Corporate Governance Report

My job is utilities.
It is not empty talk?
This is our common cause, like a family.
In order to shine our windows,
and fill our hearts with confidence.
Utilities always care for
light, coziness and warm.

Natalia Kharkova,
1st grade specialist at financial section of finance and economics directorate of Troiskaya GRES

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5.5

Committees under the Board of Directors

There are four committees under the Board of Directors of OGK-2 – Strategy and Investment Committee, Audit Committee, Human Resources and Remuneration Committee, and Reliability Committee. The listed Committees are consultative and advisory bodies and ensure the effective performance by the Board of Directors of its functions in the overall management of the Company. The members of the Committees are approved by the Board of Directors.

Strategy and Investment Committee

Mr. Nikita Yuryevich Osin, Chairman of the Strategy and Investment Committee

Deputy Managing Director for Economics and Finance of OGK-2 JSC

Dear colleagues,

The Strategy and Investment Committee operations are aimed at defining the overall strategic priorities, targets and principles of the Company’s development, as well as at making decisions in the area of investment. The Committee members are directly involved in monitoring the achievement of strategic targets and key performance indicators.

In 2020, most of the issues considered by the Committee were related to financial planning: a new business plan was prepared and approved and the progress of implementation thereof was being controlled. In addition, the Committee was working on the long-term performance targets of the Company’s operations, and on minimizing the impact of risks and new challenges the world encountered.

Strategy and Investment Committee is responsible for:

defining general strategic priorities, goals and principles of Company development;
assessing the Company performance in the medium and long term;
analyzing the implementation of adopted programs and projects for strategic development;
adjusting the adopted development strategy;
setting key performance indicators (KPIs) for approval by the Board of Directors;
controlling the achievement of strategic goals and the implementation of key performance indicators (KPIs) approved by the Board of Directors;
defining and improving policies in the sphere of business planning and budgeting;
carrying out financial planning, determining credit and dividend policy;
considering the issues on debt financing, including the issuance of bonds and other debt securities;
making decisions in the sphere of investment activity;
arranging the examination of investment projects and programs submitted for consideration by the Board of Directors.

Composition of the Strategy and Investment Committee
for the period from July 31, 2019 till July 17, 2020 (arranged by the decision of the Board of Directors, Minutes No. 219 dated July 31, 2019)		for the period from July 18, 2020 till present (arranged by the decision of the Board of Directors, Minutes No. 242 dated July 20, 2020)
Full name	Position	Full name	Position
Pavel Olegovich Shatsky (Chairman)	First Deputy General Director of Gazprom Energoholding LLC	Nikita Yuryevich Osin (chairman)	Deputy Managing Director for Economics and Finance of OGK-2 JSC
Alexey Yuryevich Doronin	Director for Regional Development of OGK-2 JSC	Alexey Yuryevich Doronin	Director for Regional Development of OGK-2 JSC
Dmitry Rufimovich Kiselyov	Deputy Director for Economics and Finance – Head of the Economic Directorate of Gazprom Energoholding LLC	Dmitry Rufimovich Kiselyov	Deputy Director for Economics and Finance – Head of the Economic Directorate of Gazprom Energoholding LLC
Sergey Andreyevich Kozimirov	Chief Expert at Gazprom PJSC	Sergey Andreyevich Kozimirov	Chief Expert at Gazprom PJSC
Roman Viktorovich Litvinov	Deputy Head of the Department at Gazprom PJSC	Roman Viktorovich Litvinov	Deputy Head of the Department at Gazprom PJSC
Sergey Vadimovich Pokrovsky	Deputy Executive Director of the Association of Professional Investors	Nikolai Dmitrievich Rogalyov	Vice-chancellor of NRU MPEI, FSBEI of HE
Valery Gennadievich Pyatnitsev	Strategy Director at Finam JSC	Valery Gennadievich Pyatnitsev	Strategy Director at Finam JSC
Alexander Vladimirovich Rogov	Deputy Head of the Directorate – Head of the Department at Gazprom PJSC	Alexander Vladimirovich Rogov	Deputy Head of the Directorate – Head of the Department at Gazprom PJSC
Andrey Igorevich Dmitriev	General Director of Gazprom Gas-Engine Fuel LLC	-	-
Evgeny Nikolaevich Zemlyanoy	Deputy General Director for Economics and Finance of Gazprom Energoholding LLC	-	-

The current composition of the Committee includes two independent directors: Mr. V. G. Pyatnitsev and Mr. N. D. Rogalyov.

