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Annual Report 2015

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Board of Directors

Professional Board of Directors is an important element of effective corporate governance in the Company. Activities of the Board of Directors are regulated by the Regulations for the Board of Directors of PJSC IDGC of the North-West.

The main functions of the Board of Directors include: general strategic management of the Company’s business activity, prioritisation of the Company’s business development, overseeing the activities of executive bodies in the interests of the Company and its shareholders, objective assessment of the financial standing of the Company.

Inclusion of independent directors in the composition of the Board of Directors contributes to its balanced state in terms of possibilities for exercising rights and considering interests of all shareholder groups.

The efficient corporate governance calls for an open dialog between the Board of Directors and executive bodies of the Company. To this extent, General Director of PJSC IDGC of the North-West submits to the Board of Directors quarterly reports on the Company’s activities, including the report on implementation of decisions of the Board of Directors. The Board of Directors establishes and maintains the necessary controls of the Management Board of the Company, including monitoring and assessment of its activities.

Composition of the Board of Directors

The quantitative composition of the Board of Directors is determined by the Articles of Association and accounts for 11 members.

In 2015, 2 compositions of the Board of Directors Members of the Board of Directors gave their consent to disclosure of the information provided in the Annual Report of PJSC IDGC of the North-West for 2015. were operating:

  • Elected by the General Meeting of Shareholders on June 25, 2014, as consisted of the following members:

S.G. Titov (Chairman as from July 03, 2014), T.P. Dronova, A.N. Zharikov, S.S. Zholnerchik (Chairman as from January 17, 2015), M.A. Lavrova, S.V. Pokrovsky, M.M. Saukh, R.A. Filkin, D.A. Chevkin, A.A. Erdyniev;

  • Elected by the General Meeting of Shareholders on June 23, 2015, as consisted of the following members:

S.S. Zholnerchik (Chairman), A.V. Letyagin, T.P. Dronova, S.V. Pokrovsky, A.N. Zharikov, R.A. Filkin, M.A. Lavrova, M.A. Bychko, A.A. Erdyniev, M.D. Stepanova, A.K. Mamontov.

Members of the Board of Directors of the Company have significant managerial and industry-specific experience, being recognised specialists in the electricity industry, make valuable contribution to activities of the Board of Directors and its Committees.

Members of the Board of Directors by work experience, persons

Gender structure of the Board of Directors

The balanced professional composition of the Board of Directors allows for creation of an objective opinion on discussing matters which, in the end, contributes to the strengthening of shareholders’ and investors’ confidence in the Company.

Members of the Board of Directors actively participate in activities of the Committees of the Board of Directors of the Company:
Full name Group of shareholders who nominated the relevant director Status in the Board of Directors Audit Committee Personnel and Remu-neration Committee Strategy and De-velopment Committee Grid Connection Committee Reliability Committee
S.S. Zholnerchik PJSC ROSSETI Chairman of the Board of Directors Member of the Committee The new revision of the Regulations for the Reliability Committee has included the following provision — members of the Board of Directors of the Company may not be members of the Committee
M.A. Bychko PJSC ROSSETI Member of the Board of Directors Member of the Committee Member of the Committee
T.P. Dronova Energosouz Holdings Limited Member of the Board of Directors Member of the Committee Member of the Committee Chairman of the Committee
A.N. Zharikov Energosouz Holdings Limited Member of the Board of Directors Member of the Committee
M.A. Lavrova PJSC ROSSETI Member of the Board of Directors Chairman of the Committee Chairman of the Committee
A.V. Letyagin PJSC ROSSETI Member of the Board of Directors Member of the Committee
A.K. Mamontov PJSC ROSSETI Member of the Board of Directors Member of the Committee
S.V. Pokrovsky Lancrenan Investments Limited Energyo Solutions Russia (Cyprus) Limited Member of the Board of Directors(independent director)The independence criteria for members of the Board of Directors are determined in accordance with the Listing Rules of MICEX Stock Exchange. Member of the Committee Member of the Committee Member of the Committee
M.D. Stepanova PJSC ROSSETI Member of the Board of Directors Member of the Committee Member of the Committee Member of the Committee
R.A. Filkin Lancrenan Investments Limited Member of the Board of Directors Member of the Committee Member of the Committee Member of the Committee
A.A. Erdyniev PJSC ROSSETI Member of the Board of Directors

Composition of the Board of Directors

Svetlana Semenovna Zholnerchik

Born in 1964.

She graduated from the Saint-Petersburg State University of Engineering and Economics named after P. Togliatti majoring in Mechanical Engineering; she was awarded the qualification of an Engineer Economist. Received a second graduate degree majoring in Law; she was awarded the qualification of a Lawyer in the Saint-Petersburg State University. Candidate of economic sciences.

