Listingrule s

2.18.1 Recommendations on the issuer’s corporate governance

If the issuer acknowledges independence of a member of/a candidate to the board of directors in accordance with procedures set in Sub-Clause 2 Clause 2.18 hereof, the issuer is further recommended to ensure that such member of/candidate to the board of directors sign a declaration of an independent member of /candidate to the board of directors produced according to the form recommended by the Exchange (hereinafter referred to as the “Declaration”).

The issuer is recommended to disclose signing the Declaration by a member of the board of directors on its website in the board of directors’ section (as part of information of the members of the board of directors). It is also recommended that such information should be made available on the issuer’s website until the date of the next annual general meeting of shareholders following the one at which the present board of directors of the issuer is elected.
If the board of directors is re-elected, and if the information stated in the Declaration changes, it is recommended that the member of the board of directors should sign the Declaration once again.

2.19. Schedule of requirements to the issuer's corporate governance which are to be met for shares to be included in Level Two

1. For the issuer's shares to be included in Level Two, such issuer shall meet the following requirements*:
1) The board of directors (supervisory board) elected by the issuer (hereinafter, the board of directors) shall include, among others, persons each of whom shall be sufficiently independent for formulating a position of their own and shall be capable of making objective judgment free from the influence of the issuer's executive bodies, certain groups of shareholders, or other stakeholders, and shall possess a sufficient degree of professionalism and experience (hereinafter, an independent director). The number of independent directors shall not be less than two.
A member of the board of directors, as a rule, cannot be an independent director if he:
a) is affiliated with the issuer;
b) is affiliated with a material shareholder of the issuer;
c) is affiliated with a material counterparty of the issuer;
d) is affiliated with a competitor of the issuer;
d) is affiliated with the government (the Russian Federation, or a constituent entity of the Russian Federation) or a municipality.


The independence of the members of the board of directors shall be determined in accordance with the Board of Directors Member Independence Criteria set out in Annex 4 of these Rules (hereinafter, the Independence Criteria).


2) The issuer's board of directors shall establish an audit committee, headed by an independent director, the core functions of which shall, among other things, include:
a) control of the assurance of completeness, accuracy and reliability of the issuer's financial statements;
b) control of the reliability and efficiency of the risk management and internal control system;
c) assurance of independence and objectiveness of the internal and external audit functions.


The audit committee shall consist of independent directors or, where this is not possible for objective reasons, the majority of committee members shall be independent directors, and the remaining committee members may include members other than the chief executive officer and/or the members of the collegiate executive body of the issuer.


3) The existence of the issuer's corporate secretary or special structural unit(s) performing the functions of the corporate secretary, with the following functions among other things:
a) support of the issuer's interaction with the regulatory authorities, trading authorities, the registrar, other professional securities market participants, within the corporate secretary's terms of reference;
b) prompt notification of the board of directors of any findings of violation of the law or the entity internal documents insofar as compliance with such documents is part of the entity corporate secretary's functions.


The corporate secretary (or the special structural unit performing the functions of the corporate secretary) may perform other functions as set out in the regulations of the corporate secretary (or of the special structural unit performing the functions of the corporate secretary).
The corporate secretary (the head of the structural unit performing the functions of the corporate secretary) shall report to the issuer board of directors, and shall be appointed to, and removed from, his office by the issuer's chief executive officer, subject to the consent of, or coordination with, the board of directors.