Under ChelPipe’s charter, the Company’s management and internal controls are structured as follows:

• The General Shareholder Meeting, which is the supreme governing body;
• The Board of Directors, which exercises with oversees overall direction of the Company’s activities, except for issues within the remit of the General Shareholder Meeting;
• Executive Bodies, which directs the day-to-day operations of the Company:
  

  a) Collective Executive Body – Management Board;

  b) The sole Executive Body – General Director (Chairman of the Management Board);

• The Examination Committee.

The key corporate governance principles that ChelPipe has adopted and implemented aim to defend the rights and interests of shareholders and ensure fair dealings with them. They also aim to ensure that the Board of Directors, Company officials and shareholders behave professionally and ethically, and to increase the transparency of information and develop a system of business ethics.

ChelPipe’s strategic development requires compliance with current corporate governance legislation, including non-mandatory components such as the Code of Corporate Behaviour recommended by the Federal Financial Markets Service on 4 April 2002. The Company continually strives to improve its corporate governance practices, which cover the following main areas:

— protection of shareholder rights;

— information disclosure;

— effective management and oversight.