From 2008 to 2013, she held the position of Deputy Chairman of the Management Board of Non-profit Partnership ’Council for Organizing Efficient System of Trading at Wholesale and Retail Electricity and Capacity Market’; she was a member of the Management Board.

In 2013, she continued working for PJSC ROSSETI as a Deputy General Director; since January 2015, she serves as Chief Adviser for PJSC ROSSETI.

Currently, she is a member of management bodies of the following organisations: PJSC Lenenergo.

Alexander Vyacheslavovich Letyagin

Born in 1976.

In 1998, he graduated from the Ivanovo Power Engineering Institute, majoring in Power Plants.

In 2003, he took the managerial training programme for the RF national economy in the Moscow Power Engineering Institute, majoring in Management.

Graduated from the St. Petersburg State University in 2015, professional retraining course of Master of Business Administration.

In the period from 1999 to 2002, he worked as an electrician for repair of relay protection and automation equipment of categories 4 and 5, a 1st class engineer of electrical laboratory of electrical shop, a head of industrial electrical laboratory of electrical shop electric plant in Belgorodskaya CHPP. In the period from 2002 to 2003, he worked as a head of laboratory of the Central Relay Protection and Automation Service in JSCBelgorodenergo of the Regional Dispatching Office branch, in 2003 — he worked for JSC SO UES of Belgorod Regional Dispatching Office as a Senior Specialist of the Relay Protection and Automation Service. From 2003 to 2006, he held the position of Technical Director in JSC Belgorodenergo. From 2006 to 2012, he worked as a Deputy General Director for Engineering — Chief Engineer of Orelenergo branch of PJSC IDGC of Center. From 2012 to 2014 — Adviser to General Director, Director of Vyborg Electric Grids branch of PJSC Lenenergo.

Since 2014, he worked for PJSC IDGC of the North-West as Acting First Deputy General Director. Since July 29, 2014 he has been General Director of the Company.

As of today, he is not a member of management bodies of any other organisations.

Mikhail Alexandrovich Bychko

Born in 1971.

In 1994, he graduated from the Moscow Power Engineering Institute. From 2003 to 2004, he improved his skills in the Academy of National Economy under the RF Government.

From 2010 to 2013 he worked as a Head of Design Department in PJSC FGC UES.

Since 2013, he has continued working for PJSC ROSSETI as Director of the Capital Construction Department.

Also, he is a member of management bodies of the following organisations: PJSC IDGC of Siberia, JSC REC IDGC, JSC Urals Energy Engineering Centre, JSC North-West Power Engineering Centre.

Tatiana Petrovna Dronova

Born in 1954.

She graduated from the Finance Academy under the Government of the Russian Federation, majoring in Finances and Credit, qualified as an economist.

Since 2008 until now, she has been Deputy General Director for Strategy and Development of CJSC Energosoyuz Investment Holding.

Also, she is a member of management bodies of the following organisations: JSC Bank Agroros, PJSC IDGC of the North-West, JSC Elektrocentronaladka.

Alexey Nikolayevich Zharikov

Born in 1970.

n 1993, he obtained a diploma of higher education upon graduation from the Moscow Institute of Management named after Sergo Ordzhonikidze majoring in Economics and Management in Fuel & Energy Industries.

From 2007 to 2009, he held the position of Director for Corporate Governance in Mosenergo.

Since 2010, he has worked for JSC Electrocentronaladka as Director of the Corporate Policy and Dealing with Shareholders Department.

As of today, he is not a member of management bodies of any other organisations.

Marina Alexandrovna Lavrova

Born in 1982.

She graduated from the State University of Management majoring in Management in Energy Industry; qualified as a Manager. Received a second graduate degree from the Finance Academy under the Government of the Russian Federation.

From 2008 to 2013, she worked as Deputy Head of Business Planning Department in PJSC ROSSETI.

In 2013, she was appointed as the Head of Economy of Subsidiaries and Dependent Entities, Economic Planning and Budgeting Department, PJSC ROSSETI; she continues working in this position.

Also, she is a member of management bodies of the following organisations: PJSC Dagestan Energy Supply Company, JSC Ekaterinburg Electric Network Company , PJSC Kubanenergo.

Andrey Klavdiyevich Mamontov

Born in 1969.

In 1994, he graduated from the St. Petersburg State Institute of Technology (Technical University), majoring in Electric Power Systems and Grids and qualified as an Electrical Engineer; in 1995, he graduated from the Technical University, majoring in Economics of Commercial Entities and Foreign Trade Activities. In 2004, he graduated from the Technical University majoring in Economics and Company Management (Power Engineering), qualified as Economic Manager.

From 2008 to 2012, he worked for PJSC Lenenergo as Director for Operation and Maintenance, and later — as Deputy Chief Engineer for Operation and Maintenance.

