MAGNIT APPROVED by the annual General Shareholders Meeting of PJSC Magnit _________ 2024
Meeting Minutes w/o number, dated __________2024
DRAFT
REGULATIONS
ON THE BOARD OF DIRECTORS
OF PUBLIC JOINT STOCK COMPANY MAGNIT
version №8
Krasnodar
2024
Regulations on the Board of Directors of Public Joint Stock Company Magnit | |||
CONTENTS | |||
Article 10. Functions of Secretary of the Board of Directors | |||
Article 12. Operation of committees | 11 | ||
Article 13. | Audit Committee | 11 | |
Article 14. HR and Remuneration Committee | 11 | ||
Article 15. | Strategy Committee | 12 | |
Article 16. Capital Markets Committee | 12 |
7. RIGHTS AND OBLIGATIONS OF DIRECTORS. PROCEDURE FOR EXERCISING
RIGHTS AND OBLIGATIONS | 13 | |
Article 17. Rights of a member of the Board of Directors | 13 | |
Article 18. Obligations of a member of the Board of Directors | 13 | |
Article 19. Procedure for exercising rights and obligations of the Board of Directors | 14 | |
Article 20. | ........ Obligations of the Company's sole executive bodies and members of the collective | |
executive body to satisfy requests of the Board of Directors | 14 | |
8. CONVENING MEETINGS OF THE BOARD OF DIRECTORS | 15 | |
Article 21. | Convening procedure | 15 |
Article 22. Venue and time of meetings | 15 | |
Article 23. Notices of meetings | 15 | |
Article 24. Change in venue and time of meetings | 16 | |
Article 25. Requests to convene a meeting | 16 | |
Article 26. | Refusal to convene a meeting | 17 |
Article 27. | Mandatory meetings | 17 |
Regulations on the Board of Directors of Public Joint Stock Company Magnit | ||
9. MEETINGS AND RESOLUTIONS OF THE BOARD OF DIRECTORS | 17 | |
Article 28. Meetings of the Board of Directors | 17 | |
Article 29. Resolutions of the Board of Directors | 17 | |
Article 30. | Counting written opinions of non-attending members of the Board of Directors | |
......................................................................................................................................... | 19 | |
Article 31. | Effective date | 19 |
Article 32. Minutes of meetings of the Board of Directors | 19 | |
10. PASSING RESOLUTIONS BY ABSENTEE VOTING | 20 | |
Article 33. | Absentee voting | 20 |
Article 34. | Voting ballots | 20 |
Article 35. | Effective date | 21 |
Article 35.1. Independent directors' questionnaires | 21 |
11. REMUNERATION AND REIMBURSEMENT OF EXPENSES OF THE BOARD OF
DIRECTORS | 22 | |
Article 36. Remuneration and reimbursement of expenses | 22 | |
Article 37. Payment of remuneration | 22 | |
Article 38. Reimbursement of expenses | 22 | |
12. | DIRECTORS' LIABILITY INSURANCE | 23 |
Article 39. Directors' liability insurance | 23 | |
13. | ACQUAINTANCE WITH THE COMPANY'S BUSINESS | 23 |
Article 40. | Procedure for getting acquainted with the Company's business | 23 |
Article 41. | Introduction of director's to the Company's management | 23 |
Article 42. | Provision of information (documents and materials) about the Company | 23 |
14. | FINAL PROVISIONS | 24 |
Article 43. | Validity | 24 |
15. | AMENDMENTS | 25 |
Regulations on the Board of Directors of Public Joint Stock Company Magnit
1. GENERAL PROVISIONS
Article 1. Regulations on the Board of Directors
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These regulations (the "Regulations") have been drafted in accordance with the Russian
Civil Code, the Federal Law on Joint Stock Companies, any other Russian laws and regulations, the Corporate Governance Code recommended by letter of the Bank of Russia No. 06-52/2463 dated 10 April 2014, the Articles of Association of Public Joint Stock Company Magnit (the "Company") and the listing rules of Russian and foreign stock exchanges on which the Company's securities are listed, and shall govern the operation of the Company's Board of Directors. - The Regulations set out the procedure for convening and holding meetings of the Board of Directors, the procedure for the passing of a resolution by the Board of Directors, the rights and duties of the members of the Board of Directors, and govern other matters related to the operation of the Board of Directors.
