CONTENTS OVERVIEW STRATEGY MANAGEMENT KEY INDICATORS SUSTAINABLE DEVELOPMENT CONTACT INFORMATION
Annual Report ОМК 2018
OMK ANNUAL REPORT 2018 1 CONTENTCONTENTSS OVERVIEWOVERVIEW STRATEGYSTRATEGY MANAGEMENTMANAGEMENT KEY INDICATORSINDICATORS SUSTAINABLE DEVELOPMENTDEVELOPMENT CONTACT INFORMATIONINFORMATION
About the Annual Report
The OMK Annual Report for 2018 includes the company’s results during the reporting period, from 1 January 2018 to 31 December 2018.
Operating results in the OMK Annual Report consolidated according to intracorporate order. OMK sustainable development results and actions are presented in accordance with GRI standards.
The corporate social responsibility committee approved the OMK Annual Report 2018 on May 27, 2019.
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CONTENTS
1.0 Overview 4.0 Operating results 1.1 About the company 4.1 Message from the Chair 1.2 Major pipeline projects of the Management Board 1.3 Geographical reach 4.2 Operating indicators 1.4 Annual results 1.5 Message from the Chairman 5.0 Sustainable development report of the Board of Directors 5.1 Message from a Member of 1.6 Main events in 2018 the Management Board, Head of the Human Resources Department 2.0 Strategy 5.2 Sustainable development practices 2.1 Mission 5.3 HR Management 2.2 Vision 5.4 Production safety 2.3 Areas for development 5.5 Environmental safety 2.4 Strategy implementation 5.6 Quality management 2.5 Collaborations 5.7 Responsible procurement 2.6 Investments 5.8 Social projects 2.7 R&D 5.9 Charity 2.8 Market overview 5.10 Conclusion 5.11 Internal audit review 3.0 Corporate governance 3.1 Approach to corporate governance Appendices 3.2 Management structure A Corporate social responsibility goals 3.3 Board of Directors B GRI Standards Index 3.4 Management Board 3.5 Management Board activity 6.0 Contacts
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1.0 Overview
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1.1 ABOUT THE COMPANY
OMK is an integrated high-tech producer of steel, rolled sheet, pipes, pipeline valves and fittings, railway wheels, and automotive springs.
Our products enable safe and efficient transportation of freight and passengers
The Group consists of five large 1 2 3 4 5
Vyksa Blagoveshchensk Trubodetal Almetyevsk Chusovoy Steel Valves Plant Plant Pipe Plant Steel Works Works
(Vyksa, Nizhny Novgorod (Blagoveshchensk, (Chelyabinsk, (Almetyevsk, (Chusovoy, region) Republic of Baskortostan) Chelyabinsk region) Republic of Tatarstan) Perm Territory)
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Vyksa steel Моscow works Vyksa R U S S I A
Blagoveshchensk valve plant
Trubodetal Almetyevsk facility Chusovoy Blagoveshchensk almetyevsk Chelyabinsk pipe plant* chusovoy matallurgical works
*app or atz
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1.1 ABOUT THE COMPANY
OMK’S BUSINESS CONSISTS OF SEVEN DIVISIONS
Large Diameter Oil and Gas APP Pipes Division, Pipes Division, Division, Vyksa Vyksa Almetyevsk
Thick-Plate Mill 5000 Casting and rolling mill — Almetyevsk Pipe Plant — (Mill 5000) — producing producing hot rolled sheet producing oil and gas pipes, hot-rolled thick sheet water and gas pipes VSW Electric Pipe Welding Shop and shaped pipes VSW Electric Pipe Welding No. 2 — producing water and gas Shop No. 4 — producing pipes and small sections large diameter pipes VSW Electric Pipe Welding Shop Pipe Anti-Corrosion No. 3 — producing oil and gas pipes Coating Shop and large sections
VSW Electric Pipe Welding 1 Shop No. 5 — producing2 3 casing pipes
Casing Pipe Finishing Centre
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1.1 ABOUT THE COMPANY
OMK’S BUSINESS CONSISTS OF SEVEN DIVISIONS
Trubodetal BVP Railway CSW Division, Division, Wheels Division, Division, Chelyabinsk 4Blagoveshchensk5Vyksa 6Chusovoy 7
Chusovoy Steel Works — Trubodetal Plant — Blagoveshchensk Valves VSW Wheel Plant — producing automotive springs producing pipe fittings Plant — producing pipeline producing railway wheels valves
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1.1 ABOUT THE COMPANY
RUSSIAN MARKET POSITION AND SHARЕ 1
1 Position 2 Position 3 Position
Railway % Water and % Shaped % 1wheels2 57 2gas pipes 12 3pipes 9
Automotive % Total tubular % Pipeline % springs 56 products 16 valves3 12
Large diameter % Pipeline % pipes 22 fittings 13
1 Market share in quantitative terms, based on production volume of this type of product (estimated) Casing % Oil and % 2 On the 1520 sector pipes gas pipes 3 In operating segments 23 14
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1.2 Major pipeline projects
OMK pipes are used in the construction Deliveries in 2018: Nord Stream 2 | Turkish Stream | of major oil and gas pipelines Nuros - Abu-Madi - El Gamil, Egypt | Kasimovskiy PHG Pipeline | Mozdok-Groznyi | (total volumes supplied since 2007). North European Gas Pipeline
680 Nord Stream 2 495 South Corridor thousands thousands of tonnes of tonnes
620 Bovanenkovo - Ukhta 480 Ukhta - Torzhok thousands thousands of tonnes of tonnes
Eastern Siberia - 570 Pacific Ocean 470 Nord Stream thousands thousands of tonnes of tonnes
530 Power of Siberia 370 Central Asia — China thousands thousands of tonnes of tonnes
North European Sakhalin — Khabarovsk — 530 Gas Pipeline 340 Vladivostok thousands thousands of tonnes of tonnes
450 Turkish Stream thousands of tonnes
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1.3 Geographical Reach
While the majority of OMK products are sold in Russia, the company is active on the international market. Products were supplied to more than 20 countries in 2018.
Azerbaijan Moldova Armenia Netherlands Belarus Poland Bulgaria Slovakia United Kingdom USA Hungary Uzbekistan Germany Ukraine Guinea Turkey Egypt Finland Italy France Kazakhstan Czech Republic Kyrgyzstan Estonia Latvia Japan Lithuania
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1.4 Annual Results
Production
% % 1983 -11 Tubular products 860 +26 Railway wheels thousands thousand of tonnes units % Large diameter % Pipeline 772 -25 pipes 13 +30 fittings thousands thousands of tonnes of tonnes % Pipeline 550 -17 Wide sheet 4,9 = valves thousands thousands of tonnes of tonnes % % Automotive 1275 +1 Rolled products 44 -1 springs thousands thousands of tonnes (rolls and sheets) of tonnes
Social responsibility *
% share of engaged Lost time injury 65 employees 1,29 frequency rate, (LTIFR)
awards for employees** Social and charity projects 199 740 Rub. Million * Hereinafter - special marks on the implementation of the 2018 goals ** Departmental, regional, municipal awards to employees in the field of corporate social responsibility of the company
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1.5 MESSAGE FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS
Dear colleagues and partners, Thirdly, we have been exploring new, in-demand products with high potential to expand the packages we offer. This year, I am proud to present the United Metallurgical Company’s we brought modular equipment, unique pipeline fittings, and annual report. 2018 was a fairly challenging year. OMK several special kinds of casing and railway wheels to market reached high levels of operational performance and laid a firm for the first time, as well as delivering innovative ball valves. foundation for further growth, all in a context of increased competition across all sectors of our business and other In addition to developing production, this reporting year, OMK external factors. was actively involved in improving the quality of life in regions where we have a presence and in creating a comfortable I would like to convey my sincere thanks to all the company’s environment for our employees and their families, in line with employees for their efficiency, their commitment to growth, and our principles of corporate social responsibility. Our programs their support for our one-of-a-kind corporate culture. I would help thousands of people from Vyksa to Chusovoy. also like to thank local, regional, and federal officials and our partners and clients for their trust and our fruitful collaboration. In the next four years, we plan to invest 167 billion rubles in developing pipe production, creating over 3,000 jobs, and We are continuing to implement our chosen strategy. expand our presence in emerging market sectors. OMK will Firstly, we have a large-scale investment program. release new kinds of tubing, including seamless pipes and oil- The reporting year saw the continued implementation of our well tubing, that meet the highest international standards and development plan for the small- and medium-diameter pipe satisfy consumers’ exacting requirements. divisions at Vyksa Steel Works. The plan will allow OMK to offer a new range of products to our partners at leading oil and gas We have a great deal of fascinating work ahead of us. It will companies. not be easy to reach the goals we have set, but I believe in our team of OMK professionals. Vertical integration, increased Secondly, we have been working continually to improve labor productivity, streamlined production, a high level of production efficiency and streamline our workflows. engagement from our employees, and an extremely strong [ A natoly S edyk h ] We received well-deserved recognition for our results in this corporate culture: these are the factors that will guarantee field, earning high scores in an independent audit by the Toyota our leadership in the field for years to come. Chair of the Board Engineering Corporation. But we are not resting on our laurels, of Directors and we see great potential in this area. Anatoly Sedykh
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1.6 Main events in 2018
BUSINESS March 2018 Closing of the open-hearth OMK Makes First furnace in Vyksa. In 85 years, Modular Equipment the workshop has smelted Sale 25 million tons of steel https://omksteel.com/press/17119/Details
OMK shut Open-Hearth Facility down in Vyksa Dhttps://omksteel.com/press/19806/etails
OMK Delivers Large Diameter Pipes to Norway for 600-m Bridge Construction Project https://omksteel.com/press/21179/Details
VSW Commissions Automated Inventory Control System Dhttps://omksteel.com/press/17128/etails
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1.6 Main events in 2018
VSW Completes 10,000,000 Tons of Hot-Rolled Coil https://omksteel.com/press/20271/Details
OMK Opens Online Store https://omksteel.com/press/21844/Details
VSW Ships First Batch of Casing from New Finishing Facility Dhttps://omksteel.com/press/21208/etails
OMK Selects Process Equipment Supplier Мay 2018 for New Seamless Opened in 2008, Pipe Mill Vyksa's CRC reached 10 mln Dhttps://omksteel.com/press/21192/etails tons of produced hot-rolled coil
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1.6 Main events in 2018
VSW Delivered Wheels of In-House Design for High-Speed Passenger Trains https://omksteel.com/press/21205/Details
OMK Presents New Unique Product for Gas Sector https://omksteel.com/press/22484/Details
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1.6 Main events in 2018
Social responsibility
Vyksa Launching Business Start Educational Program for Social Business Initiatives Dhttps://omksteel.com/press/19810/etails
Vyksa Hosts 8th Art-Ovrag Festival of Urban Culture https://omksteel.com/press/21169/Details
OMK to Fund 90 Social Projects in Areas of Operations https://omksteel.com/press/20291/Details
OMK-Uchastiye Charity Foundation Announces Launch of Inclusive Cultural Project https://omksteel.com/press/21445/Details
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1.6 Main events in 2018
OMK-Uchastiye Charity Foundation Celebrates Its 10th Anniversary Dhttps://omksteel.com/press/22467/etails
Moscow Hosted 13th Victors' Gala to Celebrate 75th Anniversary of Complete Lifting of Siege of Leningrad Dhttps://omksteel.com/press/23354/etails
An OMK-Uchastiye Charity Foundation Project Wins Second Presidential Grant Dhttps://omksteel.com/press/23342/etails
Vyksa Launching Business Start Educational Program for Social Business Initiatives https://omksteel.com/press/19810/Details
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1.6 Main events in 2018
Awards OMK Encyclopedia Recognized with ATZ Awarded Toyota Engineering National Prize Corporation's Bronze Medal https://omk.ru/news/16362/Details for Developing Production System OMK Chair of the Board Dhttps://omksteel.com/press/18664/etails of Directors Anatoly Sedykh Awarded OMK Named Russian Order of Saint Anne Oil and Gas Pipe Manufacturer https://omksteel.com/press/19802/Details of the Year https://omksteel.com/press/19798/Details
VSW Awarded Russian Federation Government Trubodetal's Collective Quality Prize Certificate Agreement Awarded Prize https://omksteel.com/press/17125/Details in Regional Competition https://omksteel.com/press/18672/Details OMK Recognized with European Institute for Purchasing Trubodetal Facility Awarded Management Award Priznaniye (Recognition) Prize https://omksteel.com/press/23622/Details https://omksteel.com/press/18577/Details
VSW Recognized OMK's Cultural Contribution with RIUE HSE Recognized with Diploma from Achievement Award National History Museum https://omksteel.com/press/17116/Details https://omksteel.com/press/21173/Details
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1.6 Main events in 2018
Trubodetal Product for OMK Announces Outcomes Surgut Regional Power of Attendance at 24th Metal Station (GRES)-2 Receives Expo Industrial Show Award https://omksteel.com/press/23338/22424/Details Dhttps://omksteel.com/press/21829/etails OMK Makes It to Top Ten OMK Wins Drive to Do Good Corporate Charity Donors Nomination for Developing in Russia Social Business https://omksteel.com/press/23363/Details Initiatives OMK Wins 2018 Moscow Dhttps://omksteel.com/press/22463/etails Volunteer of the Year Award Project to Build Casing https://omksteel.com/press/23364/Details Finishing Facility Wins VSW’s Industrial Safety Award in National Program Recognized Competition?? at National Level Dhttps://omksteel.com/press/21826/etails https://omksteel.com/press/23361/Details OMK Named Winner of OMK Project to Build Casing Competition for Corporate Finishing Facility Wins Projects by «People Investor Award in National 2018: Developing Internal Competition Resources» Dhttps://omksteel.com/press/21826/etails https://omksteel.com/press/23359/Details OMK Contribution to Developing OMK Wins Award in National Social Business Initiatives Competition for Developing Recognized by Nizhniy Novgorod Industrial Tourism Regional Government Dhttps://omksteel.com/press/23330/etails https://omksteel.com/press/23362/Details
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2.0 Strategy
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2.1 Mission
Efficient development
e produce high-quality metallurgical products for the fuel and Wenergy sectors, transport, construction and other industries, ensuring the continuous development of the domestic economy.
Creating products, we strictly follow the principles of corporate social responsibility and the global goals of sustainable development to solve pressing problems for modern society.
We contribute to improving the quality of life and the social and economic development of the regions where the company operates. We create comfortable and harmonious environment for the full realization of the potential of residents of cities, regions and republics, in which OMK operates.
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2.2 Vision
ОМК produces high-quality, high-demand metal products that meet consumers’ most stringent requirements
OMK is an integrated supplier of products and solutions for Russian energy companies
ОМК is a first-class team of professionals
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2.3 AREAS FOR DEVELOPMENT
n 2018, OMK continued to implement its chosen Istrategy of long-term expansion, improving efficiency and strengthening the company’s position in the industry and on the markets.
Our objective is to become the key supplier of integrated solutions for the oil and gas industry and the most efficient metals company in Russia.
The model we have chosen is based on the development of our own state-of-the-art products, including importsubstitution products, which meet customers’ most stringent requirements, both current and potential.
• Improving operational efficiency • Fostering a corporate culture • Perfecting the business model • Managing critical risks • Digitalizing production processes and management • Expanding the product line • Reaching new markets • Carrying out projects in partnership with other companies • Engaging in responsible business practices
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2.4 Strategy implementation
Development of new products
PIPES
• We mastered the production of sheet and large diameter pipes from innovative steel grade 05HGB. In 2018, we supplied them to vertically integrated oil companies
• The new finishing center of Vyksa Steel Works mastered the production of electric welded casing pipes with a diameter of 324-426 mm. In 2018, we supplied them to oil companies
• VMZ mastered the production of electric welded casing high strength groups (N80Q, L80, R95, C95, P110). In 2018, first deliveries were made to oil companies
• Capability has been acquired to manufacture longitudinally resistance-welded pipe with ODs between 159 and 426 mm and grades K48 through K16 designed for an operating pressure of up to and including 16 MPa, and a positive finding has been secured from Gazprom VNIIGAZ as to the usability of such pipe in in-field pipelines
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2.4 Strategy implementation
Development of new products
obsolete equipment, to perform capital PIPELINE FITTINGS repairs, and to build new gas distribution • The Trubodetal facility has manufactured systems. the first batch of thermal enclosures in support of the development of the • The Trubodetal facility acquired the Novoportovskoye oil, gas, and condensate capability for and delivered stainless steel field. The technology developed by the fittings and installation assemblies to be facility’s engineers was patented by the used to build new nuclear power plant units Federal Intellectual Property Agency. in Russia and Belarus. Thermal enclosures are used to prevent heat loss at wellheads.They are deigned • The Trubodetal facility manufactured as two steel pipes of different diameters innovative fittings and assemblies designed placed one inside the other and the annular for an operating pressure of 22.05 MPa space filled with an insulating compound.
• A next-generation Progress modular automatic gateway gas station manufactured by the Trubodetal facility completed testing at the Gazprom test range in Saratov and was recommended by an expert panel for use at PAO Gazprom installations as an entire module or in the form of subassemblies. This next- generation automatic gateway station may be used as part of a program to upgrade
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2.4 Strategy implementation
Development of new products
Pipeline valves
• The Blagoveshchensk Valve Plant expanded its line of wedge gate and check valves. The manufacture of new types of wedge gate valves designed for operating pressures of 6.3 MPa, 8.0 MPa, PN 10.0 MPa, 25.0 MPa as well as check valves designed for an operating pressure of 8.0 MPa, PN 10.0 MPa, 25.0 MPa was introduced by the facility’s specialists in record times thanks to the innovative parallel design method.
• The Blagoveshchensk Valve Plant developed new sizes of 6-th generation SPPK spring-loaded safety valves (enhanced throughput valves)
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2.4 Strategy implementation
Development of new products
Train Wheels, Springs, Steel
• VSW acquired the capability to make wheels for the Sapsan trains: qualification testing is complete and a certificate has been issued
• The facility also acquired the capability to manufacture 957-mm low-stress whole-rolled wheels from Grade L steel to be used for TVZ trains with a design speed of 200 kph as well as for the Ivolga trains, the high-speed PESO electric trains (200 kph), 860-mm from RSW steel for South Korea, 860-mm wheels for the Budapest subway, and 918-mm wheels for freight trains in Taiwan
• CMW has acquired the capability for 74 new types of springs and pneumatic suspension levers, including 64 springs for imported car makes
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2.5 Collaborations
• The United Metallurgical Company and OOO Belenergomash- BZEM (Belgorod) entered into a collaboration agreement to undertake joint sales to the Rosatom Government Corporation and buy-back sales of plate, pipe, structural steel, and pipeline fittings.
• Successful collaboration continues between OMK and the NLMK Group. A delivery contract for Novolipetsk steel slabs to be used as feedstock for plate at Vyksa Steel Works is in force until 2019
• OMK and Rosatom Government Corporation are expanding high-tech collaboration The two companies signed an updated roadmap for collaborative projects at the NDEXPO International Forum of High Technologies for Sustainable Development. In particular, facilities belonging to the Rosatom TVEL Fuel Company and Vyksa Steel Works have initiated an integrated pilot project at VSW to implement Li-Ion battery based energy storage technology.
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2.6 Investments
n 2018, OMK implemented a number of important investment Iprojects aimed at developing production, improving the efficiency of enterprises, and developing new products. The total investment amounted to 19 billion rubles.
Key investment projects* in 2018:
• Comprehensive programme of the small and medium diameter pipe division development • Construction of pipe-rolling production at VSW • Development of rolling production at CMW • Technical re-equipment of the Trubodetal plant • Construction of two low leaf springs mills at CMW • Drawing a sheeting on railway wheels • Elaboration of a concept for the development of steel-making facilities of VSW
Investments, RUB billion 2018 19,0 19,0 2017 12,5 2016 6,0 2015 5,3 2014 11,5
OMK ANNUAL REPORT 2018 * projects underway after 2018 as well 30 CONTENTCONTENTSS OVERVIEOVERVIEWW [ STRATEG STRATEG Y Y ] MANAGEMENTMANAGEMENT KEY INDICATORSINDICATORS SUSTAINABLE DEVELOPMENTDEVELOPMENT CONTACT INFORMATIONINFORMATION
2.7 R&D
he United Metallurgical Company maintains enhanced focus Ton developing and implementing innovation, on research and development that applies to the manufacturing process.
OMK’s important R&D projects:
Train Wheels
• Increase the productivity of the wheel-rolling operation through process optimization and a large-scale investment program.
• Develop the technology and acquire the capability to manufacture wheels for the Sapsan high-speed train, wheels for passenger cars moving at speeds of 200 kph (Silver Medal at the Metal-Expo Fair), an innovative low-stress wheel design using Grade T steel per GOST 10791-2011 for SUEK.
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2.7 R&D
Oil and Gas Line Pipe R&D, mln rub. n 2018, the Company initiated • Rationale has been found to lower the material safety factor for 2018 151,9 Iover 38,000 improvement electrically resistance-welded (ERW) pipes down to the seamless 2017 160,0 projects at its facilities, all pipe values designed to improve operational 151,9 2016 131,0 efficiency and industrial safety • Electrically resistance welded pipe with ODs of between 159 and 2015 131,3 which is 41% more than the year 426 mm has been recommended for new in-field oil and gas lines 2014 128,8 before. Over a thee-year period, designed for an operating pressure of 16 MPa over 798 process quality teams were established. Large-Diameter Pipe
• Process design and capability acquisition for the manufacture of sheet metal and steel longitudinally resistance-welded pipe Patents obtained in 2018 10 2 0 0 0 12 for in-field and on-site gas lines of Grade K60, diameter of 530 to 1,020 mm, wall gage of 29.8 mm, minimum pipe wall operating temperature of -42°С, minimum installation temperature of -60°C, 49 24 0 0 11 84 and an operating pressure of 12.9 MPa (Gold Medal at the Maintained patents Metal-Expo Fair).
• A process has been designed to manufacture sheet metal and large-diameter pipe from 05ХГБ steel 2017 2018 Fittings Registered innovative • Process design and capability acquisition for pipeline fittings proposals and assemblies for the Slavianskaya Compressor Station 1240 1487
• Capability acquisition for thermal insulation products (thermal enclosures).
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2.8 Market OVERVIEW
global steel market 1808,6 +4,6%* Volume of produced steel in the world in 2018, mln tonnes
Largest producers of steel by countries, mln tonnes
% % China 928,3 +6,6 Russia 71,7 +0,3 % % India 106,5 +4,9 Germany 42,3 -2,0 % % Japan 104,3 -0,3 Turkey 37,3 -0,6 % % USA 86,7 +6,2 Brasil 34,7 +1,1 % % South Korea 72,5 +2,0 Iran 25,0 +17,7
According to a report by World Steel Association, steel production in the world in 2018 increased compared to the previous year, exceeding 1.8 billion tons.
In almost all macro-regions, the indicator of smelting increased comparing to 2017, except for the European Union, where there was a slight reduction in production.
China remains the undisputed leader in steel production. It accounts for over half of the total market. India came in second place, ahead of Japan. * comparing to 2017. OMK ANNUAL REPORT 2018 33 CONTENTCONTENTSS OVERVIEOVERVIEWW [ STRATEG STRATEG Y Y ] MANAGEMENTMANAGEMENT KEY INDICATORSINDICATORS SUSTAINABLE DEVELOPMENTDEVELOPMENT CONTACT INFORMATIONINFORMATION
2.8 Market OVERVIEW
Domestic markets*
Pipes, Pipeline fittings and vanes
• The growth trend in the regional markets’ capacity for smooth pipes, observed since 2015, stopped in the reporting year due to a reduction in the consumption of water and gas pipes associated with the priority construction of facilities for the World Cup and also with restrictions on logistics in the organizing cities
• The reduction of the market for water and gas pipes in Russia was 6% compared with 2017 data. Oil and gas and general purpose were down 10%. Consumption of core pipes increased by 1%.
• The large-diameter pipe market in Russia grew by 24% due to the growth in consumption by Gazprom for the construction of the NEG-3 gas pipeline. Transneft also increased purchases of pipe products for repair needs.
• The market of pipeline fittings showed an increase of 5%, mainly due to the segment of stamped and welded parts. Consumption growth caused by the increase in the number of manned site facilities of Gazprom.
• The market of pipeline valves decreased by 5% (in the segments of the presence of BAZ). This is due to a decrease in the number of wells commissioned at oil and gas fields and the freezing of part of projects for the reconstruction of oil refineries.
* ОМК expert review
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2.8 Market OVERVIEW
Railways wheels
• The market of railway wheels inceased. In Russia, in 2018, there was high demand from the car-build- ing and car-repair companies and car owners. It is expected that in 2019 the demand will be as high.
Automotive springs
• The market capacity in 2018 decreased by 3%, mainly due to a decrease in consumption of domestic car plants
• A reason for the decline in demand for new trucks is a reduction in government support (subsidies, loans, leasing). The completion of large infrastructure projects (construction and transportation to the World Cup), weak business development in need of trucks (industry, construction), fleet renewal, exhaustion of pent-up market demand in 2017 and the first half of 2018 after the crisis downturn 2015- 2016 y.y. There is also a decrease in truck exports, primarily to Kazakhstan due to competition with Shacman and MAZ companies.
• Prospects lie in the automotive industry segment. Expected are a slight increase in the light commercial vehicle production segments, a stable situation in the heavy truck segment; moderate growth in the secondary market, especially in the spring segment for foreign cars
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2.8 Market OVERVIEW
Foreign markets*
Global factors USA The US is ahead of Russia and Saudi Arabia in terms of oil production, becoming the • The average price of Brent oil is rising: in 2018 - $ 71 / bbl (2017 - $ 55 / bbl). world’s largest producer. The United States, Mexico and Canada signed a new USMCA trade agreement to replace the North American Free Trade Area - NAFTA. The United • The average monthly number of operating oil and gas rigs in the world increased for States defended the domestic market by imposing duties and restrictive quotas on the second consecutive year to 2,211 (+ 9% by 2017). imports of steel products and welded LDP in the reporting year. At the same time, the growth of LNG supplies from the USA to Europe is increasing. • According to forecasts, global demand for natural gas will increase by an average of 1.6% over the next five years. Near East Demand for LDP in the Middle East continues to show a good trend, including due • Liquefied natural gas (LNG) is one of the main drivers of growth in world trade. to the implementation of several pipeline projects in the countries of the Persian Gulf. In the meantime, the metallurgical companies Mahshahr Pipe Company (Iran) and • In North America and Europe, measures are being actively introduced to protect United Brothers Holding (Iraq) signed contracts with SMS Group and Danieli in 2018 markets. to modernize LDP production facilities and steel square billets, respectively.
