REGULATIONS on management of conflicts of interest in the “Dori-Darmon” JSC and its constituent companies 

Chapter 1: General Rules

1. These Regulations establish the procedure for identifying, preventing and managing conflicts of interest in the “Dori-Darmon” JSC (the “Company”) and its constituent enterprises.
2. The rules of these Regulations apply to all employees of the Company, regardless of their position and job duties.
3. These Regulations are the main internal document for the prevention and management of conflicts of interest that have arisen and may arise in the Company, and are subject to unconditional compliance by all employees.
4. Issues related to conflicts of interest of the Company's employees are coordinated by the service coordinating the Company's HR activities (hereinafter the “HR Service”).
5. For the purposes of these regulations, the following basic concepts shall be used:

attracted persons - persons participating in the authorized capital of commercial organizations with the Company's employee, except for those who have less than five percent of shares of Joint Stock Companies, whose shares are publicly traded on the Republican Stock Exchange;

Cronyism - the use of power (official position) and authority in order to provide illicit benefits to friends or confidants;

conflict of interest - a situation in which a personal (direct or indirect) interest of a Company employee affects or may affect the proper performance of a person's career or official duties, and in which there is a confrontation between the rights and legitimate interests of citizens, organizations, society or the state;

Disclosure of conflicts of interest - a procedure for employees to declare a potential or actual conflict of interest;

regulation of conflicts of interest - reducing or eliminating the risk that employees' official obligations will prevail over the interests of the Company in the event of a situation of improper performance by the Company and (or) a conflict of interest in their interests (including personal, social, property, financial and other interests;

Mestnichestvo - the recruitment, rotation and appointment of a person to a position without regard to whether he or she meets the qualifications for the position because of his or her lineage (the fact that he or she is a member of a noble or famous dynasty and is recognized by the public) and the official position of close relatives;

nepotism (close kinship, nepotism; a form of favoritism based on family ties) - the use and/or influence of power to provide illegal benefits to one's close relatives or friends, as well as the unjustified reward of close relatives and (or) friends to the detriment of the interests of the Company by accepting and appointing close relatives and friends to the position;

potential conflicts of interest - personal interests of an employee, his/her close relatives and/or a person related to the Company (including personal, social, property, financial and other interests) in certain situations in which they may conflict with the interests of the Company and affect the performance of official obligations by the Company's employees;

kinship - personal interest of the Company's employee in the form of subjective, privileged and prejudicial treatment of third parties on the basis of belonging to the same dynasty, with the same ancestors;

favoritism is when a Company employee prioritizes the interests of one person or group over those of another person and/or group, selects and places personnel in the Company, promotes, awards monetary bonuses and recommends for state awards, provides vacations or sends to resorts and foreign trips, and does not follow order in cases involving turnover, work schedules and duty assignments;

personal interest of the employee - the possibility of personal benefit of the employee in the form of money, tangible or intangible assets, other property, wealth and benefits, which may affect the proper performance of career or official duties by a close relative or persons related to the employee in the performance of their duties (personal, public, property, financial, political and other interests);

patronage - protection of an employee of the Company in the form of creating favorable working conditions by another employee holding a higher position, with the acceptance of his side;

close relatives - persons related by a relative or matchmaker, i.e. parents, siblings, married couple, child, including stepchildren, grandparents, grandchildren, and parents, siblings, and stepbrothers. 

Chapter 2: Principles of Conflict of Interest Management

1. Company employees must comply with the following basic principles in managing conflicts of interest:

the priority of the rights, freedoms and legitimate interests of citizens;

to put the interests of the state above personal interests;

to make decisions on the basis of transparency, honesty, objectivity;

mandatory disclosure of potential or actual conflicts of interest;

the priority of preventive measures to avoid conflicts of interest;

respecting collectivity in handling and resolving cases of conflicts of interest;

an objective approach to reviewing, evaluating and resolving cases characterized by conflicts of interest;

ensuring the secrecy of information on the presence of a conflict of interest in accordance with the established procedure;

if an employee has disclosed a conflict of interest in a conflict of interest order before making any decisions or performing assigned functions and is willing to compromise his or her personal interests in favor of the interests of the Company, he or she may not be terminated because of a real or potential conflict of interest;

transparency and accountability;

personal responsibility and the inevitability of punishment. 

