Procurement policy

Procurement principles of Rusolovo PJSC

• Procurement transparency
• Fair and open competition
• Damage prevention in critical situations/emergency
• Centralized procurement for the entire group of companies

Procurement processes are aimed at selecting suppliers, contractors and service providers on a competitive basis. Optimal economic conditions of procurement, such as price conformity to the customer’s requirements, delivery time frame and quality, are thus ensured.

The procurement function of the management company can also consolidate the needs of subsidiaries in an effort to form a larger procurement lot and sometimes to submit purchase lots in e-trading marketplaces with the intent to receive the most attractive bid from suppliers due to lot size.

Yet another role of the MC’s procurement function is to ensure the internal logistics of the holding company, when the procurement requirement received from one subsidiary is assessed from the standpoint of provision of another subsidiary’s reserves or production resources. The Procurement Department is responsible for the implementation of procurement process within the Company, its key roles and responsibilities are the planning, organization and conduct of procurement procedures. Moreover, the Procurement Department works to strengthen market positions by consolidating the needs and ensuring purchase process unification and common behavioral model in a competitive environment.

The annual procurement plan documents the current product and service needs of Rusolovo PJSC for the current calendar year and lays down procurement activities by prescribing the amount, methods and time limits for purchasing products within the approved budget and the persons responsible for specific purchases.

The annual procurement plan is generated based on annual requirements, budget and the programs affecting the Company’s production and business activities and includes: Collection of information about customer needs (inventories and required services); Analysis of submitted needs, their classification by type and the period during which procurement is to be completed; Determination of procurement strategy; Management of procurement progress and plan adjustment should any production need arise.

Critical items include those which have a significant impact on production business – all the way up to complete cessation or functional disruption, which causes considerable adverse implications.