Committees under the Board of Directors

To ensure preliminary consideration of key issues and prepare recommendations for the Board of Directors, there were three Board Committees in 2019:

  • Audit Committee;
  • Human Resources and Remuneration Committee;
  • Strategy, Investments and Innovations Committee.

Committees contribute to the effectiveness of the decisions taken by the Board of Directors. A Committee’s chairman has the right to invite employees of the Company, experts and third parties to participate in the meetings of the Committee without the right to vote. In 2019, the Board Committees held a total of 32 meetings to consider various issues and prepare detailed recommendations and proposals for the Board of Directors.

Issues considered by the Committees in 2019
Issues considered by the Committees in 2019
Meetings of the Committees in 2017–2019
Meetings of the Committees in 2017–2019

Audit Committee

The Audit Committee under the Board of Directors is an advisory body that provides the Board of Directors with preliminary study of matters related to supervising the Company’s financial and operational activities and on other matters delegated by the Board of Directors.

The Committee’s activities are governed by the Regulations on the Audit Committee under the Board of DirectorsApproved by the Transneft Board of Directors on 19 January 2017 (Minutes No. 1)..

Key issues on which recommendations were prepared:
  • on Transneft’s Risk Management Report for 2018;
  • on preliminary approval of Transneft’s annual accounting (financial) statements, inclusive of the financial results statement;
  • on the auditor of Transneft for 2019;
  • on preliminary distribution of Transneft’s profits for 2018, including recommendations on dividend payments;
  • on the report on currency and interest rate risk management in Transneft for 2018;
  • on quarterly reports of Transneft’s executive body on the financial and economic performance of Transneft and Transneft Group for Q1 2019, 1H 2019 and 9 months of 2019;
  • on the expected implementation of the consolidated budget of Transneft Group and the budget of Transneft for 2019;
  • on the consolidated budget of Transneft Group and the budget of Transneft for 2020;
  • on reviewing the Annual Report of Transneft for 2018;
  • on supplementing the list of critical risks of Transneft for 2019;
  • on approval of amendments to the Foreign Exchange and Interest Rate Risk Management Policy of Transneft;
  • on approval of the Corporate Governance Code of Transneft.
Meetings of the Audit Committee
Meetings of the Audit Committee
Members of the Audit Committee during the reporting periodMinutes No. 13 dated 01 August 2018, Minutes No. 13 dated 24 July 2019..
  • I. Klebanov (Chairman of the Committee, Independent Director)
  • A. Korsik (Independent Director)
  • G. Shmal (Independent Director)
The most important issues of external and internal audit that were considered:
External Audit
  • the Regulations on Holding an Open Tender to Select an Auditor for the Mandatory Annual Audit of Transneft for 2019 and Reviewing the Interim Consolidated Financial Statements for Q1 2020;
  • Composition of the tender commission to select an auditor for the mandatory annual audit of Transneft;
  • Scope and plans for the audit of the annual reports for 2019 by the external auditor;
  • Transneft’s Report on the Remarks of the Auditor for 9 Months of 2018 and Remedial Actions;
  • on the offered initial (maximum) price for the open tender for the auditor selection for the mandatory annual audit of Transneft for 2020 and reviewing the interim consolidated financial statements for Q1 2021;
  • on the conclusion of Transneft’s auditor on the results of the audit of Transneft’s financial and operational activities for 2018 and the assessment of the auditor’s report that is to be provided to persons entitled to participate in the annual general meeting of Transneft shareholders.
Internal Audit
  • consideration of the report on the results of the activities of Transneft’s internal audit unit for 2018, including the independence and objectivity of the internal audit function, as well as its effectiveness;
  • approval of the revised version of Transneft’s Regulations on Internal Audit;
  • consideration of the general areas (planning) for internal audit in Transneft for 2020.

Dates of the Audit Committee’s meetings and numbers of the corresponding minutes: 31 January 2019 No. 1; 05 April 2019 No. 2; 09 April 2019 No. 3; 06 May 2019 No. 4; 27 May 2019 No. 5; 20 June 2019 No. 6; 24 June 2019 No. 7; 07 August 2019 No. 8; 12 September 2019 No. 9; 30 September 2019 No. 10; 06 November 2019 No. 11; 11 December 2019 No. 12; 20 December 2019 No. 13.


Human Resources and Remuneration Committee

The Human Resources and Remuneration Committee under the Board of Directors is an advisory body that facilitates the work of the Board of Directors through preliminary study of issues of human resources and social policies, as well as remuneration policies.

The Committee’s operations are governed by the Regulations on the Human resources and Remuneration Committee under the Board of DirectorsApproved by the Transneft Board of Directors on 19 January 2017 (Minutes No. 1)..

Key issues on which recommendations were prepared:
  • on external evaluation of the performance of Transneft’s Board of Directors and reviewing the report on its results;
  • on the concurrence of positions in governing bodies of other organisations by the President of Transneft and members of the Transneft Management Board;
  • on recommendations for the payment of remuneration to members of the Board of Directors of Transneft;
  • on recommendations for the payment of remuneration to the sole executive body;
  • on recommendations for the payment of remuneration to managers and employees of Transneft and Transneft subsidiaries, as well as to members of the Revision Commission;
  • on the introduction of professional standards in 2016-2020;
  • on the implementation and adjustment of the Plan for Introduction of Professional Standards in Transneft and Transneft Subsidiaries in 2016–2020;
  • on the proposed candidates for Transneft’s Board of Directors and Revision Commission for 2020–2021.
Meetings of the Human Resources and Remuneration Committee
Meetings of the Human Resources and Remuneration Committee
Members of the Human Resources and Remuneration Committee during the reporting period.Minutes No. 13 dated 01 August 2018, Minutes No. 13 dated 24 July 2019.
  • A. Korsik (Chairman of the Committee, Independent Director);
  • I. Klebanov (Independent Director);
  • G. Shmal (Independent Director)

Dates of the Human Resources and Remuneration Committee’s meetings and numbers of the minutes: 24 January 2019 No. 1; 05 February 2019 No. 2; 20 March 2019 No. 3; 09 April 2019 No. 4; 14 June 2019 No. 5; 28 August 2019 No. 6, 30 September 2019 No. 7; 14 November 2019 No. 8, 11 September 2019 No. 9.


Strategy, Investments and Innovations Committee

The Strategy, Investments and Innovations Committee under the Board of Directors is an advisory body providing the Board of Directors with preliminary study of issues regarding the development of the Company’s long-term strategy and its investment, innovation and dividend policy, as well as the improvement of Transneft’s performance.

The Committee’s operations are governed by the Regulations on the Strategy, Investments and Innovations Committee under the Board of DirectorsApproved by the Transneft Board of Directors on 19 January 2017 (Minutes No. 1)..

The Strategy, Investments and Innovations Committee under the Board of Directors is an advisory body providing the Board of Directors with preliminary study of issues regarding the development of the Company’s long-term strategy and its investment, innovation and dividend policy, as well as the improvement of Transneft’s performance.

The Committee’s operations are governed by the Regulations on the Strategy, Investments and Innovations Committee under the Board of DirectorsApproved by the Transneft Board of Directors on 19 January 2017 (Minutes No. 1)..

Meetings of the Strategy, Investments and Innovations Committee
Meetings of the Strategy, Investments and Innovations Committee
The members appointed by the Board of Directors on 01 August 2018Minutes No. 13 dated 01 August 2018. The members appointed by the Board of Directors on 24 July 2019Minutes No. 13 dated 24 July 2019.
K. Dmitriev (Chairman of the Committee); M. Warnig; M. Sokolov; N. Tokarev; V. Shantsev; G. Shmal (Independent Director, Representative of the Transneft Consumer Council). K. Dmitriev (Chairman of the Committee); M. Warnig; M. Sokolov; N. Tokarev; V. Shantsev; A. Korsik (Independent Director); G. Shmal (Independent Director, Representative of the Transneft Consumer Council).
Key issues on which recommendations were prepared:
  • on the reports on implementation of the Transneft Long-Term Development Programme for 2018, for H1 2019 and for 9 months of 2019;
  • on the report on implementation of Transneft’s Programme for Operational Efficiency Improvement and Cost Cutting up to 2023;
  • on the implementation of key performance indicators of Transneft’s economic activities for 2018;
  • on the auditor’s opinion regarding the implementation of the Transneft Long-Term Development Programme for 2018;
  • on the implementation of the Transneft Innovation Development Programme in 2018;
  • on the NCSP Development Strategy;
  • on the adjustment of the Transneft Long-Term Development Programme;
  • on the specifications for auditing the implementation of the Transneft Long-Term Development Programme for 2019;
  • on consideration of Transneft’s Programme for Operational Efficiency Improvement and Cost Cutting up to 2024;
  • on the key performance indicators system of Transneft’s economic activities;
  • on the target key performance indicators of Transneft’s economic activities for 2020.

Dates of the Strategy, Investments and Innovations Committee’s meetings and numbers of the minutes: 11 April 2019 No. 1; 08 May 2019 No. 2; 24 June 2019 No. 3; 11 September 2019 No. 4, 30 September 2019 No. 5; 17 October 2019 No. 6, 28 October 2019 No. 7, 14 November 2019 No. 8; 21 November 2019 No. 9, 20 December 2019 No. 10.