APPROVED

on May 24th 2021 by resolution of the Board of Directors of Mechel, Public Joint Stock Company minutes of the Board of Directors

(MoM No. w/o number dd. May 24 2021)

ANNUAL REPORT

OF PUBLIC JOINT STOCK COMPANY

MECHEL

BASED ON THE RESULTS OF 2020

Chief executive officer

Oleg V. Korzhov

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1.1.

1.2.

1.3.

1.4.

1.5.

1.6.

1.7.

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1.9.

1.10.

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10.1.

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CONTENTS

CONTENTS

CEO's address

GENERAL INFORMATION ON THE COMPANY

Name

Contact information

Details on the state registration

Authorized capital and shares

Major shareholders of the Company

Registrar

Auditor

Information on subsidiaries/affiliates. Information on the Company's securities quotations

Staff Headcount and Social policy

Representation Offices

CORPORATE GOVERNANCE BODIES

General Shareholders' Meeting

Board of Directors

Chief Executive Officer and Management Board

COMPANY'S POSITION IN THE INDUSTRY

PRIORITY BUSINESSES

REPORT OF THE BOARD OF DIRECTORS ON THE RESULTS OF THE COMPANY DEVELOPMENT BY PRIORITY BUSINESSES OF THE COMPANY

INFORMATION ON THE VOLUME OF EACH TYPE OF ENERGY RESOURCES USED BY COMPANY IN THE ACCOUNTING YEAR

COMPANY DEVELOPMENT OUTLOOK

REPORT ON THE ANNOUNCED (ACCRUED) DIVIDENDS PAID ON THE COMPANY'S SHARES

DESCRIPTION OF THE MAJOR RISK FACTORS RELATED TO THE COMPANY OPERATIONS

INFORMATION ON THE TRANSACTIONS MADE BY COMPANY IN THE ACCOUNTING YEAR

The list of the transactions made by Company in the accounting year recognized in accordance with the Federal Law On Joint Stock Companies as major transactions

The list of the transactions made by Company in the accounting year recognized in accordance with the Federal Law On Joint Stock Companies as related-party transactions

REMUNERATION PAYMENT AND EXPENSES COMPENSATION POLICIES FOLLOWED BY COMPANY

DESCRIPTION OF THE CORPORATE GOVERNANCE SYSTEM OF THE COMPANY

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12.1.

Corporate Governance principles followed by Company

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12.2.

Structure (scheme) of the Corporate Governance system of the

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Company

12.3.

Description of the risk management system and of the internal control

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system applied in the Company

12.4.

Information on the assessment of Corporate Governance in the

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Company

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ANNUAL REPORT OF THE AUDIT COMMITTEE.

14.

REPORT ON THE COMPANY'S COMPLIANCE WITH THE

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CODE OF CORPORATE GOVERNANCE PRINCIPLES AND

RECOMMENDATIONS

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APPENDICES TO THE ANNUAL REPORT

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15.1.

Report on the Company's compliance with the principles and

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recommendations prescribed by Corporate Governance Code

15.2.

IFRS consolidated financial statements for 2020

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CEO'S ADDRESS

"In 2020 the consolidated revenue of the Group decreased by 8% vs. 2019 and amounted to

265.5 bn. rubles. EBITDA decreased by 23% to 41.1 bn. rubles.

The main reason for the falling revenues was a significant slump in prices for coal products as compared to the previous year. Steel enterprises all over the world shrank their production because of COVID related restrictions, which could not but adversely affect the demand for met coals and price for them, accordingly. Mechel Group managed to survive through such adverse circumstances quite well: none of its enterprises was shut down, we managed to retain the staff, our production plans were not considerably revised, and we managed to fulfill all our financial liabilities towards the banks under the restructured loans. In spite of all the difficulties we faced last year, we managed to increase the production volumes of coal by 10%, pig iron smelting by 6% and steel smelting by 1% versus 2019. We also managed to enhance the assortment of the products manufactured by our Universal Structural Mill, complete our major projects of reconstruction of the blast furnace and of the converter at Chelyabinsk Metallurgical Plant, install the new equipment at Beloretsk Metallurgical Plant, put a new ore smelting furnace to operation at Bratsk Ferroalloy Plant, improve the synergy between the Group enterprises. We actively apply information technologies in management and reduce costs. Much was done to improve the environmental performance of our enterprises during the previous year and we continue to implement our environmental programs.

