Untitled - PRIME Gold

200 2005 NORILSK NICKEL • ANNUAL REPORT •NORILSK NICKEL • ANNUAL REPORT •200520134. There is a committee for the settlement ofcorporate conflicts of the Board of Directorsor functions of such committee are assignedto some other body (other than the AuditCommittee or the personnel and compensationcommittee).35. There are no executives of the company onthe committee for the settlement of corporateconflicts.36.The committee for the settlement of corporateconflicts is headed by an independentdirector.37. The company has internal By-laws approvedby the Board of Directors providing for theprocedure of formation and operation of thecommittees of the Board of Directors.38. The company's charter provides for a procedureto determine the quorum of the boardthat would ensure obligatory participation ofindependent directors at the board meetings.Executive bodies39. The company has a collective executive body(Management Board).Not compliedNot applicableNot applicableCompliedComplied Charter, Clause 6.2.8.CompliedThe Charter (Clause 6.3.3.38) and Regulationon the Board of Directors (Clause 1.8) providefor possible creation of committees of the Boardof Directors including members of the Board ofDirectors.The Company does not have a committee ofthe Board of Directors for the settlement of corporateconflicts.The Company does not have a committee ofthe Board of Directors for the settlement of corporateconflicts.The Company does not have a committee ofthe Board of Directors for the settlement of corporateconflicts.Meantime, in accordance with Clause 1.8 of theRegulation on the Board of Directors,"... Committees of the Board of Directors shallbe chaired by members of the Board of Directorsthat are not members of the executive bodies ofthe Company and they shall include independentdirectors".The Audit Committee formation and operationprocedures are set out in the Regulation on theAudit Committee of the Board of Directorsapproved by the Board of Directors (ProtocolNo. GMK/32-pr-sd of 8 October 2004).Charter of the Company, section 7 Executive Bodiesof the Company.41. The By-laws of the company establish proceduresfor the approval of transactions whichare outside the scope of the company's financialand operational plan.42. There are no persons in the executive bodieswho serve as members, the GeneralDirector (manager), members of the managementbody or employees of any competitorof the company.43. There are no persons in the management bodiesrecognized guilty of committing offencesin the sphere of economic activity; against thegovernment, against interests of the federal,regional and local government service; or thathave been subject to administrative penaltiesfor offences in the sphere of entrepreneurialactivities or in the sphere of finance, taxes andlevies and the securities market. If the functionsof the sole executive body are performed bya managing entity or a manager – whetherthe General Director and members of theManagement Board of the managing entityor manager meet the requirements establishedfor the General Director and members of theManagement Board of the company.44. The Charter or By-laws of the company containa prohibition for the managing entity(manager) to perform similar functions for acompetitor or have any other property relationswith the company other than the provisionof management services.Not compliedCompliedCompliedNot applicableVirtually all operations outside the scope of theCompany's financial and operational plan areconsidered by the Company's Board of Directors.In accordance with clause 6.3.3.33 of theCompany's charter, the competence of theCompany's Board of Directors includes decisionson transactions in the amount of 2% (two) ormore of the book value of the Company's assetsaccording to the accounting data at the latestreporting date.The recommendation is complied; however, theCharter and By-laws of the Company containno provisions that would require compliancewith the limitations established by the recommendationsfrom the members of the Company'sexecutive bodies.The recommendation is complied; however, theCharter and By-laws of the Company contain noprovisions that would require compliance withthe limitations established by the recommendationsfrom the members of the Company's executivebodies.The functions of the sole executive body of theCompany have not been transferred to a managingorganization (manager).APPENDIX 140. The Charter or By-laws of the company containprovisions on the need to have approval of theManagement Board for real estate transactionsand loans received by the company unless suchtransactions are major deals or are performedin the ordinary course of business.Complied Charter, clauses 7.8.3., 7.8.6, 6.3.3.33.45. The By-laws of the company include the obligationof the members of the executive bodiesto refrain from any actions that will ormay potentially lead to a conflict of interestswith the company and in the case of suchconflict – their obligation to inform the Boardof Directors on such conflict.Not compliedThe By-laws of the Company do not provide forsuch obligation. Meantime, according to theCharter (Clause 7.9) "the General Director andmembers of the Managing Board, in exercisingtheir rights and responsibilities, shall act in theinterests of the Company, and exercise theirrights and responsibilities in respect of theCompany faithfully and reasonably..."46. The Charter or By-laws of the company containcriteria for the selection of the managingentity (manager).Not applicableThe functions of the sole executive body of theCompany have not been transferred to a managingorganization (manager).47. Executive bodies provide monthly reports ontheir activities to the Board of Directors.Not compliedReports on the Company's operations are providedto the Board of Directors on a quarterlybasis.