In 2012, he continued working for LLC Complex Energy Solutions in the positions as follow: Head of Project Preparation and Implementation, Deputy General Director for Capital Construction, First Deputy Director — Chief Engineer.

From 2013 to 2014, he held the position of Adviser to General Director in JSC Kubanenergo.

From 2014 to 2015, he held the position of Adviser to Deputy General Director for Engineering — Chief Engineer in PJSC Lenenergo.

Since 2015, he has worked as Director for Technical Policy and Engineering in PJSC Federal Test Centre.

As of today, he is not a member of management bodies of any other organisations.

Sergey Vadimovich Pokrovsky

Born in 1973.

In 1996, he obtained a diploma of higher education upon graduation from the Gubkin Russian State University of Oil and Gas majoring in Applied Mathematics; he was awarded the qualification of Applied Mathematician.

Since 2004 he has worked in non-profit entity Association for Protection of Investors’ Rights (since January 2015 — Association of Institutional Investors) as Deputy Executive Director.

As of today, he is not a member of management bodies of any other organisations.

Maria Dmitrievna Stepanova

Born in 1982.

Graduated from the Lomonosov Moscow State University majoring in Government Control in the Economy.

Since 2008, she has worked as Head of Interaction with Shareholders and Investors Directorate of the Corporate Governance and Interaction with Shareholders and Investors Department, PJSC ROSSETI.

Also, she is a member of management bodies of the following organisations: JSC Berendeyevskoye, JSC Tyvaenergosbyt.

Roman Alexeevich Filkin

Born in 1983.

In 2005, he graduated from the Finance Academy under the Government of the Russian Federation, majoring in Finances and Credit, qualified as an economist.

Since 2009 he has worked as Director at the Representative Office of Prosperity Capital Management (RF) Ltd (electricity, machine building).

Also, he is a member of management bodies of the following organisations: JSC Dalenergomontazh, PJSC IDGC of the Centre and Volga Region, PJSC IDGC of the South, JSC Smolensk Energy Repair Company, JSC TGC-2.

Anton Alexandrovich Erdyniev

Born in 1984.

In 2006, he obtained a diploma of higher education upon graduation from the Novosibirsk State Technical University, qualified as an engineer majoring in Electric Power Systems and Grids.

From 2010 to 2011, he worked for JSC SibirEnergo as Head of the Trading Group in Commercial Directorate. In 2011, he was appointed Chief Expert of the Wholesale Market Department in JSC Unified Energy Supply Company. In May 2012, he joined NP ’Market Council’ as Head of Retail Market Support Department.

Since October 2013 has worked as Deputy Director of Electricity Industry Development Department of the Ministry of Energy of the Russian Federation.

As of today, he is not a member of management bodies of any other organisations.

Members of the Board of Directors of PJSC IDGC of the North-West did not hold shares of the Company and did not commit transactions with securities of the Company in 2015.

Report of the Board of Directors

Pursuant to the Development Strategy of the Electric Grid Complex of Russia (hereinafter — the EGC Strategy) developed for the period till 2030 (as per the RF Government Instruction No 511r dated April 03, 2013), the main priority of the Company’s activities is the reliable, high-quality and affordable energy supply to consumers in the Northwestern Federal District of Russia through development of the most efficient infrastructure. However, the fast pace of development of the economy and electric power industry in particular, has led to the setting of additional tasks which can be achieved only by highly efficient companies. The electricity tariff in Russia has almost run out of potential for growth. At the same time, the ongoing ageing of fixed assets necessitates a significant increase in investments in coming years to keep the quality and reliability performance already achieved. In the process of implementation of the goals, the Board of Directors, as a collective management body is a steering adviser and supervisor of the Company’s management. The Board of Directors takes decisions in the most important strategic areas, on plans developed by the Company’s management subject to the current macroeconomic environment, and monitors the implementation thereof.

As tools to improve the efficiency of the operating and investment activities of the Company, in 2015, the following Company’s internal documents were considered and approved by the Board of Directors: new revision of the Standard and Regulation on the Company’s Business Planning; Consumer Service Quality Standards; the Regulation on Operational Efficiency Improvement and Cost Reduction; the Regulation on Internal Financing; the Regulation on Payment Processing; the Regulation on the Corporate Identity Management in PJSC IDGC of the North-West; the Regulation on the Implementation of the Unified Communication Policy of PJSC IDGC of the North-West; the Policy for Integrated Security of PJSC IDGC of the North-West; the new revision of the Regulations for Insider Information of PJSC IDGC of the North-West; the Regulations for Insurance Coverage.

The following was approved as internal documents of the Company: the Unified Procurement Standard (Regulations for Procurement) of PJSC ROSSETI; Regulation on Review and Settlement of Disputes and Conflicts of Interest within the Group of PJSC ROSSETI; the Investment Policy of PJSC ROSSETI.