Current and planned investment projects provide for the implementation of the measures to reduce industrial emissions and reduce emissions to water bodies. E.g. two environmental agreements were signed by Company with the authorities in Chelyabinsk within Federal project "Pure air" and one more additional agreement on the reduction of emissions to water bodies under which the Company committed to reduce its air pollutant emissions by 15 thous. ton per year, and emissions to water bodies will be reduced thrice. The investments under the above mentioned agreements will total to 14.5 bn. rubles. To organize this work in a consistent and systematic manner this year we introduced the position of a deputy director for environmental management. We believe this will make it possible to speed up the implementation of our environmental programs and of the modern methods of environmental management at Group enterprises.

A 51% stake in the enterprises of Elga Coal Complex was sold in April 2020. Simultaneously with the above mentioned transaction the agreements on a ten years' restructuring of the debt were signed with Bank GPB (JSC) and VTB Bank (PJSC). It is a very serious step for the Group resulting in a 146 bn. rubles reduction of the financial debt of the Company, which made it possible to reduce the costs of servicing the credit portfolio and will make it possible to release financial resources for the development of the production enterprises of the Group.

The Group's net debt excluding penalties, fines and options as of December 31, 2020 in comparison with the same indicator at the end of 2019 decreased by 74.8 billion rubles and amounted to 325.6 billion rubles.

The market conditions at the beginning of 2021 are favorable for the Group. The current pricing conditions made it possible for us to generate cash flows sufficient for servicing of our credits and for financing of the investment projects of our enterprises."

Chief Executive Officer,

Oleg V. Korzhov

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1. GENERAL INFORMATION ON THE COMPANY

1.1. Name

Full name in Russian: Публичное акционерное общество «Мечел» (hereinafter referred to as the "Company", "Mechel").

Short name in Russian: ПАО «Мечел».

Short name in English: Mechel PAO.

1.2. Contact information

Сompany's location: Moscow, Russian Federation.

Company's address indicated in the Unified state register of legal entities: 1 Krasnoarmeiskaya Street, Moscow, 125167, Russian Federation.

Mail address: 1 Krasnoarmeiskaya Street, Moscow, 125167, Russian Federation.

Phone number: +7 (495) 221-88-88.

  • Internet pages where the information about the company is available:http://www.mechel.ru/;http://www.e-disclosure.ru/portal/company.aspx?id=1942.

E-mailaddress:mechel@mechel.com.

1.3. Details on the state registration

Mechel PAO is a joint stock company established under the laws of the Russian Federation. The Company was established (incorporated) under the laws of the Russian Federation. The Company was registered on March 19th 2003 in the Russian Federation by Interdistrict Tax Inspectorate No. 46 of the Federal Tax Service of the Russian Federation in Moscow under primary state registration number 1037703012896 (Certificate of state registration of a legal entity, blank series 77 № 011726883). Since its foundation on March 19th 2003 till August 19th 2005 the official name of the Company was Mechel Steel Group, Open Joint Stock Company (Mechel OAO).

Mechel PAO has been given Individual taxpayer's number (INN) 7703370008 and Code of reason for registration (KPP) 771401001 (Certificate of registration of a Russian organization in a local tax office in the Russian Federation, blank series 77 № 017744898).

The Articles of Association (its currently effective version) was approved on June 30th 2020 by resolution of the Annual general meeting of shareholders of the Company (Minutes No. 1 dd. July 2nd 2020) and registered by Interdistrict Tax Inspectorate No. 46 of the Federal Tax Service of the Russian Federation in Moscow on July 22nd 2020 under state registration number (GRN) 2207706572676.

1.4. Authorized capital and shares

In accordance with the effective version of the Articles of Association of the Company, the authorized capital of the Company is 5,550,276,600 (Five billion five hundred fifty million two hundred seventy-six thousand six hundred) rubles.

The authorized capital of the Company consists of the nominal value of the shares bought by the shareholders.

The quantity of the placed shares of the Company is 555,027,660 shares, out of them:

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Mechel PAO published this content on 28 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 May 2021 14:42:02 UTC.