Dear Shareholder! Board of Directors, NLMK

Transcription

1 Dear Shareholder! Open Joint-Stock Company "Novolipetsk Steel" (NLMK), 2, pl. Metallurgov, , Lipetsk, hereby notifies of the convocation of NLMK s Annual General Shareholders' Meeting on 2014 performance in the form of a meeting (joint presence of shareholders for the discussion of agenda items and decision-making on items put to vote), to be held on 5 June 2015, at 12:00, at: Conference Hall, NLMK Headquarters, 2, Metallurgov sq., Lipetsk, in line with the following agenda: 1. Approval of NLMK s 2014 Annual Report, Annual Financial Statements, including 2014 Profit & Loss Statement, profit distribution (including declaration of dividends) based on NLMK s performance in 2014 financial year. 2. Payment (declaration) of dividends based on Q performance. 3. Recognition of the Dividend Policy of NLMK, approved by NLMK s Annual General Shareholders Meeting on 6 June 2014, null and void. 4. Election of members of NLMK s Board of Directors. 5. Election of NLMK s President (Chairman of the Management Board). 6. Election of members of NLMK s Audit Commission. 7. Payment of remunerations to the members of NLMK's Board of Directors. 8. Approval of NLMK's internal documents. 9. Approval of the amount of basic remuneration of a member of NLMK s Board of Directors. 10. Approval of NLMK s Auditor. The list of persons, entitled to participate in NLMK's General Shareholders' Meeting, is compiled on the basis of the data of NLMK s Shareholder Register as of 17 April The participants of NLMK's Annual General Shareholders Meeting will be registered on the day of the meeting starting from 10:30 at NLMK Headquarters. For the purpose of registration the persons entitled to participate in the Annual General Shareholders' Meeting (their representatives) shall present (submit) the following documents: - a shareholder an individual (a) document(s) confirming his/her ID according to the list of persons entitled to participate in the General Shareholders Meeting; - a representative of a shareholder an individual a proxy issued by that individual and the representative's ID document(s); - a representative of a shareholder a legal entity without a proxy due to legislation or constituent documents a copy of the shareholders' (legal entity's) constituent documents and (a) document(s) confirming his/her powers (copy of decision on his/her election or designation, etc.), ID document(s); - a representative of a shareholder a legal entity a proxy issued by that legal entity and the representative's ID document(s); - a representative of a shareholder a state or municipal entity, operating without power of attorney based on federal laws or acts by the respective state or local authorities (a) document(s) confirming the respective powers (certificate of employment, voting instructions, etc.) and ID document(s). Powers of attorney and other documents confirming the participant's right to act on behalf of the shareholder shall by submitted to the Company at the time of registration. Postal address, to which, in accordance with cl. 3 Article 60 of the Federal Law On Joint-Stock Companies, filled-in voting ballots may be sent for NLMK: Equity Management Department, NLMK, 2, Metallurgov sq., Lipetsk, Russia. For the purposes of the meeting quorum and voting results determination the ballots received by NLMK before 3 June 2015 shall be taken into account. The information (materials) provided for the preparation for NLMK s Annual General Shareholders' Meeting can be studied starting from 5 May 2015 (on workdays from 8:00 till 15:00) at: NLMK Headquarters, NLMK, 2, Metallurgov sq., Lipetsk, rooms: 531, 603 (tel.: (4742) , ), as well as at NLMK s web-site: Board of Directors, NLMK