Report on the work of the Strategy and Investment Committee of the Board of Directors in 2020
Number of meetings	The most important issues considered and recommendations to the Board of Directors
6	On consideration and recommendation to the Board of Directors to approve the Company’s business plan for 2020. On preliminary consideration of matters falling within the competence of the Company’s Board of Directors: “On review of reports on the results of performance of the OGK-2 JSC business plan for 2019, Q1, 6 months and 9 months of 2020”. Following consideration of these matters, it was recommended for Board of Directors to approve the report on the business plan performance for the relevant period. On review and on recommendation to the Board of Directors to approve the business plan of OGK-2 JSC for 2021.

Audit Committee

Valery Gennadievich Pyatnitsev, Chairman of the Audit Committee

Strategy Director at Finam JSC

Dear colleagues,

In 2020, the Audit Committee continued its work on ensuring the independence and objectivity of internal audit, quality risk management, reliability of corporate governance and internal control systems.

The issues considered by the Committee primarily related to recommendations to the Board of Directors in the area of audit and internal control. Besides, the Committee was actively involved in considering to candidate to be appointed as the Company’s auditor and approved the Committee’s work schedule for 2020–2021.

Audit Committee:

The Audit Committee under the Board of Directors of OGK-2 JSC is aimed at ensuring the effective work of the Board of Directors in resolving issues falling within its competence.

The purpose of the Committee is, among other things, to develop and submit recommendations (opinions) to the Board of Directors in the sphere of audit, internal control and risk management at OGK-2 JSC. The Committee acts subject to the Regulations about the Audit Committee of the Board of Directors of OGK-2 JSC (approved by the Board of Directors of OGK-2 JSC on November 09, 2020, Minutes No. 247 dated November 09, 2020). In its operations, the Committee is also guided by Federal Acts, other regulatory legal acts of the Russian Federation, the Company’s Charter, the Regulations about the Company’s Board of Directors, and resolutions of the Company’s Board of Directors.

Members of the Audit Committee
for the period from July 08, 2019 till July 17, 2020 (arranged by the decision of the Board of Directors, Minutes No. 218 dated July 08, 2019)		for the period from July 18, 2020 till present (arranged by the decision of the Board of Directors, Minutes No. 242 dated July 20, 2020)
Full name	Position	Full name	Position
Valery Gennadievich Pyatnitsev (Chairman)	Strategy Director at Finam JSC	Valery Gennadievich Pyatnitsev (Chairman)	Strategy Director at Finam JSC
Irina Yuryevna Korobkina	Deputy Head of the Directorate of Gazprom PJSC	Irina Yuryevna Korobkina	Deputy Head of the Directorate of Gazprom PJSC
Roman Eduardovich Abdullin	Deputy Head of the Department of Gazprom PJSC	Roman Eduardovich Abdullin	Deputy Head of the Department of Gazprom PJSC
Evgeny Nikolaevich Zemlyanoy	Deputy General Director for Economics and Finance of Gazprom Energoholding LLC	Nikolai Dmitrievich Rogalyov	Vice-Chancellor of NRU MPEI, FSBEI of HE
Denis Viktorovich Kulikov	Advisor to the Executive Director of the Association of Professional Investors	-	-

The current composition of the Committee includes two independent directors: Mr. V. G. Pyatnitsev and Mr. N. D. Rogalyov.

By the decision of the Board of Directors of OGK-2 JSC dated November 09, 2020 (Minutes No. 247 dated November 09, 2020) members of the Committee elected by the Company’s Board of Directors on July 17, 2020, Mr. V. G. Pyatnitsev and Mr. N. D. Rogalyov, were recognized as independent directors.

All meetings were held in absentia. The meeting attendance rate by the Committee members was 100%.

A total of 12 issues were considered by the Committee during the reporting period.

Report on the work of the Audit Committee of the Board of Directors in 2020
Number of meetings	The most important issues considered and recommendations to the Board of Directors
8	About preliminary consideration of the issue falling within the competence of the Company’s Board of Directors; “On Approval of the Work Schedule of the Internal Audit Directorate of OGK-2 JSC for 2020”. About assessing the independence, fairness and absence of any conflict of interest for the auditor of OGK-2 JSC – BDO Unicon JSC. About assessing the opinion of the Auditor of OGK-2 JSC following the results of the audit of the Company’s annual accounting (financial) statements and consolidated financial statements for 2019 prepared subject to International Financial Reporting Standards and the quality of audit services. About preliminary consideration of the issue falling within the competence of the Company’s Board of Directors “About Recommendations to the General Meeting of Shareholders of OGK-2 JSC on the Issue Related to Approval of the Company’s 2019 Annual Accounting (Financial) Statements”. About preliminary consideration of the issue falling within the competence of the Company’s Board of Directors “About Recommendations to the General Meeting of Shareholders of OGK-2 JSC on the Issue Related to Approval of the Candidate to the Position of the Company’s Auditor”. About the proposal for determining the amount of the auditor’s fees. About the approval of the Work Schedule of the Audit Committee of the Company’s Board of Directors for 2020–2021. About preliminary consideration of the issue falling within the competence of the Company’s Board of Directors “About Approval of the Regulations about the Audit Committee under the Company’s Board of Directors”. About consideration of the Schedule for Third-Party Audit of Annual Accounting (Financial) Statements for 2020, as well as of consolidated financial statements of OGK-2 JSC Group for 2020, prepared subject to International Financial Reporting Standards. About assessing the auditor’s report following the review of the consolidated financial statements of OGK-2 JSC Group for the period from January 01, 2020 to June 30, 2020, prepared subject to International Financial Reporting Standards, and the quality of audit services. About preliminary consideration of the issue falling within the competence of the Company’s Board of Directors: “About Consideration of the Work Schedule of the Company’s Internal Audit Directorate for 2021”.

