Committees of the Board of Directors | Board of directors | Corporate management | Corporate management. Internal control and risk management KubanEnergo: Yearly report 2011

In ensure effective execution by the Board of Directors of their function in overall management of the Company’s activities committees of the Board of Directors have been set up. The committees have the status of consulting deliberating bodies which are involved in deeper development of questions related to the compentency of the Board of Directors and subsequent drawing up of recommendations on decisions by the Board of Directors.

The work of each committee is regulated by a corresponding Statement in which the aims and functions of the committee, the order of forming it and organising its work are set out^*.

The membership of each committee is chosen by the Board of Directors of the Company from candidates proposed by members of the Board of Directors. Committee members do not have to be members of the Board of Directors, with the exception of the Audit Committee, whose members are chosen exclusively from the membership of the current Board of Directors.

*
The Statement on the Committees of the Board of Directors can be found at www.kubanenergo.ru — in About the company/Constituent and in house documents

Audit Committee. Set up 16.10.2009

Main objectives	Membership	Main results of work in 2011
Preparing recommendations for the Board of Directors on questions related to monitoring the annual independent audit of financial statements and assessment of the effectiveness of internal control procedures in the Company.	Aleksei Vladimirovich Demidov, Chairman of the Committee, member of the Management Board, Deputy General Director for Economics and Finance of MRSK Holding Anna Yurevna Katina, Head of Section for Analysis and Monitoring of the Department of Corporate Management and Investor Relations, MRSK Holding Sergei Evgenevich Yurchuk, Director of Finance at MRSK Holding Current membership of the Committee elected 20 July 2011. Previous membership, which worked during 2011, elected by decision of the Board of Directors on 30 July.	Six meetings in the in absentia in person format, at which recommendations to the Board of Directors were developed on the following basic questions^*: considering candidates for external auditor and determing the size of payment for their services; preliminary approval of the Company’s annual report for 2010; progress in realising the project to set up an integrated system for risk management and internal control; considering the new revision of the Statement on insider information.

Main objectives

Membership

Main results of work in 2011

Preparing recommendations for the Board of Directors on questions related to monitoring the annual independent audit of financial statements and assessment of the effectiveness of internal control procedures in the Company.

Aleksei Vladimirovich Demidov, Chairman of the Committee, member of the Management Board, Deputy General Director for Economics and Finance of MRSK Holding

Anna Yurevna Katina, Head of Section for Analysis and Monitoring of the Department of Corporate Management and Investor Relations, MRSK Holding

Sergei Evgenevich Yurchuk, Director of Finance at MRSK Holding

Current membership of the Committee elected 20 July 2011.

Previous membership, which worked during 2011, elected by decision of the Board of Directors on 30 July.

Six meetings in the in absentia in person format, at which recommendations to the Board of Directors were developed on the following basic questions^*:

considering candidates for external auditor and determing the size of payment for their services;
preliminary approval of the Company’s annual report for 2010;
progress in realising the project to set up an integrated system for risk management and internal control;
considering the new revision of the Statement on insider information.

*
The Statement on the Committees of the Board of Directors can be found at www.kubanenergo.ru — in About the company/Constituent and in house documents

Committee for Personal and Awards. Set up 06.08.2010

Main objectives	Membership	Main results of work in 2011
Preparing recommendations for the Board of Directors on questions related to setting criteria for selection and assessment of candidates for the Board of Directors and executive bodies of the Company and with assessing the work of these bodies, as well as drawing u principles and criteria for setting the amount of remuneration to their members.	AV Chigrin, Chairman of the Committee, Head of Personnel Department at RMSK Holding VE Lutskovich, Deputy Head of Personnel Department at RMSK Holding Anna Yurevna Katina, Head of Section for Analysis and Monitoring of the Department of Corporate Management and Investor Relations, MRSK Holding NI Erpsher, Head of Directorate for Organisational Development at MRSK Holding Current membership of the Committee elected 20 July 2011. Previous membership, which worked during 2011, elected by decision of the Board of Directors on 5 August 2010.	Twelve meetings (one in person and and eleven in the in absentia in person format), at which recommendations to the Board of Directors were developed on the following basic questions: the new membership of the Management Board; approving the organisational structure and list of positions of the executive apparatus of the Company; approving the Statement on personnel reserve of young specialists; approving the new revision of the Statement on incentive schemes and the benefits packages for senior managers and the General Director.

Main objectives

Membership

Main results of work in 2011

Preparing recommendations for the Board of Directors on questions related to setting criteria for selection and assessment of candidates for the Board of Directors and executive bodies of the Company and with assessing the work of these bodies, as well as drawing u principles and criteria for setting the amount of remuneration to their members.