2 *We would like to bring the following information to the attention of shareholders individuals whose share rights are accounted in NLMK s Shareholder Register: When a resolution on dividend payment on NLMK s outstanding common shares upon 2014 financial performance is passed, funds payment shall be executed by cashless settlement only. Shareholders individuals in case of no data (outdated information) in the Shareholders Register on payment details according to which dividends shall be wired, shall submit updated bank and other details before or on 9 June 2015 for cashless funds (dividends) transfer to NLMK s Shareholder Register keeper OJSC Regional Independent Registrar Agency. For submission procedure and document forms, please contact NLMK s Registrar (OJSC RIR Agency - at the address: 10 B, 9 May str., Lipetsk, , tel.: (4742) ; web-site: We would like to draw your attention to the fact that according to clause 5, Article 44 of the Federal Law On Joint Stock Companies a person registered in NLMK s Shareholder Register is obliged to inform the Register-keeper in time in case of its details modification. **We would like to bring the following information to the attention of shareholders legal entities whose share rights are accounted in NLMK s Shareholder Register: When a resolution on dividend payment for NLMK s outstanding common shares based upon FY2014 performance is approved with regard to a shareholder legal entity - preferential taxation conditions may be applied to the income paid in the form of dividends (for this purpose it is necessary to submit documents /confirmation/ established by the Russian Law before 19 June 2015 at the latest to the following address: Equity Management Department, NLMK, 2, Metallurgov sq., Lipetsk, Russia). According to the Russian Tax Law in force the documents to be submitted shall be in Russian and duly certified by consular legalization or apostilled, if necessary. The documents (besides those to be notarized) shall be certified by the signature of an authorized person (persons) and stamp of the company and powers of respective signatories shall be verified (certified copies of resolutions (orders) on election (appointment), powers of attorney and/or other documents shall be submitted). Documents containing several pages shall be bound securely and pages shall be numbered. Management companies of unit investment trusts shall submit: - notarized copy of a license for managing a unit investment trust; - a copy of rules for trust management of a unit investment trust, certified by the management company (the first and last pages); - a certificate on asset value according to the form established by Resolution of Federal Financial Markets Service of Russia No.03-41/ps dd Accounting of stock investment funds and management companies of a unit investment fund. Management companies which manage savings for housing provision of military personnel shall submit: - notarized copy of a license for managing investment trusts, unit investment trusts and non-governmental pension funds; - a copy of trust management agreement related to managing of savings for housing provision of military servicemen certified by the management company and made according to the format for a framework agreement established by Order of Federal Financial Markets Service of Russia No.09-11/pz-n dd Approval of formats for framework agreements for rendering services of a specialized depositary to a federal executive authority, assuring the functioning of savings and mortgage system for housing provision of military servicemen, agreements for trust management of savings for housing provision of military servicemen, and agreement for rendering services of a specialized depositary of the management company performing trust management of savings for housing provision of military servicemen ; - an original extract from custody account as of the closing date of NLMK s Shareholder Register with information on NLMK s stock ownership made by the authorized management company with statement of the state registration number of shares, their type and quantity. Legal entities non-residents shall submit: a) in case the owner of NLMK s shares is a legal non-resident entity a confirmation that at time of income payment the legal non-resident entity has permanent domicile in the state with which the RF has an international treaty (agreement) on taxation (if entered into), which must be certified by a competent body of the respective foreign state. In case this confirmation is in a foreign language its translation into Russian shall also be provided (Art. 312 of the RF Tax Code). b) If dividends on NLMK s shares are to be received by a permanent establishment of a legal non-resident entity: - a notarized copy of the Certificate on Tax Registration with the RF Tax Authorities, as executed not earlier than within the preceding tax period (if the yield to be paid is related to a permanent establishment of the yield recipient in the RF); - notice that the yield to be paid refers to its permanent establishment. We would like to draw your attention that according to the RF Law exemption from taxes at source or withholding of taxes at source upon lower rates shall be performed in cases when documents that govern tax exemptions have been delivered to a tax agent, who will pay the yield, before that yield payment date, i.e. the documents must be submitted as soon as possible after the Meeting of Shareholders approves the resolution on payment, but not later than on 19 June In case the above documents are not submitted or delayed, NLMK shall not be held liable for non-application of respective tax rates. Owners of NLMK s shares, their authorized representatives shall on their own follow completeness and currency of details required for payments (transfers) of dividends (including bank account details) provided by them to the Registrar maintaining NLMK s Shareholder Register. In case the above details are not submitted or delayed, NLMK shall not be held liable for late payment (transfer) of dividends. 2

3 EVALUATION of the Auditor s opinion by the Audit Committee with NLMK Board of Directors Having reviewed the Auditor s Opinion dated March 26, 2015 on statutory accounting statement of Open Joint-Stock Company Novolipetsk Steel (hereinafter OJSC NLMK or the Company ) for 2014, submitted by ZAO PricewaterhouseCoopers Audit approved on June 6, 2014 as the Company s Auditor by NLMK s Annual General Shareholders Meeting, the Audit Committee of NLMK Board of Directors takes into consideration that this opinion has been issued in accordance with the federal standard of auditing (FSAD 1/2010) Auditor s opinion on financial (accounting) statements and preparation of position on its reliability, approved by the Decree of the Russian Federation Ministry of Finance dated May 20, 2010 No. 46n On approval of federal standards of auditing, and states that this is an unqualified positive opinion on reliable reflection of NLMK s financial position and business activity results in accordance with the requirements of the Russian Federation legislation in terms of preparation of financial (accounting) statements. Chairman of the Audit Committee /signature/ Benedict Sciortino

4 Recommendations of the Board of Directors of NLMK to NLMK s General Shareholders Meeting based on 2014 performance with regard to profit distribution upon the results of 2014 financial year and declaration (distribution) of dividends based on the results of Q At the meeting on April 24, 2015 the Board of Directors of NLMK recommended to NLMK s Annual General Shareholders Meeting to: 1. Approve NLMK s profit distribution following the results of 2014 financial year: - distribute (declare) dividends for 2014 upon common shares in cash in the amount of RUB 2.44 per common share. Considering the interim paid-in dividends for H in the amount of RUR 0.88 per common share, the Company shall additionally pay RUB 1.56 per common share. Set the date on which persons entitled to dividends will be determined: June 16, 2015; - any profit that is not spent on dividend payouts shall remain at NLMK s disposal. 2. Distribute (declare) dividends for Q upon common shares in cash in the amount of RUB 1.64 per common share. Set the date on which persons entitled to dividends will be determined: June 16, 2015.

