The Strategy and Sustainability Committee:
1. Alexey MOISEEV – Chairman of the Committee
2. Maria GORDON, Independent Director
3. Evgenia GRIGORIEVA
4. Kirill DMITRIEV
5. Andrey DONETS
6. Sergey IVANOV
7. Sergey MESTNIKOV
8. Alexey NOSKOV, Independent Director
9. Aysen NIKOLAEV
10. Vladimir RASHEVSKY
11. Maxim TERESHCHENKO
12. Oleg FEDOROV
The Audit Committee:
1. Maria GORDON – Chair of the Committee, Independent Director
2. Dmitry KONOV, Independent Director
3. Alexey NOSKOV, Independent Director
TheHR & RemunerationsCommittee:
1. Evgenia GRIGORIEVA – Chair of the Committee
2. Maria GORDON, Independent Director
3. Dmitry KONOV, Independent Director
4. Alexey NOSKOV, Independent Director
November 20, 2017 The National Corporate Governance Rating of PJSC ALROSA Confirmed at 7 ++ "Advanced Corporate Governance Practices"
The Russian Institute of Directors confirms that the Public Joint Stock Company ALROSA’s rating is at NCGR 7 ++ "Advanced Corporate Governance Practices" according to the methodology of the National Corporate Governance Rating (NCGR®).
In accordance with the scale of the National Corporate Governance Rating, a Company with an NCGR 7 ++ complies with the requirements of Russian legislation in the field of corporate governance and follows a significant number of recommendations in the Corporate Governance Code. The company is characterized by rather low risks of owner losses related to the quality of corporate governance.
During the monitoring of corporate governance practices at PJSC ALROSA, a number of corporate events took place.
On June 30, 2017, the annual General Meeting of Shareholders was held regarding the results for 2016.
In accordance with the agenda of the meeting, the shareholders approved the Annual Report and annual financial statements, a decision was made to pay dividends according to the results for 2016, new members of the Supervisory Board and the Auditing Committee were elected, and the Company's auditor for 2017 was approved.
During the annual General Meeting of Shareholders of PJSC ALROSA, changes were also made to the Articles of Associating of PJSC ALROSA, the Regulations on the General Meeting of Shareholders, the Regulations on the Supervisory Board, and the Corporate Governance Code of the Company.
The new Supervisory Board includes four independent directors (M.V. Gordon, D.V. Konov, V.I. Lemesheva and O.R. Fedorov), nine non-executive directors (G.K. Basharin, E.A. Borisov, A.S. Galushka, E.V. Grigorieva, G.I. Danchikova, K.A. Dmitriev, S.V. Mestnikov, A.G. Siluanov, A.O. Chekunov) and two executive directors (the President of PJSC ALROSA, S.S. Ivanov, and Vice President of PJSC ALROSA, S.V. Barsukov).
Four persons joined the Auditing Committee, all being representatives of the Company's shareholders.
After the election of the new Supervisory Board, the composition of the committees of the Supervisory Board of PJSC ALROSA was formed.
The Audit Committee included three independent directors (M.V. Gordon as the Chairperson, V.I. Lemesheva and O.R. Fedorov) and two non-executive directors (E.V. Grigorieva, K.A. Dmitriev).
The HR and Remunerations Committee is comprised of two independent directors (V.I. Lemesheva as the Chairperson and D.V. Konov) and one non-executive director (S.V. Mestnikov).
AO PricewaterhouseCoopers Audit, a company belonging to the Big Four audit firms worldwide, was selected as the company's auditor for 2017.
The following positive changes were recorded in the Company's corporate governance practices:
1. The Corporate Governance Code of PJSC ALROSA stipulates that there is a need to work with the Registrar to update shareholder information in the shareholders ' register.
2. The Corporate Governance Code of the Company provides for a list of the most important issues recommended by clause 168 of the Corporate Governance Code for consideration at a face-to-face meeting of the Supervisory Board.
3. The Corporate Governance Code of PJSC ALROSA provides that the purchase and redemption of shares by the Company shall be carried out at a fair price determined in accordance with the recommendations of the Russian Corporate Governance Code.
4. The Corporate Governance Code of PJSC ALROSA enshrines the ban on voting by "Quasi-treasury" shares.
5. The Company has detailed the remuneration structure for the External Auditor of PJSC ALROSA.
6. The number of meetings of the Supervisory Board held in a face-to-face format has been increased.
7. Social policy has been disclosed on the Company's website.
The experts identified the following as deterrent factors requiring further development by the Company:
1. During the reporting period, non-audit services were provided to the Company by the External Auditor, amounting to about 12 percent of the audit fee.
2. The number of independent directors in the Supervisory Board decreased from 5 (⅓ of the total number, which was in compliance with the recommendations of the Corporate Governance Code) to 4 individuals, which complies with the Listing Rules of PJSC Moscow Exchange for issuers whose shares are placed on the First listing level.
3. The Supervisory Board's strategy implementation was not considered during the reporting period.
4. The HR and Remunerations Committee includes a non-executive director (previously all members of the Committee were independent directors).
5. The Company's 2016 annual report discloses the information about persons interested in transactions in insufficient detail.
6. The Company's 2016 annual report does not provide the information about the total amount of remuneration received by Executive Committee members, the procedures used to elect external auditors and ensure their independence and objectivity, and the results of evaluation by the Auditing Committee of the effectiveness of the external and internal audit process.
The aforementioned factors do not allow the experts to change the Company's corporate governance rating in a positive direction, the NCGR for PJSC ALROSA currently remains unchanged and is confirmed at the level of 7++ "Advanced Corporate Governance Practices".
Public Joint Stock Company ALROSA is a Russian diamond mining company, ranking number one in the world in terms of rough diamond mining and possessing the largest diamond stock on the planet. ALROSA Group is involved in the field exploration, production, processing and sale of rough diamonds. The Group's activities are concentrated in two Russian regions, the Republic of Sakha (Yakutia) and Arkhangelsk region, as well as in two African countries, Angola and Botswana.
The shareholders of the Company are the Russian Federation, with a 33.0256 percent share of the authorized capital, the Republic of Sakha (Yakutia), 25.0002 percent, and districts (uluses) of the Republic of Sakha (Yakutia), 8.0003 percent. The shareholder structure also includes a large number of minority shareholders.
PJSC ALROSA is a public company, the Company's shares are included in the First level listing on PJSC Moscow Exchange.
The company's IFRS revenue for 2016 was RUB 317,090 billion, net profit was RUB 133,471 billion.
For additional information, please contact:
Lead Expert at the Expert Center of the Russian Institute of Directors
Telephone: (495) 502-94-85
Deputy Director – Head of the Expert Center of the Russian Institute of Directors
Telephone: (495) 502-94-85
Press Service of PJSC ALROSA
Telephone: (495) 620-92-50