Article 2. Board of Directors
The Board of Directors is the collective governing body of the Company responsible for overall management of the Company, except for the matters reserved to the General Shareholders Meeting (the "General Shareholders Meeting") in accordance with the federal laws and the Company's Articles of Association. The Board of Directors shall also be responsible for the strategic management of the Company, risk management and internal control frameworks, oversight of the executive bodies of the Company, and other key functions.
2. PURPOSE AND ROLE OF THE BOARD OF DIRECTORS
Article 3. Purpose and principles of the Board of Directors
- The purpose of the Board of Directors is to maximise profits and increase the Company's assets, protect the rights and legitimate interests of the shareholders, continuously oversee the executive bodies, guarantee the completeness, reliability and objectivity of information disclosed about the Company.
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To meet its purpose, the Board of Directors shall be guided by the following principles:
− decision-making shall be based on reliable information about the Company's activities; − shareholders' rights to participate in the management of the Company and receive
dividend payouts and information about the Company shall not be restricted;
- a balance of interests of various groups of shareholders shall be achieved with the Board of Directors making decisions that are as unbiased as possible and in the interests of all shareholders.
3. Any irremediable unclarity of the rules set out in the laws and other regulations shall be interpreted as expanding the rights and legitimate interests of shareholders.
Article 4. Role of the Board of Directors
To meet its purpose, the Board of Directors shall perform the following functions within its remit:
- ensure that resolutions of the General Shareholders Meeting are implemented;
- identify the goals, values, culture, strategy and priority focus areas for the Company activities; ensure their consistency;
- determine the Company's priority areas;
- assess the political, financial and other risks that affect the Company's operations;
- approve the Company's business plans and budgets;
- determine approaches to investment and participation in other entities;
- assess the performance of the Company and its bodies;
Regulations on the Board of Directors of Public Joint Stock Company Magnit
- determine conditions for dividend payments;
- determine the criteria for selecting members of the management team;
- develop HR framework, motivation and incentive schemes;
- develop systems and methods for employees motivation and encouragement; periodically review them, including for consistency with the Company culture;
- oversee the activities of the Company's executive bodies;
- ensure that the Company complies with the effective laws;
- ensure compliance with the corporate governance principles.
3. COMPOSITION OF THE BOARD OF DIRECTORS
Article 5. Composition
- The composition procedure is set out in the Company's Articles of Association.
- The Board of Directors shall consist of individuals only, whether the Company's shareholders or not.
- The number of members of the Management Board shall not exceed one-fourth of the Board of Directors.
- The Board of Directors shall include independent directors. Independent directors shall account for at least one-fifth of the Board of Directors. At least three (3) members of the Board of Directors shall be independent directors.
Article 6. Independent directors
- An independent director is a person sufficiently independent in character to formulate his/her own position on matters reserved to the Board of Directors and able to make an unbiased judgement that is not affected by the Company's executive bodies, shareholder groups, or other stakeholders who has the required professional qualification and expertise.
- The independent director (a candidate) shall be a person who is not:
- related to the Company;
- related to any of the Company's substantial shareholders;
- related to any of the Company's substantial counterparties;
- related to any of the Company's substantial competitors;
- related to the government (Russian Federation or a constituent entity thereof) or municipality.
- The independence of the members (candidates) of the Board of Directors shall be determined in accordance with the independence criteria set out in provisions 16.4-16.7 hereof.