5 EXPLANATORY NOTE: regarding the agenda item: Recognition of NLMK s Dividend Policy null and void. At NLMK the Dividend Policy approved by the resolution of NLMK's General Shareholders' Meeting was effective since In 2014 in the Russian Federation new listing rules of the stock exchange (CJSC MICEX SE) came into force and the Board of Directors of the Bank of Russia approved new Corporate Governance Code. The above regulations establish the requirement of availability of the document in the company identifying dividend policy and approved by the company s Board of Directors. On April 24, 2015, NLMK s Board of Directors approved a new revision of the Dividend Policy of NLMK which provides for quarterly payment of dividends in the following range: If Net Debt/EBITDA is 1.0x or less: the level of dividend payments falls within the range limited by 50% of net income and 50% of free cash flow; If Net Debt/EBITDA is 1.0x or higher: the level of dividend payments falls within the range limited by 30% of net income and 30% of free cash flow. Thus, it is proposed to NLMK s Annual General Shareholders Meeting to pass a resolution on recognition of NLMK's Dividend Policy, approved by NLMK's Annual General Shareholders' Meeting on June 6, 2014, null and void. 1

6 EXPLANATORY NOTE to the agenda items: Election of members of NLMK s Board of Directors ; Election of NLMK s President (Chairman of the Management Board) ; Election of members of NLMK s Audit Commission. Since in accordance with the current RF legislation and by virtue of subclauses 4, 8 and 9, clause 16.1, Article 16 of NLMK s Charter the decision-making regarding election of NLMK s BoD members, NLMK s President (Chairman of the Management Board) and NLMK s Audit Commission members pertain to the competence of NLMK s General Shareholders Meeting, it is proposed to NLMK s shareholders to make such decisions in accordance with the information below: INFORMATION ON CANDIDATES to be elected to the Board of Directors, to the position of the President (Chairman of the Management Board) and to the Audit Commission of NLMK I. Candidates for election to NLMK s Board of Directors: 1. Oleg V. Bagrin 2. Helmut Wieser* 3. Nikolai A. Gagarin 4. Karl Doering 5. Vladimir S. Lisin 6. Karen R. Sarkisov 7. Stanislav V. Shekshnia*. 8. Benedict Sciortino* 9. Franz Struzl* * Marked candidates have the status of an independent director. Information on the candidates for election to NLMK s Board of Directors: 1. Oleg V. Bagrin Year of birth: Position: President (Chairman of the Management Board) of NLMK. Member of NLMK s Board of Directors. Not a shareholder of NLMK. 2. Helmut Wieser Year of birth: Position: CEO of AMAG Austria Metall AG. Member of NLMK s Board of Directors. Not a shareholder of NLMK. 3. Nikolai A. Gagarin Year of birth: Position: Executive Partner, Council Chairman of Advocate Bureau "Reznik, Gagarin & Partners", Moscow. Member of NLMK s Board of Directors. Not a shareholder of NLMK. 4. Karl Doering Year of birth: Position: Manager of consulting firm PROJECT CONSULTING. Member of NLMK s Board of Directors. Not a shareholder of NLMK. 1

7 5. Vladimir S. Lisin Year of birth: Position: Chief Consultant of LLC RUMELCO, associate member (secondary job) of All-Russian Public Organization Russian Academy of Natural Sciences (RANS). Chairman of NLMK s Board of Directors. Not a shareholder of NLMK. 6. Karen R. Sarkisov Year of birth: Position: Advisor of Chairman of the Board of Directors on Foreign Economic Relations. Member of NLMK s Board of Directors. Not a shareholder of NLMK. 7. Stanislav V. Shekshnia. Year of birth: Education: higher Position: Senior Partner, Ward Howell consulting company. Not a member of NLMK s Board of Directors. Not a shareholder of NLMK. Candidate from NLMK's Board of Directors. 8. Benedict Sciortino Year of birth: Position: Managing Director, Duferco S.A. Member of NLMK s Board of Directors. Not a shareholder of NLMK. 9. Franz Struzl Year of birth: Education: higher Position: CEO of RHI AG. Member of NLMK s Board of Directors. Not a shareholder of NLMK. The candidates written consent for election to NLMK s Board of Directors is available. II. Candidate for election to the position of NLMK s President (Chairman of the Management Board): Oleg V. Bagrin Information on the candidate for election to the position of NLMK s President (Chairman of the Management Board): Oleg V. Bagrin Year of birth: Position: President (Chairman of the Management Board) of NLMK. Member of NLMK s Board of Directors. Not a shareholder of NLMK. The candidate s written consent for election to the position of NLMK s President (Chairman of the Management Board) is available. 2

8 III. Candidates for election to NLMK s Audit Commission: 1. Vladimir N. Markin 2. Galina I. Shipilova 3. Sergey I. Nesmeyanov 4. Natalya P. Krasnykh 5. Vladislav A. Yershov Information on the candidates for election to NLMK s Audit Commission: 1. Vladislav A. Yershov Year of birth: Position: Lead Specialist, Relations with Subsidiaries and Affiliates, General Audit Sector, Internal Audit Division of NLMK. 2. Natalya P. Krasnykh Year of birth: Position: Lead Auditor, Operational Audit, General Audit Sector, Internal Audit Division of NLMK. 3. Vladimir N. Markin Year of birth: Position: Head of General Audit Sector, Internal Audit Division of NLMK. 4. Sergey I. Nesmeyanov Year of birth: Position: Lead Specialist, Relations with Subsidiaries and Affiliates, General Audit Sector, Internal Audit Division of NLMK 5. Galina I. Shipilova Year of birth: Position: Head of Tax Audit Bureau, General Audit Sector, Internal Audit Division of NLMK. The candidates written consent for election to NLMK s Audit Commission is available. 3