Reliability Committee

Mikhail Vladimirovich Fedorov, Chairman of the Reliability Committee

Director for Production of Gazprom Energoholding LLC

Dear colleagues,

During the reporting period, the Reliability Committee considered traditional issues falling within its competence: regular monitoring of the Company’s engineering services operations in terms of ensuring the reliability of energy facilities; analysis of the implementation of technical re-equipment programs and repair plans, as well as development of recommendations based on the analysis of accidents and economic damage following the results of 2019.

In 2020, the Committee paid special attention to the implementation of the investment program and the quarterly KPIs and the R&D program.

Reliability Committee is responsible for:

conducting examination of strategic priorities, goals and principles of the Company’s development in terms of ensuring the requirements of integrated reliability;
conducting examination of technical re-equipment and reconstruction programs, schedules for the power facilities repair, analyzing implementation thereof;
preparing suggestions to the Personnel and Remuneration Committee on the assessment of management activities in terms of ensuring compliance with the requirements of integrated reliability;
assessing the completeness and sufficiency of measures taken based on the results of accidents and major technological violations;
considering and approving the Company’s Technical Policy, as well as the annual report of the Company’s General Director on implementation thereof;

assessing the Company’s technical services operations in terms of ensuring the reliability of the network, generating equipment, facilities and other technological infrastructure.

Members of the Reliability Committee
for the period from July 31, 2019 till July 17, 2020 (arranged by the decision of the Board of Directors, Minutes No. 219 dated July 31, 2019)		for the period from July 18, 2020 till present (arranged by the decision of the Board of Directors, Minutes No. 242 dated July 20, 2020)
Full name	Position	Full name	Position
Mikhail Vladimirovich Fedorov (Chairman)	Director for Production of Gazprom Energoholding LLC	Mikhail Vladimirovich Fedorov (Chairman)	Director for Production of Gazprom Energoholding LLC
Oleg Nikolaevich Ivanov	Deputy Chief Engineer – Head of the Directorate for the Organization of Technical Services of OGK-2 JSC	Oleg Nikolaevich Ivanov	Deputy Chief Engineer – Head of the Directorate for the Organization of Technical Services of OGK-2 JSC
Andrey Viktorovich Kalashnikov	Deputy Director for Production – Head of Technical Directorate of Gazprom Energoholding LLC	Andrey Viktorovich Kalashnikov	Deputy Director for Production – Head of Technical Directorate of Gazprom Energoholding LLC
Sergey Arturovich Zaitsev	Deputy Managing Director for Production – Chief Engineer at OGK-2 JSC	Sergey Arturovich Zaitsev	Deputy Managing Director for Production – Chief Engineer at OGK-2 JSC
Sergey Faritovich Mukhametov	Deputy Head of the Technical Department – Head of Repair Department of Gazprom Energoholding LLC	Sergey Faritovich Mukhametov	Head of the Technical Directorate of Gazprom Energoholding LLC
Sergey Alexandrovich Petelin	Deputy Director for Production – Head of Production Directorate of Gazprom Energoholding LLC	Sergey Alexandrovich Petelin	Deputy Director for Production – Head of Production Directorate of Gazprom Energoholding LLC
Mikhail Vladimirovich Sorokin	Head of the Department of Gazprom PJSC	Mikhail Vladimirovich Sorokin	Head of the Department of Gazprom PJSC

The current members of the Committee are not independent directors.