Europe Africa Pipe production in the European Union in 2018 declined by about 1.4% due to In recent years, there has been a decrease in the volume / number of discoveries a reduction in orders for large diameter pipe at main sites. of new oil and gas fields in Africa, however, thanks to the development of such large The productivity of the steel pipe sector in the EU was largely dependent on the companies as Total, ExxonMobil, Equinor, Tullow Oil, Kosmos, etc., geological exploration demand for small and medium diameter pipes, which was very favorable due to activities at various oil fields are expected in the coming years and gas. China also the relatively high demand for pipe products in sectors such as automotive, steel, continues to invest and strengthen its sphere of influence in the fuel and energy engineering and construction. complex of African countries, competing with American and European companies. In the years 2019-2020. The EU is expected to implement a number of pipeline projects that can revive the market. At the same time, active work is underway in Europe to diversify the import supplies of natural gas from Russia through the development of new fields.
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3.0 Corporate Governance
VSW open-hearth furnace clothing ceremony, March 23, 2018
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3.1 Approach to corporate governance
OMK is not a public company, its corporate governance system is built on the basic • The company organizes an internal audit to ensure a systematic, independent principles of the Corporate Governance Code, including: evaluation of the reliability and effectiveness of its risk management and internal control system and its corporate governance practices • Equal and fair treatment of all shareholders as they exercise their right to participate in the governance of the company • OMK’s operations are sufficiently transparent for shareholders, investors and other stakeholders • Shareholders are given equal and fair opportunities to share in profits by receiving dividends • The company discloses complete, up-to-date and reliable information about itself to allow its shareholders, investors and contractors to make informed decisions • The corporate governance system and practice ensures equal conditions for all shareholders owning shares of the same category, including minority shareholders and • OMK Group companies provide information and documents at the request of share- foreign shareholders, and equal treatment of them by all OMK Group companies holders in accordance with the principle of equal and unhindered access
• Shareholders have been provided with reliable and effective means for accounting for • Any actions that materially affect or may materially affect the company’s share capi- rights to shares, as well as the opportunity to dispose of the shares belonging to them tal structure and its financial position and, accordingly, the position of its shareholders freely and without encumbrance (‘material corporate actions’) are taken under fair terms and conditions that ensure that the rights and interests of shareholders as well as other stakeholders are • The company’s corporate secretary is responsible for conducting all ongoing commu- observed nications with shareholders, and coordinating actions to protect the rights and interests of shareholders • The company provides a procedure for material corporate actions which allows shareholders to receive timely and complete information on such actions, provides • The level of remuneration paid by the company is sufficient to enable it to attract, them with the opportunity to influence decision making about such actions, motivate and retain employees who have the required skills and qualifications and ensures compliance and an adequate level of protection of shareholder rights in the performance of such actions • The system of remuneration for members of the executive bodies and other key executives of the company provides for their remuneration to be dependent on the company’s performance and their personal contributions to achieving it
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3.2 Management structure
he United Metallurgical Company has the Board of Directors and management board. TThe Board of Directors includes Anatoly Sedykh (Chairman), Vladimir Markin, Natalya Eremina, Svetlana Obolenskaya and Anastasia Poletaeva. Anatoly Sedykh deals with the strategic development of the company.
The Board is composed of six members. Management structure OMK JSC currently provides for one sole executive body (Chairman of the Board) and one collegial executive body (Board). Heads of divisions and functions are subordinated to Natalia Eremina, Chairman of the Board.
Such system allows to quickly respond to changes in the economic situation, implement the investment strategy as efficiently as possible, has a positive effect on the pace of development and is in line with current management trends.
The sole shareholder of the main OMK companies (Trubodetal JSC, ATZ JSC, BAZ JSC, CMP JSC, OMK JSC) is a Russian company of VMZ JSC. The current activities of the main corporations of the group (JSC VMZ, JSC Trubodetal, JSC ATZ, JSC CMW, JSC BAZ) in 2018 were managed by the management organization OMK JSC, which transferred the functions of the sole executive body the above organizations.
OMK JSC is engaged in ensuring corporate governance in the OMK Group.
VSW open-hearth furnace clothing ceremony, March 23, 2018
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3.3 Board of Directors
Anatoly Sedykh — Anatoly Sedykh has been Chairman of OMK’s Board of Directors since July 2017.
Previously, he was Chairman of OMK’s Management Board from January 2013 to July 2017.
He has held management positions at the company since 1999. Mr. Sedykh first headed Vyksa Steel Works and led the plant out of crisis. He was subsequently appointed OMK Director General and Chairman of the Board of Directors of VSW.
In 2002, he was elected Chairman of the Board of Directors, and was OMK President between 2003 and 2006.
Born in 1964, Mr. Sedykh graduated from the Moscow Institute of Steel and Alloys with a PhD in Economics. He began his career as an economist at the Central Scientific Research Institute of Ferrous Metallurgy.
[ A natoly S edyk h ]
Chairman of the Board of Directors
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3.3 Board of Directors
Natalya Eremina — Vladimir Markin — Natalya Eremina has been Chair of OMK’s Vladimir Markin was appointed Deputy Management Board since July 2017. Chairman of OMK’s Board of Directors in February 2018. He has held management Ms. Eremina joined OMK as Head of the positions in the company since 2001, including Controlling Department in 2001. In 2004, she Director General of the OMK Trading Centre was appointed Director for Corporate Finance and Marketing and Sales Director at OMK. and Investor Relations. She was OMK’s Vice President from April 2006 to January 2016 and He worked his way up from assistant Deputy Chair of the Management Board from foreman in the pipe finishing shop at Vyksa February 2016 to July 2017. Before joining the Steel Works to Deputy Manager of the company, Large Diameter Pipes Shop, Director of the Marketingand Sales Department, and Deputy Ms. Eremina worked at Metallinvestbank as General Director.He was President of OMK Head of the Interbank Lending Department, from April 2006 to January 2018. Head of the Lending Division, and Deputy Chair of the Management Board. Mr. Markin was born in 1954. He graduated from the Moscow Institute of Steel and Alloys Ms. Eremina was born in 1971 and graduated with a degree in Metallurgical Engineering. [ N atalya E remina ] with a degree in Mathematics from the Faculty [ V ladimir M arkin ] of Mechanics and Mathematics at Lomonosov Chair of the Management Board, Moscow State University. Deputy Chairman Member of the Board of Directors of the Board of Directors
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3.3 Board of Directors
Anastasia Poletaeva Svetlana Obolenskaya — From 1998 to 2007 Anastasia Poletaeva Svetlana Obolenskaya has worked at OMK worked at OMK as Lawyer, Head of since 2000 and has served as Corporate Department, Chief Legal Officer and Secretary since 2007. She previously worked Corporate Governance Director. at the Moscow Region Property Fund.
She worked in Boards of Directors of OMK She was elected to and served on the boards companies: Chusovoy Metallurgical Works, of directors of the OMK Group companies Almetyevsk Pipe Plant, Vyksa Steel Works Chusovoy Steel Works and Almetyevsk Pipe and Trubodetal. Plant, and was Chair of the Trubodetal Plant Board of Directors. Member of Independent Directors Association. Obolenskaya was born in 1970. She graduated from Moscow State Law Academy with a From July 2007 - Lawyer at Asnis and degree in Jurisprudence (Civil Law) and Partners legal office. retrained at the Higher School of Economics as a Corporate Secretary and Corporate A. Poletaeva graduated from the International Management Specialist. Law Institute of Russian Justice Academy [ A nastasia P oletaeva ] and Master’s programme of the Moscow [ S vetlana O bolenskaya ] State University’s faculty of law. Lawyer at Moscow Corporate Lawyers Board Anastasia Poletaeva was born in 1972. Secretary
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3.4 Management Board
Natalya Eremina — Yulia Shkhiyants — Natalya Eremina has been Chair of OMK’s Yulia Shkhiyants is a member of OMK’s Management Board since July 2017. Management Board and Head of the Economy and Finance Department. Ms. Eremina joined OMK as Head of the Controlling Department in 2001. In 2004, she Ms. Shkhiyants joined the company in May was appointed Director for Corporate Finance 2007 as Director for Economy and Finance. and Investor Relations. She was OMK’s Vice She was appointed Vice President of OMK President from April 2006 to January 2016 and in February 2013. She previously served as Deputy Chair of the Management Board from Chief Financial Officer of Greenoak Holdings, February 2016 to July 2017. Before joining the Finance Director of Zepter International, and company, as a senior auditor at KPMG.
Ms. Eremina worked at Metallinvestbank as Ms. Shkhiyants was born in 1975 and Head of the Interbank Lending Department, graduated from the Peoples’ Friendship Head of the Lending Division, and Deputy Chair University of Russia with a degree in of the Management Board. Economics.
Ms. Eremina was born in 1971 and graduated [ N atalya E remina ] with a degree in Mathematics from the Faculty [ Y ulia Sh k h iyants ] of Mechanics and Mathematics at Lomonosov Chair of the Management Board, Moscow State University. Head of the Economy Member of the Board of Directors and Finance Department
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3.4 Management Board
Eduard Stepantsov — Petr Trushin — Eduard Stepantsov is a member of OMK’s Petr Trushin joined OMK’s Management Board Management Board and the Head of the in February 2017. Commercial Department. He previously headed OMK’s Target Setting He joined OMK in 1999 as the Director General and Evaluation Department. of the OMK Technical Centre. In 2001, Mr. Stepantsov was appointed as OMK’s Deputy He joined the company in 2008 as the Director General and Director for Commercial Head of Business Consulting. He has also Issues. He worked in a private investment held management positions in company business between 2003 and 2008. He was subdivisions involved in internal audit and OMK’s Vice President from December 2008 improving the efficiency of business processes. to January 2016. Prior to joining OMK, he worked at Siberian Coal Energy Company (SUEK) and PwC. Born in 1963, Mr. Stepantsov graduated from the Irkutsk Institute of National Economy Mr. Trushin was born in 1982 and graduated with a degree in Economics and Procurement from the National Research University Higher Planning. School of Economics in Moscow with a degree in Management. [ E duard S tepantsov ] [ P etr T rus h in ]
Head of the Commercial Efficiency Department Management Director
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3.4 Management Board
Dmitry Chernyshev — Svetlana Nikolashina — Dmitry Chernyshev is Head of the Asset Svetlana Nikolashina is a member of OMK’s Development and Investment Department Management Board and Head of the Human and a member of the Management Board. Resources Department.
He has been with the company since From 2002 to 2003 Ms. Nikolashina was the 2002, as Project Manager and First Deputy HR Director at VSW. She became OMK’s HR Director General of APP and Director for Director in 2003 and was appointed Vice Strategic Development at VSW. He was Vice President in February 2015. She previously President and Head of the Research and worked for Severstal in project teams and as Strategy Department from November 2007 HR Director at the company’s subsidiaries. to January 2016. Ms. Nikolashina was born in 1979. She Throughout 1996–2001, he held various graduated from the St. Petersburg State positions in the business development University of Engineering and Economicswith divisions of several Russian industrial a degree in Finance and Credit, and holds companies. an MBA in Strategic Management from the Russian Government Academy of National Mr. Chernyshev was born in 1974. He Economy. She has also taken courses in staff [ D mitry Ch ernys h ev ] graduated from Lomonosov Moscow State [ S vetlana N ikolas h ina ] management. University and the Russian Government Head of the Asset Development Academy of National Economy with a degree Head of the Human Resources and Investment Department in Strategic Management. Department
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3.5 Management Board activity
n 2018, 207 meetings of the OMK Board were held (104 in person, 103 in absentia), Iduring which 469 issues were considered. Key topics: improving the efficiency of enterprises, budgeting and execution of goals, opening of priority investment projects, implementation of social programs in the regions where the company operates, optimization of the structure and number of personnel of the company.
The Board also considered a number of issues related to non-financial risks: in the field of personnel management, impact on society, ecology, labor protection and industrial safety. All year, board members worked in accordance with approved individual goals forms.
The main directions of the objectives: • improving the efficiency of management teams • transformation of the role of the supervised function in business • broadcast changes to employees • effective presentation • mentoring
The members of the board are delegated the powers of the sole shareholder, the Chair- man of the board, the Board, as stipulated by the charter of OMK JSC. A matrix of func- tions of the first and second levels of the OMC was developed and approved.
Defining the direction of the company’s activity with the assignment of responsible cura- tors and owners on the main functions: the development of functional strategies, policies, standards, rules, methods, processes, functional budgets, the construction and distri- bution of powers, a description of the activities of departments. Defined and approved corporate values of the company.
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4.0 Operating results
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4.1 Message from the Chair of the Management Board OMK is one of the safest and most
Dear colleagues and partners, environmentaly responsible Overall, 2018 was a successful year for OMK. It was marked by growth and stable production output in all product areas except ferrous tubing. OMK successfully delivered LDPs for the construction of Nord Stream 2 and for the TurkStream project. The outfitting metallurgy of these international pipelines is largely complete, which has companies affected our workload. Russia’s capacity to produce LDPs continues to increase even as the implementation of some in the world pipeline projects is delayed. As a result, OMK’s large-diameter pipe output in 2018 was a quarter lower than our 2017 record.
The company’s metal pipe market share shrank less than its pipe production, which demonstrates that OMK is successfully efficiency. All of this combined with ambitious targets for tackling these challenges. We are discovering opportunities increased labor efficiency and automation will enable the in new market segments, growing our exports, expanding our company to become less vulnerable to market fluctuations product line, and improving quality in order to offer clients and remain resilient. an even wider range of goods, unique product features, and integrated solutions for effective, mutually beneficial After the slump of 2013–2016, caused in part by a Ukrainian partnership. producer’s dumping practices, the market for railroad wheels has continued to grow for the second year in a row. In this OMK’s total 2018 investment volume, 19 billion rubles, was the context of high demand, VSW is meeting transport sector highest it has been in the past eight years. We successfully needs to the greatest extent possible, using the full capabilities [ N atalya E remina ] continued the investment program at VSW launched two of its modernized facilities. Railroad wheels were shipped to all years ago, and began the large-scale modernization of much segments of the market, including to metro, high-speed, Chair of the of the machinery at Trubodetal and the rolling process at the freight, and passenger trains. Thanks to our large-scale Management Board Chusovoy Steel Works. We focused our efforts on developing investment program, constant streamlining, and efficiency output of in-demand and high-potential products, as well as on increases, we expect to meet current and future demand for resource security, vertical integration, and increased production these products to the greatest extent possible in 2019.
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4.1 Message from the Chair of the Management Board
The Trubodetal factory increased production of pipeline fittings OMK is a leader in the metal industry. Maintaining our leading by almost a third and fulfilled several unique orders. This was position on the market, searching out new opportunities for Maintaining our made possible through the development of new products, growth, meeting clients’ needs as fully as possible, effectively including thermocasing, modular equipment, nuclear power plant implementing our investment program, and continually leading position in the components, and installation nodes. improving: these are our most important goals.
market, developing Blagoveshchensk Valves Plant expanded its standard series of Thanks to our colleagues and partners for their excellent work wedge gate, check, and spring-loaded valves. Output levels also in 2018. We are confident that our mutually advantageous production, remained stable at Almetyevsk Pipe Plant, while Chusovoy Steel collaboration will continue in the future! and effectively Works experienced a small decline in output. The restricting factor was a decrease in demand from domestic auto factories Natalya Eremina implementing our and a weak freight transport market. However, the factory was able to build on existing shipments of foreign automotive springs investment program: to Russian factories. these are our most We are working to minimize the burden our operations create on important goals the environment. I would particularly like to highlight the closing of the last major open-hearth furnace in Russia at VSW. Since spring 2018, the factory has been using only steel produced using modern technologies. The environmental situation and working conditions in Vyksa are improving. In 2018, VSW’s successes in promoting occupational safety and employee health won it an award from the RUIE.
Today OMK is one of the safest companies in the ferrous metallurgy industry. The integrated safety management system that we introduced five years ago has reduced the Lost Time Injury Frequency Rate (LTIFR) at OMK plants every year since. In 2018, that indicator fell to 1.29. This is one more step towards our strategic goal of zero injuries.
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4.2 Operating indicators
Large diameter pipes, Pipeline fittings, thousands of tonnes thousands of units 2018 772 -25% 2018 13 +30% 2017 1020 2017 10
Small and medium diameter pipes, thousands of tonnes Pipeline valves, thousands of tonnes 2018 1211 -0,2% 2018 4,9 = 2017 1214 2017 4,9
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4.2 Operating indicators
Rolled products (rolls and sheets), Railway wheels, thousands of tonnes thousands of tonnes 2018 1275 +1% 2018 860 +26% 2017 1259 2017 681
Casing pipes, Automotive springs, thousands of tonnes thousands of tonnes 2018 436 +17% 2018 44 -4% 2017 373 2017 46
Shaped pipes, Wide sheet, thousands of tonnes thousands of tonnes 2018 242 -7% 2018 550 -17% 2017 260 2017 664
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4.2 Operating indicators
Large Diameter PRODUCTS Pipes Division, Vyksa Wide sheet steel for production of large diameter pipes, machine building, shipbuilding and construction. Width: 900–4850 mm. Thickness: 10–150 mm. Maximum capacity: up to 1.3 million tonnes per year Thick-Plate Mill 5000 (Mill 5000) — producing Straight-seam and single-seam ERW pipes hot-rolled thick sheet for oil and gas export pipelines with inner and outer anti-friction or anti-corrosion
VSW Electric Pipe Welding coatings. Strength class: up to Х80. Shop No. 4 — producing Diameter: 508–1420 mm. Maximum capacity: large diameter pipes up to 2 million tonnes per year Pipe Anti-Corrosion Coating Shop
Production of large diameter pipes, Production of wide sheet for large diameter pipes at Thick-Plate Mill 5000, thousand tonnes thousand tonnes
2018 772 2018 550 2017 1020 2017 664 772 2016 875 550 2016 730 2015 1380 2015 937 2014 1058 2014 623
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4.2 Operating indicators
Oil and Gas PRODUCTS Pipes Division, Vyksa Hot-rolled flat sheet steel in rolls and sheets for small and medium diameter pipes, also used in machine building, shipbuilding and construction. Width: 30–1750 mm. Thickness: 1–12.7 mm. Maximum capacity:
Casting and rolling mill — up to 1,3 million tonnes per year. producing hot rolled sheet Straight-seam and single-seam electrically welded
VSW Electric Pipe Welding Shop pipes for gas, crude oil, refined product, and water No. 2 — producing water and gas pipelines, heating systems, and development of oil pipes and small sections and gas fields. Strength class: up to X70 Diameter: 159–530 mm. Wall thickness: 4–12.7 mm
VSW Electric Pipe Welding Shop Maximum capacity: up to 1 million tonnes per year. No. 3 — producing oil and gas pipes and large sections
VSW Electric Pipe Welding Production of Casting and Rolling Mill products (roll and sheet), Shop No. 5 — producing thousand tonnes casing pipes
1275 Casing Pipe Finishing Centre 2018 2017 1259 1275 2016 1213 2015 1181 2014 1029
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4.2 Operating indicators
Water and gas pipes and general-purpose pipes Oil and Gas for water and gas pipelines, heating systems, Pipes Division, construction, and agriculture. Vyksa Diameter: 12–133 mm. Wall thickness: 0.8–6.0 mm. Maximum capacity: up to 300,000 tonnes per year
Shaped pipes for construction, machine building, Casting and rolling mill — furniture manufacturing, and other industries. producing hot rolled sheet Cross section: from 10х10 to 300х300 mm and from 15х10 to 300х200 mm. VSW Electric Pipe Welding
Shop No. 2 — producing water Casing pipes for development and gas pipes and small sections of oil and gas fields and well construction. Diameter: 140–245 mm. Wall thickness: 5.2–11.1 mm VSW Electric Pipe Welding Maximum capacity: up to 400,000 tonnes per year. Shop No. 3 — producing oil and gas pipes and large sections
VSW Electric Pipe Welding Shop No. 5 — producing casing pipes Production of tubular products by the division, Casing Pipe Finishing Centre thousand tonnes
2018 1087 2017 1102 1087 2016 963 2015 971 2014 873
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4.2 Operating indicators
Railway PRODUCTS Wheels Division, Vyksa One-piece rolled railway wheels and wheel centres for freight and passenger trains, including Lastochka high-speed trains. Diameter: 760–1098 mm, 140 sizes are mastered from the date of the shop foundation. Maximum capacity: 860,000 units per year
One-piece rolled railway wheels for fast and high-speed trains. Maximum capacity: 10,000 units per year
Railway wheel production, VSW Wheel Plant — thousand tonnes producing railway wheels
2018 860 2017 681 860 2016 342 2015 320 2014 450
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4.2 Operating indicators
Trubodetal PRODUCTS Division, Chelyabinsk Pipeline nodes, cold and hot bent branches, and stamped and welded pipeline parts: bends, T-bends, reducers and ends. Used in the construction of long-distance pipelines, oil and gas field infrastructure pipelines, distribution and pumping stations, oil refineries and gas processing facilities, nuclear power plants and cogeneration plants. Diameter: 57–1420 mm. Maximum capacity: up to 30,000 tonnes per year
Pipeline fittings production, Trubodetal plant - pipeline thousand tonnes fittings production
2018 13 13 2017 10 2016 14 2015 16 2014 19
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4.2 Operating indicators
BAZ Division, PRODUCTS Blagoveshchensk Cast wedge gate valves, spring-loaded safety relief valves, rotary check valves, changeover valves, safety relief valve assemblies, wellhead and shutoff valves, etc. Applications: oil and gas extraction, oil and gas processing, petrochemicals, power generation. Diameter: 25–800 mm. Maximum capacity: up to 13,900 tonnes per year.
Blagoveshchensk Pipe Pipeline valves production, Plant - pipeline valves thousand tonnes production
2018 4,9 4,9 2017 4,9 2016 5,0 2015 6,7 2014 6,4
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4.2 Operating indicators
APP PRODUCTS Division, Almetyevsk Water and gas pipes and tubes, oil and gas pipes and tubes — straight-seam electrically welded, including with two- and three-layer outer polyethylene coating. Applications: oil and gas industry, water supply and heating, construction, and agriculture. Diameter: 21.3–219 mm.
Almetyevsk Pipe Plant — Wall thickness: 1.5–8 mm. Length: 6–12 m. producing oil and gas pipes, water and gas pipes Square hollow sections. Used in machinery and shaped pipes and tractor production, construction, furniture manufacturing, and other industries. Cross section: 15х15–180х180. Wall thickness: 1.5–6 mm
APP production of tubular products, thousand tonnes
2018 203 2017 208 203 2016 216 2015 237 2014 247
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4.2 Operating indicators
CMW PRODUCTS Division, Chusovoy More than 800 sizes of springs in the very latest designs, including parabolic springs, as well as arms for air suspensions. Supplier to key Russian (KamAZ, Ural, NefAZ, UAZ, etc.) and foreign truck manufacturers. Capacity: 110,000 tonnes/year.
Springs production, Chusovoy Metal Works - thousand tonnes automotive springs production
2018 44 2017 46 44 2016 48 2015 43 2014 55
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5.0 Sustainable development report
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5.1 Statement from a member of the Management Board, the Head of the Human Resources Department
his reporting year, our company transitioned to a centralized Community well-being has also benefited considerably from our Tmanagement model for our community service work, a widely environmental programs, which ensure a long-term reduction employed strategy in the field of corporate social responsibility. in negative environmental impacts, and from our occupational The CSR committee decided for the first time to distribute the safety measures, which have reduced the frequency of work- company’s community service tasks between particular units, related injuries and illnesses. setting them ambitious goals in our sustainable growth target areas: human rights, the management system, expanding our OMK promotes responsible practices in the business geographical presence, responsible sourcing, and consumer community. We require contractors to meet workplace safety relations. And now, also for the first time, we will be publicly standards, and increase the number of safety checks that reporting on their achievements to interested parties. we perform from year to year. This year, as part of our OMK Dialogue program for stakeholder engagement, we conducted OMK is building new production capacity that needs to be our first survey of contractors’ employees, asking whether their staffed – but how are we to find qualified employees in the rights were being respected and how they felt about their work, small cities where we have our plants? We are addressing this in addition to a study on our own staff’s engagement. problem by, firstly, increasing labor productivity: employees in redundant positions are retrained and reassigned to new jobs. Our short-term plans include a significant expansion of our Secondly, we are helping people grow. The corporate university anti-corruption initiatives and the inclusion of CSR criteria we opened in 2018 is responsible for creating the corporate in our ratings system for potential vendors and contractors. culture we need to effectively implement our strategy. And, finally, to guarantee the labor supply we will need in the future, Svetlana Nikolashina we are continuing our local community development programs.
This is why we make sure that the average salary at our plants matches the regional average, why we are fostering corporate volunteerism, and why we award a competitive OMK Partnership [ S vetlana N ikolas h ina ] grant to selected charities and community service projects. In three monocities, we are partnering with the relevant Member of the Management government agencies to implement a socially responsible Board, Head of the Human Resources Department entrepreneurship program called Start Your Own Business.
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5.2 Sustainable development practices
e have created a management system that allows social responsibility «Wgoals to be set and their achievement tracked. OMK extends responsible practices to all divisions and corporate processes. Our consumers can be sure that our products are manufactured with due respect for human rights and the interests of stakeholders and with the lowest possible impact on the environment, » - Natalya Eremina, Chairman of the Management Board of OMK.
The OMK Corporate Social Responsibility policy was adopted by the company's board at the beginning of 2017 and is a document of action, defining both strategic CSR goals and priorities and also corresponding tasks for specific company divisions. The policy is based on social responsibility standards.
The policy is based on social responsibility standards: GOST ISO 26000 and SA8000 and the requirements of interested parties. Setting interrelated CSR goals allows for systematic management of impacts on society and the environment and is current best practice.
In early 2018, the OMK Corporate Social Responsibility Committee approved the company's 2018 CSR goals and sustainable development risk register. In total, more than 70 goals were approved* and about 40 risks were identified for all OMK corporate social responsibility priorities, as defined in the OMK CSR policy.
The Committee also identified the most significant reporting indicators that should be verified by the Internal Audit Service. The Chairman of the Management Board of OMK Natalia Eremina heads the CSR Committee.
*A KPI summary table is provided in the GRI Standards Context Index.