9 EXPLANATORY NOTE: regarding the agenda item: Remuneration payment to the members of NLMK's Board of Directors. According to Article I of Regulations on Remuneration of NLMK s Board of Directors Members dd. 29 September 2011, remuneration shall be paid to NLMK s Board of Directors members as regular fees and bonuses based on the resolution of the General Shareholders Meeting. According to clauses 1.3, 1.5 and 1.6 Article I of Regulations on Remuneration of NLMK s Board of Directors Members, remuneration may be paid to NLMK s Board of Directors members in the form of regular fees, the amount of which shall be determined based on the extent of their personal involvement into current operation of this management body of the Company, over the period starting from to (inclusive). Within this period there were 9 sessions of NLMK s Board of Directors, whereof 3 sessions were held in praesentia and 6 sessions - in absentia (by poll). In accordance with cl Article I of Regulations on Remuneration of NLMK's Board of Directors members, remuneration may also be paid to NLMK s Board of Directors members in the form of bonuses. Based on the above and according to Article I of Regulations on Remuneration of NLMK s Board of Directors Members, it is proposed to NLMK s Annual General Shareholders Meeting to pass resolution on the payment of remuneration to NLMK s Board of Directors members in the following amounts: Item Name Total remuneration (in USD) 1. V.S. Lisin V.N. Skorokhodov O.V. Bagrin N.A. Gagarin K.R. Sarkisov Karl Doering Helmut Wieser Franz Struzl Benedict Sciortino Note: The amounts of remuneration comply with the recommendations of HR, Remunerations & Social Policy Committee with NLMK s Board of Directors (when establishing individual amounts of remuneration, participation of the Board members in the meetings of the Board of Directors and operation of its committees was taken into account, according to the Regulations on Remuneration of NLMK s Board of Directors Members).

10 EXPLANATORY NOTE: to the agenda items: Approval of NLMK's internal documents ; Approval of the amount of basic remuneration of a member of NLMK s Board of Directors. 1. Pursuant to the new revision of the Corporate Governance Code (approved 21 March 2014 by the Board of Directors of the Bank of Russia, hereafter CGC), recommendations to joint-stock companies pertaining to the structure of Board member remuneration have been revised. In observance of those recommendations, it is proposed to amend the Regulations on Remuneration of Members of NLMK s Board of Directors (hereinafter the Regulations ), and pass a resolution on its approval. 1. It is proposed to revise the recitals of the Regulations (the period of fulfillment of obligations by members of the Board of Directors is defined, term settlement period is introduced) as follows: Current revision: Proposed revision: These Regulations have been developed in These Regulations have been developed in accordance accordance with the Federal Law On Joint Stock Companies, the Charter of Open Joint Stock Company Novolipetsk Steel (hereinafter NLMK ), Regulations on NLMK s Board of Directors and determine terms and conditions as well as the procedure for payment of remuneration and coverage of expenses related to their performing the functions of BoD members during the period of their performing their obligations to NLMK s Board of Directors members. with the Federal Law On Joint Stock Companies, the Charter of Open Joint Stock Company Novolipetsk Steel (hereinafter NLMK ), Regulations on NLMK s Board of Directors, and determine terms and conditions as well as the procedure for payment of remuneration to members of NLMK s Board of Directors and reimbursement of expenses related to their performing respective functions during the period of their duties execution /from the moment of election to the Board of Directors till the date of termination of powers of the Board of Directors member (hereinafter settlement period )/. 2. According to subclause and clauses 234 and 235 of CGC (a fixed annual fee is a preferable form of monetary remuneration to members of the Board of Directors; any fees for the participation in certain Board meetings or meetings of a committee with the Board of Directors are undesirable; the Company can use its discretion to determine that the payment of the full fixed fee is subject to personal presence at a certain number of meetings of the Board of Directors), it is proposed to amend items 1.2 and 1.3 of the Regulations as follows: Current revision: 1.2. Remuneration as a regular fee and a bonus is paid to the Board of Directors members based on, in the amount and in the order established by these Regulations. Current revision: 1.3. Remuneration of the certain member of the Board of Directors of NLMK paid in the form of salary shall be determined by the extent of his personal participation in the current work of this administration body of the Company and paid in the following amounts: member of the Board of Directors shall receive remuneration in the amount of 2,000 (two thousand) US dollars for personal participation in the meeting of the Board of Directors; member of the Board of Directors shall receive remuneration in the amount of 1,000 (one thousand) US dollars for participation in the meeting of the Board of Directors by submission of opinion in writing on the issues included in the agenda; member of the Board of Directors shall Proposed revision: 1.2. Remuneration to members of the Board of Directors for performing their obligations consists of a basic remuneration and a premium. Remuneration shall be paid to members of the Board of Directors based on, in the amount and in the order established by these Regulations. Proposed revision: 1.3. The amount of the basic remuneration shall be established pursuant to the resolution of NLMK's General Shareholders Meeting. A member of the Board of Directors shall be entitled to the basic remuneration if he/she participated in more than half of the Board meetings during a settlement period. 1