Chapter 3: Duties and Authority of Employees of Appropriate Structural Units

1. Employees of the Company shall, in the performance of their official duties and (or) representation of the interests of the Company, follow the principles set forth in these Regulations and protect themselves from situations that give rise to a conflict of interest.
2. To prevent conflicts of interest, employees of the Company shall, in the performance of their duties

comply with the requirements of these Regulations;

to pursue only the interests of the Company;

use his or her position and authority only for the benefit of the Company;

Report to the Company's internal Anti-Corruption Control structures (hereinafter referred to as Compliance Control) any personal interests that may conflict or conflict with the interests of the Company;

to strictly eradicate manifestations of nepotism (kinship), patronage, favoritism, cronyism, mestnichestvo and nepotism;

disclose potential or actual conflicts of interest in a timely and complete manner;

honest, complete and honest disclosure of a complete list of information about their close relatives and related persons, information about themselves and their participation in non-governmental non-profit organizations;

if there is information about the existence of conflicts of interest in other employees of the organization, it is necessary to report it in the manner prescribed by internal documents. 

1. In order to prevent conflicts of interest, an employee of the Company must disclose a conflict of interest in the following cases:

if the employee has close relatives and (or) persons related to them in his/her direct subordination;

if close relatives and (or) related persons work in the organization, whose activities are studied according to the established procedure, and (or) if the official, whose activities are studied according to the established procedure, is a close relative of the employee and (or) related person;

if the employee participates in decision-making with respect to close relatives and/or related persons (including the calculation and payment of wages, bonuses, allowances, and setting their amount).

This list is not considered definitive. The situation when a Company employee makes any decisions (granting benefits, granting licenses, purchasing products, etc.) in relation to close relatives and/or related persons (to the organizations in which they work) may provoke a potential conflict of interest. In such cases, the Company employee will be required to disclose the conflict of interest.

1. To identify situations of conflict of interest mentioned in paragraph 10 of this Policy, an employee should ask themselves the following questions before making a decision or performing their job duties: “can I make a good faith and impartial decision, take an action?” and “in this situation would another employee decide the same as me?” If an employee answers “No” to at least one of these questions, there is a risk of a conflict of interest.
2. The Company carries out the following in the direction of identifying conflicts of interest:

when an employee is hired or appointed to a position, as well as in other cases, information that causes a conflict of interest is collected;

Each employee identifies a conflict of interest that has arisen or may arise in the performance of his or her job or official duties and informs his or her supervisor and the Human Resources Department;

each information or communication that may give rise to a conflict of interest is reviewed in a collegial manner and its impact determined. Other methods of determining conflicts of interest may also be used as required by law.

1. A conflict of interest is managed as follows:

When employees are hired, they shall be acquainted with the requirements of these Regulations against their signature;

Work is carried out to explain and advise employees on the requirements of the Regulations;

A list of identified cases of conflicts of interest is maintained;

The Human Resources Management Service examines cases of conflicts of interest, assesses them and establishes measures aimed at preventing conflicts of interest;

Surveillance and monitoring is carried out to ensure the effectiveness of the conflict of interest prevention process.

Other management techniques based on legal requirements may also be used to manage conflicts of interest.

1. In cases where conflicts of interest arise or are likely to arise, the following steps may be taken:

Allow an employee to voluntarily not participate in, or deviate from, the relevant activity or decision-making;

reviewing or amending an employee's job responsibilities;

Setting restrictions on information related to an employee's personal interests;

If an employee's job duties conflict with his or her personal interests, transfer the employee to another position that does not involve a conflict of interest;

Denial by the employee of his or her personal interests that adversely affect the activities and interests of the Company;

termination of the employment contract concluded with the employee if the personal interests of the employee conflict with the activities or interests of the company and if it is impossible to use other measures to manage it. 