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5.2 Sustainable development practices
Key goals of the reporting year:
❏ Avoid deaths at work (FIFR value = 0), reduce working time lost due to injuries, reduce LTIFR by another 10% compared with 2017
❏ Gross emissions of pollutants into the air at a level of not more than 6.220 thousand tons
❏ Gross discharge of pollutants into water bodies under 3.120 thousand tons
❏ Total waste generation no more than 1006.8 thousand tons
❏ Support at least 20 employee volunteering projects as part of the OMK Partnership competition
❏ Launch no fewer than 35 new projects by social entrepreneurs in Vyksa, Blagoveshchensk and Chusovoy as part of the Start Your Own Business program
❏ Achieve a consumer claims rate of less than 0.207% for Vyksa output
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5.3 HR MANAGEMENT
uring the reporting period, personnel management was carried Dout based on the functional strategy for 2018-2020. OMK’s Department of Human Resources Management continued to work on improving the personnel practices and engagement necessary for achieving sustainable results.
In 2018, 1492 jobs were created for the new facilities at VSW, and employees were selected to fill these posts. A new division was created: the Corporate University. To make internal procedures more convenient for employees, we launched the the Facing People project. Services will be standardized, digitized and finetuned to ensure continuous improvement through feedback mechanisms.
As a rule, posts are filled from internal sources. The company is committed to promoting its employees. In 2018, 90% of appointees to senior positions were internal candidates. Preference in the selection of workers, professionals and employees is given to local residents.
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5.3 HR MANAGEMENT
Employees on roll at year end
Numbers reflect the challenges facing enterprises.
United Metallurgical Company Trubodetal facility Сhusovoy matallurgical works 2018 22801 2018 1702 2018 2206 2017 22957 2017 1597 2017 2228
2016 22948 2016 1642 2016 2234
Vyksa steel works Blagoveshchensk valve plant Аlmetyevsk pipe mill 2018 13988 2018 1695 2018 786 2017 13626 2017 1859 2017 793 2016 13158 2016 1964 2016 820
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5.3 HR MANAGEMENT
Personnel structure by gender and category (at the end of the year)
2016 2017 2018
Total 22948 22957 22801
Men 14577 14707 14671
Women 8371 8250 8130
Men Top 53 66 57 executives Women 10 10 10
Heads of Men 1213 1254 1278 functional units Women 356 354 380
Men 2018 2119 2259 Specialists Women 2853 2905 2970
Men 138 27 42 Employees Women 172 143 145
Men 11155 11241 11035 Workers Women 4980 4838 4625
The existing balance of men and women in the various personnel categories is due to the na- ture of our work and is optimal. The size of each category reflects the demands of production.
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5.3 HR MANAGEMENT
Staff structure by age (at the end of the year)
2016 2017 2018
Total 22948 22957 22801
< 25 (inclusive) 1892 1867 1787
26 - 30 3836 3579 3207
31 - 40 7974 8134 8341
41 - 50 5371 5549 5746 51 - 55 2176 1254 1982
< 55 1699 1734 1738 Average age of employees 39 39 39
Former employees on pension 2104 2103 2042
The average age is stable, and the distribution of workers between age groups remains largely the same.
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5.3 HR MANAGEMENT
Distribution of employees by education (at the end of the year)
2016 2017 2018
Total 22948 22957 22801
Workers 2425 2448 2411
Higher Specialists education Employees 3356 3393 3473 Executives 1491 1625 1766
Workers 51 62 56 Postgraduate Specialists education Employees 318 335 328 Executives 194 209 244
PhD 47 49 51
Workers 10686 10657 10458 Secondary vocational education, Specialists primary vocational Employees 884 792 820 education Executives 306 308 295
Secondary (complete) general education, basic general education 3190 3079 2899 (incomplete secondary)
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5.3 HR MANAGEMENT
OMK Values model
n 2018, a study was conducted to establish a model of values, culture and competencies. IThe results of this study formed the basis of a new competencies model for OMK employees, covering 18 competencies which fall into three main areas and are relevant to all levels of decision-making from strategic management to functional:
Managerial
Corporate Functional
Linking competencies at different levels of decision-making allows us to form a holistic model of employee behavior based on company values.
The updated competencies model was developed by our Corporate University which creates training programs and training modules for formulating individual development plans and produces scenarios for various facilitation sessions and team building activities.
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5.3 HR MANAGEMENT
ProfesSional Values
Entrepreneurial Vision Clearly Defined Systematic Focus Spirit of the Future Goals Approach on the Client Monitoring
We are constantly We make predictions We set ourselves clearly We assess and keep in We know who will be We use monitoring searching out new about what the world will defined, comprehensible, mind factors that will working with the tools to ensure that our opportunities to grow the be like in the future and and measurable goals affect outcomes and products we create and workflows are reliable company and turning understand our place and tasks. Everyone has possible consequences we understand their and that the tasks and new ideas into functional, in it. We determine our the right to learn about of our decisions. requirements. duties assigned profitable business strategic goals based on them. to us are completed. models. that vision.
Professionalism Transparency Results High Standards Teamwork
I have the necessary and Information about my We finish what we start I expect results We work towards a sufficient level of knowledge work and its outcomes and attain the goals set from myself and my collective result as a and skills to allow me to work is available to my for us. colleagues. team and harmonize effectively. I am constantly colleagues. collective goals with growing and studying best practices in order to measure individual ones. We share up to constantly updated in our successes and standards. failures.
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5.3 HR MANAGEMENT
Personal Values
Initiative Safety Responsibility Openness and Leadership
I respect safety I assess the effects of I give my genuine opinion I show initiative, am standards my decisions and actions and talk about problems engaged in making new and do not tolerate and take responsibility openly and responsibly. ideas a reality, and do not their violation. for them. leave problems unaddressed.
Personal Development Plain Dealing Trust
I constantly grow as I uphold standards for ethical I trust my colleagues and a person, expand my behavior: I do not scheme, value their trust in me. horizons, and support my manipulate, or blackmail colleagues’ development. people; I do not make people feel guilty; and I do not shift blame onto colleagues, managers, or external circumstances.
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5.3 HR MANAGEMENT
Social Values
Respect Fairness Gratitude
I respect my colleagues and Company rules are the I express my their opinion and express same for everyone; appreciation for a job well my position politely using double standards and done and expect that supporting arguments. I am discrimination of all kinds others will do the same respectful to people no matter what the nature of our are unacceptable. for me. relationship might be.
Commitment to Constant Corporate Improvement Traditions
We continually work to We respect corporate refine workflows and our traditions and working environment. older generations’ achievements, and create new history.
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5.3 HR MANAGEMENT
staff development Number of full-time training hours
ontinuous development of workers and cultivation of employees’ 2016 2017 2018 Cmanagerial skills is provided through our training centers and Corporate University. As a result, we received the synergistic effect of the activities of training centers and a corporate university. We have formed a stable, highly ОМК overall 16.24 18.61 18.29 efficient team capable of achieving the company’s long-term strategic goals. VSW 43.5 58.9 62.16 n 2018, the average number of training hours was preserved. VSW remains Ithe leader among OMK plants by the number of hours of classroom Trubodetal 11.14 13.4 12.1 instruction. This is due to the common practice of advanced training in BVP 8.4 10.3 10.2 new professions, training internal staff for new types of industries. At the Chusovoy plant in 2018, on the contrary, the share of online learning was CWS 13 11 2.5 increased. APP 16 12 15
OMK managing company 5.4 6.07 7.8
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5.3 HR MANAGEMENT
Man-hours spent on courses, by segment 2016 2017 2018 Training Centers nterprises’ training centers aim to foster and pass on specific technical OMK Overall 33532 34141 42779 Eskills of relevance to employees' positions. They ensure employees' Total 25949 26516 32539 continuous professional growth, i.e. are responsible for the formation of hard skills. Managers 1442 1338 3001 VSW Specialists 2999 2766 4129 Workers, employees 21508 22412 25409 Corporate University Total 19953 2290 3909 Managers 198 62 248 he Corporate University specializes in developing skills that are not Trubodetal Specialists 608 347 1484 Trelated to a particular professional activity. Its aim is to enhance personal qualities and foster social skills and managerial skills. The Corporate Workers, employees 1147 1881 2177 University specializes in soft skills. Total 3850 3473 3883 Managers 472 307 412 BVP Among the specific functions of a corporate university are to develop Specialists 309 179 303 qualities which are relevant to company values and which help employees Workers, employees 3069 2987 3168 succeed in their profession, to cultivate effective cross-functional Total 1561 1627 1585 interaction, and to fulfill the training needs associated with personal growth. Managers 155 181 54 CSW Specialists 651 325 62 Workers, employees 755 1121 1469 Total 219 235 863 Managers 76 78 201 APP Specialists 15 28 88 Workers, employees 128 129 574
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5.3 HR MANAGEMENT
n 2018, the company continued to improve its qualification management Employee qualification levels, % * Iprocess. APP and BVP switched to monthly monitoring of this indicator. Trubodetal and APP recorded a decrease in qualification levels at the end of the year in connection with the addition of numerous new target qualification 2016 2017 2018 requirements.
In 2018, the corporate university conducted a number of employee ОМК overall 78 86 90 programs: VSW 86 86 92 • Seminar: The Role of the Leader in the Annual Cycle Process Trubodetal 89 86 78
• Talent pool development programs BVP 45 72 81 • Comprehensive program to develop the skills of planning functions CSW 83 92 92 and the reliability of the repair services at Vyksa APP 74 90 87 • A program for developing internal trainers: sessions entitled Training for Trainers were held which provided training on working with difficult * Percentage of employees who hold the required qualifications participants
• Internal trainers now certified to conduct the workshop program The Role of the Manager in Annual Cycle Processes
• More than 800 people participated in the programs
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5.3 HR MANAGEMENT
New employee adaptation programs Partnership with educational institutions In 2018, new training and introductory courses for new employees and MK enterprises have traditionally cooperated with leading universities in re- managers were developed, and formats for all company enterprises were Ogions where they have a presence. This cooperation gives OMK a head start standardized. when it comes to attracting and hiring young professionals, as well as provid- ing advanced training opportunities for existing employees as part of specially Trainings for managers are aimed at creating shared conceptions of effective designed programs (more than 230 people in 2018). OMK has been collaborating management, rules for setting goals, controls, management features, and the with a number of universities for more than ten years. differences between the roles of an expert and a manager. OMK partner institutions
1. National University 14. Perm State University of Science and Technology MISIS 15. Chusovoy Industrial School 2. NITU MISIS’ Vyksa branch. 16. Lysva Polytechnical College Young professionals recruited after graduation * 3. Alexeyev State Technical University 17. Ufa State Aviation Technical University 4. Murom Institute of Stoletovs State University 18. Ufa State Petroleum Technical University 5. Lobachevsky State University, Nizhny Novgorod 19. Almetyevsk State Petroleum Institute 2018 358 6. Kozeradsky Metallurgical College, Vyksa 20. Kazan Aviation Institute 358 2017 403 7. Bauman State Technical University, Moscow 21. Kazan State Energy University 8. Navashino Polytechnical School 2016 375 22. Kazan (Volga) Federal University 9. Kulebaki Polytechnical School 23. TISBI University of Management, Kazan * Young professionals recruited during the period from four months to end of first year after graduation 10. Murom College of Electronic Instrument Engineering 11. Samara State Transport University 12. Boris Yeltsin Ural Federal University 13.Lysva Branch of Perm National Research Polytechnic University
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5.3 HR MANAGEMENT
Employee evaluation system Evaluation of OMK employees has the following aims:
• determination of the suitability of the professional, business and personal qualities of candidates for vacant positions • identification of employees’ compliance with the requirements of a post • identification of the potential of employees and determination of their the prospects for advancement • identification of training and development needs • making of management decisions about hiring, promotion or demotion
Assessment tools allow the Corporate University to evaluate the following parameters: - complexity of the tasks to be performed in the position - scope and nature of the influence of the position on the results of the company - specific social interactions required - qualification requirements and competencies necessary for successfully implementing the tasks assigned to the position.
The company applies a multi-stage personnel assessment system: • when applying for a job • after the trial period • during annual cycle assessment • at the request of the supervisor • during creation of a talent pool • at certification • when transferring to another position OMK ANNUAL REPORT 2018 77 CONTENTCONTENTSS OVERVIEWOVERVIEW STRATEGYSTRATEGY MANAGEMENTMANAGEMENT KEY INDICATORSINDICATORS [ S U STAINASUSTAINABLE BL E DDEVELOPMEN EVE L O P MENT T ] CONTACT INFORMATIONINFORMATION
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5.3 HR MANAGEMENT
Labor productivity increase In 2018, projects were implemented to improve the efficiency of the subdivisions with a potential effect. Increasing labor productivity is a key method of increasing the efficiency of production and the company as a whole.
million rubles a year, To increase productivity, we apply: 244.4
• financial incentives including • optimization of organizational structure • small-scale mechanization and automation of processes 75.5 VSW general production staff OMK’s financial incentive system is based on creating opportunities for workers to increase their pay: 32.3 Trubodetal support staff
• constant payment even during redistribution of work related to changes in production 75.5 VSW repair and support staff technology and process automation Labor productivity increased by in the divisions in which • potential to increase variable part of wages by increasing productivity 9.3% these projects took place. Optimization of the organizational structure is achieved in the following ways:
Staff reserves identified in 2018 were equal to 657.64 full-time • redeployment of qualified personnel to complex areas and new production equivalents. Of these reserves, 305 FTEs were utilized. Freed- • relocation of personnel from low-load to high-load production units up employees were assigned to new jobs as part of ongoing
investment projects.
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5.3 HR MANAGEMENT
Incentive programs The wage system is based on the principles of objectivity, predictability, adequacy, timeliness, ne-time bonuses are intended to motivate employees and significance, fairness and legality, and consists of two parts: conditionally constant (approximately Orecognize employee loyalty and maintaining their company’s 70%) and variable (approximately 30%). overall performance. They are aimed at increasing employee loyalty, maintaining the desire to achieve better results. One-time bonuses include bonuses for successfully implemented investment projects, 2016 2017 2018 Target 2018 % execution organizational change projects, IT projects, and for suggestions for organizational change and improvements. Compliance of the average wage at enterprises with the regional labor market (VSW, CMW, ATZ, Trubodetal, Check YES YES YES conformity 100% BAZ) (+ -15%) or exceeding the average level in the region. In 2018, OMK employee personal accounts were finalized in the Variable part SAP PHR system. Now, along with their pay slip, workers are Regular bonuses provided with information about the payments that the employer The amounts of regular bonuses are documented. Their size depends on the potential influence an makes for them to the Social Insurance Fund, the Mandatory employee/group of workers/manager could have on the achievement of a goal. Rules for calculating Medical Insurance Fund and the Pension Fund. The project will premiums are clearly described, and the procedure for and frequency of payments is determined. help employees become aware of their rights in relation to these funds and show the real value of their labor for the employer.
One-time bonuses These payments are one-time, and non-permanent in nature. They are paid to employees on achievement of a result, e.g. for successfully completing a stage of a project of importance to the company, for achievements at work, or for a particularly valuable contribution to company results.
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5.3 HR MANAGEMENT
Directions of social support *, mln rub. Extra social support 2016 2017 2018 2018 per employee, he company voluntarily assumes additional costs for those types thousands rub. Tof social support for which there is most demand, mainly related to maintaining health and cash payments in various situations. The concentration of resources in these areas and their management Total social expenses 598 558 598 30.8 allows a socially significant effect to be achieved that employees could not achieve on their own if they covered these expenses out of their Direct social payments to employees salaries. (benefits, social assistance, payments 197 164 159 8,2 for dismissal, social leave, etc.) VSW and CMW have a parental support program, which includes financial assistance for workers with children (single parent, multiple Medical support 171 179 222 11,5 children, on birth of child), childcare benefits from 1.5 to 3 years, and additional prenatal leave. Non-state pension provision 43 23 20 1,0 Parental support costs, mln rub. Sanatorium-resort treatment and rehabilitation of employees 43 41 42 2,1 2016 2017 2018 and their families
VSW 22,9 22,4 22,6 Catering 97 106 107 5,5
CSW 4,71 3,73 3,32 Other 46 45 48 2,5
* Data from VSW, CSW, APP, Social expenditure has increased by 7% due to an increase in medical and sanitary expenditure at Vyksa. «Trubodetal», BVP OMK ANNUAL REPORT 2018 81 CONTENTCONTENTSS OVERVIEWOVERVIEW STRATEGYSTRATEGY MANAGEMENTMANAGEMENT KEY INDICATORSINDICATORS [ S U STAINASUSTAINABLE BL E DDEVELOPMEN EVE L O P MENT T ] CONTACT INFORMATIONINFORMATION
5.3 HR MANAGEMENT
Non-state pension provision Issues of non-state pension provision (NGO) are very important to the company.
OMK is committed to providing a decent standard of living for workers after retirement. At the end of 2018, more than 5,700 employees were participating in non-state pension programs, and more than 3,700 people were included in the voluntary co-financing program. NGO programs are implemented through the NPF Gefest.
Pension payments from NPF Gefest in 2018 for compulsory pension insurance amounted to 49.8 million rubles, and 18.9 million rubles for non-state pension provision.
The average size of the additional pension in 2018 increased to 1,500 rubles, or at least 13% of the average pension in the regions where the company’s enterprises operate. For employees who have been participating in the program for 10 or more years, the amount of the monthly increase to the state pension reaches 17,000 rubles, with the average national level of the state pension in 2018 being 14,075 rubles.
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5.3 HR MANAGEMENT
Actual costs for social programs per year per employee (over and above legally binding costs) *, rub. Intangible Promotion Programs
ll OMK enterprises are subject to approved regulations on the recognition of employees through 2016 2017 2018 Astate, departmental, regional, municipal, and corporate awards.
108 employees awarded 66 - awarded 1. Direct social payments to employees: departmental awards in 2018 municipal awards 1.1. Material assistance to employees;
25 - awarded 49 - awarded 1.2. Social leave; regional awards corporate awards 1.3. Incentive payments. 2. Social programs for employees: The enterprises have established boards of honor, both at the shop level and at the factory level. 2.1. Medical care for employees and their families in sanatoriums and healthcare institutions; 26 910 21 293 23 370 At the end of 2018, for the 16th time, the corporate award of the Ivan and Andrey Batashev 2.2. Medical care for workers Foundation was awarded across 13 categories, five of which were for working professions. (LCA + costs for MUF); At the end of 2018, the new Best in Function corporate award was presented. The goal is to identify 2.3. Pension benefits for employees; the best functional managers and create conditions for the exchange of experience among employ- 2.4. Providing workers with food. ees. The best employees in this category will be selected by members of the board in 2019. 3. Other costs: 3.1. The cost of sports; Developed and launched in 2017 in the management company and at the Vyksa Metro, the «Cafeteria of Benefits» underwent further development in 2018 and was rolled out to the CMW. 3.2. Other expenses for social programs 2019 will see the company hold a significant competition, the Professional contest, which is held for employees. every two years. The competition is held every two years. In 2017, 130 workers competed in 13 main categories and one additional category. * VSW, ATZ, BAZ, CMW, Trubodetal
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5.3 HR MANAGEMENT
Engagement Level*, % Personnel involvement he quality of the communication of managers with subordinates plays a key role in cultivating 2016 2017 2018 Tteam spirit. For this reason, the reporting year saw the publication of a collection of tips for man- agers, How to Make Employees Allies. In each business unit, plans have been created to increase employee engagement, which include improving the work environment: working conditions, career ОМК Overall 54 67 65 opportunities, teamwork, and information and training events. VSW 56 73 74
Trubodetal 51 67 62
In 2018, a pilot project to wish employees a happy birthday and congratulate them on the comple- BVP 30 48 38 tion of advanced training was implemented in the pipe electric welding shop No. 3 and at the directorate for personnel at VSW. The goal of the project is to focus on individual employees CSW 34 42 36 and demonstrate their value for the company. Employees are congratulated at team meetings. To do this, the SAP HCM system creates APP 88 92 99 personalized birthday greeting cards, which are centrally printed by the printing house and sent OMK managing company 70 75 76 to immediate supervisor of the person being congratulated for them to add their handwritten signature. The immediate supervisor receives regular notifications about events in the team * share of employees recognized as engaged according to the methodology applied and congratulates employees at general meetings.
The level of staff engagement is determined by the results of a In 2019, the project is to be extended to other VSW workshops and to other enterprises. sociological survey. The insignificant decrease in the share engaged employees in the group as a whole is due to the drop in this indicator in the individual workshops of BAZ, CMW and Trubodetal, which is associated with the production situation or with a change of manager. The company conducts targeted work with the teams at these workshops.
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5.3 HR MANAGEMENT
Securing the rights of employees he company has procedures for protecting the rights of workers, as stipulated by the Labor Code 2016 2017 2018 Tof the Russian Federation, as well as additional rights established by the employer. The number of applications to the All enterprises of the company have labor dispute commissions established in partnership with trade labor dispute commission resolved unions. There is a management-independent hotline to which any employee or representative of an in favor of the employee / total 4/13 19/27 8/17 number of calls to the commission external interested party can report a violation of their rights. Messages are reviewed by enterprises’ (completed) ethics committees (established in 2018) or, at the request of the employee, by the OMK ethics committee (established in 2015), which is headed by OMK Chairman of the Board Natalya Eremina. The number of appeals to the court allowed in favor of the employee / total number of appeals to the court 8/19 9/15 3/10 (completed)
The number of violations of labor legislation revealed by the results of In the reporting year, as part of OMK’s dialogue with its stakeholders, a survey was conducted for the first state inspections. Labor Inspectorate time of employees of contractors in Vyksa and Chusovoy. The survey covered 802 people in 19 companies. and Prosecutor's Office / The total number of inspections on appeals 4/6 3/5 1/3 The questions concerned observance of labor rights, engagement, ensuring production safety standards, of employees in the state. Labor and participation in the life of local communities. The survey results were passed on to the leadership Inspectorate and Prosecutor's Office (completed) of the organizations, along with a proposal that they take corrective action if necessary.
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5.3 HR MANAGEMENT
Number of completed labor disputes
2016 2017 2018
OMK Group 32 42 27 VSW 19 32 17 Trubodetal 3 4 4 BVP 0 2 1 CSW 7 3 2 APP 0 0 0 Management company 0 0 0
Goal % Goal 2016 2017 2018 2018 achievement
Proportion of ethical violations considered (decision made by eth- ics committee, situation settled by an authorized body/official) of the 100% 100% 100% 100% 100% total number of calls to the OMK corporate ethics hotline.
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5.3 HR MANAGEMENT
Social partnership he company supports the trade union movement. Trade union organizations are available at all Tenterprises of the company and are provided with everything necessary for their work. Social partnership is based on principles agreed by the parties, which allow the interests of employees and the employer to be taken into account through dialogue.
Partnership is built on three levels:
• The OMK Social Council, consisting of enterprise HR directors, trade union leaders and representatives of senior management. The Council is a platform for the parties to discuss social partnership to tackle systemic issues of interaction.
• Social dialogue at the enterprise level, in which the chairs of trade union organizations, managing directors and HR directors participate. Collective bargaining agreements are concluded at this level.
• Current interaction in workshops.
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5.3 HR MANAGEMENT
Collective agreements ollective agreements regulate social and labor relations at OMK enterprises and do not contain Cconditions that restrict rights or reduce the level of guarantees provided to workers in comparison with the established labor legislation and other regulatory legal acts containing labor law norms.
The collective agreement establishes: rules on remuneration, work and rest time, a list of benefits and guarantees, norms and rules for labor protection, directions for working with young people and other rights and guarantees for workers, as well as guarantees for the activities of the trade union organizations. In the event of changes to labor laws or sectoral tariff agreements, collective agreements are revised.
During collective bargaining, the parties search for the solution that best satisfies the interests of the employees and the employer. The types of social support most demanded by workers are determined.
In 2018, at VSW, CMW, Trubodetal and BAZ, collective bargaining took place to extend the validity period or conclude new collective agreements for a period of three years. At ATZ, the collective agreement expires in 2019.
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5.4 Production Safety
he company has a new production safety policy approved by the board in 2017, which defines the Tbasic principles and responsibilities of managers at all levels. Along with environmental protection, the life and health of workers is OMK’s highest priority, which determine the principles of this policy.
In its activities, OMK is guided by the laws of the Russian Federation, international standards and best practices in the field of industrial safety, and seeks to integrate these into all its business processes.
Production safety committee he company has created conditions for safe labor and is constantly working to improve Tenvironmental safety. Efficient organization of the production safety management system is based on the exchange of experience and best practices between enterprises, as well as on the adoption of management decisions by the safety committees aimed at reducing the risk of injury and accidents.
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5.4 Production Safety
he OMK Production Safety Committee, the enterprises' production safety coordination Tcommittees and workshop working groups constitute a single management vertical. The OMK Production Safety Committee is responsible for the practical implementation of production goals, development strategies and policies in the field of industrial safety, and also manages current production safety activities at all OMK enterprises. The Chairman of the Management Board heads the committee, which counts members of the board and managing directors of enterprises among its members.
Members of the OMK Production Safety Committee are responsible for:
ensuring that the production safety providing the necessary resources to execute management system at OMK’s plants decisions made by the OMK Production Safety operates effectively, within the scope of their Committee responsibilities carrying out the committee’s decisions ensuring that decisions made are compliant with Russian Federation law, executive ensuring the effectiveness of subsidiaries' decisions, and company policy on environmental production safety coordinating protection, health, and industrial safety committees
The OMK production safety office is responsible for development in the areas of occupational safety, industrial, fire, transportation, and environmental safety, managing staff health, and the safety of production processes.
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5.4 Production Safety
Выполнение Further steps for management to increase production safety 2016 2017 2018 Goal 2018 цели, % • Finish building a vertically integrated system of production safety management that covers both current activities and plans for future growth. Frequency of accidents • Transition to a risk-oriented approach in all areas of production. Foster a culture and other incidents at dangerous 2* 0 0 0 100 of production safety while constantly refining the management system. production sites • Introduce the OTPB (online automatic safety management system) at all plants. • Make all equipment safe to utilize, and use it within safe parameters. • Help develop the Russian regulatory and legal framework for production safety. Fatal Injury • The production safety management system has a maturity level of 2.87. Frequency Rate 0 0 0 0 100 (FIFR) • No fatal injuries. • No accidents or fires.
Lost Time Injury Frequency Rate 100 (LT IFR)** 2.22 1.6 1.29 1.6
Work-Related Illnesses 3.87 3.64 2.58 - - International Certifications (safety, working conditions, technology)
VSW Certification OHSAS 18001:2007 * In 2016, there were two incidents at a dangerous production site, but no accidents. ** Based on internal standard STK.12-66.1. The standard defines the procedures for reporting incidents, conducting an internal investigation, sharing information about the findings of the internal investigation and steps taken based on the findings, and tracking and preserving Trubodetal Certification OHSAS 18001:2007 the materials of the internal investigation. The standard applies to all divisions of the organization as they investigate, document, and track incidents. Depending on the circumstances, incidents are classified as severe, significant, or not significant. BVP Certification OHSAS 18001:2007
CSW Certification OHSAS 18001:2007 2019 target 1.25 LTIFR APP Certificate ISO 45001:2018
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5.4 Production Safety
Steps taken to minimize production safety risks
Key production safety risks: To ensure plants are prepared to contain and mitigate the effects of a major explosive and flammable outdoor and indoor accident, sites are equipped with: an accident response plan; their own fire and gas production facilities gas lines rescue service (VSW), a plan for emergency medical aid, and an alarm, emergency weight-lifting devices furnaces and other communication, and surveillance system; the necessary reserves of firefighting pressure vessels technical equipment equipment, individual protective devices, and emergency tools; and contracts with professional emergency response teams.