11 receive remuneration in the amount of 1,000 (one thousand) US dollars for participation in passing the resolution of the Board of Directors by absentee voting (by ballot). 3. According to clause 233 CGC (the fixed remuneration is to reflect director s anticipated time expenditures and required efforts related to the preparations for and participation in Board meetings; preferably, the amount of the fixed remuneration should be different depending on the scope of responsibilities of a director in the Company s Board of Directors so as to reflect additional time expenditures associated with carrying out the functions of Board Chairman, committee member, committee chairman), it is proposed to amend items 1.4 and 1.5 of the Regulations as follows: Current revision: 1.4. Upon NLMK s performance results for a financial year, based on the Annual Report, Income Statement and profit distribution procedure in line with the recommendations of Personnel, Remunerations and Social Policy Committee, Annual General Shareholders Meeting may take a decision on payment to each of the Board of Directors members of a bonus amounting to 0,1% of NLMK's net profit for the reporting period determined as per the US Generally Accepted Accounting Principles (US GAAP). Bonus based on the annual performance results is not paid to the Board of Directors' members who did not participate in more than a half of Board of Directors Meetings within the period of their obligations fulfillment. Current revision: 1.5. The remuneration to the person performing the duties of the Chairman of the Board of Directors with reference to the functions related to organization of work of this management body of the Company, shall be paid 1.5 times as much compared to the amounts stated in clauses of these Regulations A person who is a member of each of the Committees with the Board of Directors (and who participates in at least half of its meetings) is entitled to a remuneration of 1.2-fold premium paid to him in accordance with clause 1.4 of this Regulation. Proposed revision: 1.4. The amount of basic remuneration paid to members of the Board of Directors in accordance with cl. 1.3 of these Regulations depending on their participation in the work of the Board may be increased as follows: Up to 50% of the basic remuneration - to a person performing the duties of the Chairman of the Board of Directors considering his functions related to organization of work of the subject management body of NLMK Up to 25% of the basic remuneration - to a member of any one Committee with the Board of Directors (who participated in over half of its meetings), and up to 50% of the basic remuneration - to a member of 2 and more Committees; Up to 40% of the basic remuneration - to a Chairman of any Committee with the Board of Directors (who participated in over half of its meetings), and up to 80% of the basic remuneration to a Chairman of 2 and more Committees; In case a member of the Board of Directors performs several additional duties specified in clauses , remuneration for performing each of such duties shall be summed up. Proposed revision: 1.5. A premium in an amount not exceeding double basic remuneration may be paid to a member of the Board of Directors depending on his/her personal contribution to the operation of the Board of Directors and Committees with the Board of Directors, based on recommendations of HR, Remunerations and Social Policy Committee with the Board of Directors. 2

12 A person who is the Chairman of each of the Committees with the Board of Directors is entitled to a remuneration of 1.4-fold premium paid to him in accordance with clause 1.4 of this Regulation. 4. Proposed amendment of clauses 1.6 and 1.7 of the Regulations (editorial changes): Current revision: 1.6. The basis for payment of the fee as well as the premium based on the performance results for the financial year shall be the resolution of the Annual General Shareholders Meeting of the company. Current revision: 1.7. Remuneration to the members of the Board of Directors shall be paid as a fee and a premium based on the annual performance results in the currency of the Russian Federation (rubles) at RF Central Bank exchange rate as of the date of adopting such a resolution by Shareholders Meeting via NLMK cash desk or in any other order in line with a personal application of the member of the Board. Proposed revision: 1.6. The basis for remuneration payment is the resolution of NLMK s General Shareholders Meeting. Proposed revision: 1.7. Remuneration to members of the Board of Directors shall be paid in the RF currency (RUB) at the exchange rate of the Bank of Russia on the date of adopting a resolution by NLMK s General Shareholders Meeting as per a personal application of a Board member. 5. According to clauses CGC (the policy of reimbursement of expenses shall detail the list of reimbursable expenses and the level of service to which Board members are entitled; members of the Board of Directors are entitled to the reimbursement (compensation) of any expenses related to travelling to the venue of meeting and other travels connected with their performance of duties; no other compensation of expenses incurred by Board members is recommended other than expenses related to travelling to the venue of meeting and other travels connected with the operation of the Board of Directors and committees with the Board of Directors), it is proposed to amend clause 2.1 of the Regulations as follows: Current revision: 2.1. NLMK shall indemnify members of the Board of Directors against any costs directly connected with performance of their duties, including: expenses arising in connection with the journey of members of the Board of Directors to the venue of the meetings of the Board of Directors and/or general meetings of shareholders of NLMK; expenses arising in connection with accommodation of the members of the Board of Directors during the period of conducting the meetings of the Board of Directors and/or general shareholders meetings of NLMK; representation expenses; Expenses related to specialists professional consultancy services regarding the issues under consideration at the Board of Directors' Meetings, as well as related to the translation of documents/materials, submitted for studying by the Board of Directors members, into the foreign language of a Board of Directors member. In the latter case the total amount of reimbursements paid by NLMK against the Proposed revision: 2.1. NLMK shall indemnify members of the Board of Directors against any costs directly connected with performance of their duties, including: expenses arising in connection with journey of members of the Board of Directors to the venue of the meetings of the Board of Directors (Committees with the Board of Directors) and/or NLMK s General Shareholders Meetings; expenses arising in connection with accommodation of members of the Board of Directors during the period of conducting meetings of the Board of Directors (Committees with the Board of Directors) and/or NLMK s General Shareholders Meetings; representation expenses; expenses related to specialists professional consulting services regarding the issues under consideration at the meetings of the Board of Directors (Committees with the Board of Directors), as well as those related to the translation of documents/materials for the meetings of the Board of Directors (Committees with the Board of Directors), submitted for studying by the Board of Directors members into a foreign language of the Board of Directors 3