Report on the Reliability Committee work in 2020
Number of meetings	The most important issues considered and recommendations to the Board of Directors
4	Implementation of the repair program based on the results of 2019. Schedule and actual quarterly implementation for 2020. On achieving KPIs: “Implementation of the repair program”, “Meeting the repair program timeline”, “Process reliability”, “Process safety”, and “Implementation of the investment program” following the results of 2019 and each quarter of 2020, as well as recommendations to the Board of Directors to consider the aforementioned KPIs as being met and having the respective actual values. Implementation of the investment program based on the results of 2019. Schedule and actual quarterly implementation for 2020. On the implementation of the R&D program. Overcoming of the spring flood in 2020. Analysis of accident rate and economic damage based on the results of 2019. Quarterly analysis in 2020. About compliance with quarterly KPIs.

Human Resources and Remuneration Committee

Pavel Olegovich Shatsky, Chairman of the Human Resources and Remuneration Committee

First Deputy General Director of Gazprom Energoholding LLC

Dear colleagues,

In 2020, the Human Resources and Remuneration Committee focused on enhancing the efficiency of the remuneration system for the members of the Company’s Board of Directors and senior managers, developing new incentive programs and improving the alignment between the corporate governance system and the goals and objectives set by the Company.

In addition, candidates to the Company’s Board of Directors were considered at the Committee’s meetings in order to make recommendations to the shareholders, it was also dealing with the issues relating to the evaluation of the Company’s Corporate Secretary work.

Human Resources and Remuneration Committee:

The Human Resources and Remuneration Committee under the Board of Directors of OGK-2 JSC (hereinafter referred to as the Committee) is aimed at ensuring the effective work of the Board of Directors in resolving issues falling within its competence.

The purpose of the Committee is, among other things, to develop and submit recommendations (opinions) to the Board of Directors in the sphere of human resources and social and labor policy adopted by OGK-2 JSC.

The Committee acts subject to the Regulations about the Human Resources and Remuneration Committee of the Board of Directors of OGK-2 JSC (approved by the Board of Directors of OGK-2 JSC on September 30, 2016, Minutes No. 154 dated September 30, 2016). In its operations, the Committee is also guided by Federal Acts, other regulatory legal acts of the Russian Federation, the Company’s Charter, the Regulations about the Company’s Board of Directors, and resolutions of the Company’s Board of Directors.

Members of the Human Resources and Remuneration Committee
for the period from July 31, 2019 till July 17, 2020 (arranged by the decision of the Board of Directors, Minutes No. 219 dated July 31, 2019)		for the period from July 18, 2020 till present (arranged by the decision of the Board of Directors, Minutes No. 242 dated July 20, 2020)
Full name	Position	Full name	Position
Pavel Olegovich Shatsky (Chairman)	First Deputy General Director of Gazprom Energoholding LLC	Pavel Olegovich Shatsky (Chairman)	First Deputy General Director of Gazprom Energoholding LLC
Valery Gennadievich Pyatnitsev	Strategy Director at Finam JSC	Valery Gennadievich Pyatnitsev	Strategy Director at Finam JSC
Denis Viktorovich Kulikov	Advisor to the Executive Director of the Association of Professional Investors	Nikolai Dmitrievich Rogalyov	Vice-Chancellor of NRU MPEI, FSBEI of HE
Irina Yuryevna Korobkina	Deputy Head of the Directorate of Gazprom PJSC	Irina Yuryevna Korobkina	Deputy Head of the Directorate of Gazprom PJSC
Alexander Vladimirovich Rogov	Deputy Head of the Directorate – Head of the Department of Gazprom PJSC	Alexander Vladimirovich Rogov	Deputy Head of the Directorate – Head of the Department of Gazprom PJSC
Andrey Igorevich Dmitriev	First Deputy Head of the Department of Gazprom PJSC	-	-

The current composition of the Committee includes two independent directors: Mr. V. G. Pyatnitsev and Mr. N. D. Rogalyov.

In 2020, the Committee held five meetings. All meetings were held in absentia. The meetings attendance rate was 100%.

A total of 8 issues were considered by the Committee during the reporting period.

Report on the work of the Human Resources and Remuneration Committee in 2020
Number of meetings	The most important issues considered and recommendations to the Board of Directors
5	About recommendations to shareholders regarding voting to elect candidates to the Company’s Board of Directors. About preliminary consideration of the issue falling within the competence of the Company’s Board of Directors “About Approval of Gazprom Energoholding LLC Report” on services providing subject to the agreement on delegating the authorities of the chief executive officer of OGK-2 JSC”. About approval of the Work Schedule of the Human Resources and Remuneration Committee of the Company’s Board of Directors for 2020–2021. About the annual assessment of the Company’s Corporate Secretary operations. About preliminary consideration of the issue falling within the competence of the Company’s Board of Directors “About Determining the status of a Member of the Company’s Board of Directors”. About the preliminary consideration of the issue falling within the competence of the Company’s Board of Directors “About Approval of the Company’s Collective Agreement for 2021–2023”.