Staff are given emergency drills, scheduled sessions on basic fire safety, and first All plants are conducting a series of mandatory trainings to minimize risks related to aid trainings to reinforce their knowledge and ability to act correctly in the event of an production safety: emergency. Before being allowed to work independently, staff attend courses on their profession The practices above help reduce all the risks incurred by the use of hazardous and designated role. production facilities to an acceptable level and make accidents at OMK Group plants less likely to occur and escalate. Every worker hired undergoes an introductory occupational safety training, an initial training at their workplace, and an apprenticeship under the guidance of an experienced mentor. Workers are allowed to work independently only after passing a production safety test.
All work sites have developed guidelines, approved by appropriate site supervisors, on Occupational safety expenditures, million rubles rules for safe usage of equipment and machinery, production safety while performing various jobs, occupational safety for particular groups of specialists, and actions to be taken by support staff during potential emergencies. 2016 337.27 2017 350.08 2018 308.55
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5.4 Production safety
Number of injuries
2016 2017 2018
Without disability 187 156 127
VSW 35 19 20
«Trubodetal» 12 6 7
BVP 10 10 7
CSW 11 9 5
APP 3 5 4
Management Company 0 0 0
Fatalities in the group 0 0 0
Number of occupational illnesses per 10,000 employees 3.87 3.64 2.58
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5.4 Production safety
Special assessment employment positions, number of positions
Goal 2016 2017 2018 Goal 2018 achievement, %
VSW 978 1 208 554 554 100
«Trubodetal» 132 119 93 93 100
BVP 291 46 343 343 100
CSW 225 120 137 137 100
APP 39 42 46 46 100
Management Company 172 54 78 78 100
In accordance with federal law No. 426-ФЗ «On Special Assessment of Working Conditions», the bulk of the work done to conduct a special assessment of working conditions was carried out in 2015, along with unscheduled special assessment and a special assessment of newly formed jobs.
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5.4 Production safety
In 2018, the following measures were taken at OMK to maintain health and prevent occupational diseases among employees:
ATZ BAZ An anti-smoking event was held, and social and psychological support is provided for An in-depth analysis of the occupational illness rate was carried out, and measures those who quit smoking. There is a gym with free access for all employees at the plant. are planned to reduce the employee ill health. Employees were trained in first aid. The Employees are given preferential trips to the Blue Lake sanatorium and preventative health center received new medical equipment (a DKI-N-10 Axion, ECG, otoscope, and healthcare center. Periodic medical examinations were organized for all workers subject to frontal reflector). A mandatory psychiatric examination was carried out. Periodic medical medical screening. examinations are organized for all workers subject to medical screening.
VSW Trubodetal Every year, with the financial support of the company, we implement a program of sanato- Workers underwent a medical examinationt according to the recommendations of the rium and clinic stays for workers and their families. Employees who work in hazardous con- software. Vaccination was organized on the enterprise’s territory for workers, according to ditions are given priority access to the program. Mother and Child vouchers are available the national calendar 125n (ADS-M, hepatitis B, measles, rubella). Preventive physiotherapy for workers with children aged 4 to 15 years. The right to receive a voucher to a corporate activities were organized for musculoskeletal issues at the enterprise’s medical center. health institution for recreation with a child and / or spouse can be exercised by each em- Periodic medical examinations are organized for all workers subject to medical screening. ployee as needed by making a contribution of 50% of the total cost of the voucher. Periodic medical examinations are organized for all workers subject to medical screening. Moscow OMK headquarters Health days and first aid training were held. Workshops for first aid trainers at OMK Group CMW enterprises were held. Educational work is carried out to promote health and hygiene: (health corners are orga- nized, leaflets are issued which aim to promote a healthy lifestyle), lectures are held on the dangers of alcoholism, and discussions are held on topics surrounding health and disease prevention. Workers receive flu vaccinations, Health Days are held, and periodic medical examinations are organized for all workers subject to medical screening.
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5.4 Production safety
Interaction with contracting organizations regarding labor protection o ensure that contractors comply with industrial safety and labor protection requirements, a corporate Tstandard, Management of Contractors in the Field of Occupational Safety, Environment and Fire Safety, was put into effect. The standard establishes the requirements for interaction with contractors to ensure safe working conditions are in place and environmental requirements are met when contractors are either working at company sites or are working off-site for OMK. When concluding contracts by the contracting organization, the obligatory appendix Requirement on Compliance with Legislation in the Field of Labor Protection and Industrial, Fire Safety and Environmental Protection is signed.
Production safety specialists evaluate suppliers / contractors / contractors according to the criteria for compliance with labor and environmental safety requirements. Prior to commencing work, all employees of contractors attend an introductory briefing where the relevant notes are made. During the briefing given to the contractor’s employees, the requirements for occupational safety and environmental protection, environmental, health and industrial safety policies, and procedures for access and movement within enterprises, including circulation of vehicles,, are communicated. In the course of work carried out under contract, OMK specialists conduct regular inspections of contractors. Data on the results of inspections are entered into a single database of OMK suppliers.
2016 2017 2018
The number of inspections of the state of industrial safety in contracting organizations 60 649 944
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5.5 Environmental safety
2016 2017 2018
Gross emissions of pollutants into the air, 5.9 5.8 4.59 thousand tons / year
Gross discharge of pollutants into water bodies, thousand tons / year 3.16 2.85 2.54
Amount of waste disposed of, 253.3 87.84 77.39 thousand tons / year
he company is constantly working to reduce the anthropogenic environmental load from its production Tactivities. To this end, the company annually plans and implements measures aimed at reducing the environmental impact of production.
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5.5 Environmental safety
Energy saving programs
The program for energy saving and energy efficiency improvement at Vyksa Steel Works for 2017 - 2021 consists of: • eliminating increased expenditure after the steelmaking shop closes by curtailing steam usage for non-technical purposes and closing steam boiler rooms while reconstructing hot water production' • modernization of the thermal complex at VSW and MUP Vyksateploenergo • construction of an oxygen pipeline from the casting and rolling complex to VSW with cessation of oxygen production at the oxygen station KA-0.4 • optimization of the current activities of the units • implementation of improvement projects («A3» format)
Total consumption of fuel and energy resources by OMK, t.r.f.* 538 901 % 2018 538 901 - 9.7 2017 596 657 2016 583 383
The 9.7% reduction in energy consumption is the result of modernization of production and the closure of the open-hearth plant at VSW.
The performance of the program of energy saving and energy efficiency is currently a little better than predicted (prediction - 87.94 million rubles., actual - 90.9 million rubles.)
* ton of reference fuel
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5.5 Environmental safety
POWER CONSUMPTION
Total reduction in energy consumption *, TJ
2016 2017 2018
Fuel 97.7 220,7 106,1
Electricity 82,8 122,1 58,1
Total energy consumption 180,4 342,7 164,2
* in absolute terms.
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5.5 Environmental safety
Energy Saving and Energy Efficiency Initiatives
• Changes in gaseous oxygen generation technology: use of more efficient equipment
• Changing the technology for preparing make-up water for circulation in water supply systems with minimization of wastewater discharge
• Changing the technology for preparing coolant (TFV, GVS) using automated modular boilers
• Reconstruction of lighting systems using energy-saving technologies
t the newly commissioned facilities, new highly efficient technologies are used, enabling rational Ause of energy resources: gas radiating heating systems of production facilities; LED lighting which can be turned on and off zone-by-zone; modular structures with a high level of automation of energy facilities, etc.
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5.5 Environmental safety
Annual purchased energy savings from the implementation of energy conservation programs, thousand rubles.
OMK Blagoveshchensk valve plant 2018 124 913 % 2018 21 102 % 2017 144 227 124 913 - 13 2017 28 571 21 102 - 26 2016 122 401 2016 15 514
Vyksa steel works Chusovoy matallurgical works 2018 90 956 % 2018 8 971 % 2017 103 604 90 956 - 12 2017 9 307 8 971 - 4 2016 51 801 2016 51 293
Trubodetal Almetyevsk pipe mill 2018 3 827 % 2018 57 2017 2 745 3 827 + 40 2017 - 57 2016 2 629 2016 1 164
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5.6 Quality MANAGEMENT
The share of products attracting consumer complaints, VSW, %
Goal % 2016 0.293 2017 0.233 2018 0.056 Goal 2018* 0.207 achievement 100
he management system at VSW is regulated by internal documentation, for the management of which Telectronic systems are used (EASUD and OMK Docs). Process management is implemented, with the effectiveness of processes reflected in the information portal. Corrective action management is carried out in the electronic system (SUAN). Internal audit activities are conducted on a scheduled basis.
The quality management system extends to the design and production of products and the activities of the entire enterprise. To ensure that products are of a suitable quality, the company certifies its products, including wheel- rolling products, which are certified for compliance with the requirements of the Technical Regulations of the Customs Union (EAC) and industrial safety expertise on tubular products.
In order to provide consumers with free access to essential information about the properties of products, the VSW website contains the current version of the product range catalog. In addition, annual conferences are held for consumers. Representatives of the company regularly take part in exhibitions and forums, presenting reports and giving presentations; product catalogs and disc drives with informational videos are distributed to the participants.
Quality management system certification in 2018 • ISO 9001: 2015 (recertification audit) • KRTS-CO-Part7-2016 (Korea) (certification audit) • STO Gazprom 9001-2012 (inspection audit) • Directive 2014/68 / EU and in accordance with EN 764-5 • ISO / TS 22163: 2017 (certification audit) and AD 2000 - Merkblatt W0 (inspection audit) • AAR M-1003 (inspection audit)
*In 2018, as part of a pilot project, the target for this indicator was set for Vyksa alone. The company is considering the possibility of extending this practice to other enterprises.
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5.6 Quality MANAGEMENT
Materials entering the enterprise for the manufacture of The share of products attracting consumer complaints, BAZ, % Input control products, components (studs, nuts, gaskets, bolts, drives, gearbox), paints and varnishes 2016 0.08 2017 0.12 2018* 0.57 The conformity of parts to the requirements of technical * In September 2018, accounting for incoming claims was changed. Previously, official claims were taken into account, not including comments. Control during documentation (TP, TI) in the steel, forging and mechanical production assembly shops is determined: visual inspection, non- destructive control, destructive control and testing. o satisfy the rights of consumers to purchase and use products that are not harmful to their health and Tecological systems, at the design stage BAZ carries out strength calculations to ensure the reliability of the structure over its entire service life, taking into account the permitted degree of corrosion (not more than 1 mm Testing for compliance with the requirements of design / year) and external loads. In manufacturing products, the company applies the best available technologies Final documentation and specifications, as well as the and high-quality materials that have proven performance and are safe for humans and the environment. At control requirements of consumers. Each finished product passes the manufacturing stage, quality control of materials, blanks, and finished products is carried out, along with acceptance tests. hydraulic tests of 100% of products.
To ensure consumers have free access to essential information about the properties of products, the BAZ site Painting of suitable Certificates of inspection of parts (products) at all stages provides up-to-date information on product ranges and their technical characteristics. In 2018, representatives of production are recorded and stored in electronic of the company participated in regional and international exhibitions and conferences, gave presentations products and paper journals. (including on serial production) at the round table «Current Issues of Operation and Modernization of Pipeline Fittings at Gazprom Neft PJSC» at the Valve Fittings forum.
To ensure reliable product quality, BAZ operates a multi-stage system for monitoring and measuring products Certification of the quality control system for compliance with established requirements. • ISO 9001: 2015, valid from 23.04.2018 to 02.02.2019, • ISO 9001: 2015, valid from 13.02.2018 Сертификация системы менеджмента качества в 2018 году certification body «Certification Association« to 04.04.2021, American Petroleum Russian Registry » Institute certification body (API)
• STO Gazprom 9001-2012 in VTS Intergassert, valid • API 6D, license for manufacturing from 07.05.2018 to 06.05.2021, certification body products according to API requirements, «Association for Certification Russian Registry» valid from 13.02.2018 to 04.04.2021, American Petroleum Institute (API) • API Q1, valid from 13.02.2018 to 04.04.2021, American certification body Petroleum Institute certification body (API)
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5.6 Quality MANAGEMENT
The share of products with claims from consumers, CMW, %
Rolled products 2016 0,07% 2017 4,00% 2018 0,58%
Springs 2016 0,12% 2017 0,89% 2018 0,65%
ork with claims and messages from consumers is carried out in accordance with STO.43-661.1, Procedure for WHandling Claims and Consumer Reports on the Quality of the Plant's Products. Production at CMW is carried out in accordance with the developed NSD, which includes all stages of production from the consumer’s application to approval and shipment of products, including the monitoring of processes carried out and services provided by contractors and suppliers. Analysis of technological processes at the pre-production and serial production stages is carried out using the methods of statistical process control (SPC) in accordance with the latest edition of the SPC AIAG manual.
Determination of the stability of processes and the influence of various factors on it is carried out on the basis of control charts. In order to provide consumers with free access to essential information about the properties of their products, the CMW site hosts an up-to-date version of the nomenclature list of products.
Certification • ISO 14001: 2015 Environmental Management Systems. • The transition to the new version of IATF 16949:2016, Fundamental Requirements and application guide Requirements for the Quality management system for the automotive industry and organizations producing relevant service • Certification of spring products in accordance with the parts» has been implemented. requirements of the Technical Regulations of the Customs Union TR TS 018/2011 «On vehicle safety» • IATF certificate No. 333254, Bureau Veritas Certification Certificate No. RUS-21134 / TS • Rolled products are certified according to GOST 14959-2016, Metal Products from Spring-Spring Unalloyed and Alloyed Steel
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5.6 Quality MANAGEMENT
The share of products with claims from consumers, Trubodetal, %
2016 0.12 2017 0.07 2018 0.2
o ensure that products are of good quality, Trubodetal conducts product certification procedures for Tcompliance with safety requirements for equipment in development (design), production (manufacturing) as well as equipment labeling requirements in order to protect human life, health and property, and to prevent actions that mislead consumers according to the Technical Regulations of the Customs Union.
The quality management system implemented at the enterprise takes into account the requirements and impacts on the enterprise of stakeholders and aspects of the internal and external environment, meets the requirements of the company's management regarding the effectiveness of QMS processes, and allows customers to demonstrate their ability to provide consumers with products that meet their requirements.
Quality management system certification in 2018
• ISO 9001: 2015 Quality Management Systems. Requirements • STO Gazprom 9001-2018 «Quality Management Systems. (1st Observation Audit of the QMS in the international system Requirements» (recertification audit) TUV CERT) • API SPECIFICATION Q1 - 9th edition (recertification audit) • GOST R ISO 9001: 2015 «Quality Management Systems. • ISO 14001: 2015 (recertification audit in the international system Requirements» (2nd inspection audit) TUV CERT) • ISO / TS 29001: 2010 Oil, petrochemical and gas industry (1st • OHSAS 18001 (2nd observation audit in the international system Observation Audit of the QMS in the international system TUV TUV CERT) CERT) • Reputation of goodwill in accordance with the LEG procedure. RU. 0124. (1st inspection control)
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5.6 Quality MANAGEMENT
The share of products with claims from consumers, ATZ, %
2016 - 2017 0.0044 2018 0.0017
To ensure reliable product quality, ATZ is working in several areas:
Quality control 1. Conduct input control of basic materials for the production of pipes (metal) and materials for insulating coating. 2. Inspection of quality control products at all stages of production, 100% non-destructive testing of pipes in the manufacturing process, conducting hydraulic tests in accordance with the requirements of regulatory and technical documentation, conducting mechanical tests in certified laboratories of the Central Plant Laboratory;
The QMS system 1. Monitoring compliance with the requirements of technological instructions, standards, NTD, conducting internal audits. 2. Product certification procedure for compliance with NSD. 3. Analysis and development of solutions to quality problems at all levels (quality circles, quality workshop and factory hours, QMS meetings).
Claims work (if there are claims from consumers) is carried out according to the Technical Standards.48-182.01, Managing External Discrepancies and Assessing Customer Satisfaction, in order to develop and adopt corrective and preventive measures to prevent such situations arising in the future..
Quality management system certification in 2018
• ISO 9001: 2015: No. 18.1796.026 of 10/04/2018, • ISO 45001: 2018: No. 18.0137.026 of 10/04/2018, valid to 12/28/2021 valid to January 30, 2021 • ISO 14001: 2015: No. 18.0136.026 of 10/04/2018, valid to January 30, 2021
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5.7 Responsible procurement
113 billion rub. - volume of procurement by OMK in 2018 87% - the share of domestic procurement
OMK's procurement does not fall under Law 223-ФЗ of the Russian Federation. Procurement is determined by internal regulatory documents.
OMK's fundamental procurement principles:
• Transparency • Responsibility • Collegiality • Support for local producers, • Competence import substitution • Competitiveness The goal of OMK is the timely execution of orders for the provision of production activities. We aim to optimize the quality of the purchased material and technical resources, work and services and the reliability of the supply while keeping costs reasonable.
For achievements in the field of organization and procurement practices, the United Metallurgical Company was awarded the Peter Kraljic Prize of the European Procurement Management Institute (EIPM Peter Kraljic Award, France).
OMK won the category Integrative Supply Management and Procurement Organization Activities. According to the results of the EIPM audit, the company's procurement system has reached a high level of maturity in category management, supplier relationship management, risk management in the implementation of construction projects in complex procurement of material and technical resources. The award ceremony took place at the 23rd annual Procurement Conference held by EIPM in Archamps, France.
EIPM Director Bernard Gracia presented the award to Alexander Sidorin, Director of Procurement at OMK in the presence of Procurement Director of Aéroports de Paris Dominique Etrorno and Director of the European Foundation for Quality Management James Letche.
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5.8 Social projects
OMK’s community service activity is aimed at supporting company strategy by creating a conducive social environment.
Collaborating with a wide range of groups that have a stake in the sustainable development of cities where OMK plants operate allows us to achieve real change in the community. Thanks to our systematic approach to social planning, OMK is growing the commercial and social potential of its regional bases.
In 2018, 740 million rubles went towards charitable and community service campaigns, projects, and programs. These resources were devoted both to developing long-term, institutional projects and to targeted charitable support. Because of this distinction in how the money is used, the company uses various different mechanisms to determine the budget for community service programs. The budget for long-term programs is set and adjusted based on key parameters such as: • the degree to which the remaining stages of the project are in need of financing and the current socio-economic situation in the region; • the results of budget spending in the previous period; • the results of performance assessments and completed projects.
OMK’s budget for sponsorship and charitable activities is set based on an evaluation of: • the needs of local governments; • the needs of non-profit organizations that represent local communities; • the needs of state and municipal organizations.
The annual plan for financial support for socially oriented projects in regions where OMK is present is approved by the Chair of the Managing Board of OMK. OMK’s community service program was included in RUIE’s 2018 collection of corporate practices, Russian Business and Sustainable Development Goals.
OMK recognized by RUIE for social development of the regions OMK won the Russian Union of Industrialists and Entrepreneurs’ (RUIE’s) Leaders of Russian Business: Dynamism, Responsibility, and Resilience 2018 contest in the category Greatest Contribution to the Social Development of a Territory. Nominees were assessed for their achievements in creating significant publicly-oriented corporate initiatives, projects, and social programs that were recognized by the community.
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5.8 Social projects
OMK social projects, results in 2016-2018
2016 2017 2018 TOTAL
OMK Partnership (projects supported) 59 78 90 227
Start Your Own Business (projects supported) 20 26 42 88
Jobs created, Start Your Own Business 22 85 86 193
Volunteers (number) 6 400 7 694 8 000 22 094
Volunteer \ hours 25 600 30 776 32 000 88 376
Number of donor events 5 8 5 18
Number of blood donors 220 208 221 649
Budget for sponsorship and charitable Kind Blagoveshchensk assistance (million rubles) 1044 815 740 2599 project
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5.8 Social projects
Participants in the Active OMK social projects, results Longevity project
The number of volunteers
Goal % 2017 7694 2018 8000 Goal 2018 6750 achievement 100
Number of volunteer projects by employees supported by the OMK Partnership contest
Goal % 2017 3294 2018 4300 Goal 2018 3050 achievement 100
Number of social entrepreneurship projects created
Goal % 2017 2694 2018 4200 Goal 2018 4050 achievement 100
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5.8 Social projects
Strategic Regional Growth Priorities
he main goal of developing community service programs is to increase the quality of life of company Temployees and local communities in cities where we have a presence. Projects are carried out based on the current needs of local communities, which is why the program focuses on a relatively wide range of areas:
• cultural and spiritual development; • sports; • education; • promoting patriotism; • veterans; • vulnerable groups; • religious institutions; • corporate volunteering; • promoting modern standards of corporate social responsibility; • socially responsible entrepreneurship.
To establish a common approach to investments in social welfare, the group has developed a policy on sponsorship and charitable activities at OMK.
Some projects – for example, the OMK Partnership grants for charitable and community service projects – are run by an internal team in partnership with municipal governments, relevant regional ministries, and centers for the support of socially-oriented non-profit organizations.
The socially responsible entrepreneurship program Start Your Own Business is run by regional Centers for Innovation in the Social Sphere in Nizhny Novgorod Region and the Republic of Bashkortostan and the Perm Foundation for the Promotion of Entrepreneurship together with OMK’s regional plants (CSW, VSW, and BVP).
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5.8 Social projects
Social Entrepreneurship Program Anna Seravkina, the most active social entrepreneur START YOUR OWN BUSINESS of Blagoveshchensk he program is aimed at finding and implementing business ideas for solving acute social problems, providing Talternative types of employment, and social development in cities and regions. The social entrepreneurship program Start Your Own Business is based around social partnership mechanisms, which gives additional stability to the project itself and enables results achieved in the social environment to be recorded. In 2018, the partners of the program were:
in Chusovoy: The Perm Entrepreneurship Development Fund, the Ministry of Industry and Trade of the Perm Territory, the administration of the Chusovsky municipal district, the Chusovsky business incubator;
in Blagoveshchensk: The State Committee for Entrepreneurship and Tourism and the Center for Social Innovation (CSIS) of the Republic of Bashkortostan, the administration of the Blagoveshchensk municipal district.
in Vyksa: Center for Social Innovations in the Nizhny Novgorod Region, Vyksa's administration, the Ministry of Industry and Trade of the Nizhny Novgorod Region, and the Vyksa business incubator.
Projects are chosen on the basis of evaluation criteria defined in the rStart Your Own Business grant competition regulations. The information partners of the Start Your Own Business program were regional and federal media.
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5.8 Social projects
2018 results
Dilbar Akhmetova, mother of many children and creator Blagoveshchensk Chusovoy Vyksa Total of the School of Needlework project, Blagoveshchensk
Projects supported 13 17 12 42
Jobs created 33 25 28 86
Number of people trained 40 50 80 170
Number of applications submitted to the grant competition 39 34 36 109
Number of winners of the grant competition 13 17 12 42
The number of people who used the CISS and PFRP accelerators 13 17 12 42
Program budget 3 mln rub. in each town 9 mln rub.
Grant pool 2.2 mln rub. in each town 6.6 mln rub.
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5.8 Social projects
2018 projects Chusovoy, Perm Krai Irina Serdigtykh, creator of the project House of Children's Iris House of Children's Clothing, by Irina Serditykh Clothing, Chusovoy Under the Crumbs LLC brand, Iris produces fleece and knitwear clothing for children from 1 to 7 years: overalls, sweatshirts, and underwear. The entire range of the company complies with Russian standards (GOSTs and TUs). Certain of the company's products are sold throughout Russia through the online store WildBerries. In 2018, Irina Angry, as director of Iris LLC, employed five people, four of whom had recently been released from prison. The company cooperates with the charitable foundation Bereginya, with the interregional public crime prevention organization Choice of the Chusovsky municipal district and with other organizations and funds. In 2018, Irina took part in the program for the development of social entrepreneurship Start Your Own Business: she received training as part of the the acceleration program School of Social Entrepreneurship and won a grant for 150 thousand rubles. In 2018, she reached the finals of the Best Social Project of the Year competition. LLC Garment Factory RK became a resident of the territory of advanced socio-economic development after they appointed Irina as Director.
Kote Workshop of Cool Pieces and Creative Solutions by Ksenia Gracheva, entrepreneur The Kote workshop produces souvenirs, interior and decor items, children's toys, decorations and many other products made of wood and plywood. The company works with clients throughout Russia. Kote has already taken orders from Moscow, St. Petersburg, Nizhnevartovsk and Kungur. A cooperation agreement has been signed with a Moscow online store. Ksenia Gracheva opened her shop in Chusovoy to sell finished products. Making souvenirs with the symbols of Chusovoy, Ksenia Gracheva promotes the territory's brand at the regional level. She also uses environmentally friendly materials to manufacture her products. At the end of 2018, two jobs were created, and she has plans to create jobs for another two to five people from socially disadvantaged groups of the population. In 2018, Ksenia received training as part of the School of Social Entrepreneurship acceleration program and won a grant in the Start Your Own Business competition. In 2018, Ksenia took part in regional fairs and reached the final of the regional competition Best Social Project of the Year. In 2019, she participated in the municipal contest Entrepreneur of the Year.
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5.8 Social projects
Sozvezdie Montessori 2018 projects Vyksa, Nizhny Novgorod region Center, Vyksa Sozvezdie Montessori Center The Sozvezdie Montessori Center was created by the Sozvezdie Public Organization of Parents of Disabled Children (Vyksa), and follows a program developed by the International Institute of Montessori Pedagogy. It has also become a regional resource center for inclusive pre-school Montessori pedagogy. Twenty centers will be created in Russia.
At the end of 2018, two jobs were created. Support for Families with Children open tender for the provision of grants for the federal project Support for Families with Children and received 7.4 million rubles.
An open competition for grants in the form of subsidies from the federal budget to legal entities for implementation of the federal project Support for Families with Children (part of the national project Education), approved by the Presidium of the Presidential Council for Strategic Development and National Projects.
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5.8 Social projects
2018 Projects Blagoveshchensk, Republic of Bashkortostan
Sirius Centre for Early Childhood Development A center that offers a variety of services to promote all-around, balanced growth for preschool children in the city; it also offers inclusive education. The center runs individual and group activities for children from six months to seven years old. Babies are accompanied by their parents. Around 60 children, including four with special needs, attend sessions there. The project received a 500,000-ruble grant from the municipal authorities. The author of the proposal won the 2018 competition for Best Community Service Project. Six jobs were created.