- Members (candidates) of the Board of Directors shall be recognised as related to the Company if they and/or their related parties:
- are, or have been over the past 3 years, members of executive bodies or employees of the Company, an entity controlled by the Company and/or the Company's managing company;
- received from the Company and/or its controlled entities, at any time over the past 3 years, remuneration and/or other financial benefits with a value exceeding one half of a director's base (fixed) annual remuneration. The actual income received from the Company and/or its controlled entities in any of the last 3 years shall be compared with the base (fixed) remuneration to independent directors accrued as at the time their independence is assessed in accordance with the remuneration policy. If the remuneration policy is not in place or unavailable, the expected base (fixed) remuneration shall be the base (fixed) remuneration approved for these directors at the last annual General Shareholders Meeting. The assessed financial benefits shall not include payments and/or compensations these persons received as remuneration and/or reimbursement of expenses in connection with the discharge of the director's / committee member's duties at the
Regulations on the Board of Directors of Public Joint Stock Company Magnit
Company and/or its controlled entity, including expenses in connection with directors' liability insurance and proceeds or other earnings received by these persons from securities of the Company and/or its controlled entity;
- are holders or beneficiaries of the Company's shares accounting for over 1% of the Company's authorised capital or total number of the Company's voting shares or having a market value which is more than 20 times higher than a director's fixed annual remuneration;
- are members of executive bodies and/or employees of a legal entity whose remuneration is determined (considered) by the remuneration committee of such entity, if any of the Company's executives and/or employees is a member of the remuneration committee of such legal entity;
- provide advisory services to the Company, an entity controlling the Company or legal entities controlled by the Company, or serve on the governing and/or executive bodies of organisations providing such services to the Company or the above legal entities, or are the employees of such organisations who are directly engaged in the provision of such services;
- provide or have provided over the past 3 years valuation, tax, audit or accounting services to the Company or its controlled legal entities, or have served over the past 3 years on the governing and/or executive bodies of organisations providing such services to these legal entities or of the Company's rating agency, or were the employees of such organisations / rating agency who were directly engaged in the provision of the above services;
- if a director has served on the Board of Directors for an aggregate of over 7 years. To determine the period of director's membership in the Company's Board of Directors, the period of director's membership in the Board of Directors of the reorganized legal entity, whose legal successor became the Company, shall be taken into account. For the purposes of assessment of independence of a candidate (an elected member of the Board of Directors), the candidate (the elected member of the Board of Directors) who has served on the Board of Directors for an aggregate of 7 to 12 years may not be treated as related to the Company if so resolved by the Board of Directors;
- are on the Board of Directors of a legal entity controlling the Company or a company controlled by, or the managing company of, such legal entity;
5. Members (candidates) of the Board of Directors shall be recognised as related to the Company's substantial shareholder if they and/or their related parties:
- are employees and/or members of executive bodies of the Company's substantial shareholder (a legal entity within a group of companies including the Company's substantial shareholder);
- received from the Company's substantial shareholder (a legal entity within a group of companies including the Company's substantial shareholder), at any time over the past 3 years, remuneration and/or other financial benefits with a value exceeding one half of a director's based (fixed) annual remuneration. The assessed financial benefits shall not include payments and/or compensations these persons received as remuneration and/or reimbursement of expenses in connection with the discharge of their duties as directors / committee members of the Company's substantial shareholder (a legal entity within a group of companies including the Company's substantial shareholder), including expenses in connection with directors' liability insurance and proceeds or other earnings received by these persons from securities of the Company's substantial shareholder (a legal entity within a group of companies including the Company's substantial shareholder);
- are members of the Board of Directors in more than two legal entities controlled by a substantial shareholder of the Company or a person controlling a substantial shareholder of the Company.
Regulations on the Board of Directors of Public Joint Stock Company Magnit
6. Members (candidates) of the Board of Directors shall be recognised as related to the Company's substantial counterparty or competitor if they and/or their related parties:
- are employees and/or members of governing and/or executive bodies of the Company's substantial counterparty / competitor or legal entities controlling the Company's substantial counterparty / competitor or entities controlled by such substantial counterparty / competitor;
- are holders or beneficiaries of shares (interests) in the Company's substantial counterparty / competitor accounting for over 5% of the Сompany's authorised capital or total voting shares (interests).
7. Members (candidates) of the Board of Directors shall be recognised as related to the to the government or a municipality if they:
- are, or have been for a year preceding their election to the Company's Board of Directors, civil/municipal servants, government officials or employees of the Bank of Russia;
- have an obligation to vote on one or more matters reserved to the Company's Board of Directors in accordance with a directive of the Russian Federation, its constituent entity or municipality;
- represent the Russian Federation, its constituent entity or municipality on the board of directors of a company in respect of which it was resolved to exercise a special right to control (a "golden share");
- are, or have been for a year preceding their election to the Company's Board of Directors, employees or members of executive bodies at an entity controlled by the Russian Federation, its constituent entity or municipality, employees of a governmental or municipal unitary enterprise/institution (other than employees of governmental or municipal educational/research institutions who are engaged in educational or research activity and are not persons appointed (approved) to the sole executive body or any other position at a governmental or municipal education/research institution by a resolution or consent of government authorities (local authorities)), if they are nominated to the board of directors of a company in which the Russian Federation, its constituent entity or municipality controls more than 20% of the authorised capital or voting shares of the Company.
