In 2014, the Board of Directors held five ordinary meetings, all of which occurred in Limassol, Cyprus. During the course of 2014, the Board of Directors continued working on the development of the Company’s mid-term and long-term financial and business strategy, including investment plans,
M&A activities, budgeting and general corporate development.
Throughout the year, the Board of Directors focused on the improvement of the Company’s internal control and risk management systems.
At its meetings, the Board of Directors reviewed other issues connected with the activities of the Company within its remit, including the approval of corporate reports and the Company’s participation in legal proceedings (for further details see Litigation).
The Board of Directors Committees
In 2014 the Board of Directors established a Strategy and Investments Committee. Mr. Nikolay Yamburenko, Mr.
Gary Yamamoto, and Mr. Yury Skrynnik were elected as members of the Committee and Mr. Nikolay Yamburenko was appointed as chairman. The Strategy and Investments Committee is responsible for considering, amongst other matters:
(i) strategic business combinations, (ii) acquisitions, mergers, dispositions,
divestitures and similar strategic transactions involving the Company together with (iii) fundamental investments of the Company.
There are two further Committees of the Board of Directors: the Audit Committee and the Remuneration Committee. A brief description of the main activities of these two Committees in 2014 is set out below.
In 2014, the revised Terms of Reference of the Audit Committee were approved by the Board of Directors. The Audit Committee is to be made up of at least two members, one of whom is to be an independent non-executive Director. The Committee expects to meet four times each year. Currently, the Audit Committee is chaired by Philippe Delpal; its other member is Gary S. Yamamoto.
The Audit Committee is responsible for considering, amongst other matters: (i) the integrity of the Group’s financial statements, including its annual and interim financial statements; (ii) the effectiveness of the Group’s internal controls and risk management systems;
(iii) auditors’ reports on the Group; and (iv) the terms of appointment and remuneration of the auditors of the Group.
The Audit Committee supervises and monitors, and advises the Board of Directors on, risk management and control systems and the implementation of codes of conduct. The Audit Committee also supervises the submission by the Group of financial information and a number of other audit-related issues and assesses the efficiency of work of the Chairman of the Board of Directors.
Activities in 2014
In 2014, two meetings of the Audit Committee were held. The main issues the Audit Committee oversaw in 2014 were the preliminary review of IFRS financial statements (including goodwill impairment at the end of 2014) and internal control and risk management (including the audit plan).
The Audit Committee also supervised the internal and external audit procedures and the annual tax strategy implementation within the course of the year. The Audit Committee also made recommendations to the Board of Directors with regards to internal control efficiency and the appointment of a new external auditor of Company.
The Remuneration Committee comprises three Directors and expects to meet at least once each year. Currently, the Remuneration Committee is chaired by Gary S.
Yamamoto; its other members are Mr. Nikolay Yamburenko and Philippe Delpal. The Remuneration Committee is responsible for determining and reviewing, amongst other matters, the Group’s remuneration policies. The remuneration of independent Directors is a matter for the Chairman of the Board of Directors and the Executive Directors. No Director or manager may be involved in any decisions regarding his/her own remuneration.
Activities in 2014
In 2014, two meetings of the Remuneration Committee were held. The main matters reviewed by the Remuneration Committee were the Group’s Long-Term Incentive Program, the Financial Performance Targets used in the setting of 2014 remuneration and Individual Financial Performance Bonus Targets.
The Remuneration Committee adopted decisions and made recommendations to the Board of Directors with regards to the Group’s CEO Compensation Targets, in accordance with international best practice.
External Audit of Financial Statements
Every year the [Company/Group] appoints an external auditor who is responsible for the auditing and inspection of the consolidated financial statements of the [Company/Group] in compliance with IFRS. The external auditor also prepares reviews of the consolidated interim condensed financial information of the [Company/Group] in compliance with IFRS requirements. The external auditor of the [Company/Group] is selected from leading audit firms after a thorough review of their respective proposals. Following that review, the Audit Committee gives its recommendations to the Board of Directors regarding the candidacy of the external auditor and the amount of the auditor’s compensation, and advises the Board of Directors on other terms and conditions of the contract with the auditor. In 2014,
based on the recommendation of the Audit Committee, the Board of Directors selected Deloitte (Cyprus) to conduct the audit of the financial statements of the [Company/Group] for the year ended 31 December 2014.
The total compensation of the independent Directors, as set out in the Group’s consolidated income statement, was Euro 195,000 for the year ended 31 December 2014.