The Role of the Board

The Board is responsible for the general management of the Company and has exclusive power to:

Federal law prohibits the Board of Directors from acting on issues that fall within the exclusive remit of a General Shareholders’ Meeting.

The Company Charter requires a majority of the directors present at a Board meeting to vote for an action in order for it to be approved. The exception to this is when the Board is voting on a major transaction, when Russian legislation requires a unanimous vote. A Board meeting is considered to be duly assembled and legally competent to act when a majority of the Board members are present.

Board of Directors meetings are held in accordance with the annual schedule and as necessary, but not less than 5 times a year. The Board met 12 times during 2014.

Corporate Secretary

The Board of Directors elects a Corporate Secretary to support its activities and organise its work flow for the same term that the Board of Directors serves. The activities of the Corporate Secretary are governed by the respective regulation approved in 2013.

Chief Executive Officer

The Company’s Chief Executive Officer (CEO) is responsible for the day-to-day operations of the Company, with the exception of matters that fall within the exclusive remit of the Company’s General Shareholders’ Meeting, the

Board of Directors and the Executive Board.

The CEO also acts as Chairman of the Executive Board.

The CEO organises the implementation of decisions of the Company’s General Shareholders’ Meeting, the Board of Directors and the Executive Board.

The CEO acts in the name of the Company without warrant and represents the interests of the Company, conducts transactions, approves personnel, issues orders and provides direction to all employees of the Company.

The CEO is elected by the Board for a period of up to five years. His contract is signed by the Chairman of the Board of Directors and authorised by the Board. Contract conditions are approved by the Board of Directors.

Only upon approval of the Board of Directors may the CEO combine his position with other executive roles in the management of other organisations.

If the CEO is not able to carry out his responsibilities, the Board of Directors has the right to make a decision on the early termination of his powers and assign a new CEO.

Executive Board

The Company’s Board of Directors approves both the size of the Executive Board and the people who are to serve on the Executive Board after receiving proposals from the Chairman of the Executive Board. The size of the Executive Board must be optimal for constructive business discussions, as well as timely and effective decision-making.

The authority of the Executive Board is determined by the Company’s Charter.

The Executive Board is authorised to:

Internal Control/Risk Management

The Board of Directors holds overall responsibility for ensuring that the Company maintains an adequate system of internal control and risk management, and for reviewing its effectiveness.

Internal control is also carried out by the Revision Committee, the activities of which are governed by the Company’s Charter and the Regulation on the Revision Committee. The Committee oversees and coordinates audits of the Company’s financial and economic activities. Its principal duties are to ensure that the Company’s activities comply with the applicable Russian legislation, do not infringe on shareholders’ rights, and that accounting and reporting do not contain material misstatements. The members of the commission are elected for one year at the General Shareholders’ Meeting and may not include the Chief Executive Officer or other members of the Board.

Cherkizovo Group’s Code of Corporate Governance was incorporated on January 11, 2010. On December 14, 2011, a special anonymous hotline for Company employees was set up.

Audit Committee

In 2014, the members of the Audit Committee were Mr Musheg Mamikonian, Mr Samuel Lipman and Mr Marcus Rhodes, who chairs the Committee. As a chartered accountant and a former E&Y audit partner, Marcus Rhodes possesses relevant financial experience.

The Audit Committee maintains a formal agenda of items that are to be considered at each Committee meeting and within the annual audit cycle.

The exclusive responsibilities of the Audit Committee are to:

The Audit Committee is required to:

Personnel and Remuneration Committee

In 2014, the members of the Personnel and Remuneration Committee were Mr. Musheg Mamikonian, Mr. Marcus Rhodes and Mr. Vitaliy Podolskiy, who served as the Committee’s Chairman.

The Committee adheres to a formal list of issues within its area of responsibility that must be discussed at each meeting during the financial year.

The Committee’s main objective is to propose and issue recommendations to the Company’s Board on issues including:

The main tasks of the Committee include first examining, and then issuing recommendations to the Board on the following areas of policy:

 

Investments and Strategic Planning Committee

In 2014, the members of the Investments and Strategic Planning Committee were Mr. Sergei Mikhailov, Mr. Samuel Lipman, Mr. Evgeny Mikhailov and Mr. Musheg Mamikonian, who served as the Committee’s Chairman.

The Committee adheres to a formal list of issues within its area of responsibility that must be discussed at each meeting during the financial year.

The Committee’s main objective is to propose and issue recommendations to the Company’s Board on a number of issues, including: