Committees under the Board of Directors
In 2022, there were four committees formed under the Company’s Board of Directors:
Nomination and Remuneration Committee
Sustainable Development Committee
To improve the effectiveness of interaction with the Company’s officials, to prepare in advance and discuss issues considered by the Board of Directors more promptly and in more details, as well as to monitor the implementation of decisions made, the Board of Directors establishes standing committees. The Board of Directors has the authority to establish and dissolve committees of the Board of Directors, to decide the number and makeup of committees, to appoint and remove committee chairpersons, and to approve committee regulations.
The Board of Directors’ committees serve as advising bodies, and the Board of Directors may or may not rely on their recommendations when making decisions.
The Board of Directors strives to form committees in line with the recommendations of the Corporate Governance Code of the Bank of Russia and the requirements of the Listing Rules of the Moscow Exchange.
According to the Company’s corporate governance guidelines, adherence to which is a requirement for including and keeping shares in the second tier of the securities quotation list established by the Listing Rules of the Moscow Exchange, the Audit Committee and the Nomination and Remuneration Committee of the Board of Directors of the Company should consist of independent directors, and, if for some objective reason, this is not possible, the majority of the Committee should be made up of independent Board members.
The Audit Committee consists of two independent directors, V. Pogulyaev and R. Kascheyev, as well as the Chair of the Board of Directors, E. Chernova. Although E. Chernova’s membership on the Audit Committee prevents it from being entirely made up of independent directors, her expertise in audit and finance, education in economics and management, ACCA diploma, and more than fifteen years of experience as a financial expert in Russia’s private equity and venture capital industries enable her to carry out the duties outlined in the Regulations on the Audit Committee effectively. The Board of Directors therefore believes that the composition of the Audit Committee strikes a balance between the members’ independence, professional experience, and financial and auditing skills.
The Nomination and Remuneration Committee of the Company’s Board of Directors is made up entirely of independent Board members. The Committee is chaired by A. Vasilenko who possesses all the necessary HR management skills as well as a wealth of experience working for businesses across a variety of industries.
Attendance of Board members at Committee meetings
|Full name of Board member||Attendance at Board committee meetings|
|Audit Committee||Strategy Committee||Nomination and Remuneration Committee||Sustainable Development Committee|
|FROM 01.01.2022 TO 23.06.2022|
|FROM 24.06.2022 TO 31.12.2022|
Audit Committee of the Board of Directors
Report of the Chair of the Audit Committee on the work performed by the Committee in 2022Vladislav Pogulyayev
In 2022, the Audit Committee held six meetings, five of which were in the form of joint attendance. All Committee members attended the meetings and invited other Board members to join the meetings.
The Audit Committee paid close attention to review the completeness of the Company’s risk map, the relevance of the Risk Management Policy and the quality of the risk management process carried out by the Company’s management. Risk management issues were addressed at almost all Committee meetings.
The year 2022 was replete with the risks that were previously thought to be unlikely to occur, and management confirmed the high quality of the risk management process, the deep understanding of risk management concepts and methodologies, and the real and full application of the risk management policy in all key internal processes aimed to ensure the stability of the Company’s operations.
The Audit Committee interviewed all major risk owners, checked that the Company’s risk map was up-to-date, and through conversation with risk owners confirmed that each of them is duly complied with the Company’s Risk Management Policy.
Before the Company’s Board of Directors approved the 2023 business plan in 2022, the Audit Committee members gave it a thorough evaluation.
While reviewing the draft business plan, Committee members received reassurances regarding the high quality of the planning process, both in terms of the accuracy and traceability of all the numerical indicators in the plan and the fact that the plan takes into account all pertinent information for all of the Board’s focus areas, including strategy, the new construction segment, sustainability plans, risk management programmes, and other significant aspects.
The Audit Committee observes that all management representatives and line managers of the Company are heavily and genuinely invested in the planning and review process, which gives the Board assurance that the Company’s 2023 business plan is pertinent, comprehensive, and represents a high-quality outlook.
The Audit Committee regularly examines the accuracy and reliability of the Company’s consolidated financial statements.
The Audit Committee held three meetings to review the reliability of the Company’s annual and interim consolidated financial statements and to meet with the Company’s auditors.
The Audit Committee believes that the Company’s consolidated financial statements are accurate because every conversation with the auditors went as expected and all significant issues of the audit were covered.
The Audit Committee considered the auditor nominations for the 2022 reporting year within its remit and made respective recommendations to the Board to approve at the General Meeting of Shareholders.
The role of the Audit Committee is to evaluate the efficiency of the Company’s risk management and internal control system, as well as internal and external audits of the Company, and to provide recommendations to the Board of Directors when making decisions on these issues. The Audit Committee also reviews the Company’s financial performance, analyses the Company’s financial statements (including interim financial statements), and makes recommendations to ensure that the Company strictly complies with applicable Russian law.