Bilingual Montessori Education for Children The first preschool that not only employs the Montessori method, but does so in a bilingual environment. The center is built to accommodate 50 students and accepts children from two to seven years old, including children with special needs. It offers discounts for vulnerable groups. The author of the proposal won the 2018 competition for Best Community Service Project.
Aygul Okatyeva teaches classes in two languages using the Montessori method
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5.8 Social projects
2018 projects
Victors’ Gala The Victory Museum on Poklonnaya Hill hosted the annual Victors' Gala. This year it celebrated the complete lifting of the siege of Leningrad. It was organized by the Victory Museum, the Maris Liepa Charity Foundation, and OMK.
Over 400 attendees from Russia and the 14 CIS and Baltic states gathered at the Victory Museum to honor the memories of war heroes, share stories, and be reunited with former comrades in arms. Victors' Gala attendees included veterans of World War II and local conflicts, members of the civilian war effort, representatives of the patriotic paramilitary youth movement, and secondary school students.
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5.8 Social projects
2018 projects
Exhibit: Alexander II the Liberator: 200th Birthday OMK helped to finance the exhibit Alexander II the Liberator: 200th Birthday at the National History Museum in Moscow.
This large-scale show covered the principal events in the Emperor's reign as well as dispassionately portraying Alexander II as a human being. OMK is the parent company for three of the oldest steel mills, including two (in Vyksa and Blagoveshchensk) that experienced growth because of Alexander's reform and the abolition of serfdom, while the Chusovoy Metal Works was founded during that era. The plant owners, the Dashkovs, the Golitsyns, and the Batashev-Shepelevs, along with others that developed Russia's metal industry in the 18th and the 19th centuries, are closely linked with Russian history and intertwined with the Romanovs.
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5.8 Social projects
Competition FOR charitable and social projects 2018 Results
OMK Partnership Applied Supported The year 2018 has been declared the Year of the Volunteer in Russia, and so special attention has been paid to OMK employees' projects in adjudicating the NGO Municipal Volunteers NGO Municipal Volunteers OMK Partnership grant competition. Their initiatives were aimed at employing people with disabilities, social support for poor people and children with Management company 0 7 0 6 disabilities, promoting healthy lifestyles and organizing healthy leisure activities for children and young people. Potential volunteer projects were presented in person by their creators, which is a testimony to the effectiveness, quality and transparency of the selection process APP 8 1 9 4 1 8
Innovation in 2018 was a special category for municipal institutions that played an active part in the competition. The scrap metal company OMK-EcoMetall has BVP 12 12 9 4 7 5 lent its support to social projects, financing the construction of a sports field in one of the villages of the Vyksa city district for 250 thousand rubles. NCOs that won the OMK Partnership contest also achieved success in the Presidential Trubodetal 13 3 8 8 1 5 Grants Foundation contest and as a result attracted 27 million rubles to their cities. CSW 9 36 13 2 9 7
Projects of 2018 by categories / quantity VSW 16 12 27 5 6 12 Animal rights / 1 Leisure activities / 9 Ecology / 6 Support for children and pregnant women / 9 122 73 47 43 Disabled support / 8 Support for the elderly / 10 Subtotal Sport / HLS / 2 Landscaping / 15 Medicine / Health / 2 Education and vocational guidance / 15 TOTAL 195 90
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5.8 Social projects
Projects by NGOs and municipal institutions
Museum by Touch (Chusovoy, Perm region) Creating a tactile museum for people with visual impairments based at the Chusovoy Local Museum. Visitors had the opportunity to hear some of the exhibits (birds, animals) and touch copies of the objects stored in the museum.
Kind Blagoveshchensk Festival (Blagoveshchensk, Republic of Bashkortostan) This was a complex of events combining a wide variety of formats (activities, flashmobs, quests, mass trainings, concerts, meetings, literary evenings, etc.). They were held in Blagoveshchensk throughout the summer. Every participant received a Good Urban Citizen certificate to mark their achievements. The project thereby helped to make residents active creators, rather than simply consumers, of their environment. Anna Serakvina, who developed the project, won a grant in the first wave of the presidential competition: the SPORTmaster Summer Sports Ground for Children from Families at Risk received a grant of more than 280,000 rubles.
Science Week (Novosineglazovsky, Chelyabinsk) During Science Week, students at Novosineglazovo schools learned the basics of robotics, computer science, and programming. Classes were held for them in 3D modeling, scanning and printing. There were also two scientific shows: Cryoshow, where the children worked with liquid nitrogen, and an entertaining physics lesson, where they studied the properties of fire. The Russian Union ofY outh received a presidential grant for more than 750,000 rubles with another similar project, New-Generation Social Technologists: Designing an Inclusive Future.
Anna Pestova helps animals thanks to an OMK Partnership grant
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5.8 Social projects
School for Dads (Vyksa, Nizhny Novgorod region) The goal of the project is to optimize prevention of family problems, strengthen the institution of the family by expanding the access of parents' associations and young families of the city of Vyksa to methodological resources and social technologies related to paternity. The project included educational and socio-pedagogical events: lectures, trainings, master classes, a competition, and family holidays. The LADA Center, a Nizhny Novgorod regional public organization, achieved success in the first wave of presidential grants for its project Let's Make Friends with Clubs, receiving more than 2.8 million rubles.
Active Longevity (Almetyevsk, Republic of Tatarstan) Organization of outdoor activities for senior citizens: cycling in the summer, Nordic walking in the winter. The Council of Veterans of Almetyevsk provided free bicycles and poles for Nordic walking to everyone. From May to September, over 1,000 pensioners from Almetyevsk took advantage of this new opportunity.
Examples of volunteer projects
The Purest Hearts (Blagoveshchensk, Republic of Bashkortostan) The goal of Anna Pestova's project is to help the Good Work charity fund, which looks after homeless animals, to equip its discounted veterinary care cabinet. Currently, the foundation is engaged in the treatment of seriously ill animals, nursing, vaccination and sterilization of homeless animals; it also cares for domestic animals whose owners cannot afford to send their pet to an expensive clinic. Children, teenagers and volunteers are involved in working with the foundation. The project was awarded first prize in the Champion of Good Deeds competition in the Environment category. Participants in the Purest Hearts project
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5.8 Social projects
Примеры волонтерских проектов Ekaterina Kuleshova's volunteer project «Art Illusion», Blagoveshchensk A Look through the Lens» (Chusovoy, Perm region) Organizing and conducting master classes in journalism for schoolchildren with the involvement of experienced specialists in print and television media. Creation together with the project participants of a number of full-fledged news programs, social videos, broadcasts on the regional TV channel and publications on social networks.
Dance Picnic Historical Festival (Vyksa, Nizhny Novgorod region) Organization of an open historical festival, Dance Picnic 2018, in Vyksa. Took second place in the Champions of Good Deeds competition in the Local Communities category.
Formula of Good (Moscow) Help for lonely, low-income elderly people and veterans in the Sokol district. Took third place in the Champions of Good Deeds competition in the Local Communities category; winner of the Russian Youth Organization prize.
A Healthy Lifestyle for Personal Success for All (Novosineglazovsky, Chelyabinsk) After eight weeks of trainings on fitness and healthy nutrition, the creator of this project, helped her colleagues to lose almost ten kilograms. About 50 people took part in the project. She is now a finalist for the Russian Youth Organization Award.
Silver Internet (Almetyevsk, Republic of Tatarstan) The project aims to give senior citizens the skills to protect themselves against crime on the Internet and through other means of communication. For pensioners, there is also an emergency telephone number, which they can ring at any time to be talked through the correct steps to take in any given situation by volunteers.
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5.8 Social projects
Corporate volunteering
The Corporate Volunteering program is implemented together with the following partners: • Mosvolunteer; • regional volunteer centers; • business partners, contractors, relatives and friends of employees of enterprises, residents of cities where OMK operates.
Number of hours donated by volunteers
2016 25 600 2017 30 776 2018 32 000 Number of volunteers
2016 6 400 2017 7 694 2018 8 000
In 2018, 126 volunteer events were held in which more than eight thousand OMK employees took part — more than 35% of all employees in the company. In all six regions, trainings on corporate volunteering were held for employees of enterprises and the Moscow office as part of the OMK Partnership contest.
OMK's corporate volunteering is a tool for the creative and professional development of employees, increasing their motivation. The willingness of staff to participate in volunteer projects has a positive effect on employee engagement.
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5.8 Social projects
In 2018, we successfully implemented four types of volunteer initiative:
• Volunteer events – the whole staff participated in volunteer campaigns together with the OMK Participation foundation. Projects included Every Little Christmas Tree Helps, Let’s Get Our Kids Ready for School, and the Who’s Running? Everyone’s Running! Marathon.
• Intentional volunteering – OMK employees have the opportunity to initiate community service projects independently by winning mini-grants from the company for them and engaging other volunteers in their initiatives. Individual volunteer projects are assessed and implemented through the competition for OMK Partnership grants.
• Volunteer projects by the Council of Young Steelworkers at our plants: planting trees, cleaning rivers, and helping factory veterans and nursing home residents. Projects in this area included the Giving Garden, the Environmental Attack Force that landscaped the factory grounds, and the volunteer area at the Magic Mittens charity festival in Vyksa.
• Blood drives. In 2018, OMK’s Moscow office and the Blagoveshchensk Valves Plant organized five blood drives that brought together 221 volunteers. Altogether, company employees donated more than 100 liters of blood over the course of the year. OMK’s partners at Metallinvestbank, the Russian Martial Arts Council, MISiS National University of Science and Technology, and elsewhere also take part in these events.
Participants in the Giving Garden project
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5.9 charity
OMK-Uchastie Charity Foundation
n October 2018, the OMK-Uchastie charitable foundation for family support, childhood protection, motherhood Iand fatherhood celebrated its tenth birthday. The fund, established on the initiative of managers and employees of the United Metallurgical Company, provides targeted assistance to families and children in need or in difficult situations, supports medical institutions, develops educational and medical methods, and holds inclusive campaigns in the cities where OMK enterprises are located.
Over the ten years of its existence, the OMK-Uchastie Fund has supported 1,180 families. The philanthropists and founders of the Foundation have collected and sent 48 million rubles for targeted assistance to their wards, and another 18 million rubles were allocated for the purchase of medical equipment.
The Foundation implements educational programs, including for teachers working with children with disabilities. Last year, campaigns included With Love in our Hearts, To School Together, the charity race Who's Running? Everyone's Running!, weekend volunteering sessions, and other fund initiatives.
In 2018, OMK-Uchastie held its now traditional charity event at the Research Institute of Pediatric Oncology and Hematology of the N.N. Blokhin Russian Cancer Research Center in Moscow, acquiring medical equipment and arranging holidays for the patients in the center's children's department, and organized a New Year performance at the Nikulin Circus in Moscow.
In 2018, OMK Chairman of the Board of Directors and President of the OMK Uchastie Fund Anatoly Sedykh was awarded the Philanthropist of the Nizhny Novgorod Land Gold Medal for his many years of multilateral charitable activity in the Nizhny Novgorod Region and his great personal contribution to the socio-cultural development of the region.
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5.9 charity
ART-OVRAG Festival
n June 2018, the United Metallurgical Company and the OMK Uchastie Icharitable foundation held the eighth Art-Ovrag urban culture festival in Vyksa at more than ten venues, including OMK's Vyksa Metallurgical Works.
The festival has been held since 2011. This is the only example of a cultural project developing a whole city in Russia. Thanks to the project, more than 85 artworks appeared in Vyksa, we held our own artistic residency and created art installations along with residents, and the city museum began to build up a collection of contemporary art.
The theme of the festival in 2018 is Useful Art: art aimed at developing ties within the urban community. More than 12 thousand people took part in the festival events.
The central project of the festival was the theater performance Passion for an Open-Hearth Furnace in the open-hearth workshop of the Vyksa Steel Works. The production by winner of the Golden Mask, director and choreographer Anna Abalikhina was devoted to the closure of the last major open hearth in the country. The performance won the Grand Prix of the Sergey Kuryokhin International Prize in Contemporary Art, and the film about it won the Grand Prix of the Metal Vision 2018 competition, as well as the prize for best direction and the audience prize.
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5.9 charity
he theater team provided an interpretation of the topic of the industrial Tbreakthroughs in history, masterfully using the real sounds of production transformed into music, modern dance and interviews with veterans against the backdrop of one of the largest open-air shops in the country. A large team joined Anna Abalikhina to work on the project: artist Ksenia Peretrukhina, composer Alexey Sysoev, and playwright Ekaterina Bondarenko. The curator of the project is director Yuri Muravitsky.
New this year was a parallel program for Vyksa residents, who sent their creative ideas to the festival. The organizers selected the ten best projects and helped citizens implement them within the Art-Ovraga festival. These projects included poetry, dance, and sporting initiatives. During the festival, Vyksa also became home to an open-air cinema which screened of short films.
For holding the festival and contributing to the development of Vyksa, the OMK-Uchastie Fund won the Development of Local Communities category in the People Investor 2018 competition.
https://omk.ru/news/20385/ More details
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5.9 charity
Vyksa: Access Permitted project
n 2018, the OMK Uchastie charitable foundation won the second competition Ifor grants from the President of the Russian Federation for the development of civil society. The fund received 5.97 million rubles to develop a project to provide disabled people with social opportunities, Vyksa: Access Permitted.
More and more people are attracted to Vyksa's cultural life, but people with disabilities do not always have the opportunity to participate in it fully. To solve this problem, in July 2018, the Foundation launched the Vyksa: Access Permitted project, with the VSW history museum as a launching pad for that initiative.
This program by the foundation is aimed at developing the best practice in regard to inclusivity in the museum environment and fostering social tolerance towards people with disabilities within the city. For just under six months, the museum managers studied the basics of working with people with disabilities, and adapted museum tours and industrial tours of VSW. The museum and the company held their first guided tours in Russian sign language, making the tours accessible to deaf and hearing impaired visitors.
With the support of the presidential grant, as part of this community project for people with disabilities, museum staff from Vyksa are joining forces with specialists from Moscow and Nizhny Novgorod to organize highly professional tours, taking into account all the wishes of the residents of Vyksa.
OMK ANNUAL REPORT 2018 128 CONTENTCONTENTSS OVERVIEWOVERVIEW STRATEGYSTRATEGY MANAGEMENTMANAGEMENT KEY INDICATORSINDICATORS [ S U STAINASUSTAINABLE BL E DDEVELOPMEN EVE L O P MENT T ] CONTACT INFORMATIONINFORMATION
5.9 charity
ew tactile models of the museum’s exhibits and urban art installations for Nthe blind and video guides in sign language for the deaf will be created. New adapted excursions using electric wheelchairs for disabled people will also be developed.
Visual materials will be created for inclusive tours and educational programs. The Foundation also plans to scale up and replicate Vyksa’s experience in creating equal opportunities for residents of nearby areas with health limitations.
Also as part of the Vyksa: Access Permitted project, in December 2018, the OMK Uchastie Fund organized a round table in Vyksa on the topic Development of Tools for Disabled Access to Cultural Sites. Participants included representatives of the federal and municipal authorities, experts in creating tools for creating an accessible environment for people with disabilities, representatives of museums and cultural centers, and organizations of people with disabilities from Moscow, Nizhny Novgorod, Vyksa and other cities.
At the round table, the Foundation presented its project on adapting tours of the Vyksa History Museum and the Vyksa Steel Works for people with various disabilities, including deaf, blind, and partially sighted visitors and wheelchair users, along with tools for adapting information for visitors with intellectual disabilities. A feature of the project is the lack of emphasis on any one form of disability and the satisfaction of the needs of all residents.
OMK ANNUAL REPORT 2018 129 CONTENTCONTENTSS OVERVIEWOVERVIEW STRATEGYSTRATEGY MANAGEMENTMANAGEMENT KEY INDICATORSINDICATORS [ S U STAINASUSTAINABLE BL E DDEVELOPMEN EVE L O P MENT T ] CONTACT INFORMATIONINFORMATION
5.9 charity
Conference on small towns and historical settlements
n October 2018, the All-Russian Conference on Small Cities and Historical Settlements took place in Vyksa with Ithe theme of Revitalization of Small Cities Through Involvement of the Local Population in Cultural Practices. The organizers were the OMK Uchastie charitable foundation and the Ministry of Construction and Housing and Communal Services of the Russian Federation with the support of OMK, the Nizhny Novgorod Region Government, the Vyksa Administration, and the 8 Lines project group. The event was overseen by the CENTER Strategic Development Agency.
Over 300 delegates attended the conference from 100 cities in 40 constituent entities of the Russian Federation , including heads of municipalities and representatives of business and professional communities. Eleven sessions, discussions and lectures were organized for them, and an extensive cultural program was held. For the first time, more than 40 leading Russian and international experts in the development of public spaces in small Russian cities, participating in designing, architects, designers, economists, urbanists, and representatives of ministries and departments spoke at one expert platform.
The conference was organized using a grant from the President of the Russian Federation for the development of civil society provided by the Presidential Grants Foundation. During the conference, the best Russian and foreign practices for creating a comfortable environment in Russian cities, were presented along with tools for «resetting» problem areas, taking into account the specificities of historical settlements.
CREATE YOUR OWN CITY TOOLKIT
In 2018, OMK, the OMK-Uchastie Foundation and the 8 Lines project group prepared and published a textbook entitled Create Your Own City. It brings together their unique experience of transforming public spaces, participatory design and creating art installations in Vyksa as part of the Art-Ovrag festival. The manual, issued in the format of a book and a video, was distributed throughout Russia's cities.
It is also publicly available on the Internet. With its help, the experience of OMK and the OMK Participation Fund in developing urban spaces and creating a comfortable social environment can be rolled out to other regions of the country. The achievements collected in the manual will serve as a foundation for positive transformations and maximize the involvement of residents in solving urban problems.
OMK ANNUAL REPORT 2018 130 CONTENTCONTENTSS OVERVIEWOVERVIEW STRATEGYSTRATEGY MANAGEMENTMANAGEMENT KEY INDICATORSINDICATORS [ S U STAINASUSTAINABLE BL E DDEVELOPMEN EVE L O P MENT T ] CONTACT INFORMATIONINFORMATION
5.9 charity
OMK-Uchastie awards
2019 Sergey Kuryokhin Independent Award for 2017 National Event 2018 status Contemporary Art Second place in the Youth Tourist Event category in the Grand Prix for Anna Abalikhina's Passion for an Open- finals of the National Prize in Event Tourism of the Russian Hearth Furnace at the 2018 Art-Ovrag festival. The Event Awards 2017. First place in the same category in the performance took place in the unique historical open- finals of the regional stage, for the best events in the Ural hearth shop of the Vyksa Steel Works, and was dedicated and Volga Federal Districts. to its closure. It was one of the last large open-hearth shops in Russia. 2014 Sergey Kuryokhin Independent Award for Contemporary Art 2018 People Investor 2018 Award: Development Architect Peter Vinogradov won the Art in Public Spaces of Domestic Resources category for his work Pro Elka, created in Vyksa as part of Winner of the Development of Local Communities category the fourth Art-Ovrag festival. of the People Investor 2018: Development of Internal Resources corporate project contest for the effective 2014 VI Minsk International Biennale of Young solution of not only corporate, but also socially significant architects Leonardo-2015 tasks. Peter Vinogradov received second prize in the Landscape Architecture, Street Design and Monumental Art category 2018 Awakening Award for his work Pro Elka. Winner of the Civil Society Project of the Year category for the creation, development and promotion of civil projects 2013 MOST Awards: Personal Contribution and communities and the organization of events and Winner of the Event of the Year category at the Street projects in the field of education, culture and art. Contribution International Forum of Street Art.
2018 Metal Vision 2018 competition 2013 Leaders of corporate charity. Grand Prix, winner of award for Best Direction and audience Winner of the Best Program Aimed at Supporting award, all for the film Passion for an Open-Hearth Furnace. Contemporary Art category.
OMK ANNUAL REPORT 2018 131 CONTENTCONTENTSS OVERVIEWOVERVIEW STRATEGYSTRATEGY MANAGEMENTMANAGEMENT KEY INDICATORSINDICATORS [ S U STAINASUSTAINABLE BL E DDEVELOPMEN EVE L O P MENT T ] CONTACT INFORMATIONINFORMATION
5.10 conclusion
MK is a leading industrial producer playing a prominent role in the country's economy. OMore than 23,000 employees work at OMK enterprises. A few hundred thousand more people live in cities where the company operates. By consistently implementing its chosen strategy of sustainable development, OMK seeks to satisfy all its stakeholders to the greatest extent possible and improve the quality of life in the regions.
In 2018, OMK achieved its corporate social responsibility goals. Production has become safer. Impact on the environment has decreased. Thanks to grant competitions in the regions where the company operates, more than a hundred new social and business projects have appeared. Corporate volunteering is developing: more than a third of the company's employees regularly participate in voluntary events. OMK supported a number of cultural and charitable initiatives.
In 2019, the company will continue to develop its social role in dialogue with stakeholders and taking into account the best international practices. At the end of 2018, the board adopted the OMK anti-corruption policy. The company plans to pay special attention to the development of the anti-corruption compliance system. Another priority for the near future is sustainable supply chains.
OMK ANNUAL REPORT 2018 132 CONTENTCONTENTSS OVERVIEWOVERVIEW STRATEGYSTRATEGY MANAGEMENTMANAGEMENT KEY INDICATORSINDICATORS [ S U STAINASUSTAINABLE BL E DDEVELOPMEN EVE L O P MENT T ] CONTACT INFORMATIONINFORMATION
5.11 Internal Audit Review
onclusion on the reliability of data in the Sustainable Development section following the results of Caudit by the internal audit service of OMK. In order to ensure the accuracy of the information disclosed on the activities of the OMK Group in the field of sustainable development, the responsible persons in the operational divisions of the company have internally verified all the data presented in the Sustainable Development section. Information on the interaction of the company's representatives with various groups of stakeholders was approved by the Corporate Communications Directorate for inclusion in OMK official releases for 2018.
Additionally, during the preparation of information for the annual report, OMK’s Committee for Corporate Social Responsibility made the decision to conduct an internal audit of the procedures for consolidating essential environmental and social indicators.
In accordance with the decision taken, the internal audit service checked the following operational indicators:
• Number of rationalization proposals • Number of labor disputes • Number of occupational diseases
Analysis of sources of primary information and data consolidation techniques made it possible to verify that the indicators selected for verification are reliable. Minor simplifications were made to the calculations for the indicator “number of rationalization proposals”, the impact of which on the final KPIs is assessed as non-critical. In order to improve public reporting procedures, recommendations on adjusting the methodology for calculating KPI data in future reporting cycles are provided to the responsible departments.
OMK ANNUAL REPORT 2018 133 CONTENTCONTENTSS OVERVIEWOVERVIEW STRATEGYSTRATEGY MANAGEMENTMANAGEMENT KEY INDICATORSINDICATORS SUSTAINABLE DEVELOPMENTDEVELOPMENT CONTACT INFORMATIONINFORMATION
5.0 Appendices
OMK ANNUAL REPORT 2018 134 CONTENTCONTENTSS OVERVIEWOVERVIEW STRATEGYSTRATEGY MANAGEMENTMANAGEMENT KEY INDICATORSINDICATORS SUSTAINABLE DEVELOPMENTDEVELOPMENT CONTACT INFORMATIONINFORMATION
Appendices А Corporate social responsibility goals Выполнение целей в области корпоративной социальной ответственности
Critical Red Green Assessment Effect on Responsible Result Result of achievement CSR priorities CSR materials topics № KPI result in border in border in Calculation method Assessment method SDG UN department in 2017 in 2018 of the 2018 goal 2018 2018 2018 (if applicable)
OMK Corporate Stakeholder Implementation of a plan for informing employees The plan is executed on 3/4 1 №8 Communications 1 0,8 0,9 1 100% 100% Plan and fact comparison information about CSR activities and more - 100%. Department
The share of concluded contracts with consumers, in Attitude of the concluded agreements with 100% - reaching the green border; CMW Sales 2 which there is a condition that when using the products №17 n/a 0,5 0,65 0,8 1 100% the accepted condition to the total number 50% achievement of the red border; Department of CMW JSC, human rights should not be violated of concluded agreements 0% - value below critical level
Observance of human The share of regulatory, technical (technological) Engineering and Evaluation of the achievement of the goal is equal to the rights when using 3 documents with information on the degree of impact of №11 0,6 0,85 0,85 0,9 1 100% Share of technical documents with OS section Technology Center actual value of the indicator Stakeholder OMK products products (technology) on humans and the environment Engagement
Daily monitoring of publications, analysis of publications OMK Corporate 4 mentioning human rights violations by OMK and №11 Communications 1 0 0 1 1 100% Availability of daily monitoring Executes -100%, not executed - 0%. factories when using OMK products. Department
Evaluation 100% - if the actual share of products with recognized claims from consumers is less than or equal to the green border. A score of The share of non-conforming products 50% - if the actual share of products with recognized claims from VSW Product Product quality 5 The share of products with claims from consumers,% №8 0,233 0,351 0,350 0,233 0,056 100% identified by the consumer in relation consumers is less than the red border, but more green. Evaluation 0% - Quality Department to the products shipped, % if the actual share of products with recognized claims from consumers is greater than or equal to the critical value
CMW Human The number of detected cases of use of labor When the value of the indicator> 0, the goal is 0%, 6 №8 Resourses 0 0 0 0 0 100% Report on the non-use of child labor of children under 14 years old otherwise - 100% Elimination Department Child care of child labor OMK Human The number of detected cases of use of labor When the value of the indicator> 0, the goal is 0%, 7 №8 Resourses 0 0 0 0 0 раз 100% Report on the non-use of child labor of children under 14 years otherwise - 100% Department Accounting for the number of volunteers in 1) general corporate promotions in partnership with the charity fund OMK-Uchastie Fundraising campaigns “With the world of the Christmas tree”, “From heart to heart”, “Let's get the child to school” Sports fundraising marathon “Who runs? Is everyone running? ”And others. 2) individual projects of employees (in the framework of The information is collected from reports of enterprises, Development 8 The number of volunteers №16* Resolution of the UN General Assembly7694 “Transforming5000 our6400 world: the Sustainable6750 Development8000 100% Agenda until 2030”OMK-Partnership). (25.09.2015) Mini-grants for OMK employees as part donor shares, general corporate actions, reports of OMK Department of volunteer of the OMK-Partnership grant competition aimed at employees, the winners of OMK-Partnership Development for Relations with OMK ANNUALinitiatives REPORT 2018 developing local communities, NGOs, state and municipal 135 of the territory Governmental institutions in the cities where the company operates. of presence Organizations 3) volunteer projects of the councils of young and CSR metallurgists. Planting forest. Donor shares. Help for veterans of enterprises. Arrangement of plant areas ("environmental landing") Number of volunteer projects of employees supported 100% - reaching the green border; 50% - reaching the red 9 №16 32 10 20 30 43 100% Data from the decisions of competitive commissions. in the OMK-Partnership competition border; 0% - value below critical level Social The number of social entrepreneurial projects created Information is collected on the basis of the analysis of the The number of open social entrepreneurial projects, the entrepreneurship 10 by the authors of the projects of the "Start Your №16 26 35 28 40 42 100% reports of the winners of the program “Start your own number of jobs created development Business" competition. business” The proportion of cases of violations considered (the decision of the ethics committee was made, the OMK Human Consideration of The assessment of the achievement of the goal is equal 11 situation was settled by an authorized body / official) of №8 Resourses 1 0,8 0,9 1 1 100% Percentage of considered appeals to received ones. employee complaints to the actual value of the indicator the total number of calls to the OMK corporate ethics Department hotline. Growth in labor productivity from last year / 100% - if the current value is greater than or equal The ratio of growth rates of labor productivity and Growth in average wages from last year 12 №9 over 1 less than 1 1 over 1 1,13 100% to the target average wages Growth from last year = (fact fact. - fact previous) / 0% - if the current value is less than the target fact previous. * 100% CMW Human Fair reward Resourses 100% - 80% or more of the plan’s activities have been Department Percentage ratio of the number of actually completed completed; Revision of the bonus system: development and 13 №9 n/a 0,5 0,8 1 1 100% activities to the number of planned activities under the 0% - 50% or less of the plan’s activities have been implementation of new indicators of bonus effects revision plan completed; Respect for between them - calculated linearly human rights
FIFR = Number of deaths due to accidents / total number 100% - reaching the green border; 50% - reaching the red 14 Частота травм со смертельным исходом (FIFR) №3 0 0 0 0 0 100% of hours worked by all staff * 1000000 border; 0% - value below critical level OMK Production Safety Department The number of victims of accidents with the loss of 100% - достижение зеленой границы; High occupational 15 Lost Time Injury Frequency Rate (LTIFR) №3 1,6 1,73 1,68 1,6 1,29 100% working time / total number of hours worked by all staff * 50% - достижение красной границы; safety standards 1000000 0% - значение ниже критического уровня
The number of victims of accidents with the loss of 100% - reaching the green border; CMW Production 16 Lost Time Injury Frequency Rate (LTIFR) №3 2,58 2,58 2,45 2 1,4 100% working time / total number of hours worked by all staff * 50% - reaching the red border; Safety Department 1000000 0% - value below critical level
100%, the High healthcare OMK Production indicator value is Occupational disease rate = number of confirmed 100% - reaching the green border; 50% - reaching the red 17 Occupational Disease Indicator №3 3,64 13,2 11,01 8,8 2,58 lower than the standards Safety Department industry cases x 10,000 / cf. list number of employees. border; 0% - value below critical level indicator. CMW Human The level of staff involvement is determined by the results Decent working 100% - achieving the red border of the goal 18 Level of engagement №8 Resourses 0,42 0,34 0,42 0,47 36% 25% of an independent sociological study by an external conditions 0% - goal achievement less than critical Department provider according to the Aon Hewitt methodology.