Chapter 4. Procedure for disclosing and reviewing information on conflicts of interest

1. General rules for declaring a conflict of interest 

1. The following forms of conflict of interest declaration shall be used to prevent conflicts of interest in the Company:

Pre-disclosure of conflicts of interest when rotating and appointing candidates to vacant jobs in the Company's system;

annual disclosure of conflicts of interest (annual declaration);

Disclosure of information about a real or potential conflict of interest. 

2. Declaration of Conflict of Interest in Rotation and Appointment of Candidates to Vacancies

1. In the Company's system, prior declaration of conflicts of interest when appointing candidates to vacancies, employees to positions and their rotations is made by submitting the following documents to the Company's Human Resources Department:

certificate filled in the form in accordance with Appendix 1 to these Regulations;

in the process of hiring, assignment and rotation, a statement in the form in accordance with Appendices 2 and 3 to these Regulations on the presence/absence of a conflict of interest shall be completed.

Documents submitted by the employee are reviewed by Human Resources for the presence or absence of a conflict of interest. If a conflict of interest is detected, the Human Resources Department notifies the Chairman of the Company's Management Board or the deputy head coordinating the activities of the structural subdivision that is to hire or rotate the candidate.

According to the Chairman's instructions, the Human Resources Service, in cooperation with the Company's relevant structures, takes measures to resolve conflicts of interest. 

3. Annual Declaration of Conflict of Interest

1. The annual declaration of conflicts of interest shall be made in the following order:

Employees must annually, by February 15, fully and correctly complete the Conflict of Interest Statement on the form in accordance with Appendix 3 to these Regulations and submit the completed statement to Human Resources;

By March 10, Human Resources will review the statements received for the presence/absence of a conflict of interest in order to identify employees who have indicated a conflict of interest;

If the analysis reveals employees whose activities may lead to a conflict of interest, information about such employees is submitted to the Ethics Commission of the Company;

The Ethics Commission of the Company, with the participation of the employee's immediate supervisor and (if necessary) the employee himself/herself, reviews the conflict of interest situation by March 20 and makes a decision on the development of measures to resolve situations characterized by the presence or absence of a conflict of interest. This decision shall be recorded in the minutes of the commission meeting. The protocol establishes the structure (official) responsible for the development of measures;

The Human Resources Management Service shall collect and store electronic information about the circumstances of a conflict of interest by March 25, which will be included in the Conflict of Interest Register in the form according to Appendix 4 to these Regulations;

Every year in the first quarter, the Company's Human Resources Service submits a statistical analysis of declaring, identifying and resolving conflicts of interest to the internal anti-corruption control structure (the Compliance Control Service) and the Chairman of the Company. 

4. Filling out a declaration of actual or potential conflicts of interest

1. Declaration of information on the occurrence of a real or potential conflict of interest shall be made in the following order:

When an employee of the Company has a conflict of interest, he or she must notify his or her direct supervisor within one business day of becoming aware of the situation, on the form set forth in Appendix 5 to these Regulations, describing in detail the situation described as an actual or potential conflict of interest;

The employee's immediate supervisor shall review information about the conflict of interest within three business days of receiving a written report from the employee and submit a notice proposing to eliminate the conflict of interest, register the notice with Human Resources, and take appropriate action;

The Human Resources Department, in cooperation with the employee's direct supervisor, takes steps to eliminate conflicts of interest, or a conclusion is made that there is no conflict of interest, and the relevant information is submitted in writing to Compliance Control and the Chairman of the Company. 