The following documents were updated: The Company’s Strategy for Information Technology, Automation and Telecommunications for the period till 2016; the Regulations for Financial Incentives for the General Director of the Company, the Regulations for Payment of the Remuneration and Compensations to members of the Committees of the Board of Directors of the Company.

To ensure sustainable development of the Company, the following long-term plans and programmes were approved: the Company’s Activity Plan for Exercise of the Right to Collect Debts of Companies and Organisations that filed for Bankruptcy for 2015-2016, the revised List of Energy Saving and Energy Efficiency Projects Suitable for Implementation Subject to Entering into Energy Service Agreements (Contracts) for the period until 2023, the Target Programme for Improving the Anti-terrorism and Anti-sabotage protection of the Company’s Facilities for 2015-2020, Schedule for Removal of Equipment Posing a Risk of Injury for 2015-2016; the draft revised Investment Programme of the Company for 2015 and the period of 2016-2020 was reviewed; the Scheduled Plan of Activities to Reduce Outstanding Receivables for Electricity Transmission Services of PJSC IDGC of the North-West is updated on a quarterly basis. Based on the principles of regularity and operational efficiency, the Board of Directors oversees the implementation of the approved programmes and plans by considering reports on implementation thereof.

The establishment of sanctions against the financial sector and certain industries of the Russian economy while limiting the growth of tariffs, has led in recent years to increase in the level of underfunding of operations and the Investment Programme, and limitation of possibilities of attracting non-tariff sources of development funding such as credits and funds of private investors. Thus, the current macroeconomic situation, namely a drop in power consumption, reduction in financial solvency of consumers, increase in the cost of borrowing — causes the improvement of the Company’s performance to be the operating priority.

As part of activities aimed at improving the Company’s performance, the Board of Directors reviewed and approved:

  • The revised Company’s business plan that includes the Investment Programme and information about the key operational risks for 2015 subject to implementation of the RF Government Directive No. 2303p-P13 dated April 16, 2015 on the annual reduction in operating costs of not less than 2-3%;
  • The Company’s Activity Plan for Improvement of Efficiency and Financial and Economic Performance of the Company for 2015.

The Board of Directors also reviewed the Company’s financial economic model for 2015-2019 subject to the implementation of the Activity Plan for Improvement of Efficiency and Financial and Economic Performance of the Company as compared to the approved Business Plan.

The Company Management Incentive System was amended by decision of the Board of Directors to reach the targets and achieve the objectives of the EGC Strategy, and to perform the RF Government instructions to reduce the operating costs. As from January 01, 2015, in accordance with the decision of the Board of Directors a new Methods for Calculation and Evaluation of Implementation of key performance indicators (KPIs) for the General Director of the Company have been in use. Also, in order to increase the efficiency of business processes, to identify bottlenecks and possible opportunities, the Company management (on behalf of the Board of Directors) developed Methods for Comparative Analysis and Performance Assessment of Branches, Operating Divisions and Regional Electric Grids of PJSC IDGC of the North-West.

Based on results of the comparative analysis of performance indicators of the branches in detail to the level of operating divisions and distribution zones (hereinafter — OD and DZ) for 2010-2015, the Company has planned to develop proposals for amendment of the current management system of the Company to increase the efficiency and effectiveness of the Company activities.

In pursuance of the RF Government Instruction No.ИШ-П13-3464 ’On establishment of unified treasuries in publicly owned companies and their subsidiaries’ dated May 13, 2014, the Board of Directors has determined the implementation of treasury function centralization and automation measures as one of the priority areas of the Company. As part of this priority area, the Board of Directors reviewed and approved the following documents: the Scheduled Plan for the Treasury Function Centralisation and Automation Project, the Scheduled Plan for the Integration into the Uniform Treasury System of PJSC ROSSETI, the Scheduled Plan for the Company’s Transition to the AIS TM with immediate support of processes for planning, agreeing upon, approving and effecting Company’s payments in the AIS TM.

The decline in economic activity in Russia aggravates the poor state of consumer payment discipline. Despite regular monitoring of accounts receivable and updating of activities aimed at reducing outstanding receivables of PJSC IDGC of the North-West, significant amount of accounts receivable is the cause of additional debts. As measures aimed at reducing outstanding receivables and disputable receivables, the Company developed additional activities following which the Board of Directors approved the Company’s Activity Plan for the Exercise of the Right to Collect Debts of Companies and Organizations that filed for Bankruptcy for 2015-2016.

At the initiative of the Board of Directors, the Company carried out the analysis of the claims work in the Company’s branches and prepared a Report on results of the analysis, containing opinions and recommendations to improve the claims work. As a result of the implementation of planned activities, in 2015 the Company achieved a reduction of outstanding receivables against the target by RUB 607 million, or 6%.