8. For the purposes of this article, the following terms and definitions shall apply:
- related party of a member (a candidate) of the Board of Director means spouse, parents, children, adoptive parents, adopted children, full- and half-blood siblings, grandparents and any other person living, or sharing a home, with such person;
- Company's substantial shareholder means a person entitled - directly or indirectly (through controlled entities), independently or jointly with other parties under a fiduciary management agreement and/or simple partnership agreement and/or agency agreement and/or shareholders' agreement and/or any other agreement which provides for exercising rights conferred by shares (interests) in the Company - to 5% or more of voting rights attached to voting shares in the Company's authorised capital;
- A group of organizations, which includes a substantial shareholder of the Company, shall mean legal entities controlled by a substantial shareholder of the Company and/or legal entities controlled by a person controlling a substantial shareholder (including a substantial shareholder and/or a person controlling a substantial shareholder). The term "a group of organizations", which includes a substantial shareholder of the Company, shall not apply when a substantial shareholder is the Russian Federation, a constituent entity of the Russian Federation or a municipality;
- Company's substantial counterparty means an entity that is a party to an agreement(s) with the Company, under which obligations exceed(ed) 2% of the book value of consolidated assets of the Company or such entity as at the reporting date preceding the counterparty's
Regulations on the Board of Directors of Public Joint Stock Company Magnit
substantiality assessment, or 2% of consolidated revenue (income) of the Company or such entity for the full calendar year preceding the counterparty's substantiality assessment. If the counterparty does not have consolidated financial statements, the calculations can be based on its financial statements.
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beneficiary of the Company's shares means an individual who, by virtue of equity ownership in the Company, by contract or otherwise, receive economic benefit from holding shares (interests) and/or exercising voting rights attached to the shares (interests) in the Company's authorised capital.
9. In exceptional cases, the Board of Directors may recognise a candidate/director as independent even if the candidate/director meets the formal criteria of being related to the Company, the Company's substantial shareholder, the Company's substantial counterparty and/or competitor, the government (the Russian Federation or its constituent entity) and/or a municipality in accordance with Articles 6.4-6.7 hereof, provided that this does not affect the ability of such person to make independent, unbiased and good faith judgements.
The above applies if all of the following conditions are met:
- the relevant resolution of the Board of Directors shall contain a reasoned justification for the director/candidate being recognised as independent;
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the resolution to recognise the director/candidate as independent shall be disclosed on the Company's website, indicating:
− the quorum at the meeting of the Company's Board of Directors and the results of the voting on this matter, including the full name and the voting options (FOR, AGAINST, ABSTAINED) for each member of the Board of Directors who voted, or abstained from voting, on the matter to recognise the director/candidate as independent;
− the contents of the resolution, including a reasoned justification for the director/candidate being recognised as independent;
− the date of the meeting of the Company's Board of Directors at which the relevant resolution was passed;
− the date and the number of the minutes of the meeting at which the relevant resolution was passed.
The circumstances in which the Board of Directors may recognise a candidate/director as independent include, inter alia:
- the related party of the candidate/director is an employee (other than an employee with management powers) at an entity controlled by the Company or a legal entity within a group of companies including the Company's substantial shareholder (but excluding the Company), the Company's substantial counterparty / competitor or a legal entity controlling the Company's substantial counterparty / competitor or its controlled entities;
- the nature of relationships between the candidate/director and their related party is such that they cannot influence the candidate's decisions;
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the candidate/director has an established reputation (including with the investor community) for being able to formulate an independent position on their own.
10. Independent directors shall refrain from any actions that may result in them ceasing to be independent. If, after an independent director has been elected to the Board of Directors, any circumstances arise that cause him/her to cease to be independent, he/she shall notify the Board of Directors thereof.
11. The Board of Directors (the Board of Directors' HR and Remuneration Committee) shall assess the independence of candidates for the Board of Directors, give an opinion on the candidate's independence and review on a regular basis whether its independent directors meet the independence criteria set out in Articles 6.4-6.7 hereof.
Regulations on the Board of Directors of Public Joint Stock Company Magnit
- An independent director responsible for specific functions of the Board of Directors (serving on the Board of Directors' committee) shall possess adequate professional knowledge in the relevant area (the Company's industry, crisis management, corporate governance, financial analysis, audit and others).
- If the Listing Rules of PJSC Moscow Exchange setting out the independence criteria for the members of the Board of Directors are amended resulting in a conflict with certain provisions of these Regulations, the provisions of the Listing Rules shall prevail.
4. CHAIRMAN OF THE BOARD OF DIRECTORS
Article 7. Election of Chairman of the Board of Directors
- The Chairman of the Board of Directors shall be elected by the Board of Directors from among its members by majority of votes of all its members. Votes of former members shall not be counted.
