Untitled - PRIME Gold

206 2005 NORILSK NICKEL • ANNUAL REPORT •NORILSK NICKEL • ANNUAL REPORT •200520770. By-laws of the company establish dates forthe submission of documents and materialsto the internal control service for the assessmentof financial and operational transactionsperformed and liability of officials andemployees of the company for failure to providethem in time.Not compliedThis requirement is not defined in the By-lawsof the Company.Dividends76. There is an internal document approved bythe Board of Directors used as guidance bythe Board of Directors in developing recommendationson the size of dividends(Regulation on Dividend Polices).CompliedProtocol of the Board of Directors No. GMK/18-pr-sd dated 4 June 2002.71. By-laws of the company provide for the obligationof the internal control service to communicateany violations detected to the AuditCommittee and where there is no such committeeto the Board of Directors.72. The company's charter contains a requirementon preliminary assessment of the practicalityof transactions not envisaged in thecompany's financial and operational plan(unusual transactions) by the internal controlservice.73. By-laws of the company establish a procedurefor the agreement of any unusual transactionswith the Board of Directors74. There is an internal document determining theprocedure of audits of the financial and operatingactivities by the internal audit commissionapproved by the Board of Directors.Not compliedNot compliedNot compliedCompliedAt the date of approval of this annual report, thisrequirement is not defined in the By-laws of theCompany.Meanwhile, the Company is developing the regulationson internal control over financial andoperating activities (to be approved by theCompany's Board of Directors) in accordancewith which the Internal Control Department"shall inform the Audit Committee of the Boardof Directors and the Company's Sole ExecutiveBody of the identified breaches of internal controlprocedures."The Company's Charter contains no such requirement.Actually, all unusual transactions are consideredby the Company's Board of Directors.Regulation on the Revision commission,section 5 Procedure of Audits (Inspections)77. The Regulation on Dividend Policies containsa procedure for the determination of theminimum share of the net profit of the companyused for the payment of dividends andconditions under which dividends are notpaid or are not paid in full on preferred sharesfor which the size of dividends is determinedin the company's charter.78. Publication of information on dividend policiesof the company and any amendmentsthereto in a periodical stipulated in the company'scharter for publication of announcementson General Meetings and on the website of the company.CompliedCompliedProtocol of the Board of Directors meeting No.GMK/18-pr-sd dated 4 June 2002.Recommendations regarding terms of dividendpayment on preferred stock are not applicableto the Company due to absence of this class ofshares.Information on Dividend Policy (when approvedby the Board of Directors) was placed on theCompany's web site in its annual reports and distributedin the form of a press release whereasno such information was placed in periodic publicationsas envisaged by the Company's Charter.Notes:(1) This report on compliance with the Code of Corporate Conduct was prepared in accordance with the Methodological Recommendations approved by theDirective of the FCSM of Russia No. 03-849/r dated 30 April 2003.(2) For the purposes of this Report, "complied"/"not complied" answers in respect of a specific provision of the Corporate Governance Code should be interpretedas compliance/non-compliance by the Company with the principal (material) part of the provision in accordance with the Company's Charter or by-lawseffective at the time of preparation of this compliance report and/or based on the existing corporate governance practices at the Company. For the purposes ofthis compliance report, "not applicable" in respect of a specific provision of the Corporate Governance Code should be interpreted as the non-applicability ofthe Code's provision to the Company, since the Code's provision refers to an institution/a procedure which does not exist within the Company.APPENDIX 175. The Audit Committee performs an assessmentof the auditor's report before it is presentedto the shareholders in the GeneralMeeting.CompliedClause 2.3.1 (e) of the Regulation of the AuditCommittee of the Board of Directors providesthat it is within the competence of the AuditCommittee to "review financial statements andresults of audits, discuss them with external auditorsand management of the Company beforethey are presented to the Board of Directors ofthe Company".In accordance with Clause 5.7 of the Charter,"the review of the Auditor's Report preparedby the Audit Committee" constitutes "information(materials) to be made available to personseligible to participate in a Meeting in thecourse of preparation for the Meeting".