Report on the Results of the Board of Directors’ Operation

In 2018, the Board of Directors held 22 meetings The following are dates of the meetings of the Board of Directors and numbers of the corresponding minutes: 9 February 2018 No. 1; 19 March 2018 No. 2; 21 March 2018 No. 3; 2 April 2018 No. 4; 23 April 2018 No. 5; 24 April 2018 No. 6; 4 May 2018 No. 7; 16 May 2018 No. 8; 22 May 2018 No. 9; 31 May 2018 No. 10; 22 June 2018 No. 11; 28 June 2018 No. 12; 1 August 2018 No. 13; 30 August 2018 No. 14; 25 September 2018 No. 15; 8 October 2018 No. 16; 15 October 2018 No. 17; 30 November 2018 No. 18; 11 December 2018 No. 19; 24 December 2018 No. 20; 25 December 2018 No. 21; 27 December 2018 No. 22. and considered a total of 96 issues.

Total number of meetings of the Board of Directors
Issues reviewed by the Board of Directors (%)
Participation in meetings of the Board of Directors and the Committees under the Board of Directors in 2018
Members of the Board of Directors In-person meetings (5) In-absentia meetings (17) Strategy, Investments and Innovations Committee (11 meetings) Audit Committee (13 meetings) Human Resources and Remuneration Committee (10 meetings)
A. Novak 5 17
M. Warnig 4 (including 3 written opinions) 15 11
D. Vasilevskaya Member of the Board of Directors up to 30 June 2018. 3 9 6
K. Dmitriev 5 (including 3 written opinions) 17 11
I. Klebanov 5 (including 1 written opinion) 17 5 13 10
A. Korsik 5 17 13 10
M. Sokolov 2 8
N. Tokarev 5 17 11
V. Shantsev 5 17 11
G. Shmal 5 17 11 13 10
Key issues reviewed by the Board of Directors and decisions made
Sphere Results for 2018
Strategy Results of implementation of the following were considered:
  • Long-Term Development Programme: for 2017, for Q1 2018, for 1H 2018 and for 9 months of 2018
  • Transneft Innovation Development Programme for 2017
The specifications for auditing the implementation of the Transneft Long-Term Development Programme for 2018 was approved.
Financial and operational activities The following questions were addressed:
  • Quarterly reports on procurement results
  • Quarterly reports of the executive body on the financial and economic performance of Transneft and Transneft Group
  • Quarterly reports on the implementation of the Programme for Disposal of Transneft Group Enterprises’ Non-Core Assets
  • Implementation of executive orders of the Government of the Russian Federation
  • Charitable activities of the Company
  • Approval of transactions
The following issues were considered and approved:
  • Adjusted Transneft Long-Term Development Programme
  • The method of calculating the reduction in Transneft’s operating expenses
  • Transneft’s budget for 2019
  • Consolidated budget of revenues and expenses of Transneft Group for 2019
  • Consolidated cash flow budget of Transneft Group for 2019
  • Projected values of key performance indicators of operational activities for 2019
  • Transneft’s Programme for Operational Efficiency Improvement and Cost Cutting up to 2023
Corporate governance The following documents in the field of corporate governance were considered and approved:
  • The Regulations on the Procedure of Access to Insider Information of Transneft, rules for protecting its confidentiality and controlling the observation of the redrafted laws on insider information
  • The new edition of the Regulations on the Procedure of Providing Information and Documents to Transneft’s Shareholders
The following documents in the field of counteracting corruption were considered and approved:
  • Transneft’s Action Plan for Preventing and Countering Corruption for 2018
  • Report on the effectiveness of Transneft’s activities aimed at preventing and combating corruption in 2017
  • The new edition of Transneft’s Anti-Corruption Policy
The following documents in the field of risk management were considered and approved:
  • Key parameters of the Risk Management System
  • Transneft’s risk management report for 2017
  • Transneft’s report on managing currency and interest rate risks for 2017
  • List of critical risks for 2019
The following documents in the field of internal control were considered and approved:
  • Revised version of the Regulations on the Procurement of Goods, Works and Services
  • Revised standards for the procurement of certain types of goods, works and services

In addition to the Company’s strategy, financial and operational activities and corporate governance, in the reporting year the Board of Directors considered procedural issues related to the organisation of its activities and the activities of the of the Committees under the Board of Directors, as well as other issues that fall within the Board of Directors’ competence.

In the reporting year, resolutions of the Board of Directors on the most significant issues were disclosed by the Company in the form of press releases and notifications on material facts in accordance with the legislation and the Regulations on Transneft’s Information Policy.

In 2018, members of the Board of Directors did not provide any dissenting opinions on the issues considered at the meetings.