Gross emissions of pollutants into the air, thousand Targets can be indexed depending on actual production 19 №12 6,3 6,3 6,2 6,11 4,59 100% According to the state statistical reporting "2-TP (air)" tons / year volumes in the reporting period.
OMK Production Gross discharges of pollutants into water bodies, Safety Department According to the state statistical reporting "2-TP (water Targets can be indexed depending on actual production Minimizing the 20 №6 3,17 3,17 3,12 3,07 2,54 100% thousand tons / year management)" volumes in the reporting period. environmental impact The total mass of waste generated, thousand tons / Targets can be indexed depending on actual production 21 №12 1037,94 1037,94 1022,37 1006,8 598,98 100% According to the state statistical reporting "2-TP (waste)" year volumes in the reporting period.
Total consumption of fuel and energy resources VSW Energy Supply The volume of actual consumption of fuel and energy 100% consumption does not exceed the planned value (on 22 №7 502 008 504 794 490 000 475 000 445 627 91% (tons of standard fuel) Department resources of JSC "VMZ" for the billing period the red border) The ratio of the average wage in the enterprise and the Compliance of the average wage in AO "VMZ" with the less than average monthly nominal accrued wages of employees 23 №8 over 85% over 85% 132% 100% The ratio is in the specified range - 100%, otherwise - 0%. regional labor market of the Nizhny Novgorod region 85% of organizations (excluding small businesses) in the range of ± 15% Respect for Fair reward human rights Correspondence of the average wage in CMW JSC to the less than Compliance - the ratio of the average wage in the 24 №8 over 85% over 85% 92% 100% The ratio is in the specified range - 100%, otherwise - 0%. regional labor market of the Perm Territory 85% enterprise and the average wage in the range of ± 15%
OMK Human Decent working Report of independent consultants on the results of the Between red and green border - proportionally, 25 The level of OMK personnel engagement, % №8 Resourses 63 50 54 66 65 100% conditions Department involvement study below critical - 0%
Share of employees satisfied with career opportunities, Report of independent consultants on the results of the Between red and green border - proportionally, 26 №8 56 32 36 59 59% 100% % involvement study below critical - 0% Personnel development Share of employees satisfied with recognition of their Report of independent consultants on the results of the Between red and green border - proportionally, 27 №8 54 35 38 57 58% 100% merits, % involvement study below critical - 0%
1. 100% - 100% completed VSW Human Consideration of Consideration of all appeals to the labor dispute 100% (12 2. 80% of the goal is 80% 28 №8 Resourses 80% 100% 100% Number of requests reviewed / total number of requests employee complaints committee requests) 3. 0% - completed less than 80% of the activities Department of the plan
Employee participation in the development and implementation of Management strategies, policies and OMK Business system operational plans to 1 Number of registered innovation proposals for the year №9 System Development 1240 1420 Inventory accounting system development minimize negative Department consequences for employees, company and society Costs in excess of the Labor Code of the Russian 22,39 mln 22.58 mln 2 Costs of parenting support in AO "VMZ" №3 Federation to support children and parents, rubles per rub. rub. year Parenting support Costs in excess of the Labor Code of the Russian 3,73 mln 3,32 mln 3 Costs of parenting support in AO "CMW" №3 Federation to support children and parents, rubles per rub. rub. year The actual costs for the year on social programs beyond Development of OMK Human the law / SSC for the year. the territory of Resourses Actual expenses for the year on social programs beyond presence Department the law: 1. Direct social payments to employees; Additional staff costs in excess of the legally binding 1.1. Material assistance to employees; 1.2. Social leave; Personnel (social programs), rubles / person in the OMK group (list 1.3. Incentive payments. 2. Social programs for employees; 4 №8 21 293 23 370 development of legal entities included in the OMK group - VSW JSC, 2.1. Improvement in sanatorium-resort health institutions ATZ JSC, CMW JSC, TDT JSC, JSC BAZ ") of employees and their families; 2.2. Medical care for workers (LCA + costs for MUF); 2.3. Pension benefits for employees; 2.4. Providing workers with food; 3. Other costs; 3.1. The cost of sports; 3.2. Other expenses on social programs for employees. Availability of monitoring the number of labor disputes (appeals of employees about violation of their labor rights to the labor dispute commission, reports Compliance with labor Fixing in the register of labor disputes and the results of 5 (statements) to the employer, to the court, to the state №8 OMK Law Department 1 1 laws their consideration labor inspectorate, to the prosecutor's office), the result Respect for of their consideration. Formation of a report on the human rights results of annual monitoring The coefficient of labor loss (KP) due to illness: the ratio of High healthcare OMK Production loss of working time due to disability to the normative 6 Sickness rate due to illness №3 2,7 2,57 standards Safety Department fund of working time. KP = PRV, h / NRV, h * 100 Critical Red Green Assessment Effect on Responsible Result Result of achievement CSR priorities CSR materials topics № KPI result in border in border in Calculation method Assessment method SDG UN department in 2017 in 2018 of the 2018 goal 2018 2018 2018 (if applicable)
OMK Corporate Stakeholder Implementation of a plan for informing employees The plan is executed on 3/4 1 №8 Communications 1 0,8 0,9 1 100% 100% Plan and fact comparison information about CSR activities and more - 100%. Department
The share of concluded contracts with consumers, in Attitude of the concluded agreements with 100% - reaching the green border; CMW Sales 2 which there is a condition that when using the products №17 n/a 0,5 0,65 0,8 1 100% the accepted condition to the total number 50% achievement of the red border; Department of CMW JSC, human rights should not be violated of concluded agreements 0% - value below critical level
Observance of human The share of regulatory, technical (technological) Engineering and Evaluation of the achievement of the goal is equal to the rights when using 3 documents with information on the degree of impact of №11 0,6 0,85 0,85 0,9 1 100% Share of technical documents with OS section Technology Center actual value of the indicator Stakeholder OMK products products (technology) on humans and the environment Engagement
Daily monitoring of publications, analysis of publications OMK Corporate 4 mentioning human rights violations by OMK and №11 Communications 1 0 0 1 1 100% Availability of daily monitoring Executes -100%, not executed - 0%. factories when using OMK products. Department
Evaluation 100% - if the actual share of products with recognized claims from consumers is less than or equal to the green border. A score of The share of non-conforming products 50% - if the actual share of products with recognized claims from CONTENTS OVERVIEWOVERVIEW STRATEGYSTRATEGY VSW Product MANAGEMENTMANAGEMENT KEY INDICATORSINDICATORS SUSTAINABLE DEVELOPMENTDEVELOPMENT CONTACT INFORMATIONINFORMATION Product CONTENTquality 5S The share of products with claims from consumers,% №8 0,233 0,351 0,350 0,233 0,056 100% identified by the consumer in relation consumers is less than the red border, but more green. Evaluation 0% - Quality Department to the products shipped, % if the actual share of products with recognized claims from consumers is greater than or equal to the critical value
CMW Human The number of detected cases of use of labor When the value of the indicator> 0, the goal is 0%, 6 №8 Resourses 0 0 0 0 0 100% Report on the non-use of child labor of children under 14 years old otherwise - 100% Elimination Department Child care Critical Red Green Assessment of child labor Effect on Responsible Result Result of achievement CSR priorities CSR materials topics № KPI OMK Human result in border in border in of the 2018 goal Calculation method Assessment method The number of detected cases of use of labor SDG UN department in 2017 in 2018 When the value of the indicator> 0, the goal is 0%, 7 №8 Resourses 0 0 2018 0 2018 0 2018 0 раз 100%(if applicable) Report on the non-use of child labor of children under 14 years otherwise - 100% Department OMK Corporate Stakeholder Implementation of a plan for informing employees Accounting for the number of volunteers in The plan is executed on 3/4 1 №8 Communications 1 0,8 0,9 1 100% 100% Plan and fact comparison information about CSR activities 1) general corporate promotions in partnership with the and more - 100%. Department charity fund OMK-Uchastie Fundraising campaigns “With the world of the Christmas tree”, “From heart to heart”, The share of concluded contracts with consumers, in Attitude“Let's get of the the child concluded to school” agreements Sports fundraising with 100% - reaching the green border; CMW Sales 2 which there is a condition that when using the products №17 n/a 0,5 0,65 0,8 1 100% themarathon accepted “Who condition runs? Is to everyone the total running? number ”And others. 50% achievement of the red border; Department of CMW JSC, human rights should not be violated of2) individualconcluded projects agreements of employees (in the framework of 0%The - information value below is critical collected level from reports of enterprises, Development 8 The number of volunteers №16 7694 5000 6400 6750 8000 100% OMK-Partnership). Mini-grants for OMK employees as part donor shares, general corporate actions, reports of OMK Department of volunteer of the OMK-Partnership grant competition aimed at employees, the winners of OMK-Partnership Development for Relations with Observanceinitiatives of human The share of regulatory, technical (technological) developing local communities, NGOs, state and municipal of the territory EngineeringGovernmental and Evaluation of the achievement of the goal is equal to the rights when using 3 documents with information on the degree of impact of №11 0,6 0,85 0,85 0,9 1 100% Shareinstitutions of technical in the citiesdocuments where withthe company OS section operates. of presence TechnologyOrganizations Center actual value of the indicator OMK products products (technology) on humans and the environment 3) volunteer projects of the councils of young Stakeholder and CSR Engagement metallurgists. Planting forest. Donor shares. Help for veterans of enterprises. Arrangement of plant areas Daily monitoring of publications, analysis of publications OMK Corporate ("environmental landing") 4 Numbermentioning of volunteer human rights projects violations of employees by OMK supportedand №11 Communications 1 0 0 1 1 100% Availability of daily monitoring 100%Executes - reaching -100%, thenot greenexecuted border; - 0%. 50% - reaching the red 9 №16 32 10 20 30 43 100% Data from the decisions of competitive commissions. infactories the OMK-Partnership when using OMK competition products. Department border; 0% - value below critical level Social The number of social entrepreneurial projects created Information is collected on the basis of the analysis of the The number of open social entrepreneurial projects, the Evaluation 100% - if the actual share of products with recognized claims entrepreneurship 10 by the authors of the projects of the "Start Your №16 26 35 28 40 42 100% reports of the winners of the program “Start your own number of jobs created development Business" competition. business”from consumers is less than or equal to the green border. A score of 50% - if the actual share of products with recognized claims from The proportion of cases of violations considered (the The share of non-conforming products VSW Product consumers is less than the red border, but more green. Evaluation 0% - Product quality 5 decisionThe share of of the products ethics committee with claims was from made, consumers,% the №8 OMK Human 0,233 0,351 0,350 0,233 0,056 100% identified by the consumer in relation Consideration of Quality Department Theif the assessmentactual share of productsof the achievement with recognized of claims the fromgoal con is equalsumers 11 situation was settled by an authorized body / official) of №8 Resourses 1 0,8 0,9 1 1 100% Percentageto the products of considered shipped, % appeals to received ones. employee complaints to the actual value of the indicator the total number of calls to the OMK corporate ethics Department is greater than or equal to the critical value hotline. Growth in labor productivity from last year / CMW Human 100% - if the current value is greater than or equal The numberratio of growth of detected rates casesof labor of productivityuse of labor and Growth in average wages from last year When the value of the indicator> 0, the goal is 0%, 612 №89 Resourses 0over 1 0less than 1 01 0over 1 01,13 100% Report on the non-use of child labor to the target ofaverage children wages under 14 years old Growth from last year = (fact fact. - fact previous) / otherwise - 100% Elimination Department 0% - if the current value is less than the target Child care fact previous. * 100% of child labor CMW Human Fair reward ResoursesOMK Human 100% - 80% or more of the plan’s activities have been The number of detected cases of use of labor When the value of the indicator> 0, the goal is 0%, 7 №8 DepartmentResourses 0 0 0 0 0 раз 100% PercentageReport on the ratio non-use of the ofnumber child labor of actually completed completed; ofRevision children of underthe bonus 14 years system: development and otherwise - 100% 13 №9 Department n/a 0,5 0,8 1 1 100% activities to the number of planned activities under the 0% - 50% or less of the plan’s activities have been implementation of new indicators of bonus effects Accountingrevision plan for the number of volunteers in completed; Respect for 1) general corporate promotions in partnership with the between them - calculated linearly human rights charity fund OMK-Uchastie Fundraising campaigns “With the world of the Christmas tree”, “From heart to heart”, “Let'sFIFR = get Number the child of deaths to school” due Sportsto accidents fundraising / total number 100% - reaching the green border; 50% - reaching the red 14 Частота травм со смертельным исходом (FIFR) №3 0 0 0 0 0 100% marathonof hours worked “Who runs? by all Isstaff everyone * 1000000 running? ”And others. border; 0% - value below critical level OMK Production 2) individual projects of employees (in the framework of The information is collected from reports of enterprises, Safety Department Development 8 The number of volunteers №16 7694 5000 6400 6750 8000 100% OMK-Partnership). Mini-grants for OMK employees as part donor shares, general corporate actions, reports of OMK Department The number of victims of accidents with the loss of 100% - достижение зеленой границы; of volunteer of the OMK-Partnership grant competition aimed at employees, the winners of OMK-Partnership Development High occupational 15 Lost Time Injury Frequency Rate (LTIFR) №3 for Relations with 1,6 1,73 1,68 1,6 1,29 100% working time / total number of hours worked by all staff * 50% - достижение красной границы; initiatives developing local communities, NGOs, state and municipal of the territory safety standards Governmental 1000000 0% - значение ниже критического уровня institutions in the cities where the company operates. of presence Organizations 3) volunteer projects of the councils of young and CSR metallurgists.The number of Planting victims offorest. accidents Donor with shares. the lossHelp offor 100% - reaching the green border; CMW Production 16 Lost Time Injury Frequency Rate (LTIFR) №3 2,58 2,58 2,45 2 1,4 100% veteransworking time of enterprises. / total number Arrangement of hours worked of plant by areas all staff * 50% - reaching the red border; Safety Department ("environmental1000000 landing") 0% - value below critical level Number of volunteer projects of employees supported 100% - reaching the green border; 50% - reaching the red 9 №16 32 10 20 30 43 100% Data from the decisions of competitive commissions. in the OMK-Partnership competition border; 0% - value below critical level 100%, the Social The number of social entrepreneurial projects created Information is collected on the basis of the analysis of the OMK ANNUALHigh REPORThealthcare 2018 OMK Production indicator value is OccupationalThe number of disease open social rate =entrepreneurial number of confirmed projects, the 100% - reaching the green border; 50% - reaching the red 136 entrepreneurship 1710 Occupationalby the authors Disease of the projects Indicator of the "Start Your №316 3,6426 13,235 11,0128 8,840 2,5842 lower100% than the reports of the winners of the program “Start your own standards Safety Department casesnumber x 10,000of jobs /created cf. list number of employees. border; 0% - value below critical level development Business" competition. industry business” The proportion of cases of violations considered (the indicator. decision of the ethics committee was made, the CMWOMK HumanHuman The level of staff involvement is determined by the results DecentConsideration working of 100%The assessment - achieving theof the red achievement border of the of goal the goal is equal 1811 Levelsituation of engagement was settled by an authorized body / official) of №8 Resourses 0,421 0,340,8 0,420,9 0,471 36%1 25%100% ofPercentage an independent of considered sociological appeals study to byreceived an external ones. conditionsemployee complaints 0%to the - goal actual achievement value of the less indicator than critical the total number of calls to the OMK corporate ethics Department provider according to the Aon Hewitt methodology. hotline. Growth in labor productivity from last year / 100% - if the current value is greater than or equal TheGross ratio emissions of growth of ratespollutants of labor into productivity the air, thousand and Growth in average wages from last year Targets can be indexed depending on actual production 1219 №912 over6,3 1 less6,3 than 1 16,2 over6,11 1 1,134,59 100% According to the state statistical reporting "2-TP (air)" to the target averagetons / year wages Growth from last year = (fact fact. - fact previous) / volumes in the reporting period. 0% - if the current value is less than the target fact previous. * 100% OMKCMW ProductionHuman Fair reward Gross discharges of pollutants into water bodies, SafetyResourses Department According to the state statistical reporting "2-TP (water Targets100% - 80% can orbe more indexed of the depending plan’s activities on actual have production been Minimizing the 20 №6 Department 3,17 3,17 3,12 3,07 2,54 100% Percentage ratio of the number of actually completed completed; Revisionthousand of tons the /bonus year system: development and management)" volumes in the reporting period. environmental impact 13 №9 n/a 0,5 0,8 1 1 100% activities to the number of planned activities under the 0% - 50% or less of the plan’s activities have been implementation of new indicators of bonus effects The total mass of waste generated, thousand tons / revision plan Targetscompleted; can be indexed depending on actual production 21 №12 1037,94 1037,94 1022,37 1006,8 598,98 100% According to the state statistical reporting "2-TP (waste)" Respect for year volumesbetween inthem the -reporting calculated period. linearly human rights Total consumption of fuel and energy resources VSW Energy Supply The volume of actual consumption of fuel and energy 100% consumption does not exceed the planned value (on 22 №7 502 008 504 794 490 000 475 000 445 627 91% (tons of standard fuel) Department FIFRresources = Number of JSC of "VMZ"deaths for due the to billing accidents period / total number 100%the red - reaching border) the green border; 50% - reaching the red 14 Частота травм со смертельным исходом (FIFR) №3 0 0 0 0 0 100% of hours worked by all staff * 1000000 border; 0% - value below critical level OMK Production The ratio of the average wage in the enterprise and the Compliance of the average wage in AO "VMZ" with the less than average monthly nominal accrued wages of employees 23 №8 Safety Department over 85% over 85% 132% 100% The ratio is in the specified range - 100%, otherwise - 0%. regional labor market of the Nizhny Novgorod region 85% Theof organizations number of victims (excluding of accidents small businesses) with the loss of 100% - достижение зеленой границы; High occupational 15 Lost Time Injury Frequency Rate (LTIFR) №3 1,6 1,73 1,68 1,6 1,29 100% workingin the range time of / total± 15% number of hours worked by all staff * 50% - достижение красной границы; Respect for safetyFair reward standards 1000000 0% - значение ниже критического уровня human rights Correspondence of the average wage in CMW JSC to the less than Compliance - the ratio of the average wage in the 24 №8 over 85% over 85% 92% 100% The ratio is in the specified range - 100%, otherwise - 0%. regional labor market of the Perm Territory 85% Theenterprise number and of thevictims average of accidents wage in thewith range the loss of ± of 15% 100% - reaching the green border; CMW Production 16 Lost Time Injury Frequency Rate (LTIFR) №3 2,58 2,58 2,45 2 1,4 100% working time / total number of hours worked by all staff * 50% - reaching the red border; Safety Department OMK Human 1000000 0% - value below critical level Decent working Report of independent consultants on the results of the Between red and green border - proportionally, 25 The level of OMK personnel engagement, % №8 Resourses 63 50 54 66 65 100% conditions Department involvement study below critical - 0% 100%, the indicator value is High healthcare Share of employees satisfied with career opportunities, OMK Production ReportOccupational of independent disease rate consultants = number on of the confirmed results of the Between100% - reaching red and the green green border border; - proportionally, 50% - reaching the red 2617 Occupational Disease Indicator №83 563,64 3213,2 3611,01 598,8 59%2,58 lower100% than the standards % Safety Department industry involvementcases x 10,000 study / cf. list number of employees. belowborder; critical 0% - value - 0% below critical level Personnel indicator. development CMW Human The level of staff involvement is determined by the results Decent working 100% - achieving the red border of the goal 18 LevelShare of of engagement employees satisfied with recognition of their №8 Resourses 0,42 0,34 0,42 0,47 36% 25% ofReport an independent of independent sociological consultants study on by the an results external of the Between red and green border - proportionally, conditions 27 №8 54 35 38 57 58% 100% 0% - goal achievement less than critical merits, % Department providerinvolvement according study to the Aon Hewitt methodology. below critical - 0%
1. 100% - 100% completed VSW Human Consideration of ConsiderationGross emissions of allof appealspollutants to intothe laborthe air, dispute thousand 100% (12 2.Targets 80% of can the be goal indexed is 80% depending on actual production 2819 №812 Resourses 6,3 6,3 80%6,2 100%6,11 4,59 100% NumberAccording of torequests the state reviewed statistical / total reporting number "2-TP of requests (air)" employee complaints committeetons / year requests) 3.volumes 0% - completed in the reporting less than period. 80% of the activities Department of the plan OMK Production Gross discharges of pollutants into water bodies, Safety Department According to the state statistical reporting "2-TP (water Targets can be indexed depending on actual production Minimizing the 20 №6 3,17 3,17 3,12 3,07 2,54 100% thousand tons / year management)" volumes in the reporting period. environmental impact The total mass of waste generated, thousand tons / Targets can be indexed depending on actual production 21 №12 1037,94 1037,94 1022,37 1006,8 598,98 100% According to the state statistical reporting "2-TP (waste)" year volumes in the reporting period.