- A person acting as any of the Company's sole executive bodies may not simultaneously serve as chairman of the Board of Directors.
- The Board of Directors may re-elect its Chairman at any time by majority of votes of its all members. Votes of former members shall not be counted.
- Members of the Board of Directors may elect a Deputy Chairman of the Board of Directors to exercise chairman's functions in the absence of the chairman.
- If the person who served as Chairman of the previous Board of Directors is elected to the new Board of Directors, this person continues to serve as Chairman until the new Chairman of the Board of Directors is elected. If the person who served as Chairman of the previous the Board of Directors is not elected to the new Board of Directors, the oldest member of the Board of Directors shall act as its Chairman until the new Chairman of the Board of Directors is elected.
Article 8. Functions of Chairman of the Board of Directors
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The Chairman of the Board of Directors shall oversee the activities of the Board of Directors, convene and chair its meetings, ensure that minutes of meetings are taken and chair General Meetings of Shareholders.
The Chairman of the Board of Directors interacts with the Company's shareholders, organizes exchange of correspondence between the Board of Directors and the Company's shareholders and signs letters and other documents on behalf of the Board of Directors. - In the absence of the Chairman and Deputy Chairman, their functions shall be exercised by a director as resolved by the Board.
The person acting as Chairman in the absence of the Chairman of the Board of Directors may exercise all powers exercisable by the Chairman of the Board of Directors. - The Chairman of the Board of Directors may not delegate the functions of the Chairman to any other person.
5. SECRETARY OF THE BOARD OF DIRECTORS
Article 9. Election of Secretary of the Board of Directors
1. The Secretary of the Board of Directors shall be elected from members of the Board of Directors.
The Secretary of the Board of Directors may be appointed from individuals who do not serve on the Board of Directors.
2. The Board of Directors may re-elect its Secretary at any time.
Regulations on the Board of Directors of Public Joint Stock Company Magnit
- If the person who served as Secretary of the previous Board of Directors is elected to the new Board of Directors, this person continues to serve as its Secretary until the new Secretary of the Board of Directors is elected. If the person who served as Secretary of the previous Board of Directors is not elected to the new Board of Directors, the duties of the Secretary of the Board of Directors shall be exercised by a director acting as Chairman of the Board of Directors until the new Secretary of the Board of Directors is elected.
- If the Secretary of the Board of Directors is absent or unable to exercise the functions of Secretary at a meeting of the Board of Directors, the functions of Secretary of the Board of Directors shall be exercised by an individual appointed by the Chairman of the Board of Directors.
Article 10. Functions of Secretary of the Board of Directors
The Secretary of the Board of Directors shall:
- register and store incoming documents and copies of outgoing documents of the Board of Directors;
- provide technical and administrative support to directors during preparation for the meetings of the Board of Directors;
- maintain and prepare minutes of meetings of the Board of Directors, ensure minutes of meetings with all attachments are stored, and prepare extracts from minutes of meetings of the Board of Directors;
- ensure that ballots sent to the Board of Directors by its members are properly stored when resolutions are passed by poll (absentee voting);
- count votes on resolutions voted on at meeting of the Board of Directors; count votes on resolutions voted on by poll (absentee voting);
- exercise other functions in accordance with these Regulations.
6. COMMITTEES OF THE BOARD OF DIRECTORS
Article 11. Establishment of committees
- To fulfil its functions, the Board of Directors may establish committees. The committees conduct preliminary reviews of critical matters reserved to the Board of Directors and advise the Board of Directors in its decision-making.
- The Board of Directors shall establish the following permanent committees:
- Audit Committee;
- HR and Remuneration Committee;
- Strategy Committee;
- Capital Markets Committee.
The Board of Directors may resolve to establish other permanent or ad hoc committees.
- The committees shall be established by the Board of Directors from among its members who have relevant expertise and knowledge.
- Each committee shall consist of at least three members. The Audit Committee and the HR and Remuneration Committee shall be made up of independent directors only. If this is impossible for objective reasons, then the majority shall be independent directors, with the remaining members being appointed from directors other than the sole executive bodies and/or the members of the collective executive body of the Company
- Chairmen of the Board of Directors' committees shall be elected by the Board of Directors from among members of the relevant committees.
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Magnit OAO published this content on 04 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 June 2024 08:17:06 UTC.