Along with a shortage of funding sources for the commissioning of new facilities, as well as timely upgrade, refurbishment and renovation of existing facilities, the Company has a significant amount of costs under the current grid connection contracts which is not covered by a funding source. The result of this activity has a negative impact on the financial standing of the Company. It was instructed by the Board of Directors to analyse the information on income shortfall resulting from grid connection services to ’privileged’ group of applicants, and to prepare proposals to optimize the entire process of grid connection. The comprehensive analysis of the Company’s electric grid connection services for 2009-2015 was reviewed by the Board of Directors; the Grid Connection Committee took part in a detailed examination of the matter. Following the review, the Company’s management was given orders on ways to optimize the grid connection process; as part of the Report on the Company’s Business Plan implementation regular monitoring of the current state of the activity is carried out to assess the impact of this activity on the financial standing of the Company. A Reliable energy supply and a quality of service are the Company’s strategic business priorities for a long term. In 2015, the Board of Directors of the Company approved the Consumer Service Quality Standards of IDGC of the North-West. Also, the Board of Directors reviewed the Report on the Achievement of the Established Reliability and Service Quality Level in accordance with the regulatory legal acts of 2014.

Activities of the Board of Directors

In 2015, 23 meetings of the Board of Directors of the Company were held, 5 of them were implemented in person and in absentia.

Information on participation of members of the Board of Directors in meetings
Full name January 01, 2015 through June 23, 2015 (total number of meetings – 13) June 24, 2015 through December 31, 2015 (total number of meetings – 10)
in praesentia/in absentia % of attendance in praesentia/in absentia % of attendance
S.S. Zholnerchik (Chairman) 3/10 100 2/8 100
M.A. Bychko 1 + 1at the meeting of the Board of Directors held in person and in absentia, the member of the Board of Directors presented a written opinion (questionnaire) on the agenda of the meeting./8 100
T.P. Dronova 2/8 76.92 2/6 80
A.N. Zharikov 2/10 92.31 2/8 100
M.A. Lavrova 2at the meeting of the Board of Directors held in person and in absentia, the member of the Board of Directors presented a written opinion (questionnaire) on the agenda of the meeting./10 92.31 1 + 1at the meeting of the Board of Directors held in person and in absentia, the member of the Board of Directors presented a written opinion (questionnaire) on the agenda of the meeting./8 100
A.V. Letyagin 2/8 100
A.K. Mamontov 2/8 100
S.V. Pokrovsky 3/10 100 2/8 100
M.M. Saukh 3/10 100
V.V. Sofiyn 3/10 100
M.D. Stepanova 1 + 1at the meeting of the Board of Directors held in person and in absentia, the member of the Board of Directors presented a written opinion (questionnaire) on the agenda of the meeting./8 100
S.G. Titov 3/10 100
R.A. Filkin 1 + 1at the meeting of the Board of Directors held in person and in absentia, the member of the Board of Directors presented a written opinion (questionnaire) on the agenda of the meeting./10 92.31 2at the meeting of the Board of Directors held in person and in absentia, the member of the Board of Directors presented a written opinion (questionnaire) on the agenda of the meeting./7 90
D.A. Chevkin 1 + 2at the meeting of the Board of Directors held in person and in absentia, the member of the Board of Directors presented a written opinion (questionnaire) on the agenda of the meeting./10 100
A.A. Erdyniev 1at the meeting of the Board of Directors held in person and in absentia, the member of the Board of Directors presented a written opinion (questionnaire) on the agenda of the meeting./8 69.23 2at the meeting of the Board of Directors held in person and in absentia, the member of the Board of Directors presented a written opinion (questionnaire) on the agenda of the meeting./3 50
Matters addressed by the Board of Directors
Matters addressed by the Board of Directors
Voting at the meetings of the Board of Directors
Structure of matters addressed by the Board of Directors by nature of decision taken
Types of vote in meetings of the Board of Directors
Structure of matters addressed by the Board of Directors

Committees of the Board of Directors

The following advisory bodies — committees of the Board of directors — have been established to comply with principles provided for in the Corporate Governance Code and to carry out a preliminary review and analyses of the most important aspects of the Company’s business activities: the Audit Committee, the Personnel and Remuneration Committee, the Strategy and Development Committee, the Reliability Committee and the Grid Connection Committee (hereinafter — the Committees).

The Committees play an active role in the process of making decisions by the Board of Directors of the Company, increasing the efficiency of the Board of Directors activities. They carry out a prior review and analysis of and give the Board of Directors recommendations on the most important matters within its competence. For the Board of Directors, Committees’ decisions serve as recommendations.

Committees’ activities are governed by the Regulations on CommitteesFull text of the Provisions on the Committees of the Board of Directors of PJSC IDGC of the North-West is available on the website of PJSC IDGC of the North-West. that define their competence, procedures for the formation of the Committees and their functions, and rights and obligations of Members of the Committees.

