The Board of Directors
The Board of Directors of Zarubezhneft JSC (prior to the Annual General Meeting of Shareholders) was elected in accordance with Order No. 822-р “On Resolutions of the Extraordinary General Meeting of Shareholders of Zarubezhneft Joint Stock Company” of the Federal Agency for State Property Management, dated November 29, 2018, with the composition as follows:
| Full name | Information |
|---|---|
| Aleksandr Alekseevich Gladkov | Director of the Oil and Gas Production and Transportation Department of the Ministry of Energy of the Russian Federation year of birth — 1969 holds no Company shares |
| Karen Vilgelmovich Karapetyan | year of birth — 1963 holds no Company shares |
| Sergey Ivanovich Kudryashov | General Director of Zarubezhneft JSC year of birth — 1967 holds no Company shares |
| Maksim Yurievich Sokolov | General Director of LSR Group PJSC year of birth — 1968 holds no Company shares |
| Evgeniy Alekseevich Murov | year of birth — 1945 holds no Company shares |
| Aleksey Leonidovich Teksler | First Deputy Minister of Energy of the Russian Federation year of birth — 1973 holds no Company shares |
| Anatoliy Vladimirovich Tikhonov | General Director FSBI “Russian Energy Agency” of the Ministry of Energy of the Russian Federation year of birth — 1969 holds no Company shares |
Pursuant to the resolution of the Board of Directors of Zarubezhneft JSC, dated December 06, 2018 (Minutes No. 161), Evgeniy Alekseevich Murov was elected Chairman of the Board of Directors of Zarubezhneft JSC.
Pursuant to Order No. 409-р “On Resolutions of the Annual General Meeting of Shareholders of Zarubezhneft Joint Stock Company” of the Federal Agency for State Property Management, dated June 30, 2019, the Board of Directors of Zarubezhneft JSC was elected with the composition as follows:
| Full name | Information |
|---|---|
| Karen Vilgelmovich Karapetyan | Advisor to the Chairman of the Management Board of Gazprombank (JSC) year of birth — 1963 holds no Company shares |
| Pavel Anatolievich Kadochnikov | Vice-Rector for Research of the All-Russian Academy of Foreign Trade of the Ministry of Economic Development of the Russian Federation year of birth — 1978 holds no Company shares |
| Sergey Ivanovich Kudryashov | General Director of Zarubezhneft JSC year of birth — 1967 holds no Company shares |
| Evgeniy Alekseevich Murov | year of birth — 1945 holds no Company shares |
| Maksim Yurievich Sokolov | First Deputy General Director of LSR Group PJSC year of birth — 1968 holds no Company shares |
| Pavel Yurievich Sorokin | Deputy Minister of Energy of the Russian Federation year of birth — 1973 holds no Company shares |
| Anatoliy Vladimirovich Tikhonov | Deputy Minister of Energy of the Russian Federation year of birth — 1969 holds no Company shares |
The Regulation on the Board of Directors of Zarubezhneft JSC was approved by resolution of the Extraordinary General Meeting of Shareholders of Zarubezhneft JSC (Order No. 2253-р of the Federal Agency for State Property Management, dated October 12, 2005).
In accordance with the instructions of the Federal Agency for State Property Management, the Company annually sends proposals on candidates to the Board of Directors of Zarubezhneft JSC. When preparing proposals for the candidates of independent members of the Board of Directors, the Company follows the requirements specified in Clause 8 (1) of the Regulation “On Management of Joint Stock Companies’ Shares Held in Federal Ownership and Use of the Special Right to Participation of the Russian Federation in Management of Joint Stock Companies” (“Golden Share”) approved by Decree No. 738 of the Government of the Russian Federation, dated December 3, 2004, as well as the Bank of Russia requirements specified in Annex No. 4 to Regulation No. 534-П “On Admission of Securities to Organized Trading” approved by the Bank of Russia on February 24, 2016.
The Regulation on Compensation to the Members of the Board of Directors of Zarubezhneft JSC was approved by Order No. 243-р of the Federal Agency for State Property Management dated May 18, 2017. According to the Regulation, the compensation payable to the members of the Board of Directors shall depend on the Company’s achievement of target values of key performance indicators determined subject to the guidelines as delivered by federal executive authorities, and aimed at fulfillment of strategic business objectives of Zarubezhneft JSC.
In 2019, the total amount of compensation payments to 5 members of the Board of Directors of Zarubezhneft JSC, based on the 2018-2019 corporate year performance in accordance with Order No. 409-р “On Resolutions of the Annual General Meeting of Shareholders of Zarubezhneft Joint Stock Company” of the Federal Agency for State Property Management, dated June 30, 2019, was as high as 38,448,219 RUB, including to
- E. A. Murov — 10,000,000 RUB,
- A. V. Tikhonov — 9,517,260 RUB,
- M. Yu. Sokolov — 9,434,521 RUB,
- R. R. Simonyan — 4,219,726 RUB,
- K. V. Karapetyan — 5,276,712 RUB.
