Prevention of the conflict of interests of members of the Board of Directors

Rational and conscientious behaviour by members of the Board of Directors requires that Board resolutions shall be based on exhaustive information in the absence of any conflict of interest, treating all shareholders of the company equally, within the limits of normal business risk.

The company has put an integrated procedure in place for managing conflicts of interest of members of the Board of Directors, achieving reasonable assurance that conflicts of interest are settled at early stages, and that the interests of the company and its shareholders are not harmed.

As they exercise their rights and perform their duties, the members of the Board of Directors shall be guided by the ethical standards used by the company, including the Code of Corporate Conduct, comply with the company’s by-laws concerning the insider information rules along with the restrictions imposed on the members of the Board of Directors in their capacity of company insiders by such by-laws.

According to the Regulation on the Board of Directors, members of the Board of Directors provide to the Corporate Secretary information in written within five business days since the occurrence of any of the following circumstances:

  1. about the legal entities in which a member of the Board of Directors holds, individually or jointly with an affiliated person(s), at least 20 per cent of voting shares (equity interests or stakes);
  2. about the legal entities in which the member of the Board of Directors holds positions in the management bodies;
  3. about all actual and potential transactions which the member of the Board of Directors is aware of, in which the member can be qualified as a related party.
  4. about the circumstances as a result of which the member of the Board of Directors ceases to meet the independence criteria for members of the board of directors, as established by the Listing Rules of Moscow Exchange PJSC.

Moreover, the member of the Board of Directors shall disclose in due time the information on the ownership of securities of the company, the company’s subsidiaries and controlling entities, on their sale and (or) acquisition, and on changing his/her permanent (principal) place of work and on the offices held concurrently in other legal entities.

The member of the Board of Directors shall notify the Board of Directors via the Corporate Secretary upon occurrence of the conflict of interest in respect of any item of agenda of the meeting or absentee voting of the Board of Directors, before the start of discussion of such agenda item at the meeting in presence of the Board of Directors or within one day upon receipt of voting ballots for participation in absentee voting. Each member of the Board of Directors shall abstain from voting on any agenda item where he/she faces a conflict of interests.