Quantitative and individual compositions of each Committee are determined by resolution of the Board of Directors of the Company. Activities of the Committees are carried out in accordance with the plans of the Committees’ work annually approved at the meetings of the Committees.

In 2015, each of the Committees of the Board of Directors was operating in 2 compositions, excluding the Reliability Committee which was operating in 3 compositions due to the approval of a new revision of Regulations on the Committee and the change in the Committee membership requirements.

Current compositions of the Audit Committee, the Strategy and Development Committee, the Personnel and Remuneration Committee, and the Grid Connection Committee the Board of Directors were elected by decision of the Company’s Board of Directors as of August 13, 2015 (Minutes No. 188/3). The current composition of the Reliability Committee was elected by the Board of Directors on December 12, 2015 (Minutes No. 193/8).

Participation of members of the current Committees of the Board of Directors in the work of the Committees.
Full name Title/position Participation Participation %
Audit Committee (only Members of the Board of Directors can join)
Marina Alexandrovna Lavrova (Chairman) Head of Economy of Subsidiaries and Dependent Entities, Economic Planning and Budgeting Department, PJSC Russian Grids. 4 100
Mikhail Alexandrovich Bychko Director of Capital Construction Department, PJSC Russian Grids 4 100
Tatiana Petrovna Dronova Deputy General Director for Strategy and Development of CJSC Energosoyuz Investment Holding 3 75
Sergey Vadimovich Pokrovsky Deputy Executive Director of the Association of Institutional Investors 3 75
Maria Dmitrievna Stepanova Head of Interaction with Shareholders and Investors, Department for Corporate Governance and Interaction with Shareholders and Investors, PJSC Russian Grids 4 100
Roman Alexeevich Filkin Director for Electric Energy and Machine Building at the Representative Office of Prosperity Capital Management (RF) Ltd. 4 100
Personnel and Remuneration Committee (only Members of the Board of Directors can join)
Marina Alexandrovna Lavrova (Chairman) Head of Economy of Subsidiaries and Dependent Entities, Economic Planning and Budgeting Department, PJSC Russian Grids. 3 100
Mikhail Alexandrovich Bychko Director of Capital Construction Department, PJSC Russian Grids 3 100
Tatiana Petrovna Dronova Deputy General Director for Strategy and Development of CJSC Energosoyuz Investment Holding 3 100
Svetlana Semenovna Zholnerchik Chief Adviser at PJSC Russian Grids 3 100
Sergey Vadimovich Pokrovsky Deputy Executive Director of the Association of Institutional Investors 3 100
Maria Dmitrievna Stepanova Head of Interaction with Shareholders and Investors, Department for Corporate Governance and Interaction with Shareholders and Investors, PJSC Russian Grids 3 100
Roman Alexeevich Filkin Director for Electric Energy and Machine Building at the Representative Office of Prosperity Capital Management (RF) Ltd. 3 100
Reliability Committee
Sergey Mikhailovich Katayev (Chairman) Director of Production Asset Management Department, PJSC Russian Grids 1 100
Alexander Vasilyevich Korotenko Deputy Head of Electric Power Industry Prospective Development Department, Electric Power Industry Development Department of the RF Ministry of Energy 1 100
Alexander Yuryevich Matyushin Head of Core Equipment, Electric Equipment Operation Management Office, Production Asset Management Department, PJSC Russian Grids 1 100
Vladimir Sergeevich Motin Head of Development Department at the Moscow Branch of JSC Bank Agroros 1 100
Dmitry Ivanovich Nikonov First Deputy General Director — Chief Engineer at PJSC IDGC of the North-West 1 100
Vadim Nikolayevich Fedorov Deputy General Director for Services Development and Selling at PJSC IDGC of the North-West 1 100
Pavel Vyacheslavovich Shiryaev Deputy General Director for Economy and Finance at PJSC IDGC of the North-West 1 100
Andrey Klavdiyevich Mamontovpowers terminated as of December 11, 2015 Director for Technical Policy and Engineering, PJSC Federal Test Centre 3 100
Igor Georgievich Polovnevpowers terminated as of December 11, 2015 Finance Director of the Association of Institutional Investors 3 100
Strategy and Development Committee
Vladimir Vladimirovich Sofyin (Chairman) Director of Technology Development and Innovation Department, PJSC Russian Grids 7 100
Irina Vladimirovna Bogachova Head of the Division of Analysis and Assessment of Efficiency of Investment Projects PJSC Russian Grids 6 86
Alexander Evgenievich Bogashov Head of the Department of Corporate Governance, Pricing Structure and Control and Auditing Work in Industries of the Fuel and Energy Complex of the RF Ministry of Energy 2 29
Alexey Nikolayevich Goncharov Head of Interaction with Electricity Wholesale and Retail Market Entities, PJSC Russian Grids 7 100
Alexey Nikolayevich Zharikov Director of the Corporate Policy and Dealing with Shareholders Department, JSC Electrocentronaladka 7 100
Konstantin Vladimirovich Zavizenov Deputy Director of Electric Power Industry Development Department of the RF Ministry of Energy 6 86
Vitaly Vasilyevich Kuzmin Independent Expert 7 100
Alexander Vyacheslavovich Letyagin General Director of PJSC IDGC of the North-West 7 100
Andrey Klavdiyevich Mamontov Director for Technical Policy and Engineering, PJSC Federal Test Centre 7 100
Alexey Igorevich Pavlovelected to the Committee as of December 11, 2015 Head of Financial Management, PJSC Russian Grids 2 29
Yury Nikolaevich Pankstiyanov Head of Tariff Policy Department, PJSC Russian Grids 7 100
Sergey Vadimovich Pokrovsky Deputy Executive Director of the Association of Institutional Investors 4 57
Maria Dmitrievna Stepanova Head of Interaction with Shareholders and Investors, Department for Corporate Governance and Interaction with Shareholders and Investors, PJSC Russian Grids 7 100
Olga Nikolayevna Troinina Chief Expert of the Strategic Project Department, PJSC Russian Grids 7 100
Roman Alexeevich Filkin Director for Electric Energy and Machine Building at the Representative Office of Prosperity Capital Management (RF) Ltd. 7 100
Valery Nikolayevich Krasnikovpowers terminated as of December 11, 2015 Director of Corporate Finance Department, PJSC Russian Grids 4 80
Grid Connection Committee
Tatiana Petrovna Dronova (Chairman) Deputy General Director for Strategy and Development of CJSC Energosoyuz Investment Holding 2 67
Timur Olegovich Boitsov Chief Expert of Grid Connection Regulation, Department for Grid Prospective Development and Grid Connection PJSC Russian Grids 3 100
Marat Nikolayevich Dinmukhametov Head of Technology Development and Innovation Department, PJSC IDGC of the North-West 3 100
Irina Borisovna Masaleva Director of Department for Grid Prospective Developmentand Grid Connection, PJSC Russian Grids 3 100
Alexander Valeryevich Pavlov Senior Adviser of Electric Power Industry Prospective Development Department, Electric Power Industry Development Department of the RF Ministry of Energy 3 100
Igor Georgievich Polovnev Finance Director of the Association of Institutional Investors 3 100
Vadim Nikolayevich Fedorov Deputy General Director for Services Development and Selling at PJSC IDGC of the North-West 3 100

Audit Committee

Matters addressed by the Audit Committee in 2015

The main purpose of the Audit Committee is to assist the Board of Directors in carrying out its duties through the prior review of issues related to the Company’s financial and business activities.

The main objectives of the Audit Committee:

  • Review of accounting (financial) statements of the Company and oversight of the statements preparation;
  • Supervision over the risk management, internal control and corporate governance systems;
  • Oversight over the conduct of external audit and the selection of External Auditor;
  • Organising and ensuring the independence and objectivity of the Internal Audit function;
  • Monitoring the performance of the system against unethical behavior of the Company’s employees and third parties.

Decision of the Board of Directors of the Company dated August 13, 2015 (Minutes No. 188/3) determined the number of members of the Audit Committee — 6 people; as well as the personal composition of the Committee which consists only of members of the Board of Directors.

Members of the Audit Committee have the necessary expertise in the field of finance, accounting, economics, internal audit and control; they have significant experience which is necessary for work and analysis of business activity and financial management.

The Audit Committee has an independent director, Sergey Vadimovich Pokrovsky who is also Deputy Executive Director of the Association of Institutional Investors.

In 2015, the Audit Committee of the Board of Directors held 10 meetings, including 4 meetings in the form of joint attendance. 35 agenda items were considered.

In 2015 the Board of Directors approved the report on the Company’s internal control system performance in 2014. In pursuance of the decision, the internal control and risk management system improvement measures were implemented by the Company in 2015, including measures aimed at improving the quality of internal audit function in order to increase the maturity level of the internal control and management system. Information on the assessment of efficiency of the Company internal control system during the reporting year is presented in the section ’Internal Control System’ of this report.

Personnel and Remuneration Committee

In 2015, the Personnel and Remuneration Committee held 8 meetings and considered 25 agenda items.

