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Information on Corporate Governance

Information on Corporate Governance

Relationship between the earnings of management executives and the performance of the Company and the subsidiaries.

An annual target-setting mechanism for all employees with executive authority is in place in all subsidiaries. The results, in terms of evaluating the performance of these executives against the targets agreed at the start of the year, determine their total annual earnings. Because of the nature of the business activities of the subsidiaries companies, social and environmental performance are core targets and, consequently, key criteria in this annual performance review.

Conflict of interests

The existence of independent and non-executive Board members allows circumstances which might potentially lead to conflict of interests to be avoided. In collaboration with the Human Resources Department, the members of the Company’s Board of Directors have developed and are applying procedures to prevent any likelihood of conditions giving rise to conflict of interests. These procedures include continuous monitoring and information updates on the need to prevent such conditions from arising, as well as procedures for their early identification, should they arise. Additionally, the audits conducted by the Internal Audit Department also address, for each audited subject, the likelihood of occurrence of conflict of interests in violation of the policies of the Company;s subsidiaries.

Procedures for specifying the qualifications of the Board members

The Chairman of the Board and CEO, in collaboration with other Board members and especially with the Remunerations Committee, examines the CVs of candidate Board members and the other facts that guarantee their independence, in order to ensure that all necessary conditions – such as specialization and experience, but also availability in terms of time, which will allow such candidates to contribute substantial work., if elected – are met. The criteria based on which candidates are elected to the Board include, among others, specialisation, academic qualifications, managerial abilities, honesty and professional or other experience, as the case may be, which can help manage more effectively the matters of interest to MYTILINEOS.

Corporate policies and values relating to the Company's economic, environmental and social performance

The Company has drawn up a Professional Ethics Code which has been communicated to all Board members and to all Units and employees in all the Subsidiaries. The Code is closely related to the UN Global Compact in what concerns the protection of Human Rights and the promotion of Transparency. Additionally, the Company’s mission and the values that govern its operation are incorporated in all official corporate documents, such as the Internal Rules of Operation and the Internal Procedures and Quality System. The work conditions and the environmental performance of the subsidiries are checked and certified in accordance with the Occupational Health and Safety Management Systems (OHSAS 18001 – ELOT 1801) and the Environmental Management (ISO 14001) and Quality Management (ISO 9001) Standards, respectively. The Internal Rules of Operation lay down the responsibilities, duties and obligations of all statutory bodies established pursuant to the Articles of Association and to the applicable laws.

Risk Management

Adopting a pre-emptive approach, MYTILINEOS and its subsidiaries have in place a Risk Management System which is coordinated by the Board of Directors, covers the entire management hierarchy and concerns all business activity sectors. Because of the nature of the core activities of the subsidiaries (heavy industry), each proposed business action is continuously monitored in order to identify potential associated risks during business planning, the development and presentation of new products, and the environmental protection and the protection of public health, so as to decide on the best way in which such risks are to be handled.

The activities of the subsidiaries also involve multiple financial risks, including currency and interest rate risk, market price fluctuation risk, credit risk and liquidity risk.

The risk management and risk hedging plan of the Subsidiaries aims to mitigate the potential adverse impact on the Company’s financial results which may result from the inability to forecast the financial conditions and the fluctuations in the cost and sales variables. To this end, the Company employs derivative financial instruments to compensate for its exposure to specific risk categories.

The Risk Management Policy is applied by the Company’s Corporate Treasury Department, which operates as a service centre and follows specific directions approved by the Management. The Corporate Treasury Department identifies, quantifies, manages and offsets the financial risks created from the core operations of the subsidiaries.

Procedure for evaluating the performance of the Board with respect to the Company’s economic, environmental and social performance

In addition to the annual evaluation, during the regular and extraordinary Board meetings extensive references are made, if judged necessary by the Chairman and CEO, to the economic, environmental and social performance of the Company and of the subsidiaries, followed by the evaluation of the performance of the Board members with respect to these issues. The relevant data are secured through the information available to the CEO through his presence in the Boards of Directors and from the reports submitted to the Board's executive members through the management hierarchy, in line with the latter’s duties.

Initiatives of the Company relating to the precautionary approach or principle

In line with the requirement for application of the precautionary approach, the Company’s strategy relies on investing in accountability and on the annual publication of Sustainability Reports, which accompany the Company's annual financial statements. The Sustainability Report presents in detail the economic, environmental and social performance of the Company’s individual companies by business activity sector. In its operations, the Company adheres to principles and values that promote business excellence, striving for socially responsible development with respect to the environment, and for the social acceptance of its business activities. These values are based on continuous efforts to support the development of the human resources of the subsidiaries, by fostering teamwork, personal integrity and professional conduct and by ensuring good health and safety standards at the workplace. These standing corporate values, together with the rules of ethical and professional conduct and with the Company’s overall Corporate Governance and Performance System, ensure correct operation and the achievement of the desired results in addressing with economic, social and environmental challenges.