Dividends

— The company shall pay dividends on an annual basis, the company will endeavour to pay interim dividends provided that its current financial position is sustainable;

 
— The dividend payout will depend on the performance of PAO Severstal and its subsidiaries, i.e. it will vary with the amount of net profits and its free cash flow of PAO Severstal and its subsidiaries;

 
— In the medium term, the company intends to declare dividends on a quarterly basis, so that the total annual dividend amount is equivalent to 100% of free cash flow of PAO Severstal and its subsidiaries for the respective reporting period determined on the basis of periodic consolidated financial statements of PAO Severstal and its subsidiaries prepared in accordance with International Financial Reporting Standards (“the Consolidated financial statements”), provided that the net debt/EBITDA ratio based on figures in the Consolidated financial statements is lower than 1.0x, the company is allowed to make amendments as a result of seasonal fluctuations in working capital;

— Should the net debt/EBITDA ratio, determined on the basis of the Consolidated financial statements, be lower than 0.5x, the amount of paid dividends can exceed 100% of free cash flow, based on the Consolidated financial statements for the respective reporting period;

— Should the net debt/EBITDA ratio be higher than 1.0x, the company shall move to a policy of paying dividends on a quarterly basis with an average amount for the results of a calendar year equivalent to 50% of free cash flow for the respective reporting period, determined on the basis of the Consolidated financial statements until the net debt/EBITDA ratio returns to 1.0x or below.