The Board of Directors consists of seven (7) members, three (3) of whom are Executive Directors. During the year ending 31 December 2015, new Terms of Reference of the Board of Directors and Managing Director (CEO) were approved by the Board of Directors.
The Board of Directors held four ordinary meetings in 2015, all of which occurred in Limassol, Cyprus. During the course of the year, 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, long-term incentive plan for the management of the Company, 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 that are within its remit, including the approval of corporate reports.
The Board of Directors Committees
There are three Committees of the Board of Directors: the Audit Committee, the Remuneration Committee, and the Strategy and Investments Committee. A brief description of the main activities of these Committees in 2015 is set out below.
The Audit Committee comprises two independent Directors and is expected to meet three to four times per year. Currently, the Audit Committee is chaired by Mr. Philippe Delpal; the other member is Mr. 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 2015
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).
Three meetings of the Audit Committee were held in 2015. The main issues that the Audit Committee oversaw during the year were the preliminary review of IFRS financial statements (including goodwill impairment at the end of 2015) and internal control and risk management (including the audit plan).
The Audit Committee also supervised the internal and external audit procedures, and the implementation of the annual tax strategy within the course of the year. The Audit Committee also made recommendations to the Board of Directors with regards to internal control efficiency and interim dividend distribution.
The Remuneration Committee comprises three Directors and is expected to meet at least once per year. Currently, the Remuneration Committee is chaired by Mr. Gary S. Yamamoto; its other members are Mr. Nikolay Yamburenko and Mr. Philippe Delpal. The Remuneration Committee is responsible for, amongst other matters, determining and reviewing the Group’s remuneration policies. The remuneration of independent Directors is a matter for the Chair of the Board of Directors and the Executive Directors. No Director or manager may be involved in any decisions regarding their own remuneration.
Activities in 2015
Three meetings of the Remuneration Committee were held in 2015. The main matters reviewed by the Remuneration Committee were the terms of the CEO’s contract and the Group’s Long-Term Incentive Program. Ernst & Young were engaged to develop the Long-Term Incentive Program in line with international best practice.
The Remuneration Committee adopted decisions and made recommendations to the Board of Directors regarding the CEO’s contract and the Long-Term Incentive Program, 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 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 the review, the Audit Committee gives its recommendations to the Board of Directors regarding the candidacy of the external auditor and the level of the auditor’s compensation, and advises the Board of Directors on other terms and conditions of the contract with the auditor. In 2015, 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 ending 31 December 2014, and Deloitte remains in the office for the 2015 audit.
Strategy and Investments Committee
The Strategy and Investments Committee comprises three directors, one of whom is independent. The Committee is expected to meet at least once each year. Currently, the Strategy and Investments Committee is chaired by Mr. Nikolay Yamburenko and the other members are Mr. Gary Yamamoto and Mr. Yury Skrynnik.
The Strategy and Investments Committee is responsible for considering, amongst other matters: (i) strategic business combinations; (ii) acquisitions, mergers, disposals and similar strategic transactions involving the Company; and (iii) fundamental investments of the Company.
Activities in 2015
One meeting of the Strategy and Investments Committee was held in 2015. The main matter reviewed by the Committee was the Group Strategy up to 2020.
Total compensation of the Chairman of the Board was Euro 270,115 for the year ended 31 December 2015. Total compensation of the independent Directors, as set out in the Group’s consolidated statement of profit or loss and other comprehensive income, was Euro 225,000 for the year ended 31 December 2015.