Naftna Industrija Srbije : Questionnaire on Corporate Governance Practice - NIS a.d., Novi Sad

QUESTIONNAIRE

ON CORPORATE GOVERNANCE PRACTICE FOR ISSUERS

Business name of the	Društvo za istraživanje, proizvodnju, preradu, distribuciju i promet nafte i
Company:	naftnih derivata i istraživanje i proizvodnju prirodnog gasa Naftna
industrija Srbije a.d. Novi Sad
Company	Narodnog fronta 12
Headquarters:	Novi Sad
Republika Srbija
Company ID No.:	20084693
Company Tax ID No.	104052135

Questionnaire instructions:

• o When answering a question, a more detailed explanation is required in addition to a YES/NO answer.

• o If a question was answered based on information gathered from a publicly available Company act, it is required to indicate the location where the act can be read (e.g. the website where the act has been published), and if it is an act which has not been published, indicate the act's full name and number and the Company body which has adopted it.

• o If the answer is grounded on a usual corporate practice, it is required to provide a specific example to demonstrate such answer.

1. Has the Company adopted its own Code of Corporate Governance or has it applied another organisation's Code of Corporate Governance?
Answer:	Yes. The NIS j.s.c. Novi Sad Code of Corporate Governance (No. 85/OD-od/XXVI-3a) was adopted on 27 January 2014.
website where the applicable Code is publicly available:	www.nis.rs
2. Have applicable corporate governance principles been incorporated into the Company acts and are they easily available to all stakeholders?
Answer:	Yes.
The most significant acts on corporate governance, and the manner in which they have been made available.	NIS j.s.c. Novi Sad Articles of Association, NIS j.s.c. Novi Sad Code of Corporate Governance, NIS j.s.c. Novi Sad Shareholders' Assembly Rules of Procedure, The Rules of Procedure of the Board of Directors the Board of Directors' Commissions, NIS j.s.c. Novi Sad Dividend Policy. All of the above documents are available on the Company website (www.nis.rs).
4. Does the Company publish in its annual reports the information on its business operations' compliance with the corporate governance principles or provide explanations for any departure from the principles, in line with Article 368 of the Law on Commercial Entities?
Answer:	Yes. The Corporate Governance Statement is an integral part of the Company's Annual Report and includes the information on applicable Code of Corporate Governance, the website where it is
available, the overview of the most important corporate governance practices applied by the Company as well as the explanation of any departures from the principles prescribed by the Code. The Company's Annual Report is available on the Company website (www.nis.rs) as well as the website of the Belgrade Stock Exchange, in the Official Registry of Information of the Serbian Securities Commission and on the website of Serbian Business Registers Agency.
ASSEMBLY AND SHAREHOLDERS
5. Does a Invitation for meeting of the Shareholders Assembly include all the prescribed elements and information, including the Shareholders Day details and information on shareholders' rights to participate in the activities of the Shareholders Assembly and propose items of the agenda, with timeframe for exercising these rights, as well as the description of voting procedures, either by proxy, absentee ballot or electronically?
Answer:	Yes. The Invitation for meeting of the Shareholders Assembly includes:  date of publishing of the Invitation,  time and place of the meeting,  agenda of the meeting with clearly specified items on the agenda regarding which the Shareholders Assembly is proposed to pass a decision, total number of voting shares that have the right to vote on that decision and the majority required to adopt the decision,  information that materials for the Shareholders Meeting may be downloaded from the Company website (www.nis.rs) and are also available to shareholders in the Company registered seat,  guidance on shareholders' rights to participate in the Shareholders' Assembly activities and a clear and precise information on rules for their exercise,  notice of the Shareholders Day, explanation persons which are Company shareholders on that day are entitled to participate in the Shareholders' Assembly activities as well as the information on how to access the list of shareholders,  notice of shareholders right to propose items of the agenda and address questions with the indication of deadlines for exercising such rights, with a clear note that detailed information on the exercise of such rights is available on the Company website (www.nis.rs)  description of the voting procedure by shareholder proxy and deadlines for submitting the Power of Attorney, as well as the information about the way in which the company allows shareholders to submit notices of appointment of proxies electronically,  note that a Power of Attorney Form may be downloaded from the Company website (www.nis.rs),  description of the absentee ballot procedure and procedure
for voting by electronic means including the information that an Ballot Form may be downloaded from the Company website (www.nis.rs) and deadlines for submission of the ballot. The contents of the Invitation for meeting of the Shareholders Assembly is regulated by the Shareholders' Assembly Rules of Procedure (No. 70/SA-od/XI-11а dated 27 June 2019 (consolidated text)) which are publicly available on the Company website (www.nis.rs). The Invitation to shareholders for XIII Ordinary meeting of the Shareholders' Assembly was published starting from 28 May 2021. The invitation was sent to shareholders by publication on the Company website (www.nis.rs), and it was also published on the website of the Belgrade Stock Exchange (www.belex.rs), the website of the Central Securities Depository and Clearing House (www.crhov.rs), the website of the Business Registers Agency(www.apr.gov.rs)and in the Public Register of Information of the Securities Commission of the Republic of Serbia.
6. Is the Invitation for meeting of the Shareholders Assembly, with all relevant explanations and information submitted to the Stock Exchange for the purpose of publishing in the regulated market, i.e. MTP Belex, immediately after its sending (publishing) to shareholders?
Answer:	Yes.