Chapter 5. Measures to Address Conflicts of Interest

1. In order to prevent violations of the Company's interests, measures to resolve actual conflicts of interest should be implemented as soon as possible.
2. In managing conflicts of interest in the company, the following measures should be outlined:

transfer of a directly subordinated employee to another person who is not a close relative;

removal from participation in the discussion and decision-making process on issues that are the subject of a conflict of interest at the discretion of the employee, his or her self-denial or forced (permanent or temporary) removal;

in order to avoid conflicts of interest, to review the scope of the employee's job duties;

restricting an employee's use of Company data and documents that represent his or her personal interests and are subject to a conflict of interest;

ensuring a collective decision with respect to a close relative and (or) related person in a higher position regarding promotion, performance evaluation, payment of bonuses and wage increments, referral to education and training and abroad on various issues, agreement to go on labor leave and ensuring a collective decision on wage control;

the employee's transfer to a position that does not involve a conflict of interest, and other circumstances.

1. In exceptional cases, if the measures listed in paragraph 20 of these Regulations do not fully regulate conflicts of interest, the following regulatory measures may be taken:

employee's renunciation of personal interests that collide with the interests of the Company;

Termination of the employment contract with the employee if he or she does not give up his or her personal interest that conflicts with the interests of the Company.

1. In each situation, based on what determines the subject of the conflict of interest, other measures may be applied to resolve it in accordance with the Company's agreement with the employee. All measures taken must comply with legal requirements and ensure the implementation of the principles set out in this Regulation.
2. Measures to eliminate conflicts of interest and decisions taken by the Human Resources Management Service and the employee's immediate supervisor in the Company shall be reviewed at the next meeting of the Ethics Commission, which shall be reflected in the minutes of the meeting.
3. Compliance Control has the right to verify the objectivity and acceptability of decisions made by the employee or executive assignment, as well as the immediate supervisor of Human Resources and the employee on their own initiative, as well as the Ethics Committee to resolve conflicts of interest. 

Chapter 6. Confidentiality of information

1. Employees involved in resolving conflicts of interest must ensure the confidentiality of information received and ensure that this information is only used by those responsible for reviewing, recording and taking action to resolve conflicts of interest, and for monitoring the process.
2. When individuals and legal entities contact the Company with a report of a conflict of interest or suspected conflict of interest in the Company's employees, the Compliance Control Service, together with the Human Resources Service, shall review the report on the basis of these Regulations and other internal documents.

 

Chapter 7: Requirements for maintenance and storage of the Register

1. The Human Resources Management Service of the Company shall be obliged to keep timely and complete records of conflicts of interest by entering them in the Register according to the form in accordance with Appendix 4 to these Regulations. In this case, information from the Register of territorial and structural subdivisions shall be combined by the HR Service into the General Register of the Company. The General Register shall be provided to the Compliance Control Service on a quarterly basis.
2. Information shall be entered in the Register in the following cases:

When hiring at the Company - when the candidate indicates on the application form the presence/absence of a conflict of interest, and the Chairman of the Company confirms the fact that a conflict of interest may arise;

If a conflict of interest is disclosed during appointment/rotation, no later than three business days after the order is signed by the Chairman of the Management Board of the Company;

as conflicts of interest arise - if action is taken by Human Resources and the employee's immediate supervisor;

when information on conflicts of interest is annually declared by employees of the Company - in accordance with paragraph 17 of these Regulations;

in the case of confirmation of information received through communication channels about the presence of a conflict of interest;

when internal service audits are conducted and compliance with the Company's Anti-Corruption Policy and requirements is monitored, and there is a direct order from the Chairman of the Company to include the information in the Register.

1. Statements and notifications of employees relating to conflicts of interest, as well as other information, shall be kept in the Human Resources Department. 

Chapter 8: Final Rules

1. All employees, regardless of their position, are personally responsible for complying with the requirements of this Policy, as well as for providing timely information to the Company about their conflict of interest.
2. Persons who have violated the requirements of these Regulations shall be held liable in accordance with the established procedure.