AV Chigrin, Chairman of the Committee, Head of Personnel Department at RMSK Holding

VE Lutskovich, Deputy Head of Personnel Department at RMSK Holding

Anna Yurevna Katina, Head of Section for Analysis and Monitoring of the Department of Corporate Management and Investor Relations, MRSK Holding

NI Erpsher, Head of Directorate for Organisational Development at MRSK Holding

Current membership of the Committee elected 20 July 2011.

Previous membership, which worked during 2011, elected by decision of the Board of Directors on 5 August 2010.

Twelve meetings (one in person and and eleven in the in absentia in person format), at which recommendations to the Board of Directors were developed on the following basic questions:

the new membership of the Management Board;
approving the organisational structure and list of positions of the executive apparatus of the Company;
approving the Statement on personnel reserve of young specialists;
approving the new revision of the Statement on incentive schemes and the benefits packages for senior managers and the General Director.

Reliability Committee. Set up 18.09.2006

Main objectives	Membership	Main results of work in 2011
Preparing recommendations for the Board of Directors on fields related to providing technological reliability and development of energy facilities, network equipment and other fixed assets of the Company.	BI Makhanoshin, Chairman of the Committee, Deputy General Director and Technical Director at MRSK Holding AP Petrov, Deputy Head of Department, Head of Section for Industrial Technological Regulation of the Department for Technical Development of MRSK Holding AV Bespalov, Head of Section for Investment Projects and Estimations of the Department of Capital Construction of MRSK Holding Pavel Vasilevich Zinchenko, Deputy General Director for Technical Questions, Head Engineer at Kubanenergo DYu Ryazantsev, Deputy Head Engineer, Head of Department of Operational and Process Management at Kubanenergo VD Voronin, Head Power Engineer at RN-Tuapsinskii NPZ MG Petrenko, Head Power Engineer at RN-Krasnodarneftegaz Current membership of the Committee elected 20 July 2011. Previous membership, which worked during 2011, elected by decision of the Board of Directors on 30 July 2010 and 23 March 2011.	Ten meetings in the in absentia in person format, at which recommendations to the Board of Directors were developed on the following basic questions: approving the business plan and targets for key indicators of effectiveness at the Company for 2011, as well as quarterly results of their execution; examining the report on bringing power line buffer zones within statutory values; examining information about the condition of the Company’s electricity production facilities.

Main objectives

Membership

Main results of work in 2011

Preparing recommendations for the Board of Directors on fields related to providing technological reliability and development of energy facilities, network equipment and other fixed assets of the Company.

BI Makhanoshin, Chairman of the Committee, Deputy General Director and Technical Director at MRSK Holding

AP Petrov, Deputy Head of Department, Head of Section for Industrial Technological Regulation of the Department for Technical Development of MRSK Holding

AV Bespalov, Head of Section for Investment Projects and Estimations of the Department of Capital Construction of MRSK Holding

Pavel Vasilevich Zinchenko, Deputy General Director for Technical Questions, Head Engineer at Kubanenergo

DYu Ryazantsev, Deputy Head Engineer, Head of Department of Operational and Process Management at Kubanenergo

VD Voronin, Head Power Engineer at RN-Tuapsinskii NPZ

MG Petrenko, Head Power Engineer at RN-Krasnodarneftegaz

Current membership of the Committee elected 20 July 2011.

Previous membership, which worked during 2011, elected by decision of the Board of Directors on 30 July 2010 and 23 March 2011.

Ten meetings in the in absentia in person format, at which recommendations to the Board of Directors were developed on the following basic questions:

approving the business plan and targets for key indicators of effectiveness at the Company for 2011, as well as quarterly results of their execution;
examining the report on bringing power line buffer zones within statutory values;
examining information about the condition of the Company’s electricity production facilities.

Committee for Strategy, Development, Investments and Restructuring. Set up 05.02.2010