Employee participation in the Total consumption of fuel and energy resources VSW Energy Supply The volume of actual consumption of fuel and energy 100% consumption does not exceed the planned value (on development and 22 №7 502 008 504 794 490 000 475 000 445 627 91% (tons of standard fuel) Department resources of JSC "VMZ" for the billing period the red border) implementation of Management strategies, policies and OMK Business The ratio of the average wage in the enterprise and the system operational plans to 1 ComplianceNumber of registered of the average innovation wage proposalsin AO "VMZ" for with the theyear №9 System Development 1240 less than 1420 averageInventory monthly accounting nominal system accrued wages of employees 23 №8 over 85% over 85% 132% 100% The ratio is in the specified range - 100%, otherwise - 0%. development minimize negative regional labor market of the Nizhny Novgorod region Department 85% of organizations (excluding small businesses) consequences for in the range of ± 15% employees, company and Respect for societyFair reward human rights Correspondence of the average wage in CMW JSC to the less than ComplianceCosts in excess - the of ratio the Laborof the Codeaverage of thewage Russian in the 24 №8 22,39 mln over 85% over 85% 92%22.58 mln 100% The ratio is in the specified range - 100%, otherwise - 0%. 2 regionalCosts of laborparenting market support of the in Perm AO "VMZ" Territory №3 85% enterpriseFederation andto support the average children wage and in parents,the range rubles of ± 15% per rub. rub. year Parenting support OMK Human Costs in excess of the Labor Code of the Russian Decent working Resourses 3,73 mln 3,32 mln Report of independent consultants on the results of the Between red and green border - proportionally, 325 CostsThe level of parentingof OMK personnel support inengagement, AO "CMW" % №38 63 50 54 66 65 100% Federation to support children and parents, rubles per conditions Department rub. rub. involvement study below critical - 0% year Share of employees satisfied with career opportunities, TheReport actual of independent costs for the consultants year on social on theprograms results beyond of the Between red and green border - proportionally, 26 №8 56 32 36 59 59% 100% Development of % OMK Human theinvolvement law / SSC study for the year. below critical - 0% the territory of Resourses Personnel Actual expenses for the year on social programs beyond presence Department development the law: 1. Direct social payments to employees; ShareAdditional of employees staff costs satisfied in excess with of recognitionthe legally binding of their Report1.1. Material of independent assistance toconsultants employees; on 1.2. the Social results leave; of the Between red and green border - proportionally, Personnel 27 (social programs), rubles / person in the OMK group (list №8 54 35 38 57 58% 100% 1.3. Incentive payments. 2. Social programs for employees; 4 merits, % №8 21 293 23 370 involvement study below critical - 0% development of legal entities included in the OMK group - VSW JSC, 2.1. Improvement in sanatorium-resort health institutions ATZ JSC, CMW JSC, TDT JSC, JSC BAZ ") of employees and their families; 2.2. Medical care for 1. 100% - 100% completed VSW Human workers (LCA + costs for MUF); 2.3. Pension benefits for Consideration of Consideration of all appeals to the labor dispute 100% (12 2. 80% of the goal is 80% 28 №8 Resourses 80% 100% 100% Numberemployees; of requests 2.4. Providing reviewed workers / total with number food; 3. of Other requests employee complaints committee requests) 3. 0% - completed less than 80% of the activities Department costs; 3.1. The cost of sports; 3.2. Other expenses on social programs for employees. of the plan Availability of monitoring the number of labor disputes (appeals of employees about violation of their labor rights to the labor dispute commission, reports Compliance with labor Fixing in the register of labor disputes and the results of 5 (statements) to the employer, to the court, to the state №8 OMK Law Department 1 1 laws their consideration labor inspectorate, to the prosecutor's office), the result Respect for of their consideration. Formation of a report on the Employee participation in the results of annual monitoring human rights development and implementation of Management strategies, policies and OMK Business The coefficient of labor loss (KP) due to illness: the ratio of High healthcare OMK Production loss of working time due to disability to the normative system operational plans to 61 SicknessNumber of rate registered due to illness innovation proposals for the year №39 System Development 2,71240 2,571420 Inventory accounting system development standardsminimize negative DepartmentSafety Department fund of working time. consequences for KP = PRV, h / NRV, h * 100 employees, company and society Costs in excess of the Labor Code of the Russian 22,39 mln 22.58 mln 2 Costs of parenting support in AO "VMZ" №3 Federation to support children and parents, rubles per rub. rub. year Parenting support Costs in excess of the Labor Code of the Russian 3,73 mln 3,32 mln 3 Costs of parenting support in AO "CMW" №3 Federation to support children and parents, rubles per rub. rub. year The actual costs for the year on social programs beyond Development of OMK Human the law / SSC for the year. the territory of Resourses Actual expenses for the year on social programs beyond presence Department the law: 1. Direct social payments to employees; Additional staff costs in excess of the legally binding 1.1. Material assistance to employees; 1.2. Social leave; Personnel (social programs), rubles / person in the OMK group (list 1.3. Incentive payments. 2. Social programs for employees; 4 №8 21 293 23 370 development of legal entities included in the OMK group - VSW JSC, 2.1. Improvement in sanatorium-resort health institutions ATZ JSC, CMW JSC, TDT JSC, JSC BAZ ") of employees and their families; 2.2. Medical care for workers (LCA + costs for MUF); 2.3. Pension benefits for employees; 2.4. Providing workers with food; 3. Other costs; 3.1. The cost of sports; 3.2. Other expenses on social programs for employees. Availability of monitoring the number of labor disputes (appeals of employees about violation of their labor rights to the labor dispute commission, reports Compliance with labor Fixing in the register of labor disputes and the results of 5 (statements) to the employer, to the court, to the state №8 OMK Law Department 1 1 laws their consideration labor inspectorate, to the prosecutor's office), the result Respect for of their consideration. Formation of a report on the human rights results of annual monitoring The coefficient of labor loss (KP) due to illness: the ratio of High healthcare OMK Production loss of working time due to disability to the normative 6 Sickness rate due to illness №3 2,7 2,57 standards Safety Department fund of working time. KP = PRV, h / NRV, h * 100 Critical Red Green Assessment Effect on Responsible Result Result of achievement CSR priorities CSR materials topics № KPI result in border in border in Calculation method Assessment method SDG UN department in 2017 in 2018 of the 2018 goal 2018 2018 2018 (if applicable)
OMK Corporate Stakeholder Implementation of a plan for informing employees The plan is executed on 3/4 1 №8 Communications 1 0,8 0,9 1 100% 100% Plan and fact comparison information about CSR activities and more - 100%. Department
The share of concluded contracts with consumers, in Attitude of the concluded agreements with 100% - reaching the green border; CMW Sales 2 which there is a condition that when using the products №17 n/a 0,5 0,65 0,8 1 100% the accepted condition to the total number 50% achievement of the red border; Department of CMW JSC, human rights should not be violated of concluded agreements 0% - value below critical level
Observance of human The share of regulatory, technical (technological) Engineering and Evaluation of the achievement of the goal is equal to the rights when using 3 documents with information on the degree of impact of №11 0,6 0,85 0,85 0,9 1 100% Share of technical documents with OS section Technology Center actual value of the indicator Stakeholder OMK products products (technology) on humans and the environment Engagement
Daily monitoring of publications, analysis of publications OMK Corporate 4 mentioning human rights violations by OMK and №11 Communications 1 0 0 1 1 100% Availability of daily monitoring Executes -100%, not executed - 0%. factories when using OMK products. Department
Evaluation 100% - if the actual share of products with recognized claims from consumers is less than or equal to the green border. A score of The share of non-conforming products 50% - if the actual share of products with recognized claims from VSW Product Product quality 5 The share of products with claims from consumers,% №8 0,233 0,351 0,350 0,233 0,056 100% identified by the consumer in relation consumers is less than the red border, but more green. Evaluation 0% - Quality Department to the products shipped, % if the actual share of products with recognized claims from consumers is greater than or equal to the critical value
CMW Human The number of detected cases of use of labor When the value of the indicator> 0, the goal is 0%, 6 №8 Resourses 0 0 0 0 0 100% Report on the non-use of child labor of children under 14 years old otherwise - 100% Elimination Department Child care of child labor OMK Human The number of detected cases of use of labor When the value of the indicator> 0, the goal is 0%, 7 №8 Resourses 0 0 0 0 0 раз 100% Report on the non-use of child labor of children under 14 years otherwise - 100% Department Accounting for the number of volunteers in 1) general corporate promotions in partnership with the charity fund OMK-Uchastie Fundraising campaigns “With the world of the Christmas tree”, “From heart to heart”, “Let's get the child to school” Sports fundraising marathon “Who runs? Is everyone running? ”And others. 2) individual projects of employees (in the framework of The information is collected from reports of enterprises, Development 8 The number of volunteers №16 7694 5000 6400 6750 8000 100% OMK-Partnership). Mini-grants for OMK employees as part donor shares, general corporate actions, reports of OMK Department of volunteer of the OMK-Partnership grant competition aimed at employees, the winners of OMK-Partnership Development for Relations with initiatives developing local communities, NGOs, state and municipal of the territory Governmental institutions in the cities where the company operates. of presence Organizations 3) volunteer projects of the councils of young and CSR metallurgists. Planting forest. Donor shares. Help for veterans of enterprises. Arrangement of plant areas ("environmental landing") Number of volunteer projects of employees supported 100% - reaching the green border; 50% - reaching the red 9 №16 32 10 20 30 43 100% Data from the decisions of competitive commissions. in the OMK-Partnership competition border; 0% - value below critical level Social The number of social entrepreneurial projects created Information is collected on the basis of the analysis of the The number of open social entrepreneurial projects, the entrepreneurship 10 by the authors of the projects of the "Start Your №16 26 35 28 40 42 100% reports of the winners of the program “Start your own number of jobs created development Business" competition. business” The proportion of cases of violations considered (the decision of the ethics committee was made, the OMK Human Consideration of The assessment of the achievement of the goal is equal 11 situation was settled by an authorized body / official) of №8 Resourses 1 0,8 0,9 1 1 100% Percentage of considered appeals to received ones. employee complaints to the actual value of the indicator the total number of calls to the OMK corporate ethics Department hotline. Growth in labor productivity from last year / 100% - if the current value is greater than or equal The ratio of growth rates of labor productivity and Growth in average wages from last year 12 №9 over 1 less than 1 1 over 1 1,13 100% to the target average wages Growth from last year = (fact fact. - fact previous) / 0% - if the current value is less than the target fact previous. * 100% CMW Human Fair reward Resourses 100% - 80% or more of the plan’s activities have been Department Percentage ratio of the number of actually completed completed; Revision of the bonus system: development and 13 №9 n/a 0,5 0,8 1 1 100% activities to the number of planned activities under the 0% - 50% or less of the plan’s activities have been implementation of new indicators of bonus effects revision plan completed; Respect for between them - calculated linearly human rights
OVERVIEW FIFR = Number of deaths due to accidents / total number 100% - reaching the green border; 50% - reaching the red CONTENTCONTENTS14S Частота травм соOVERVIE смертельнымW исходом (FIFR) STRATEGYSTRATEG№3 Y MANAGEMENTMANAGEMEN0 T0 0 0 KEY INDICATORSINDICATOR0 100%S SUSTAINABLE DEVELOPMENTDEVELOPMENT CONTACT INFORMATIONINFORMATION of hours worked by all staff * 1000000 border; 0% - value below critical level OMK Production Safety Department The number of victims of accidents with the loss of 100% - достижение зеленой границы; High occupational 15 Lost Time Injury Frequency Rate (LTIFR) №3 1,6 1,73 1,68 1,6 1,29 100% working time / total number of hours worked by all staff * 50% - достижение красной границы; safety standards 1000000 0% - значение ниже критического уровня
Critical Red Green Assessment The number of victims of accidents with the loss of 100% - reaching the green border; Effect on CMWResponsible Production Result Result of achievement CSR priorities CSR materials topics 16№ Lost Time Injury FrequencyKPI Rate (LTIFR) №3 2,58 2,58result in 2,45border in 2border in 1,4 100% working time / totalCalculation number of hours method worked by all staff * 50% - reaching theAssessment red border; method SDG UN Safetydepartment Department in 2017 in 2018 of the 2018 goal 2018 2018 2018 (if applicable) 1000000 0% - value below critical level
OMK Corporate 100%, the Stakeholder Implementation of a plan for informing employees The plan is executed on 3/4 1 №8 Communications 1 0,8 0,9 1 100% indicator100% value is Plan and fact comparison informationHigh healthcare about CSR activities OMK Production Occupational disease rate = number of confirmed and100% more - reaching - 100%. the green border; 50% - reaching the red 17 Occupational Disease Indicator №3 Department 3,64 13,2 11,01 8,8 2,58 lower than the standards Safety Department industry cases x 10,000 / cf. list number of employees. border; 0% - value below critical level indicator. The share of concluded contracts with consumers, in Attitude of the concluded agreements with 100% - reaching the green border; CMW HumanSales The level of staff involvement is determined by the results Decent working 2 which there is a condition that when using the products №17 n/a 0,5 0,65 0,8 1 100% the accepted condition to the total number 100%50% achievement - achieving the of thered redborder border; of the goal 18 Level of engagement №8 ResoursesDepartment 0,42 0,34 0,42 0,47 36% 25% of an independent sociological study by an external conditions of CMW JSC, human rights should not be violated of concluded agreements 0% - goalvalue achievement below critical less level than critical Department provider according to the Aon Hewitt methodology.
Observance of human The share of regulatory, technical (technological) Gross emissions of pollutants into the air, thousand Engineering and EvaluationTargets can of be the indexed achievement depending of the on goal actual is equal production to the rights when using 319 documents with information on the degree of impact of №1112 0,66,3 0,856,3 0,856,2 0,96,11 14,59 100% ShareAccording of technical to the state documents statistical with reporting OS section "2-TP (air)" tons / year Technology Center actualvolumes value in the of thereporting indicator period. Stakeholder OMK products products (technology) on humans and the environment Engagement OMK Production Gross discharges of pollutants into water bodies, Safety Department According to the state statistical reporting "2-TP (water Targets can be indexed depending on actual production Minimizing the 20 Daily monitoring of publications, analysis of publications №6 OMK Corporate 3,17 3,17 3,12 3,07 2,54 100% thousand tons / year management)" volumes in the reporting period. environmental impact 4 mentioning human rights violations by OMK and №11 Communications 1 0 0 1 1 100% Availability of daily monitoring Executes -100%, not executed - 0%. factories when using OMK products. Department The total mass of waste generated, thousand tons / Targets can be indexed depending on actual production 21 №12 1037,94 1037,94 1022,37 1006,8 598,98 100% According to the state statistical reporting "2-TP (waste)" year Evaluationvolumes 100%in the - if reporting the actual share period. of products with recognized claims from consumers is less than or equal to the green border. A score of Total consumption of fuel and energy resources VSW Energy Supply The volume of actual consumption of fuel and energy 100% consumption does not exceed the planned value (on 22 №7 502 008 504 794 490 000 475 000 445 627 91% The share of non-conforming products 50% - if the actual share of products with recognized claims from (tons of standard fuel) VSWDepartment Product resources of JSC "VMZ" for the billing period the red border) Product quality 5 The share of products with claims from consumers,% №8 0,233 0,351 0,350 0,233 0,056 100% identified by the consumer in relation consumers is less than the red border, but more green. Evaluation 0% - Quality Department The ratio of the average wage in the enterprise and the to the products shipped, % if the actual share of products with recognized claims from consumers Compliance of the average wage in AO "VMZ" with the less than average monthly nominal accrued wages of employees 23 №8 over 85% over 85% 132% 100% Theis greater ratio than is in or theequal specified to the critical range value - 100%, otherwise - 0%. regional labor market of the Nizhny Novgorod region 85% of organizations (excluding small businesses) in the range of ± 15% Fair reward Respect for CMW Human The number of detected cases of use of labor When the value of the indicator> 0, the goal is 0%, human rights 6 Correspondence of the average wage in CMW JSC to the №8 Resourses 0 less0 than 0 0 0 100% ComplianceReport on the - thenon-use ratio ofof thechild average labor wage in the 24 of children under 14 years old №8 over 85% over 85% 92% 100% Theotherwise ratio is - in100% the specified range - 100%, otherwise - 0%. Elimination regional labor market of the Perm Territory Department 85% enterprise and the average wage in the range of ± 15% Child care of child labor OMK Human The number of detected cases of use of labor OMK Human When the value of the indicator> 0, the goal is 0%, Decent working 7 №8 Resourses 0 0 0 0 0 раз 100% Report ofon independentthe non-use consultantsof child labor on the results of the Between red and green border - proportionally, 25 Theof children level of under OMK personnel14 years engagement, % №8 Resourses 63 50 54 66 65 100% otherwise - 100% conditions Department involvement study below critical - 0% Accounting for the number of volunteers in Share of employees satisfied with career opportunities, Report1) general of independentcorporate promotions consultants in partnership on the results with of the the Between red and green border - proportionally, 26 №8 56 32 36 59 59% 100% % involvementcharity fund OMK-Uchastiestudy Fundraising campaigns “With below critical - 0% the world of the Christmas tree”, “From heart to heart”, Personnel “Let's get the child to school” Sports fundraising development marathon “Who runs? Is everyone running? ”And others. Share of employees satisfied with recognition of their Report of independent consultants on the results of the Between red and green border - proportionally, 27 №8 54 35 38 57 58% 100% 2) individual projects of employees (in the framework of The information is collected from reports of enterprises, merits, % involvement study below critical - 0% Development 8 The number of volunteers №16 7694 5000 6400 6750 8000 100% OMK-Partnership). Mini-grants for OMK employees as part donor shares, general corporate actions, reports of OMK Department of volunteer of the OMK-Partnership grant competition aimed at employees, the winners of OMK-Partnership Development for Relations with initiatives developing local communities, NGOs, state and municipal 1. 100% - 100% completed of the territory GovernmentalVSW Human Consideration of Consideration of all appeals to the labor dispute 100% (12 institutions in the cities where the company operates. 2. 80% of the goal is 80% of presence 28 №8 OrganizationsResourses 80% 100% 100% Number of requests reviewed / total number of requests employee complaints committee requests) 3) volunteer projects of the councils of young 3. 0% - completed less than 80% of the activities andDepartment CSR metallurgists. Planting forest. Donor shares. Help for of the plan veterans of enterprises. Arrangement of plant areas ("environmental landing") Number of volunteer projects of employees supported 100% - reaching the green border; 50% - reaching the red 9 №16 32 10 20 30 43 100% Data from the decisions of competitive commissions. in the OMK-Partnership competition border; 0% - value below critical level Social The number of social entrepreneurial projects created Information is collected on the basis of the analysis of the OMK ANNUAL REPORT 2018 The number of open social entrepreneurial projects, the 137 entrepreneurship 10 by the authors of the projects of the "Start Your №16 26 35 28 40 42 100% reports of the winners of the program “Start your own number of jobs created developmentEmployee participation in the Business" competition. business” development and The proportion of cases of violations considered (the implementation of decision of the ethics committee was made, the OMK Human Management Considerationstrategies, policies of and OMK Business The assessment of the achievement of the goal is equal operational plans to 11 situation was settled by an authorized body / official) of №8 Resourses 1 0,8 0,9 1 1 100% Percentage of considered appeals to received ones. system employee complaints 1 Number of registered innovation proposals for the year №9 System Development 1240 1420 Inventory accounting system to the actual value of the indicator development minimize negative the total number of calls to the OMK corporate ethics Department consequences for hotline. employees, company and Growth in labor productivity from last year / society 100% - if the current value is greater than or equal The ratio of growth rates of labor productivity and Growth in average wages from last year 12 №9 over 1 less than 1 1 over 1 1,13 100% Costs in excess of the Labor Code of the Russian to the target average wages 22,39 mln 22.58 mln Growth from last year = (fact fact. - fact previous) / 2 Costs of parenting support in AO "VMZ" №3 Federation to support children and parents, rubles per 0% - if the current value is less than the target rub. rub. fact previous. * 100% CMW Human year ParentingFair reward support Resourses 100% - 80% or more of the plan’s activities have been Department PercentageCosts in excess ratio of of the the Labor number Code of actuallyof the Russian completed completed; Revision of the bonus system: development and 3,73 mln 3,32 mln 133 Costs of parenting support in AO "CMW" №93 n/a 0,5 0,8 1 1 100% activitiesFederation to to the support number children of planned and parents,activities rubles under perthe 0% - 50% or less of the plan’s activities have been implementation of new indicators of bonus effects rub. rub. revisionyear plan completed; Respect for The actual costs for the year on social programs beyond between them - calculated linearly Developmenthuman rights of OMK Human the law / SSC for the year. the territory of Resourses Actual expenses for the year on social programs beyond presence Department FIFR = Number of deaths due to accidents / total number 100% - reaching the green border; 50% - reaching the red 14 Частота травм со смертельным исходом (FIFR) №3 0 0 0 0 0 100% the law: 1. Direct social payments to employees; of hours worked by all staff * 1000000 border; 0% - value below critical level Additional staff costs in excess of the legally binding OMK Production 1.1. Material assistance to employees; 1.2. Social leave; Personnel (social programs), rubles / person in the OMK group (list 1.3. Incentive payments. 2. Social programs for employees; 4 №8 Safety Department 21 293 23 370 development of legal entities included in the OMK group - VSW JSC, The2.1. Improvement number of victims in sanatorium-resort of accidents with health the loss institutions of 100% - достижение зеленой границы; High occupational 15 LostATZ JSC,Time CMW Injury JSC, Frequency TDT JSC, Rate JSC (LTIFR) BAZ ") №3 1,6 1,73 1,68 1,6 1,29 100% workingof employees time /and total their number families; of hours 2.2. Medical worked care by all for staff * 50% - достижение красной границы; safety standards 1000000workers (LCA + costs for MUF); 2.3. Pension benefits for 0% - значение ниже критического уровня employees; 2.4. Providing workers with food; 3. Other costs; 3.1. The cost of sports; 3.2. Other expenses on The number of victims of accidents with the loss of 100% - reaching the green border; CMW Production social programs for employees. 16 Lost Time Injury Frequency Rate (LTIFR) №3 2,58 2,58 2,45 2 1,4 100% working time / total number of hours worked by all staff * 50% - reaching the red border; Availability of monitoring the number of labor disputes Safety Department (appeals of employees about violation of their labor 1000000 0% - value below critical level rights to the labor dispute commission, reports Compliance with labor Fixing in the register of labor disputes and the results of 5 (statements) to the employer, to the court, to the state №8 OMK Law Department 1 1 laws 100%, the their consideration High healthcare labor inspectorate, to the prosecutor's office), the result OMK Production indicator value is Occupational disease rate = number of confirmed 100% - reaching the green border; 50% - reaching the red 17 Occupational Disease Indicator №3 3,64 13,2 11,01 8,8 2,58 lower than the Respect for standards of their consideration. Formation of a report on the Safety Department cases x 10,000 / cf. list number of employees. border; 0% - value below critical level results of annual monitoring industry human rights indicator. CMW Human The levelcoefficient of staff of involvement labor loss (KP) is determined due to illness: by the ratioresults of Decent working 100% - achieving the red border of the goal High healthcare 18 Level of engagement №8 ResoursesOMK Production 0,42 0,34 0,42 0,47 36% 25% ofloss an of independent working time sociological due to disability study toby the an externalnormative conditions 6 Sickness rate due to illness №3 2,7 2,57 0% - goal achievement less than critical standards DepartmentSafety Department providerfund of working according time. to the Aon Hewitt methodology. KP = PRV, h / NRV, h * 100
Gross emissions of pollutants into the air, thousand Targets can be indexed depending on actual production 19 №12 6,3 6,3 6,2 6,11 4,59 100% According to the state statistical reporting "2-TP (air)" tons / year volumes in the reporting period.
OMK Production Gross discharges of pollutants into water bodies, Safety Department According to the state statistical reporting "2-TP (water Targets can be indexed depending on actual production Minimizing the 20 №6 3,17 3,17 3,12 3,07 2,54 100% thousand tons / year management)" volumes in the reporting period. environmental impact The total mass of waste generated, thousand tons / Targets can be indexed depending on actual production 21 №12 1037,94 1037,94 1022,37 1006,8 598,98 100% According to the state statistical reporting "2-TP (waste)" year volumes in the reporting period.