13 expenses of the member of the Board may not exceed 2,000,000 (two million) rubles for the term of office of the said member of the Board of Directors. 6. Proposed amendment of clause 2.2 of the Regulations (editorial changes): Current revision: 2.2. The expenses shall be reimbursed through the cash desk of NLMK in accordance with the order of the Chairman of the Board of Directors issued pursuant to an application of a member of the Board of Directors to reimburse expenses and the certificate issued by the Secretary of the Board of Directors on participation of the said member in the work of the Board of Directors. Application of a member of the Board of Directors shall be accompanied by original documents confirming actual expenses (tickets, bills, receipts, etc.). member; other expenses related to performance of their duties by the members of the Board of Directors (Committees with the Board of Directors). Maximum amount of expenses to be reimbursed by NLMK and incurred by the Board of Directors member for a settlement period shall be established according to the resolution of NLMK s General Shareholders' Meeting and cannot exceed 30% of basic remuneration. A member of the Board of Directors shall be entitled to reimbursement if he participated in over half of the Board of Directors Meetings. Proposed revision: 2.2. Expenses shall be reimbursed in accordance with the order of the Chairman of the Board of Directors issued on the basis of application of a member of the Board of Directors to reimburse expenses and information of the Corporate Secretary proving participation of this member of the Board of Directors in the work of such body. Application of a member of the Board of Directors shall be accompanied by original documents confirming actual expenses (tickets, bills, receipts, etc.). 2. On the basis of clause 1.3 of the presented Regulations, the amount of basic remuneration is determined based on resolution of NLMK s General Shareholders Meeting, so NLMK s shareholders are recommended to pass the following resolution: Approve the amount of basic remuneration to each member of NLMK's Board of Directors as USD 160,000 (One hundred sixty thousand US dollars). 4

14 DRAFT APPROVED by the General Shareholders Meeting of Open Joint Stock Company Novolipetsk Steel Minutes of Meeting No. dd. June 2015 REGULATIONS ON REMUNERATION OF MEMBERS OF THE BOARD OF DIRECTORS OF OPEN JOINT STOCK COMPANY NOVOLIPETSK STEEL (revised) These Regulations have been developed in accordance with the Federal Law On Joint Stock Companies, the Charter of Open Joint Stock Company Novolipetsk Steel (hereinafter NLMK ), Regulations on NLMK s Board of Directors and determine terms and conditions as well as the procedure for payment of remuneration and coverage of expenses to NLMK's Board of Directors members related to their performing the functions of the Board of Directors members during the period of their duties execution /from the moment of election to the Board of Directors till the date of termination of powers of the Board of Directors member (hereinafter settlement period)/. 1. Remuneration paid to members of the Board of Directors 1.1. Remuneration shall be paid to members of the Board of Directors for reasonable and fair exercise of their rights and performance of their duties in the interests of NLMK Remuneration to members of the Board of Directors for performing their obligations consists of basic remuneration and premium. Remuneration shall be paid to members of the Board of Directors based on, in the amount and in the order established by these Regulations Basic remuneration amount shall be established pursuant to the resolution of NLMK's General Shareholders Meeting. A member of the Board of Directors shall be entitled for basic remuneration if he participated in over half of the Board of Directors Meetings for a settlement period Basic remuneration amount paid to members of the Board of Directors depending on their participation in the work of such body in accordance with cl. 1.3 of these Regulations may be increased: Up to 50% of the basic remuneration - to a person performing the duties of the Chairman of the Board of Directors considering his functions related to organization of work of the subject management body of NLMK; Up to 25% of the basic remuneration - to a member of any one Committee with the Board of Directors (who participated in over half of its meetings), and up to 50% of the basic remuneration - to a member of 2 and more Committees; Up to 40% of the basic remuneration - to a Chairman of any Committee with the Board of Directors (who participated in over half of its meetings), and up to 80% of the basic remuneration - to a Chairman of 2 and more Committees; In case a member of the Board of Directors performs several additional duties specified in clauses , remunerations for performing each of such duties shall be summed up A premium in an amount not exceeding double basic remuneration may be paid to a member of the Board of Directors depending on his/her personal contribution to the operation of the Board of Directors and Committees with the Board of Directors, based on recommendations of HR, Remunerations and Social Policy Committee with the Board of Directors The basis for remuneration payment is the resolution of the General Shareholders Meeting of NLMK. 1

