Dividend Policy
The Board of Directors of OAO Severstal adopted the key principles of the corporate dividend policy in July, 2003.
In accordance with the OAO Severstal Charter dividends are a portion of the company's net profits allotted to shareholders in proportion to the amount of shares of the appropriate category and type owned by them. The company shall have the right to make a decision on (announce) the payment of dividends on placed shares. Decisions on the payment of dividends, the amount of those dividends and the form of payment shall be taken in accordance with the requirements of the Russian federal law «On Joint-Stock Companies». The amount of the dividend may not be higher than that suggested by the company's Board of Directors.
The company will make dividend payment within 9 months after the decision to pay dividends was adopted, unless otherwise enumerated in the dividend payment decision.
All shareholders registered as of the compilation date for the list of shareholders with the right to participate in the shareholder meeting at which the resolution on dividend payment was approved have the right to collect dividends.
The key points of the dividend policy:
- The company will pay dividends on the annual basis;
- The affordable level of the annual profit is the prerequisite for the dividend payment;
- The annual dividend payout will depend on the industry's cycle, i.e. it will vary with the amount of the profit received and company's cash flow;
- The mid-term dividend policy is to pay out as dividends a minimum of 25% of net profits received by the end of the reporting period, calculated according to IFRS;
- In long-term the company may increase the dividend payout ratio if the capex requirements are reduced;
- If the current financial position of the company is sustainable it can make an interim dividend payment.
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