PAO Severstal : Report on Payments to Governments in 2020

REPORT ON PAYMENTS TO GOVERNMENTS in 2020

30 June, 2021

Essential Information

• This Report on payments to governments ("the Report") is prepared in accordance with the requirements of the Disclosure and Transparency Rules Instrument 2014 «Report on payments to governments», issued by the Financial Conduct Authority (FCA's Instrument). As FCA's Instrument has multiple references to the Accounting Directive
  (Directive 2013/34/EU of 26 June 2013 on the annual financial statements) the Report is prepared in accordance with Chapter 10 of the Accounting Directive.
• PAO Severstal ("Severstal" or "the Company") is obliged to prepare the Report under the requirements of Financial
  Conduct Authority since Severstal conducts extractive activities around the world and its GDR are traded on London Stock Exchange.
• The Report is published on the official site of Severstal and can be found in Investor relations section.
  Basis for preparation the Report for FY2020
• The Report provides citizens, authorities and independent users with the information on payments made to governments where Severstal conducts its extractive activities.
• Payments are reported in respect of extractive activities only. For the purposes of this Report under extractive activities it is understood any activity involving the exploration, prospection, discovery, development and extraction of minerals.
• For the purposes of this Report payments per governments (federal, regional or local) are disclosed.
• There were no payments per entity or project made in 2020. For the purposes of this Report under projects it is understood a single contract, license, concession or similar legal agreements, which forms the basis for payment liabilities.
• Payments are broken down by governments only.
• For the purposes of the Report preparation the scope of companies is the same as in consolidated financial statement of Severstal.

It is strictly forbidden to use, copy, disclose or distribute materials contained in this document	2
(or appendices hereto) in any way whatsoever without due authorization.

Essential Information

According to Chapter 10 of the Accounting Directive 2013/34/EU of 26 June 2013 the following types of payments are in scope:

• Production entitlements. These are host government's share of production in the reporting period derived from projects operated by a company. There were no such payments made in 2020.
• Taxes levied on the income, production or profits of companies. These payments include corporate income tax, mineral extraction tax, flat and surface tax. Taxes on consumption such as VAT, sales taxes, customs and stamp duties, personal, social, property and environmental taxes, land tax as well withholding taxes are excluded. Royalties. There were no such payments made in 2020.
• Dividends. These are payments made by a company to a government in lieu of production entitlements or royalties, where the government is an ordinary shareholder of that company.
• Bonuses. These are payments made by companies to a host country upon signing an agreement or contract, or upon achievement of certain levels of production (stated in agreement or contract). There were no such payments made in 2020.
• License fees, rental fees, entry fees and other considerations for licenses or concessions. These are payments for the access to the area where extractive activities will be performed.
• Payments for infrastructure improvements. These are payments made by a company to governments in the form of infrastructure expenditure (e.g. building a road or a bridge), excluding any voluntary contributions and charity payments.
  Payments for infrastructure improvements may be in the form of "in-kind payments".
• The Report include payments that are above 100,000 EUR only.

Notes:

• Voluntary contributions and charity payments are disclosed by Severstal in the Sustainability Report.
• There were no "in-kind payments" made in 2020.
• The Report is prepared in EUR. Payments made in currencies other than EUR were translated based on the average exchange rate for 2020 which is 82,43 RUB/EUR.
• The payments reflected in this report were made in the Russian Federation.
• Corporate income tax is shown as a sum of payments both within and without consolidated group taxpayer. Severstal CGT consists of 25 companies and payments from the CGT include income tax from non-extractive activities.

It is strictly forbidden to use, copy, disclose or distribute materials contained in this document	3
(or appendices hereto) in any way whatsoever without due authorization.

Payments Broken Down by Governments and Type of Payments

Type of payments

Production entitlements

Taxes levied on income, production or profits of companies:

Corporate Income Tax*

Mineral Extraction Tax

One-time payments for the use of sub-surface resources (bonuses)

Regular payments for the use of sub-surface resources (rentals)

Royalties

Dividends

Bonuses (signature, discovery, production)

License fees, rental fees, entry fees and other considerations

Payments to infrastructure improvements

TOTAL

Payments to governments above 100,000 EUR (in currency)

Federal	Regional	Local	State owned
government	government	government	company
-	-	-	-
-	-	-	-
30,719,098 €	166,002,662 €	-	-
8,959,175 €	13,438,763 €	-	-
-	-	-	-
9,738 €	14,607 €	-	-
-	-	-	-
253,113 €	-	-	-
-	-	-	-
-	-	1,414,817 €	-
-	-	69,394 €	-
39,941,125 €	179,456,033 €	1,484,210 €	-

TOTAL

-

-

196,721,761 €

22,397,939 €

24,345 €

253,113 €

1,414,817 €

69,394 €

It is strictly forbidden to use, copy, disclose or distribute materials contained in this document (or appendices hereto) in any way whatsoever without due authorization.

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Disclaimer

These materials are confidential and have been prepared by PAO Severstal (Severstal) solely for your information and may not be reproduced, retransmitted or further distributed to any other person or published, in whole or in part, for any other purpose.

These materials may contain projections and other forward-looking statements regarding future events or the future financial performance of Severstal. You can identify forward-looking statements by terms such as "expect," "believe," "estimate," "intend," "will," "could," "may" or "might", or other similar expressions. Severstal cautions you that these statements are only predictions and that actual events or results may differ materially. Severstal will not update these statements to reflect events and circumstances occurring after the date hereof. Factors that could cause the actual results to differ materially from those contained in projections or forward-looking statements of Severstal may include, among others, general economic and competitive environment conditions in the markets in which Severstal operates, market change in the steel and mining industries, as well as many other risks affecting Severstal and its operations.

These materials do not constitute or form part of any advertisement of securities, any offer or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for, any securities of Severstal in any jurisdiction, nor shall they or any part of them nor the fact of their presentation, communication or distribution form the basis of, or be relied on in connection with, any contract or investment decision.

No representation or warranty, express or implied, is given by Severstal, its affiliates or any of their respective advisers, officers, employees or agents, as to the accuracy of the information or opinions or for any loss howsoever arising, directly or indirectly, from any use of these materials or their contents

It is strictly forbidden to use, copy, disclose or distribute materials contained in this document	5
(or appendices hereto) in any way whatsoever without due authorization.