15 1.7. Remuneration to members of the Board of Directors shall be paid in the RF currency (RUB) at the exchange rate of the Bank of Russia on the date of adopting a resolution by NLMK s General Shareholders Meeting as per a personal application of a Board member. 2. Reimbursement of expenses to members of the Board of Directors 2.1. NLMK shall indemnify members of the Board of Directors against the costs directly connected with performance of their duties, including: expenses arising in connection with journey of members of the Board of Directors to the venue of the meetings of the Board of Directors (Committees with the Board of Directors) and/or General Shareholders Meetings of NLMK; expenses arising in connection with accommodation of members of the Board of Directors during the period of conducting meetings of the Board of Directors (Committees with the Board of Directors) and/or General Shareholders Meetings of NLMK; representation expenses; expenses related to specialists professional consulting services regarding the issues under consideration at the meetings of the Board of Directors (Committees with the Board of Directors), as well as related to the translation of documents/materials for the meetings of the Board of Directors (Committees with the Board of Directors), submitted for studying by the Board of Directors members into a foreign language of the Board of Directors member; other expenses related to performance by the members of the Board of Directors (Committees with the Board of Directors) of their duties. Maximum amount of expenses to be reimbursed by NLMK and incurred by the Board of Directors member for a settlement period shall be established according to the resolution of NLMK s General Shareholders' Meeting and cannot exceed 30% of basic remuneration. A member of the Board of Directors shall be entitled for reimbursement if he participated in over half of the Board of Directors Meetings Expenses shall be reimbursed in accordance with the order of the Chairman of the Board of Directors issued on the basis of application of a member of the Board of Directors to reimburse expenses and information of a Corporate Secretary proving participation of this member of the Board of Directors in the work of such body. Application of a member of the Board of Directors shall be accompanied by original documents confirming actual expenses (tickets, bills, receipts, etc.) The Board of Directors may adopt at its meeting, by a majority of votes of elected members, a resolution on refusal to reimburse the expenses to a member of the Board of Directors, in case it is proved that the actions of such member were directed against NLMK s interests. 2

16 EXPLANATORY NOTE: on the agenda item: Approval of NLMK s Auditor. NLMK s Board of Directors, with reference to the proposal of the Audit Committee with NLMK's Board of Directors, recommends the Annual General Shareholders Meeting to approve CJSC PricewaterhouseCoopers Audit as the Auditor of NLMK s 2015 financial (accounting) statements prepared under Russian Accounting Standards /RAS/, as well as NLMK s 2015 consolidated financial statements prepared under International Financial Reporting Standards /IFRS/. Details on the candidate for Auditor: Full name: Closed Joint-Stock Company PricewaterhouseCoopers Audit". Abbreviated name: CJSC PwC Audit. Domicile: 10, ul. Butyrsky Val, Moscow TIN: ; KPP: ; OGRN: CJSC PwC Audit is a member of the self-regulatory organization of auditors, the Noncommercial Partnership Audit Chamber of Russia (SRO NP ACR). Domicile of NP ACR: 3/9 building 3, 3 rd Syromyatnichesky pereulok, Moscow, , Russia. Membership certificate proving the membership of CJSC PwC Audit in SRO NP ACR - No. 870 dated 28 December CJSC PwC Audit is assigned the Principal Number of Registration Entry (PNRE) Closed Joint-Stock Company PricewaterhouseCoopers Audit" is a Russian branch of the international auditing firm PricewaterhouseCoopers one of the four world s leading audit companies. CJSC PricewaterhouseCoopers Audit" has an extensive experience of auditing statements compiled under IFRS and RAS.

17 Draft resolutions NLMK s Annual General Shareholders Meeting Item No.1 of the meeting agenda: Approval of NLMK s 2014 Annual Report, Annual Financial Statements, including 2014 Profit & Loss Statement, profit distribution (including declaration of dividends) based on NLMK s performance in 2014 financial year. Initiator of the Item inclusion into the meeting agenda: NLMK s Board of Directors. Resolution: 1.1. Approve NLMK s 2014 Annual Report, Annual Financial Statements, including Profit & Loss Statement for Resolution: 1.2. Approve NLMK s profit distribution following the results of 2014 financial year: - distribute (declare) dividends for 2014 upon common shares in cash in the amount of RUB 2.44 per common share. Considering the interim paid-in dividends for H in the amount of RUR 0.88 per common share, the Company shall additionally pay RUB 1.56 per common share. Set the date on which persons entitled to dividends will be determined: June 16, 2015; - any profit that is not spent on dividend payouts shall remain at NLMK s disposal. Item No.2 of the meeting agenda: Payment (declaration) of dividends based on Q performance. Initiator of the Item inclusion into the meeting agenda: NLMK s Board of Directors. ResolutionDistribute (declare) dividends for Q upon common shares in cash in the amount of RUB 1.64 per common share. Set the date on which persons entitled to dividends will be determined: June 16, Item No.3 of the meeting agenda: Recognition of the Dividend Policy of NLMK, approved by NLMK s Annual General Shareholders Meeting on 6 June 2014, null and void. Initiator of the Item inclusion into the meeting agenda: NLMK s Board of Directors. Resolution: Recognize the Dividend Policy of NLMK, approved by NLMK s Annual General Shareholders Meeting on 6 June 2014, null and void. Item No.4 of the meeting agenda: Election of members of NLMK s Board of Directors. Initiator of the Item inclusion into the meeting agenda: NLMK s Board of Directors. Initiators of nominated candidates for election into NLMK s Board of Directors: NLMK s shareholder - FLETCHER GROUP HOLDINGS LIMITED and NLMK Board of Directors. Resolution: Elect NLMK's Board of Directors in the following composition: Oleg V. Bagrin Helmut Wieser Nikolai A. Gagarin Karl Doering Vladimir S. Lisin Karen R. Sarkisov Stanislav V. Shekshnia Benedict Sciortino Franz Struzl Item No.5 of the meeting agenda: Election of NLMK s President (Chairman of the Management Board). Initiator of the Item inclusion into the meeting agenda: NLMK s Board of Directors. Initiator of nominated candidate for election to the position of NLMK s President (Chairman of the Management Board): NLMK s shareholder - FLETCHER GROUP HOLDINGS LIMITED. Resolution: Elect Oleg Vladimirovich Bagrin President (Chairman of the Management Board) of NLMK. 1