Primary competencies of the Committee
- Monitoring the completeness, accuracy, and reliability of accounting (financial) statements of the Company, which are compliant with RAS and the Company’s consolidated financial statements under IFRS
- Monitoring the reliability and effectiveness of risk management, internal control and corporate governance, including the performance assessment of the Company’s risk management, internal control, and corporate governance practices, and the development of proposals for their improvement
- Handling the employment (termination) and remuneration of the Internal Audit Service’s Head
- Assessing the internal audit performance and considering the proposals for its improvement
- Assessing the independence, objectivity and absence of conflict of interest of the Company’s external auditors, including the assessment of nominees for the Company’s auditors, proposals for the appointment, re-election and removal of the Company’s external auditors, their remuneration and the terms of their engagement
The Audit Committee of the Board of Directors is chaired by an independent member of the Board of Directors, which is in line with the recommendations of the Corporate Governance Code of the Bank of Russia.
The following three people make up the incumbent Audit Committee of the Board of Directors, which was elected on 30 June 2022 (Board meeting minutes No. 378 dated 30 June 2022):
- Vladislav Pogulyayev – Chair of the Audit Committee
- Roman Kascheyev
- Ekaterina Chernova
The Audit Committee met six times in 2022 in face-to-face format, including by videoconference.
Recommendations of the Audit Committee to the Company’s Board of Directors
- To approve the Risk Management Policy of Russian Aquaculture PJSC.
- To recommend to the annual General Meeting of Shareholders to approve Atlas Audit LLC (OGRN 5147746074251) as the Company’s auditor responsible for auditing the Company’s RAS financial statements for 2022.
- To recommend to the annual General Meeting of Shareholders to approve BST JSC (OGRN 1027700425444) as the Company’s auditor in charge of auditing the IFRS consolidated financial statements of the Company for 2022.
- To approve the Company’s business plan for 2023.
Strategy Committee of the Board of Directors
Report of the Chair of the Strategy Committee on the work performed by the Committee in 2022Sayyora Ayupova
”Beginning in March 2022, the Strategy Committee of the Board of Directors of INARCTICA PJSC met three times to discuss with the Company’s management how to approach strategic investment projects in light of the altered geopolitical and economic environment and the difficulties associated with the Company’s long-term strategy for 2022–2026.
The meetings of the Strategy Committee were attended by all Committee members.
During its meetings, the Strategy Committee considered strategic investment projects to build the Company’s vertically integrated business, and adjusted the INARCTICA Group’s development strategy for 2023–2027.
The meetings culminated in the formulation of thorough recommendations for the Company’s Board of Directors regarding steps to be taken in connection with the renewal and execution of strategic projects. In particular, management concentrated on creating new competencies to successfully implement the modified strategy, found new openings for extending and adapting investment projects, tested and launched a new, highly profitable B2B ready-to-eat product line, and rethink the business marketing support options. As a result, the Company kept on track with its strategic plan to develop a vertically integrated business strategy in the new environment.
The Strategy Committee intends to keep an eye on the Company’s progress on updated investment projects in 2023, develop new capabilities for accomplishing the long-term strategy, and put into practice a new commercial strategy to broaden its client base and geographic reach. Currently, these appear to be the most important and promising sectors of the Company’s development.
The purpose of the Strategy Committee of the Board of Directors is to ensure that the Company’s Board of Directors effectively addresses issues pertaining to identifying the priority areas, strategic goals, and fundamental principles of the Company’s strategic development, monitoring the advancement of adopted programmes, and making recommendations to the Board of Directors on these areas.
Primary competencies of the Committee
- Making recommendations to the Board of Directors on the priority business areas and the overall development strategy of the Company and its subsidiaries, and approving a strategy implementation plan and suggesting changes to this strategy
- Developing the Company’s investment policy.
- Making recommendations on the Company’s dividend policy and on the distribution of the Company’s profits and losses.
- Identifying the Company’s key performance indicators (KPIs) and assessing the Company’s performance over the long term.
The following three people make up the incumbent Strategy Committee of the Board of Directors, which was elected on 30 June 2022 (Board meeting minutes No. 378 dated 30 June 2022):
- Sayyora Ayupova – Chair of the Strategy Committee
- Dmitry Vasilkov
- Arne Geirulv
The Strategy Committee met three times in 2022 in face-to-face format, including by videoconference. The meetings were attended by all Committee members. Meeting attendees discussed the progress being made on investment projects and the creation of value-added products (VAPs), as well as evaluated the INARCTICA Group’s development strategy for 2023–2027 and provided the Board of Directors with the necessary recommendations.
Recommendations of the Strategy Committee to the Company’s Board of Directors
- To approve the Company’s development strategy for 2023–2027.
Nomination and Remuneration Committee of the Board of Directors
Report of the Chair of the Nomination and Remuneration Committee on the work performed by the Committee in 2022Anna Vasilenko
The key objective of the Nomination and Remuneration Committee of the Board of Directors of INARCTICA PJSC is to strengthen the professional composition and, consequently, the efficiency of the Company. In 2022, the Committee had special focus on long-term motivation of employees of INARCTICA Group, KPI system of key managers, as well as approaches to succession planning of the top management.
