the Board of Directors, intended to encourage long-term ownership of such shares, should be available and disclosed

 complied with

partially complied with

not complied with

Company’s internal documents do not provide for the provision of shares to the Supervisory Board members

4.2.3

It is not recommended to provide for any additional allowance or compensation in the event of early dismissal of board members in connection with a change of control over the company or other circumstances

1. The Company does not envisage any additional benefits or compensations in case of early termination of powers of the members of the Board of Directors in connection with change of control over the Company or any other circumstances

 complied with

partially complied with

not complied with

4.3.1

Remuneration due to the executive bodies and other key managers of the company should be set in such a way as to procure a reasonable and justified ratio between its fixed portion and its variable portion that is dependent on the company’s performance results and employees’ personal (individual) contributions to the achievement thereof

1. During the reporting period, the annual performance indicators approved by the Board of Directors, were used to determine the amount of variable remuneration of members of executive bodies and other key managers of the Company

2. During the most recent assessment of the remuneration system for the members of executive bodies and other key managers of the Company, the Board of Directors (the Remunerations Committee) made sure the Company applied an efficient ratio of the fixed remuneration portion to the variable one

3. While setting the size of remuneration due to members of the executive bodies and other key managers, the Company proceeds from risk the Company bears, so to avoid creating incentives for highly risky management decisions

complied with

 partially complied with

not complied with

1. Complied with.

2. Partly complied with.

In the reporting year 2021, there was neither assessment of the remuneration payable to executive body members, no special discussion among members of the Nominations Committee of a ratio between fixed and variable portions of remuneration

In the reporting year 2021, the Nominations Committee reviewed the remuneration practices for members of the Executive Board and developed recommendations for changes in the remuneration of Executive Board members. The Supervisory Board considered that issue, including in terms of extending the powers of Executive Board members

3. Compiled with

4.3.2

Companies whose shares are admitted to trading at organised markets are recommended to put in place a long-term incentive programme for the company’s executive bodies and other key managers involving the company’s shares (or options or other derivative financial instruments the underlying assets for which are the company’s shares)

1. In case the Company has introduced a long-term incentive program for members of executive bodies and other key managers of the Company using shares in the Company (financial instruments based on the shares in the Company), the program implies that the right to sell the shares and other financial instruments used in such program will not arise until three years from their provision; provided that the right to sell the same is conditional upon achievement of certain performance indicators of the Company

 complied with

partially complied with

not complied with

4.3.3

The amount of severance pay (so-called “golden parachute”) payable by the company in the event of early dismissal of an executive body or other key manager at the initiative of the company, provided that there have been no bad faith actions on the part of such person, should not exceed two times the fixed portion of his/her annual remuneration

1. The amount of compensation (“golden parachute”) paid by the Company in case of early termination of powers to the members of executive bodies or key managers at the Company’s initiative and in the absence of unfair actions on their part, did not exceed the double fixed portion of the annual remuneration in the reporting period

 complied with

partially complied with

not complied with

5.1.1

The board of directors should determine the principles of and approaches to creation of the risk management and internal control system in the company

1. Functions of various management bodies and business units of the Company in the risk management and internal control system are clearly determined in internal documents/ the Company’s relevant policy approved by the Board of Directors

 complied with

partially complied with

not complied with

5.1.2

The company’s executive bodies should ensure the establishment and continuing operation of the efficient risk management and internal control system in the company

1. The Company’s executive bodies ensured allocation of the functions and powers as concerns risk management and internal control among their subordinate managers (heads) of business units and divisions

 complied with

partially complied with

not complied with

5.1.3

The company’s risk management and internal control system should enable one to obtain an objective, fair and clear view of the current condition and prospects of the company, integrity and transparency of its accounts and reports, and reasonableness and acceptability of risks being assumed by the company

1. The Company approved the anti-corruption policy.

2. The Company established a secure, confidential and affordable method to notify the Board of Directors or the Board of Directors Audit Committee on actual violations of the laws, internal procedures, and the Company’s ethics code

 complied with

partially complied with

not complied with

5.1.4

The board of directors is recommended to take required and sufficient measures to procure that the existing risk management and internal control system of the company is consistent with the principles of and approaches to its creation as set forth by the board of directors and that it operates efficiently

1. In the reporting year, the Board of Directors and the Board of Directors Audit Committee assessed efficiency of the risk management and internal control system of the Company. Information on the key findings of such assessment is included into the Company’s annual report.

1. In the reporting period, the Board of Directors (the Audit Committee and (or) Risk Committee (if applicable), arranged for assessing the reliability and effectiveness of the risk management and internal control system.