Total consumption of fuel and energy resources VSW Energy Supply The volume of actual consumption of fuel and energy 100% consumption does not exceed the planned value (on 22 №7 502 008 504 794 490 000 475 000 445 627 91% (tons of standard fuel) Department resources of JSC "VMZ" for the billing period the red border) The ratio of the average wage in the enterprise and the Compliance of the average wage in AO "VMZ" with the less than average monthly nominal accrued wages of employees 23 №8 over 85% over 85% 132% 100% The ratio is in the specified range - 100%, otherwise - 0%. regional labor market of the Nizhny Novgorod region 85% of organizations (excluding small businesses) in the range of ± 15% Respect for Fair reward human rights Correspondence of the average wage in CMW JSC to the less than Compliance - the ratio of the average wage in the 24 №8 over 85% over 85% 92% 100% The ratio is in the specified range - 100%, otherwise - 0%. regional labor market of the Perm Territory 85% enterprise and the average wage in the range of ± 15%
OMK Human Decent working Report of independent consultants on the results of the Between red and green border - proportionally, 25 The level of OMK personnel engagement, % №8 Resourses 63 50 54 66 65 100% conditions Department involvement study below critical - 0%
Share of employees satisfied with career opportunities, Report of independent consultants on the results of the Between red and green border - proportionally, 26 №8 56 32 36 59 59% 100% % involvement study below critical - 0% Personnel development Share of employees satisfied with recognition of their Report of independent consultants on the results of the Between red and green border - proportionally, 27 №8 54 35 38 57 58% 100% merits, % involvement study below critical - 0%
1. 100% - 100% completed VSW Human Consideration of Consideration of all appeals to the labor dispute 100% (12 2. 80% of the goal is 80% 28 №8 Resourses 80% 100% 100% Number of requests reviewed / total number of requests employee complaints committee requests) 3. 0% - completed less than 80% of the activities Department of the plan
Employee participation in the development and implementation of Management strategies, policies and OMK Business system operational plans to 1 Number of registered innovation proposals for the year №9 System Development 1240 1420 Inventory accounting system development minimize negative Department consequences for employees, company and society Costs in excess of the Labor Code of the Russian 22,39 mln 22.58 mln 2 Costs of parenting support in AO "VMZ" №3 Federation to support children and parents, rubles per rub. rub. year Parenting support Costs in excess of the Labor Code of the Russian 3,73 mln 3,32 mln 3 Costs of parenting support in AO "CMW" №3 Federation to support children and parents, rubles per rub. rub. year The actual costs for the year on social programs beyond Development of OMK Human the law / SSC for the year. the territory of Resourses Actual expenses for the year on social programs beyond presence Department the law: 1. Direct social payments to employees; Additional staff costs in excess of the legally binding 1.1. Material assistance to employees; 1.2. Social leave; Personnel (social programs), rubles / person in the OMK group (list 1.3. Incentive payments. 2. Social programs for employees; 4 №8 21 293 23 370 development of legal entities included in the OMK group - VSW JSC, 2.1. Improvement in sanatorium-resort health institutions ATZ JSC, CMW JSC, TDT JSC, JSC BAZ ") of employees and their families; 2.2. Medical care for workers (LCA + costs for MUF); 2.3. Pension benefits for employees; 2.4. Providing workers with food; 3. Other costs; 3.1. The cost of sports; 3.2. Other expenses on social programs for employees. Availability of monitoring the number of labor disputes (appeals of employees about violation of their labor rights to the labor dispute commission, reports Compliance with labor Fixing in the register of labor disputes and the results of 5 (statements) to the employer, to the court, to the state №8 OMK Law Department 1 1 laws their consideration labor inspectorate, to the prosecutor's office), the result Respect for of their consideration. Formation of a report on the human rights results of annual monitoring The coefficient of labor loss (KP) due to illness: the ratio of High healthcare OMK Production loss of working time due to disability to the normative 6 Sickness rate due to illness №3 2,7 2,57 standards Safety Department fund of working time. KP = PRV, h / NRV, h * 100 Critical Red Green Assessment Effect on Responsible Result Result of achievement CSR priorities CSR materials topics № KPI result in border in border in Calculation method Assessment method SDG UN department in 2017 in 2018 of the 2018 goal 2018 2018 2018 (if applicable)
OMK Corporate Stakeholder Implementation of a plan for informing employees The plan is executed on 3/4 1 №8 Communications 1 0,8 0,9 1 100% 100% Plan and fact comparison information about CSR activities and more - 100%. Department
The share of concluded contracts with consumers, in Attitude of the concluded agreements with 100% - reaching the green border; CMW Sales 2 which there is a condition that when using the products №17 n/a 0,5 0,65 0,8 1 100% the accepted condition to the total number 50% achievement of the red border; Department of CMW JSC, human rights should not be violated of concluded agreements 0% - value below critical level
Observance of human The share of regulatory, technical (technological) Engineering and Evaluation of the achievement of the goal is equal to the rights when using 3 documents with information on the degree of impact of №11 0,6 0,85 0,85 0,9 1 100% Share of technical documents with OS section Technology Center actual value of the indicator Stakeholder OMK products products (technology) on humans and the environment Engagement
Daily monitoring of publications, analysis of publications OMK Corporate 4 mentioning human rights violations by OMK and №11 Communications 1 0 0 1 1 100% Availability of daily monitoring Executes -100%, not executed - 0%. factories when using OMK products. Department
Evaluation 100% - if the actual share of products with recognized claims from consumers is less than or equal to the green border. A score of The share of non-conforming products 50% - if the actual share of products with recognized claims from VSW Product Product quality 5 The share of products with claims from consumers,% №8 0,233 0,351 0,350 0,233 0,056 100% identified by the consumer in relation consumers is less than the red border, but more green. Evaluation 0% - Quality Department to the products shipped, % if the actual share of products with recognized claims from consumers is greater than or equal to the critical value
CMW Human The number of detected cases of use of labor When the value of the indicator> 0, the goal is 0%, 6 №8 Resourses 0 0 0 0 0 100% Report on the non-use of child labor of children under 14 years old otherwise - 100% Elimination Department Child care of child labor OMK Human The number of detected cases of use of labor When the value of the indicator> 0, the goal is 0%, 7 №8 Resourses 0 0 0 0 0 раз 100% Report on the non-use of child labor of children under 14 years otherwise - 100% Department Accounting for the number of volunteers in 1) general corporate promotions in partnership with the charity fund OMK-Uchastie Fundraising campaigns “With the world of the Christmas tree”, “From heart to heart”, “Let's get the child to school” Sports fundraising marathon “Who runs? Is everyone running? ”And others. 2) individual projects of employees (in the framework of The information is collected from reports of enterprises, Development 8 The number of volunteers №16 7694 5000 6400 6750 8000 100% OMK-Partnership). Mini-grants for OMK employees as part donor shares, general corporate actions, reports of OMK Department of volunteer of the OMK-Partnership grant competition aimed at employees, the winners of OMK-Partnership Development for Relations with initiatives developing local communities, NGOs, state and municipal of the territory Governmental institutions in the cities where the company operates. of presence Organizations 3) volunteer projects of the councils of young and CSR metallurgists. Planting forest. Donor shares. Help for veterans of enterprises. Arrangement of plant areas ("environmental landing") Number of volunteer projects of employees supported 100% - reaching the green border; 50% - reaching the red 9 №16 32 10 20 30 43 100% Data from the decisions of competitive commissions. in the OMK-Partnership competition border; 0% - value below critical level Social The number of social entrepreneurial projects created Information is collected on the basis of the analysis of the The number of open social entrepreneurial projects, the entrepreneurship 10 by the authors of the projects of the "Start Your №16 26 35 28 40 42 100% reports of the winners of the program “Start your own number of jobs created development Business" competition. business” The proportion of cases of violations considered (the decision of the ethics committee was made, the OMK Human Consideration of The assessment of the achievement of the goal is equal 11 situation was settled by an authorized body / official) of №8 Resourses 1 0,8 0,9 1 1 100% Percentage of considered appeals to received ones. employee complaints to the actual value of the indicator the total number of calls to the OMK corporate ethics Department hotline. Growth in labor productivity from last year / 100% - if the current value is greater than or equal The ratio of growth rates of labor productivity and Growth in average wages from last year 12 №9 over 1 less than 1 1 over 1 1,13 100% to the target average wages Growth from last year = (fact fact. - fact previous) / 0% - if the current value is less than the target fact previous. * 100% CMW Human Fair reward Resourses 100% - 80% or more of the plan’s activities have been Department Percentage ratio of the number of actually completed completed; Revision of the bonus system: development and 13 №9 n/a 0,5 0,8 1 1 100% activities to the number of planned activities under the 0% - 50% or less of the plan’s activities have been implementation of new indicators of bonus effects revision plan completed; Respect for between them - calculated linearly human rights
FIFR = Number of deaths due to accidents / total number 100% - reaching the green border; 50% - reaching the red 14 Частота травм со смертельным исходом (FIFR) №3 0 0 0 0 0 100% of hours worked by all staff * 1000000 border; 0% - value below critical level OMK Production Safety Department The number of victims of accidents with the loss of 100% - достижение зеленой границы; High occupational 15 Lost Time Injury Frequency Rate (LTIFR) №3 1,6 1,73 1,68 1,6 1,29 100% working time / total number of hours worked by all staff * 50% - достижение красной границы; safety standards 1000000 0% - значение ниже критического уровня
The number of victims of accidents with the loss of 100% - reaching the green border; CMW Production 16 Lost Time Injury Frequency Rate (LTIFR) №3 2,58 2,58 2,45 2 1,4 100% working time / total number of hours worked by all staff * 50% - reaching the red border; Safety Department 1000000 0% - value below critical level
100%, the High healthcare OMK Production indicator value is Occupational disease rate = number of confirmed 100% - reaching the green border; 50% - reaching the red 17 Occupational Disease Indicator №3 3,64 13,2 11,01 8,8 2,58 lower than the standards Safety Department industry cases x 10,000 / cf. list number of employees. border; 0% - value below critical level indicator. CMW Human The level of staff involvement is determined by the results Decent working 100% - achieving the red border of the goal 18 Level of engagement №8 Resourses 0,42 0,34 0,42 0,47 36% 25% of an independent sociological study by an external conditions 0% - goal achievement less than critical Department provider according to the Aon Hewitt methodology.
Gross emissions of pollutants into the air, thousand Targets can be indexed depending on actual production 19 №12 6,3 6,3 6,2 6,11 4,59 100% According to the state statistical reporting "2-TP (air)" tons / year volumes in the reporting period.
OMK Production Gross discharges of pollutants into water bodies, Safety Department According to the state statistical reporting "2-TP (water Targets can be indexed depending on actual production Minimizing the 20 №6 3,17 3,17 3,12 3,07 2,54 100% thousand tons / year management)" volumes in the reporting period. environmental impact The total mass of waste generated, thousand tons / Targets can be indexed depending on actual production 21 №12 1037,94 1037,94 1022,37 1006,8 598,98 100% According to the state statistical reporting "2-TP (waste)" year volumes in the reporting period.
Total consumption of fuel and energy resources VSW Energy Supply The volume of actual consumption of fuel and energy 100% consumption does not exceed the planned value (on 22 №7 502 008 504 794 490 000 475 000 445 627 91% (tons of standard fuel) Department resources of JSC "VMZ" for the billing period the red border) The ratio of the average wage in the enterprise and the Compliance of the average wage in AO "VMZ" with the less than average monthly nominal accrued wages of employees 23 №8 over 85% over 85% 132% 100% The ratio is in the specified range - 100%, otherwise - 0%. regional labor market of the Nizhny Novgorod region 85% of organizations (excluding small businesses) in the range of ± 15% Respect for Fair reward human rights Correspondence of the average wage in CMW JSC to the less than Compliance - the ratio of the average wage in the 24 №8 over 85% over 85% 92% 100% The ratio is in the specified range - 100%, otherwise - 0%. regional labor market of the Perm Territory 85% enterprise and the average wage in the range of ± 15%
OMK Human Decent working Report of independent consultants on the results of the Between red and green border - proportionally, 25 The level of OMK personnel engagement, % №8 Resourses 63 50 54 66 65 100% conditions Department involvement study below critical - 0%
Share of employees satisfied with career opportunities, Report of independent consultants on the results of the Between red and green border - proportionally, 26 №8 56 32 36 59 59% 100% % involvement study below critical - 0% Personnel development Share of employees satisfied with recognition of their Report of independent consultants on the results of the Between red and green border - proportionally, 27 №8 54 35 38 57 58% 100% CONTENTCONTENTSS merits, % OVERVIEWOVERVIEW STRATEGYSTRATEGY MANAGEMENTMANAGEMENT KEY INDICATORSINDICATORS involvement studySUSTAINABLE DEVELOPMENTDEVELOPMENT below critical - 0% CONTACT INFORMATIONINFORMATION
1. 100% - 100% completed VSW Human Consideration of Consideration of all appeals to the labor dispute 100% (12 2. 80% of the goal is 80% 28 №8 Resourses 80% 100% 100% Number of requests reviewed / total number of requests employee complaints committee requests) 3. 0% - completed less than 80% of the activities Department of the plan
Critical Red Green Assessment Effect on Responsible Result Result of achievement CSR priorities CSR materials topics № KPI result in border in border in Calculation method Assessment method SDG UN department in 2017 in 2018 of the 2018 goal 2018 2018 2018 (if applicable)
OMK Corporate StakeholderEmployee participation in the Implementation of a plan for informing employees The plan is executed on 3/4 1 №8 Communications 1 0,8 0,9 1 100% 100% Plan and fact comparison informationdevelopment and about CSR activities and more - 100%. implementation of Department Management strategies, policies and OMK Business system operational plans to 1 Number of registered innovation proposals for the year №9 System Development 1240 1420 Inventory accounting system The share of concluded contracts with consumers, in Attitude of the concluded agreements with 100% - reaching the green border; development minimize negative CMWDepartment Sales consequences for 2 which there is a condition that when using the products №17 n/a 0,5 0,65 0,8 1 100% the accepted condition to the total number 50% achievement of the red border; Department employees, company and of CMW JSC, human rights should not be violated of concluded agreements 0% - value below critical level society Costs in excess of the Labor Code of the Russian 22,39 mln 22.58 mln Observance of human 2 TheCosts share of parenting of regulatory, support technical in AO "VMZ"(technological) №3 Federation to support children and parents, rubles per Engineering and rub. rub. Evaluation of the achievement of the goal is equal to the rights when using 3 documents with information on the degree of impact of №11 0,6 0,85 0,85 0,9 1 100% Shareyear of technical documents with OS section Technology Center actual value of the indicator Stakeholder ParentingOMK products support products (technology) on humans and the environment Costs in excess of the Labor Code of the Russian Engagement 3,73 mln 3,32 mln 3 Costs of parenting support in AO "CMW" №3 Federation to support children and parents, rubles per rub. rub. Daily monitoring of publications, analysis of publications OMK Corporate year 4 mentioning human rights violations by OMK and №11 Communications 1 0 0 1 1 100% TheAvailability actual costsof daily for monitoring the year on social programs beyond Executes -100%, not executed - 0%. Development of factories when using OMK products. OMKDepartment Human the law / SSC for the year. the territory of Resourses Actual expenses for the year on social programs beyond Evaluation 100% - if the actual share of products with recognized claims presence Department the law: 1. Direct social payments to employees; from consumers is less than or equal to the green border. A score of Additional staff costs in excess of the legally binding 1.1. Material assistance to employees; 1.2. Social leave; 50% - if the actual share of products with recognized claims from Personnel (social programs), rubles / person in the OMK group (list 1.3.The Incentive share of non-conformingpayments. 2. Social products programs for employees; 4 №8 VSW Product 21 293 23 370 consumers is less than the red border, but more green. Evaluation 0% - developmentProduct quality 5 ofThe legal share entities of products included with in theclaims OMK from group consumers,% - VSW JSC, №8 0,233 0,351 0,350 0,233 0,056 100% 2.1.identified Improvement by the consumer in sanatorium-resort in relation health institutions Quality Department if the actual share of products with recognized claims from consumers ATZ JSC, CMW JSC, TDT JSC, JSC BAZ ") ofto employeesthe products and shipped, their families; % 2.2. Medical care for workers (LCA + costs for MUF); 2.3. Pension benefits for is greater than or equal to the critical value employees; 2.4. Providing workers with food; 3. Other costs; 3.1. The cost of sports; 3.2. Other expenses on CMW Human The number of detected cases of use of labor social programs for employees. When the value of the indicator> 0, the goal is 0%, 6 №8 Resourses 0 0 0 0 0 100% Report on the non-use of child labor ofAvailability children underof monitoring 14 years the old number of labor disputes otherwise - 100% Elimination Department Child care (appeals of employees about violation of their labor of child labor rights to the labor dispute commission, reports Compliance with labor OMK Human Fixing in the register of labor disputes and the results of 5 (statements)The number of to detected the employer, cases to of the use court, of labor to the state №8 OMK Law Department 1 1 When the value of the indicator> 0, the goal is 0%, laws 7 №8 Resourses 0 0 0 0 0 раз 100% theirReport consideration on the non-use of child labor of children under 14 years otherwise - 100% labor inspectorate, to the prosecutor's office), the result Department of their consideration. Formation of a report on the Respect for Accounting for the number of volunteers in results of annual monitoring human rights 1) general corporate promotions in partnership with the Thecharity coefficient fund OMK-Uchastie of labor loss Fundraising(KP) due to illness:campaigns the ratio “With of High healthcare OMK Production lossthe world of working of the time Christmas due to tree”,disability “From to theheart normative to heart”, 6 Sickness rate due to illness №3 2,7 2,57 standards Safety Department fund“Let's of get working the child time. to school” Sports fundraising KPmarathon = PRV, “Whoh / NRV, runs? h * Is100 everyone running? ”And others. 2) individual projects of employees (in the framework of The information is collected from reports of enterprises, Development 8 The number of volunteers №16 7694 5000 6400 6750 8000 100% OMK-Partnership). Mini-grants for OMK employees as part donor shares, general corporate actions, reports of OMK Department of volunteer of the OMK-Partnership grant competition aimed at employees, the winners of OMK-Partnership Development for Relations with initiatives developing local communities, NGOs, state and municipal of the territory Governmental institutions in the cities where the company operates. of presence Organizations 3) volunteer projects of the councils of young and CSR metallurgists. Planting forest. Donor shares. Help for veterans of enterprises. Arrangement of plant areas ("environmental landing") Number of volunteer projects of employees supported 100% - reaching the green border; 50% - reaching the red 9 №16 32 10 20 30 43 100% Data from the decisions of competitive commissions. in the OMK-Partnership competition border; 0% - value below critical level Social The number of social entrepreneurial projects created Information is collected on the basis of the analysis of the OMK ANNUAL REPORT 2018 The number of open social entrepreneurial projects, the 138 entrepreneurship 10 by the authors of the projects of the "Start Your №16 26 35 28 40 42 100% reports of the winners of the program “Start your own number of jobs created development Business" competition. business” The proportion of cases of violations considered (the decision of the ethics committee was made, the OMK Human Consideration of The assessment of the achievement of the goal is equal 11 situation was settled by an authorized body / official) of №8 Resourses 1 0,8 0,9 1 1 100% Percentage of considered appeals to received ones. employee complaints to the actual value of the indicator the total number of calls to the OMK corporate ethics Department hotline. Growth in labor productivity from last year / 100% - if the current value is greater than or equal The ratio of growth rates of labor productivity and Growth in average wages from last year 12 №9 over 1 less than 1 1 over 1 1,13 100% to the target average wages Growth from last year = (fact fact. - fact previous) / 0% - if the current value is less than the target fact previous. * 100% CMW Human Fair reward Resourses 100% - 80% or more of the plan’s activities have been Department Percentage ratio of the number of actually completed completed; Revision of the bonus system: development and 13 №9 n/a 0,5 0,8 1 1 100% activities to the number of planned activities under the 0% - 50% or less of the plan’s activities have been implementation of new indicators of bonus effects revision plan completed; Respect for between them - calculated linearly human rights
FIFR = Number of deaths due to accidents / total number 100% - reaching the green border; 50% - reaching the red 14 Частота травм со смертельным исходом (FIFR) №3 0 0 0 0 0 100% of hours worked by all staff * 1000000 border; 0% - value below critical level OMK Production Safety Department The number of victims of accidents with the loss of 100% - достижение зеленой границы; High occupational 15 Lost Time Injury Frequency Rate (LTIFR) №3 1,6 1,73 1,68 1,6 1,29 100% working time / total number of hours worked by all staff * 50% - достижение красной границы; safety standards 1000000 0% - значение ниже критического уровня
The number of victims of accidents with the loss of 100% - reaching the green border; CMW Production 16 Lost Time Injury Frequency Rate (LTIFR) №3 2,58 2,58 2,45 2 1,4 100% working time / total number of hours worked by all staff * 50% - reaching the red border; Safety Department 1000000 0% - value below critical level
100%, the High healthcare OMK Production indicator value is Occupational disease rate = number of confirmed 100% - reaching the green border; 50% - reaching the red 17 Occupational Disease Indicator №3 3,64 13,2 11,01 8,8 2,58 lower than the standards Safety Department industry cases x 10,000 / cf. list number of employees. border; 0% - value below critical level indicator. CMW Human The level of staff involvement is determined by the results Decent working 100% - achieving the red border of the goal 18 Level of engagement №8 Resourses 0,42 0,34 0,42 0,47 36% 25% of an independent sociological study by an external conditions 0% - goal achievement less than critical Department provider according to the Aon Hewitt methodology.
Gross emissions of pollutants into the air, thousand Targets can be indexed depending on actual production 19 №12 6,3 6,3 6,2 6,11 4,59 100% According to the state statistical reporting "2-TP (air)" tons / year volumes in the reporting period.
OMK Production Gross discharges of pollutants into water bodies, Safety Department According to the state statistical reporting "2-TP (water Targets can be indexed depending on actual production Minimizing the 20 №6 3,17 3,17 3,12 3,07 2,54 100% thousand tons / year management)" volumes in the reporting period. environmental impact The total mass of waste generated, thousand tons / Targets can be indexed depending on actual production 21 №12 1037,94 1037,94 1022,37 1006,8 598,98 100% According to the state statistical reporting "2-TP (waste)" year volumes in the reporting period.
Total consumption of fuel and energy resources VSW Energy Supply The volume of actual consumption of fuel and energy 100% consumption does not exceed the planned value (on 22 №7 502 008 504 794 490 000 475 000 445 627 91% (tons of standard fuel) Department resources of JSC "VMZ" for the billing period the red border) The ratio of the average wage in the enterprise and the Compliance of the average wage in AO "VMZ" with the less than average monthly nominal accrued wages of employees 23 №8 over 85% over 85% 132% 100% The ratio is in the specified range - 100%, otherwise - 0%. regional labor market of the Nizhny Novgorod region 85% of organizations (excluding small businesses) in the range of ± 15% Respect for Fair reward human rights Correspondence of the average wage in CMW JSC to the less than Compliance - the ratio of the average wage in the 24 №8 over 85% over 85% 92% 100% The ratio is in the specified range - 100%, otherwise - 0%. regional labor market of the Perm Territory 85% enterprise and the average wage in the range of ± 15%
OMK Human Decent working Report of independent consultants on the results of the Between red and green border - proportionally, 25 The level of OMK personnel engagement, % №8 Resourses 63 50 54 66 65 100% conditions Department involvement study below critical - 0%
Share of employees satisfied with career opportunities, Report of independent consultants on the results of the Between red and green border - proportionally, 26 №8 56 32 36 59 59% 100% % involvement study below critical - 0% Personnel development Share of employees satisfied with recognition of their Report of independent consultants on the results of the Between red and green border - proportionally, 27 №8 54 35 38 57 58% 100% merits, % involvement study below critical - 0%
1. 100% - 100% completed VSW Human Consideration of Consideration of all appeals to the labor dispute 100% (12 2. 80% of the goal is 80% 28 №8 Resourses 80% 100% 100% Number of requests reviewed / total number of requests employee complaints committee requests) 3. 0% - completed less than 80% of the activities Department of the plan
Employee participation in the development and implementation of Management strategies, policies and OMK Business system operational plans to 1 Number of registered innovation proposals for the year №9 System Development 1240 1420 Inventory accounting system development minimize negative Department consequences for employees, company and society Costs in excess of the Labor Code of the Russian 22,39 mln 22.58 mln 2 Costs of parenting support in AO "VMZ" №3 Federation to support children and parents, rubles per rub. rub. year Parenting support Costs in excess of the Labor Code of the Russian 3,73 mln 3,32 mln 3 Costs of parenting support in AO "CMW" №3 Federation to support children and parents, rubles per rub. rub. year The actual costs for the year on social programs beyond Development of OMK Human the law / SSC for the year. the territory of Resourses Actual expenses for the year on social programs beyond presence Department the law: 1. Direct social payments to employees; Additional staff costs in excess of the legally binding 1.1. Material assistance to employees; 1.2. Social leave; Personnel (social programs), rubles / person in the OMK group (list 1.3. Incentive payments. 2. Social programs for employees; 4 №8 21 293 23 370 development of legal entities included in the OMK group - VSW JSC, 2.1. Improvement in sanatorium-resort health institutions ATZ JSC, CMW JSC, TDT JSC, JSC BAZ ") of employees and their families; 2.2. Medical care for workers (LCA + costs for MUF); 2.3. Pension benefits for employees; 2.4. Providing workers with food; 3. Other costs; 3.1. The cost of sports; 3.2. Other expenses on social programs for employees. Availability of monitoring the number of labor disputes (appeals of employees about violation of their labor rights to the labor dispute commission, reports Compliance with labor Fixing in the register of labor disputes and the results of 5 (statements) to the employer, to the court, to the state №8 OMK Law Department 1 1 laws their consideration labor inspectorate, to the prosecutor's office), the result Respect for of their consideration. Formation of a report on the human rights results of annual monitoring The coefficient of labor loss (KP) due to illness: the ratio of High healthcare OMK Production loss of working time due to disability to the normative 6 Sickness rate due to illness №3 2,7 2,57 standards Safety Department fund of working time. KP = PRV, h / NRV, h * 100 CONTENTCONTENTSS OVERVIEWOVERVIEW STRATEGYSTRATEGY MANAGEMENTMANAGEMENT KEY INDICATORSINDICATORS SUSTAINABLE DEVELOPMENTDEVELOPMENT CONTACT INFORMATIONINFORMATION
Appendices B
GRI Standards Index Page /comment GRI Standards Index Page /comment
Universal Standards Universal Standards
GRI 101 Reporting principles 2 102-30 Effectiveness of risk management processes 32, 46, 62, 89, 91-92, 107 GRI 102 General disclosures 102-31 Frequency of analysis of economic, environmental and social impacts, 102-1 Name of the organization 5 risks and opportunities of the highest corporate governance body quarterly 102-2 Activities, brands, products, and services 5-12 102-32 Position of the person who officially checks and approves the report of the Chair of the 102-3 Location of headquarters 131 organization and ensures that all essential aspects are covered Management Board 102-4 Location of operations 11 102-33 Communicating critical concerns 38-39 102-5 Ownership and legal form AO OMK (JSC OMK) 102-34 Nature and total number of critical concerns 24 102-6 Markets served 9 102-35 Remuneration policies 38 102-7 Scale of the organization 9-12 102-40 List of stakeholder groups 29, 64, 96, 102, 110 102-8 Information on employees and other workers 65 102-45 Entities included in the consolidated financial statements 5 102-9 Supply chain 107 102-49 Changes in reporting No 102-10 Significant changes to the organization and its supply chain 13 102-50 Reporting period Year 102-11 Precautionary Principle or approach 46, 91 102-51 Date of most recent report June 2018 102-12 External initiatives 108 102-52 Reporting cycle Annually 102-13 Membership of associations RUIE 102-53 Contact point for questions regarding the report 131 102-14 Statement from senior decision-maker 13, 48, 61 102-54 Claims of reporting in accordance with the GRI Standards Core 102-15 Key impacts, risks, and opportunities 46, 91 102-55 GRI content index 133 102-16 Values, principles, standards, and norms of behavior 22,70 102-56 External assurance n/a 102-17 Mechanisms for advice and concerns about ethics 86 GRI 103 Management Approach 102-18 Governance structure 39 103-1 Explanation of the material topic and its Boundary 62-63 102-19 Delegating authority 46 103-2 The management approach and its components 62, 64, 88, 96, 100, 103, 107, 108 102-20 Executive-level responsibility for economic, environmental, and social topics 40-45 Economic Standards 102-22 Composition of the highest governance body and its committees 40-45 GRI 201 Economic Performance 102-23 Chair of the highest governance body 40 201-1 Direct economic value generated and distributed 12 102-24 Nominating and selecting the highest governance body 39 201-3 Defined benefit plan obligations and other retirement plans 81-82 102-25 Conflicts of interest 46 201-4 Financial assistance received from government no 102-26 Role of highest governance body in setting purpose, values, and strategy 46 GRI 202 Market Presence 102-27 Collective knowledge of highest governance body 62 202-1 Ratios of standard entry level wage by gender compared to local minimum wage 80 102-28 Evaluating the highest governance body’s performance 39 GRI 204 Procurement Practices 102-29 Identifying and managing economic, environmental, and social impacts 62 204-1 Proportion of spending on local suppliers 107
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Environmental Standards GRI 405 Diversity and Equal Opportunity GRI 302 Energy 405-1 Diversity of governance bodies and employees 67 302-1 Energy consumption within the organization 99 405-2 Ratio of basic salary and remuneration of women to men no 302-3 Energy intensity 100 GRI 413 Local Communities 302-4 Reduction of energy consumption 98, 100 413-1 Operations with local community engagement, impact assessments, 302-5 Reductions in energy requirements of products and services 100 and development programs 108 GRI 303 Water and Effluents GRI 414 Supplier Social Assessment 303-1 Interactions with water as a shared resource 97 414-1 New suppliers that were screened using social criteria 107 303-2 Management of water discharge-related impacts 97 303-3 Water withdrawal 97 GRI 304 Biodiversity 304-1 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside Impact of production sites protected areas is not significant. 304-3 Habitats protected or restored One-time activities GRI 305 Emissions 305-1 Direct (Scope 1) GHG emissions 97 305-5 Reduction of GHG emissions 97 305-6 Emissions of ozone-depleting substances (ODS) 97 305-7 Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions 97 GRI 306 Effluents and Waste 306-1 Water discharge by quality and destination 97 306-2 Waste by type and disposal method 97 Social Standards GRI 401 Employment 401-1 New employee hires and employee turnover 76 GRI 403 Occupational Health and Safety 403-2 Hazard identification, risk assessment, and incident investigation 91 GRI 404 Training and Education 404-1 Average hours of training per year per employee 73 404-2 Programs for upgrading employee skills and transition assistance programs 74 404-3 Percentage of employees receiving regular performance and career development reviews 77
OMK ANNUAL REPORT 2018 140 CONTENTCONTENTSS OVERVIEWOVERVIEW STRATEGYSTRATEGY MANAGEMENTMANAGEMENT KEY INDICATORSINDICATORS SUSTAINABLE DEVELOPMENTDEVELOPMENT [ CONTACT CONTACT IN INFORMATIO F ORMATION N ]
6.0 Contacts
28-2, Ozerskaya Nab., Moscow, 115184, Russia Tel.: (495) 231-77-71 Fax: (495) 231-77-72 Email: [email protected] Corporate website: www.omk.ru
OMK ANNUAL REPORT 2018 141