Matters addressed by the Personnel and Remuneration Committee in 2015

The main purpose of the Committee is the development of recommendations (opinions) in the following areas of activities:

  • Development of recommendations on remuneration of members of the Board of Directors;
  • Development of principles and criteria for determining the remuneration of members of the Board of Directors, members of the corporate executive body and a person performing the functions of the sole executive body of the Company;
  • Development of proposals for determining the fundamental terms of contracts of members of the Board of Directors, members of the corporate executive body and a person performing the functions of the sole executive body of the Company;
  • Determination of criteria for selecting candidates to the Board of Directors, members of the collegial executive body and to the position of sole executive body of the Company, as well as a preliminary assessment of such candidates;
  • Periodic performance assessment of a person performing the functions of the sole executive body of the Company, and members of the corporate executive body; preparation of proposals for re-appointment of these persons to be submitted to the Board of Directors.

Decision of the Board of Directors of the Company dated August 13, 2015 determined the number of members of the Personnel and Remuneration Committee — 7 people; as well as the personal composition of the Committee which consists only of members of the Board of Directors. Members of the Personnel and Remuneration Committee have the professional experience and knowledge of the Company’ business activity, as necessary for exercise of their powers.

The Personnel and Remuneration Committee has an independent director, Sergey Vadimovich Pokrovsky who is also Deputy Executive Director of the Association of Institutional Investors.

Reliability Committee

In 2015, the Reliability Committee of the Board of Directors held 9 meetings, including 1 meeting in the form of joint attendance.

Matters addressed by the Reliability Committee in 2015

At the meeting of October 21, 2015, the Board of Directors approved the new revision of the Regulations for the Reliability Committee of the Board of Directors of PJSC IDGC of the North-West.

In the new revision of the Regulations for the Reliability Committee the Committee membership requirements has been changed so that the Company’s chief technology officer, the Head of economy and finance division, Head of services development and selling division became obligatory members of the Committee.

Members of the Reliability Committee were reelected pursuant to the requirements of the new revision of the Regulations (Decision of the Board of Directors dated December 11, 2015). The same decision determined the personal composition of the Committee — 7 persons.

Reliability Committee consists of technical experts having expertise and a vast experience in the field of power engineering.

Main purposes of the Committee are as follow:

  • Review of production programs, plans for refurbishment, renovation, new construction and repair of power grid facilities; analysis of their development and implementation as relates to reliability and technical state of electric grids;
  • Assessment of completeness and adequacy of measures following the results of investigation of accidents in accordance with the Procedure for Investigation of Causes of Accidents in the Electric Power Industry approved by the Regulation of the Government of the Russian Federation, and monitoring of their performance;
  • Review of quality of investigation of the causes of grid disturbances (accidents);
  • Review of the Company’s activities in the field of accident-prevention work (ensuring preparedness, organisation and conduct of rescue and restoration operations at the power grid facilities);
  • Review of programs for the prevention and reduction of risk of injury among the Company’s personnel and to third parties in electric installations of the Company, as well as monitoring of their implementation;
  • Monitoring and assessment of activities of the Company technical services in terms of ensuring reliable operation of electrical grids and industrial safety;
  • Review of the internal technical supervision system of the Company;
  • Review of the safety management system of the Company;
  • Review of the Environmental Policy Implementation Programme;
  • Review of the fire and industrial safety system.

Strategy and Development Committee

In 2015, the Strategy and Development Committee addressed 42 agenda items and held 13 meetings, including 2 meetings in the form of joint attendance

Matters addressed by the Strategy and Development Committee in 2015

The Strategy and Development Committee develops recommendations to the Board of Directors of the Company on priorities, strategic objectives and core principles for the strategic development of the Company, as well as on performance evaluation, improvement of investment opportunities and financial planning of the Company.

The activities of the Strategy and Development Committee are governed by the Regulations on the Strategy and Development Committee of PJSC IDGC of the North-West, approved by decision of the Board of Directors as of August 22, 2008.

Starting from January 01, 2015, the Strategy and Development Committee consisted of 13 people (the number of members is determined by the Board of Directors as of July 18, 2014, Minutes No. 160/2). Pursuant to the decision of the Board of Directors dated August 13, 2015 (Minutes № 188/3), the Strategy and Development Committee was elected with 15 members.

Members of the Strategy and Development Committee have knowledge of the Company’ business activity, as necessary for exercise of their powers.

The Strategy and Development Committee has an independent director, Sergey Vadimovich Pokrovsky who is also Deputy Executive Director of the Association of Institutional Investors.

Grid Connection Committee

In 2015, the Grid Connection Committee held 5 meetings

Matters addressed by the Grid Connection Committee in 2015

The main purpose of the Grid Connection Committee is to ensure transparent and nondiscriminatory access to the Company’s grid connection services for consumers.

The activities of the Grid Connection Committee are governed by the Regulations for the Committee approved by the Board of Directors of the Company as of February 10, 2009.

In the first half of 2015, the number of members of the the Grid Connection Committee was 8.

In accordance with the decision of the Board of Directors dated August 13, 2015, the Grid Connection Committee of 7 people is to be formed.

Members of the Grid Connection Committee have knowledge of the Company’ business activity, as necessary for exercise of their powers.