2. In the reporting period, the Board of Directors reviewed findings of assessment of Company’s risk management and internal control system efficiency. Information about the results of the review is presented in the Company’s annual report

 complied with

partially complied with

not complied with

5.2.1

It is recommended that internal audits be carried out by a separate structural division (internal audit department) to be created by the company or through retaining an independent third-party entity. To ensure the independence of the internal audit department, it should have separate lines of functional and administrative reporting. Functionally, the internal audit department should report to the board of directors, while from the administrative standpoint, it should report directly to the company’s one-person executive body

1. For the purposes of internal audit, the Company established a separate business unit for internal audit, which functionally reports to the Board of Directors or the Audit Committee, or engaged an independent external company with the same principle of reporting

 complied with

partially complied with

not complied with

5.2.2

When carrying out an internal audit, it is recommended to evaluate efficiency of the internal control system and the risk management system, as well as to evaluate corporate governance and apply generally accepted standards of internal auditing

1. In the reporting period, as part of internal audit, the internal control and risk management system efficiency was assessed.

2. In the reporting period, the internal audit assessed corporate governance practices (individual practices), including those relating to internal control and risk management) across all company’s management levels, and stakeholder relationship procedures were assessed either

 complied with

partially complied with

not complied with

6.1.1

The company should develop and implement an information policy enabling the company to efficiently exchange information with its shareholders, investors, and other stakeholders

1. The Company’s Board of Directors approved the Company’s information policy developed with the view to the Code’s recommendations.

2. During the reporting period, the Board of Directors (or one of its committees) reviewed whether the Company exchanged information with its shareholders, investors and other stakeholders efficiently and whether it was expedient (necessary) to revise the Company’s information policy

 complied with

partially complied with

not complied with

6.1.2

The company should disclose information on its corporate governance system and practices, including detailed information on compliance with the principles and recommendations of this Code

1. The Company discloses its corporate governance system and the general corporate governance principles applied, in particular,on the Company’s website.

2. The Company discloses the composition of executive bodies and the Board of Directors, independence of members of the Board and their membership in committees of the Board of Directors (as defined in the Code).

3. If the Company has a controlling person, the Company publishes the memorandum of the controlling person concerning such person’s plans for corporate governance in the Company

 complied with

partially complied with

not complied with

1. Compiled with

2. Compiled with

3. The Company has no controlling persons

6.2.1

The company should disclose information in accordance with the principles of regularity, consistency and timeliness, as well as accessibility, reliability, completeness and comparability of disclosed data

1. The company has a procedure for coordinating the work of all company divisions and employees associated with the disclosure of information or whose activities may require the disclosure of information.

2. If the Company’s securities are traded in foreign organized markets, materials information is disclosed in the Russian Federation and on such markets simultaneously and equivalently in the reporting year.

3. If foreign shareholders hold a significant number of shares in the Company, then, in the reporting period, disclosures were carried out not only in Russian but also in one of the most common foreign languages

 complied with

partially complied with

not complied with

1. Complied with

2. Not applicable, as the Company securities do not trade on foreign regulated markets

3. Complied with

6.2.2

The company is advised against using a formalistic approach to information disclosure; it should disclose material information on its activities, even if disclosure of such information is not required by law

1. The Company’s information policy sets out the approaches to and criteria for determining the information that may materially influence the value or prices of its securities and disclosure of information not required by law.

2. The Company discloses comprehensive information on the Company’s capital structure, according to Recommendation 290 of the Code in the annual report and on the Company’s website.

3. The Company discloses information on the controlled entities that are material to it, including their key activities, methods for ensuring accountability of controlled entities, the powers of the Company’s Board of Directors regarding strategy definition and evaluation of the controlled entities’ performance

4. The Company discloses a non-financial report, the ESG or any other report containing non-financial information, including factors related to the environment (inclusive of environmental factors and factors related to climate change), society (social factors) and corporate governance, except for the report of the issuer of issue-grade securities and the annual report of a joint stock company

 complied with

partially complied with

not complied with

6.2.3

The company’s annual report, as one of the most important tools of its information exchange with its shareholders and other stakeholders, should contain information enabling one to evaluate the company’s performance results for the year.

1.The Company’s annual report contains information on findings of the audit committee’s review in respect of external and internal audit processes.

2. The Company’s annual report contains information on environmental and social dimensions of the Company’s business.

 complied with

partially complied with

not complied with

1. Complied with

2. Complied with

6.3.1

Exercise by the shareholders of their right to access the company’s documents and information should not be unreasonably burdensome.

1. The Company’s information policy (internal documents setting the information policy) defines an easy procedure for providing access for shareholders to Company’s information and documents upon their request.

2. The Company’s information policy (internal documents setting the information policy) include provisions requiring that if a shareholder requests information on entities under the company’s control, the company shall make the necessary efforts to obtain such information from the relevant entities under the company’s control

complied with

 partially complied with

not complied with

1. Complied with.

2. Partly complied with.

The current laws do not require joint-stock companies provide information on the controlled entities upon shareholder’s requests, therefore the Company’s data policy does not include such provisions.

In referring to the above, the Company does not plan to achieve full compliance with this recommendation of the Code in this respect but will strive to provide the shareholder with the requested information guided by the principle of reasonableness.

6.3.2

When providing information to its shareholders, the company should maintain a reasonable balance between the interests of individual shareholders and its own interests related to the fact that the company is interested in keeping confidential sensitive business information that might have a material impact on its competitiveness.