In 2019, 14 meetings of the Company’s Board of Directors were held, at which 78 issues were considered, including 13 issues under the directives of the Government of the Russian Federation and instructions of the Federal Agency for State Property Management received by the Company in 2019, as follows:
| Item No. | Number and date of the directives of the Government/instructions of the Federal Agency for State Property Management | Number and date of the Minutes of the meeting of the Board of Directors | Issue |
|---|---|---|---|
| 1 | No. 10068п-П13 dated 06.12.2018 | 163 dated 28.01.2019 | On transition of Zarubezhneft JSC to preferential use of domestic software. |
| 2 | No. 276п-П13 dated 17.01.2019 | 164 dated 26.02.2019 | On updating the Long-Term Development Program of Zarubezhneft JSC (hereinafter, the LTDP) and submission of the LTDP audit reports to the Ministry of Economic Development of the Russian Federation, the Federal Agency for State Property Management, and federal executive authorities coordinating Zarubezhneft JSC activities, in accordance with Decree No. 1870-р of the Government of the Russian Federation dated August 30, 2017 |
| 3 | No. 1519п-П13 dated 20.02.2019 | 164 dated 26.02.2019 | On development of programs to improve the quality of procurement management. |
| 4 | No. 584п-П13 dated 26.01.2019 | 166 dated 29.03.2019 | On finalizing corporate import phase-out plans for protection against radiation, chemical and biological factors. |
| 5 | No. 4111п-П13 dated 08.05.2019 | 168 dated 11.06.2019 | On expanding the practice of using factoring in the performance of contracts for the supply of goods (performance of work, provision of services). |
| 6 | No. 4482п-П13 dated 23.05.2019 | 168 dated 29.05.2019 | On Zarubezhneft JSC year-end dividends for 2018. |
| 7 | No. 5051п-П13 dated 10.06.2019 | 170 dated 27.06.2019 | On establishing Zarubezhneft JSC subsidiaries. |
| 8 | No. 6387п-П13 dated 15.07.2019 | 171 dated 12.08.2019 | On electing the Chairman of the Board of Directors of Zarubezhneft JSC. |
| 9 | No. 9054п-П13 dated 02.10.2019 | 174 dated 26.11.2019 | On implementation of methodological guidelines on KPI application in state companies and development (updating) of the Company bylaws governing formation of key performance indicators and compensations to the Company management. |
| 10 | No. 9984п-П13 dated 01.11.2019 | 174 dated 26.11.2019 | On the purchase of Russian production used to execute national projects and implement a comprehensive plan of modernization and expansion of the trunk infrastructure. |
| 11 | No. 10357п-П13 dated 14.11.2019 | 176 dated 30.12.2019 | On expediency of the Company integration into the activities covered by the national project (program) “International Cooperation and Export”. |
| 12 | No. 10464п-П13 dated 18.11.2019 | 176 dated 30.12.2019 | On amendments to Zarubezhneft JSC procurement documentation governing competitive procedures. |
| 13 | No. 11528п-П13 dated 13.12.2019 | 176 dated 30.12.2019 | On the possibility of the JSC transition to tax control in the form of tax monitoring. |
In 2019, as part of the measures on updating the Long-Term Development Program of the Company, the following annexes to the LTDP were updated by resolution of the Board of Directors, subject to the recommendations given on the results of the LTDP audit and to the directives received from the Government of the Russian Federation, as below:
- Annex No. 3 “Zarubezhneft Group Innovation-Related Activity”;
- Annex No. 4 “Action Plan for Zarubezhneft JSC Long-Term Development Program Risk Management up to 2030”;
- Annex No. 5 “Demand of Labor Resources under Zarubezhneft JSC Long-Term Development Program”;
- Annex No. 6 “Labor Performance Enhancement Program”;
- Annex No. 7 “Measures to Increase Performance and Transparency of Zarubezhneft JSC Activities;
- Annex No. 8 “Measures on Planned and Phased Replacement of the Foreign Production, Works and Services Purchased with Equivalent Domestic Products, Work and Services”;
- Annex No. 9 “Operating Expenses Reduction Program”;
- Annex No. 10 “Program Measures to Ensure Achievement of the LTDP KPIs and Compensation to Zarubezhneft JSC Management”.
Also, for the purpose of implementation of measures on Zarubezhneft JSC digital transformation, Annex No. 13 to the Long-Term Development Program, “Zarubezhneft JSC Strategy in Digital Transformation”, was developed and approved by the Board of Directors.
In pursuance of directive No. 276п-П13 dated January 17, 2019 of the Government of the Russian Federation, in order to implement the sectoral section of the action plan for acceleration of the growth rates of investments in fixed capital and increase their share in the gross domestic product up to 25 percent, the Board of Directors of Zarubezhneft JSC approved Annex No. 14 to the LTDP, “Long-Term Development Program Measures to Accelerate the Growth Rates of the Investments in Fixed Capital of the Exploration and Production segment.
Detailed information on the Company’s compliance with the directives of the Government of the Russian Federation, and with the instructions of the President and the Government of the Russian Federation, is provided in the Section “Report on the Execution of the Instructions of the President and the Government of the Russian Federation”.
The meetings of the Board of Directors also considered the issues aimed at fulfillment of the strategic business objectives of the Company, as follows:
- On approval of the Report on Achievement of Zarubezhneft JSC Corporate KPI Target Values for 2018;
- Preliminary approval of the Annual Report of Zarubezhneft JSC for 2018;
- On approval of the Report on Implementation of Zarubezhneft JSC Innovation Development Program for 2018;
- Progress report on implementation of Zarubezhneft JSC Corporate Strategy for 2019;
- On approval of Zarubezhneft JSC KPI target values for 2020;
- On approval of Zarubezhneft JSC Business Plan for 2020.
- The Annex encloses a complete list of issues considered at the meetings of the Board of Directors of the Company in 2019.
The full list of issues considered at the meetings of the Company’s Board of Directors in 2019 is given in the appendix “Information on the holding of the Board of Directors’ meetings”.