18 Item No.6 of the meeting agenda: Election of members of NLMK s Audit Commission. Initiator of the Item inclusion into the meeting agenda: NLMK s Board of Directors. Initiator of nominated candidates for election into NLMK s Audit Commission: NLMK s shareholder - FLETCHER GROUP HOLDINGS LIMITED. Resolution: Elect NLMK's Audit Commission in the following composition: Vladislav A. Yershov Natalya P. Krasnykh Vladimir N. Markin Sergey I. Nesmeyanov Galina I. Shipilova Item No.7 of the meeting agenda: Payment of remunerations to the members of NLMK's Board of Directors. Initiator of the Item inclusion into the meeting agenda: NLMK s Board of Directors. Resolution: Approve the resolution on payment of remunerations to the members of NLMK's Board of Directors. Item No.8 of the meeting agenda: Approval of NLMK's internal documents. Initiator of the Item inclusion into the meeting agenda: NLMK s Board of Directors. Resolution: Approve the revised Regulations on remuneration of members of NLMK s Board of Directors. Item No.9 of the meeting agenda: Approval of the amount of basic remuneration of a member of NLMK s Board of Directors. Initiator of the Item inclusion into the meeting agenda: NLMK s Board of Directors. Resolution: Approve the amount of basic remuneration to each member of NLMK's Board of Directors as USD 160,000 (One hundred sixty thousand US dollars). Item No.10 of the meeting agenda: Approval of NLMK s Auditor. Initiator of the Item inclusion into the meeting agenda and initiator of nominated candidate for election of NLMK s Auditor: NLMK s Board of Directors. Resolution: Approve CJSC PricewaterhouseCoopers Audit /OGRN / as the Auditor of Financial Statements of NLMK for 2015, prepared based on Russian Accounting Standards /RAS/. Resolution: Engage CJSC PricewaterhouseCoopers Audit /OGRN / to carry out audit of NLMK s 2015 Consolidated Financial Statements based on International Financial Reporting Standard (IFRS). 2

19 Location map of NLMK s Annual General Shareholders Meeting.

20 Approximate form of power of attorney that may be issued by a shareholder to its representative for participation in NLMK s General Shareholders' Meeting and information on certifying such a power of attorney POWER OF ATTORNEY N (venue) (date (day, month, year)in words) Citizen, (Full Name of Principal) Passport: series N, issued, division code, (date and place of its issue, authority that issued the document) registered at the address:, (if the Principal legal entity:, (name of legal entity) located at the address:, in person of, (full name of authorized person) acting on the basis of (type of the identification document (specify the details, issued by whom and where) being owner of (specify the quantity) common stock of OJSC Novolipetsk Steel hereby authorizes citizen, (full name of authorized person) Passport: series N, issued, division code, (date and place of its issue, authority that issued the document) registered at the address:, to represent the Principal s interests at NLMK s General Shareholders' Meeting which will take place of 20 with the right to vote with all the common stock of OJSC Novolipetsk Steel in my possession on all agenda items of the Meeting and also with the right to: participate in discussion of the agenda items; receive materials distributed to the participants of the General Shareholders Meeting; address statements and make suggestions to working bodies of the General Shareholders Meeting; perform other actions in relation to representation of my interests at the General Shareholders Meeting. The present Power of Attorney shall be valid for (Power of Attorney validity) and may (not) be reassigned. I herewith certify the signature of. (full name of authorized person) (signature) Principal: / / 1

21 Note: According to Art. 57 of the Federal Law «On joint-stock companies» the power of attorney for voting shall be executed in accordance with the requirements of clauses 3 and 4 of Art of the Civil Code or shall be notarized. In accordance with the specified rules: - power of attorney issued on behalf of a shareholder - a legal entity - shall be signed by their Head or other person entitled by the constituent documents (cl. 4 Art ) - power of attorney issued on behalf of a shareholder - an individual being an RF citizen - may be certified by the organization in which the shareholder works or studies or by administration of an outpatient medical institution in which he receives medical treatment (cl. 3 Art ) or be notarized. On presentation of the power of attorney which is certified in accordance with cl.3 Art , it is necessary to submit the respective certificates confirming the fact of being in employment relations, of studying or of receiving medical treatment. -shareholders being foreign citizens issue powers of attorney under legislation of the respective state. In this case the power of attorney shall be duly authorized and translated into Russian. Translation is notarized. The same procedure is used for certification of powers of attorney issued by shareholders being foreign legal entities. 2