1. In the reporting period, the Company did not deny any shareholders’ requests for information or such denials were reasonable.

2. In cases determined in the Company’s information policy, shareholders are warned of the confidential nature of the information and undertake to keep it confidential.

 complied with

partially complied with

not complied with

7.1.1

Material corporate actions shall be deemed to include reorganisation of the company, acquisition of 30 or more percent of its voting shares (takeover), entering by the company into any material transactions, increasing or decreasing its share capital, listing and delisting of its shares, as well as other actions which might result in material changes in rights of its shareholders or violation of their interests. It is recommended to include in the company’s articles of association a list of (criteria for identifying) transactions or other actions falling within the category of material corporate actions and provide therein that decisions on any such actions should fall within the jurisdiction of the company’s board of directors.

1. The Company’s Charter determines a list of transactions and other efforts that constitute material corporate actions. According to the Company’s Charter, decision-making on material corporate actions falls within the competence of the Board of Directors. Where taking of these corporate actions is directly referred by law to the competence of GSM, the Board of Directors makes the relevant recommendations to the shareholders.

complied with

 partially complied with

not complied with

1. Partly complied with.

The list of material corporate actions is not defined in the Charter, but in the Company Corporate Governance Code. As part of its review of the issue of the Bank of Russia CGC implementation, the Audit Committee found it appropriate to provide, in the Company’s Charter, a reference to the Corporate Governance Code that contains the List of Material Corporate Actions.

At present, the Company has no intention to include the list of transactions and actions that constitute material corporate actions for the Company.

The applicable law and the Company Charter reserve decisions on material actions for the Supervisory Board or the shareholders meeting. In connection with any matters brought before the shareholders meeting, including those related to material corporate actions, the Supervisory Board provides relevant recommendations to shareholders.

7.1.2

The board of directors should play a key role in passing resolutions or making recommendations relating to material corporate actions; for that purpose, it should rely on opinions of the company’s independent directors.

1. The Company envisages the procedure; whereby independent directors announce their standpoint on material corporate actions before their approval.

 complied with

partially complied with

not complied with

7.1.3

When taking any material corporate actions which would affect rights or legitimate interests of the company’s shareholders, equal terms and conditions should be ensured for all of the shareholders; if statutory mechanisms designed to protect the shareholder rights prove to be insufficient for that purpose, additional measures should be taken with a view to protecting the rights and legitimate interests of the company’s shareholders. In such instances, the company should not only seek to comply with the formal requirements of law but should also be guided by the principles of corporate governance set out in this Code.

1. The Company’s Charter, established lower minimum criteria for classifying the Company’s transactions as major corporate actions than envisaged in law, taking account of specifics of Company’s operatiolns.

2. During the reporting period, all material corporate actions were approved prior to their implementation.

 complied with

partially complied with

not complied with

7.2.1

When disclosing information about material corporate actions, it is recommended to give explanations concerning reasons for, conditions and consequences of such actions.

1. If the Company implemented any material corporate actions during the reporting period, such actions were disclosed by the Company in a timely and detailed manner, including the reasons, terms of such actions, and their consequences for shareholders

 complied with

partially complied with

not complied with

In 2021, the Company did not conduct material corporate actions.

7.2.2

Rules and procedures in relation to material corporate actions taken by the company should be set out in its internal documents.

1. The Company’s internal documents define when and how to engage an independent appraiser in evaluating the assets disposed of or purchased under a major transaction or a related party transaction.

2. The Company’s internal documents envisage the procedure for engaging an independent appraiser in evaluating the purchase and redemption price for the shares in the Company.

3. If a member of the board of directors, the sole executive body, a member of the collegial executive body of the company or a person who controls the company, or a person who has the right to give the company binding instructions, has no formal interest in transactions of the company, but has a conflict of interest or any other de facto interest, the internal documents of the company require that such persons shall not participate in voting on the approval of such transaction.

complied with

 partially complied with

not complied with

1.Partly complied with

In February 2019, the new Corporate Governance Code of the Company was adopted, allowing for the engagement of an appraiser when purchasing or selling assets under major transactions.

In February 2019, the new Corporate Governance Code of the Company was adopted, allowing for the engagement of an appraiser when purchasing or selling assets under major transactions.

Company’s internal documents do not provide for an independent appraiser to be engaged in assessing assets sold or purchased under related party transactions (as separate grounds).

However, the new Corporate Governance Code of the Company provides for the engagement of an appraiser for the real estate or non-core assets valuation when the value of such assets exceeds RUB 600 mln, whether there is an interested party in the transaction or not. The Company believes that this approach aims to reduce the risk of non-compliance with the Code’s principle described above.

2. Partly complied with.

In redemption requested by shareholders, an appraiser is engaged under the law. The Company’s by-laws do not envisage the obligation to engage an appraiser to evaluate the Company’s shares.

The reason for this non-compliance is that since Company’s shares are traded on the exchange, the share purchase price has been determined subject to share weighted average price according to trading results for six months. Hence, the Company does not plan to establish the obligation to involve an appraiser in purchasing its shares in the near future.

3. Compiled with