Specify whether and how long following the sending of the Invitation to shareholders it was submitted to the Stock Exchange for the purpose of publication in 2021.	The Invitation for XIII Ordinary meeting of the Shareholders' Assembly was published on the NIS j.s.c. Novi Sad website on 28 May 2021 and on the day of its publication was submitted to the Belgrade Stock Exchange j.s.c. and the Republic of Serbia Securities Commission.
7. Are the materials for the meeting of the Shareholders Assembly available on the Company website?
Answer:	Yes. The materials for the meeting of Shareholders Assembly are available on the Company website (www.nis.rs), where they can be downloaded in whole, and they are also available in the Company's seat - in the premises of NIS j.s.c. Novi Sad Office for Minority Shareholders Affairs.
Specify how the materials for the meeting of the Shareholders Assembly are available to the shareholders, if they are not available on the Company website	/
8. Has the Company established some of legally prescribed options for online participation in the Assembly activities, and if so, in which manner?
Answer:	Yes. Starting from 2014 the Company has provided the possibility for the Company's shareholders to vote by electronic means before the meeting by delivery of the ballot form signed with a qualified electronic signature.
9. Does the Company publish adopted decisions and minutes of the meetings, immediately, i.e. within prescribed deadlines, after the meeting?
Answer:	Yes. The Company has published all decisions adopted at the XIII Ordinary meeting of the Shareholders' Assembly, as well as other relevant documents (Voting Commission Report on Voting Results and Minutes) within deadlines specified under the Law following the meeting of the Shareholders Assembly.
Specify in which manner the Company ensured shareholders' and public notification of these issues in 2021.	The Company has published the above decisions, Minutes and other documents on its website (www.nis.rs) in the "Shareholders' Assembly Decisions" section, within the section intended for investors and shareholders, which could have been accessed from the Company web site home page. The following news: "XIII Ordinary Meeting of NIS Shareholders' Assembly held" was published on the website in the News section and also submitted to the Belgrade Stock Exchange and Serbian Securities Commission with an overview of the most important decisions adopted at the XIII Ordinary Meeting of Shareholders Assembly, and this Company press release was sent to all major Serbian medias. Also the following decisions were submitted to the Belgrade Stock Exchange and Serbian Securities Commission on 30 June 2021: Decision on Adopting Annual Report for 2020, Decision оn Distribution the Profit from Previous years, Coverage of Loss of NIS j.s.c. Novi Sad for 2020, Dividend Payment and Determining the Total Amount of Retained Profit of NIS j.s.c. Novi Sad, Decision on Adoption of Financial Statements for 2020, Decision on Adoption of Consolidated Financial Statements for 2020 and decisions on adoption of reports of the independent auditor on audit of Financial and Consolidated Financial statements and Annual report of the Company for 2020.
10. What materials, decisions and other relevant documents related to the Shareholders' Assembly, if any, are also prepared and published in English?
Answer:	Yes. All decisions, materials and other published documents related to the activities of the Shareholders' Assembly are also prepared and published in English and can be found on the Company website (www.nis.rs).
11. Has the Company adopted the Shareholders' Assembly Rules of Procedure and does this or other Company act set forth rules and procedures which ensure that shareholders are provided with timely answers to all relevant questions concerning the Assembly?
Answer:	Yes. Rules of Procedure of Shareholders Assembly of NIS j.s.c. Novi Sad (No. 70/SA-od/XI-11a dated 27 June 2019 (consolidated text)), among other things, regulate the right of a shareholder to ask questions, receive answers and submit proposals.
Specify whether the Company has ensured and in which manner that all shareholders are continuously provided with information on all applicable rules and procedures.	The NIS j.s.c. Novi Sad Shareholders' Assembly Rules of Procedure is available on the Company website (www.nis.rs) in the section intended for investors and shareholders. Explanation of the procedure for asking questions, receiving answers and submitting proposals was also a part of the Invitation for XIII Ordinary meeting of Shareholders' Assembly of NIS j.s.c. Novi Sad.
12. Has the Company clearly defined its dividend policy and the procedures and deadlines for its distribution?
Answer:	The Company has adopted its Dividend Policy which is available to shareholders on the Company website (www.nis.rs), and it governs a long-term corporate policy concerning dividend payment to shareholders, dividend amount compared to net profit, factors affecting dividend payment and dividend payment method. The Company has defined procedures regarding payment of dividends and the rights of shareholders to receive dividends by Company Standard SD-10.02.09 - The realization of the rights of shareholders to receive dividends. In accordance with the law, the deadline for dividend payment is determined by the decision of the Shareholders' Assembly on the payment of dividends and it can not be longer than 6 months from the date of adoption of this decision.
13. Has the Company issued shares in the previous year with restriction on shareholders' option to buy new emissions of the Company shares?
Answer:	No.
14. Has the Company established its mechanism for prevention and settlement of possible conflicts between its shareholders and the company?
Answer:	Yes. The Company has a three-member Commission for Minority Shareholders Complaint Settlement, working according to the relevant internal act of the Company (Instructions for the work of the Commission for resolving complaints of minority shareholders number UP-10.02.13-001 version 2.0 dated 13 August 2018), that governs the procedures for addressing the Commission, working procedures at its meetings, obligations and responsibilities of its members and other issues of relevance to the work of the Commission.