Main objectives	Membership	Main results of work in 2011
Preparing recommendations for the Board of Directors on questions related to developing the Company’s development strategy, assessing the effectiveness of its work and improving investment attractiveness.	DL Pankov, Chairman of the Committee, Director for Strategy, Development and Innovation at MRSK Holding DO Akhrimenko, Deputy Head of Department of Corporate Management and Investor Relations at MRSK Holding SA Balaeva, Head of Department of Investment at MRSK Holding VI Isaev, Head of Finance Department at MRSK Holding MA Lavrova, Deputy Head of Department of Business Planning at MRSK Holding Vitalii Aleksandrovich Kocherga, Deputy General Director for Corporate Management at Kubanenergo Andrei Vladimirovich Lyashko., Deputy General Director for Devolopment and Realising Services at Kubanenergo YuA Dmitrieva, Leading Advisor of Section for Realisation of the Federal Targeted Investment Programme of the Department of Economic Regulation and Property Relations in the Fuel and Energy Sector of the Ministry for Energy of Russia IA Korotaev, Head of Section for Energy Supply to Oil Processing and Sales Businesses of the Department of Power at Rosneft VP Levaev, Head of Section for Long Term Development of the Department of Power at Rosneft Current membership of the Committee elected 20 July 2011. Previous membership, which worked during 2011, elected by decision of the Board of Directors on 30 July 2010 and 23 March 2011.	Nineteen meetings (three in the joint presence format and the remainder in absentia) at which recommendations to the Board of Directors were developed on the following most important questions: approving the business plan and investment programme, targets for key indicators of effectiveness at the Company, as well as reports on the results of their execution; approving the Programme for innovation development of the Company; on measures to eliminate delays in the schedule for construction of Olympic facilities.

Main objectives

Membership

Main results of work in 2011

Preparing recommendations for the Board of Directors on questions related to developing the Company’s development strategy, assessing the effectiveness of its work and improving investment attractiveness.

DL Pankov, Chairman of the Committee, Director for Strategy, Development and Innovation at MRSK Holding

DO Akhrimenko, Deputy Head of Department of Corporate Management and Investor Relations at MRSK Holding

SA Balaeva, Head of Department of Investment at MRSK Holding

VI Isaev, Head of Finance Department at MRSK Holding

MA Lavrova, Deputy Head of Department of Business Planning at MRSK Holding

Vitalii Aleksandrovich Kocherga, Deputy General Director for Corporate Management at Kubanenergo

Andrei Vladimirovich Lyashko., Deputy General Director for Devolopment and Realising Services at Kubanenergo

YuA Dmitrieva, Leading Advisor of Section for Realisation of the Federal Targeted Investment Programme of the Department of Economic Regulation and Property Relations in the Fuel and Energy Sector of the Ministry for Energy of Russia

IA Korotaev, Head of Section for Energy Supply to Oil Processing and Sales Businesses of the Department of Power at Rosneft

VP Levaev, Head of Section for Long Term Development of the Department of Power at Rosneft

Current membership of the Committee elected 20 July 2011.

Previous membership, which worked during 2011, elected by decision of the Board of Directors on 30 July 2010 and 23 March 2011.

Nineteen meetings (three in the joint presence format and the remainder in absentia) at which recommendations to the Board of Directors were developed on the following most important questions:

approving the business plan and investment programme, targets for key indicators of effectiveness at the Company, as well as reports on the results of their execution;
approving the Programme for innovation development of the Company;
on measures to eliminate delays in the schedule for construction of Olympic facilities.

Committee for Technological Connection. Set up 11.10.2011

Main objectives	Membership	Main results of work in 2011
Preparing recommendations (conclusions) for the Board of Directors on questions related to improving the effectiveness and development of the Company’s activities in the sphere of technological connection of consumers to electricity networks.	Alisher Izamovich Arifov., Chairman of the Committee, Deputy General Director at RN-Energo AM Pyatigor, Head of Department for Long Term Development and Technological Connection at MRSK Holding Andrei Vladimirovich Lyashko., Deputy General Director for Devolopment and Realising Services at Kubanenergo Vitalii Aleksandrovich Kocherga, Deputy General Director for Corporate Management at Kubanenergo VP Levaev, Head of Section for Long Term Development of the Department of Power at Rosneft Current membership of the Committee elected 11 October 2011.	The Committee held no meetings in the accounting year.

Main objectives

Membership

Main results of work in 2011

Preparing recommendations (conclusions) for the Board of Directors on questions related to improving the effectiveness and development of the Company’s activities in the sphere of technological connection of consumers to electricity networks.

Alisher Izamovich Arifov., Chairman of the Committee, Deputy General Director at RN-Energo

AM Pyatigor, Head of Department for Long Term Development and Technological Connection at MRSK Holding

Andrei Vladimirovich Lyashko., Deputy General Director for Devolopment and Realising Services at Kubanenergo

Vitalii Aleksandrovich Kocherga, Deputy General Director for Corporate Management at Kubanenergo

VP Levaev, Head of Section for Long Term Development of the Department of Power at Rosneft

Current membership of the Committee elected 11 October 2011.

The Committee held no meetings in the accounting year.