Over the past year, the management of INARCTICA has significantly advanced its competencies, which is particularly valuable for ensuring the Company’s sustainable performance. We continue to improve the KPI system of top management, in particular, we are integrating sustainability indicators into it. Likewise, we are actively working on succession planning within the Company, taking into account its business strategy and current challenges. The Committee communicates with management on an ongoing basis to identify employee expectations in terms of professional development.
In 2022, the Committee assessed the independence of the members of the Board of Directors, approved a long-term incentive scheme for the Company’s employees, and analysed the continuity of key employees’ functions and management’s KPIs for 2023.
The Nomination and Remuneration Committee’s work plan for 2023 includes refining the KPI system and long-term incentives for employees. Particular attention will be paid to HR issues affecting the Company’s sustainability prospects.
The Nomination and Remuneration Committee’s main goal is to ensure that the Company’s Board of Directors works efficiently to resolve matters pertaining to corporate personnel policy, standards, and principles for selecting candidates for the Company’s governing bodies, as well as to bring in the most qualified professionals to manage subsidiaries and affiliates.
Primary competencies of the Committee
- Developing the Company’s overall HR policy
- Elaborating the remuneration policy and various employee incentive programmes, overseeing their implementation and enforcement
- Evaluating the performance of the Company’s executive bodies, including a preliminary review of reports on KPI fulfilment
- Planning key appointments and making recommendations to the Board of Directors on candidates for key positions within the Board purview
- Preparing recommendations on a performance evaluation system for the Company’s Board of Directors and its Committees
- Assessing the composition of the Board of Directors in expertise, experience, independence and involvement of its members in the Board activities, and identifying priority areas to make the Board stronger
- Analysing qualifications and independence of all candidates to the Board based on the information available to the Committee
- Recommending to the Board of Directors that, in certain cases, a candidate (or a member) be deemed independent, notwithstanding any formal affiliation with the Company, its material shareholder, counterparty or competitor
The following three people make up the incumbent Nomination and Remuneration Committee of the Board of Directors, which was elected on 30 June 2022 (Board meeting minutes No. 378 dated 30 June 2022):
- Anna Vasilenko – Chair of the Nomination and Remuneration Committee
- Sayyora Ayupova
- Vladislav Pogulyayev
- In 2022, the Nomination and Remuneration Committee held six meetings, of which five were held in person and one by absentee balloting. The Committee members discussed the payment of annual bonuses to employees and top management based on the Company’s performance in 2021, evaluated the independence of the Board members, considered the approval of a stock option scheme, developed succession plans for the Company’s top management, and established the KPIs of the management for 2023 during the meetings. The relevant recommendations and assignments of the Committee were forwarded to the Board of Directors and the management of the Company.
Recommendations of the Nomination and Remuneration Committee to the Board of Directors of the Company
- To approve the third phase of the stock option scheme.
- To confirm that the members of the Board o Directors of Russkaya Akvakultura PJSC – S. Ayupova, A. Vasilenko, D. Vasilkov, R. Kascheyev, A. Marchenko – comply with the independence criteria set out in the Listing Rules of the Moscow Exchange and the Corporate Governance Code of the Bank of Russia.
- To recognise V. Pogulyayev as an independent member of the Board of Directors of Russian Aquaculture PJSC despite the existence of the affiliation therewith – subpara. 6 and 7, para. 4, Annex No. 4 to the Listing Rules of the Moscow Exchange.
Sustainable Development Committee of the Board of Directors
Report of the Chair of the Sustainable Development Committee on the work performed by the Committee in 2022Ekaterina Chernova
The Sustainable Development Committee convened four times in 2022 to discuss meeting agendas.
Sustainable development is an extremely pressing topic. ESG factors and actions in these areas are given strong consideration in Russia and throughout the world.
With the help of the Sustainable Development Committee, management created a roadmap in 2021 that outlined the initiatives for 2022. The Committee’s job was to assist, direct and support management while it carried out the actions that were planned. For instance, we’ve included a section on sustainability in the 2021 Annual Report and scheduled a separate ESG report for 2022. The Company has a lot to say on the matter since in 2022 management undertook several safety, social security, and staff development projects. We also drafted and put into effect more than a dozen policies and carried out a number of environmental efforts.
Additionally, I want to draw attention to the rising interest in sustainable development among both senior executives and regular employees.
The Sustainable Development Committee members appreciated the management’s ESG efforts in 2022.
Getting an ESG rating is a key objective of the Sustainable Development Committee and the management when it comes to environmental, social and governance (ESG) issues. We anticipate that the rating will improve the Company’s capitalisation and provide access to more affordable finance. Our primary objective is to receive a rating in 2024, and the Sustainable Development Committee still has a lot of tasks to complete in 2023.
The Sustainable Development Committee exists to make sure that the Board of Directors properly addresses matters pertaining to the Company’s sustainable development. The Company’s sustainable development encompasses a broad spectrum of initiatives, including (but not limited to) environmental protection, natural resources, waste management, social issues, employee working conditions, gender diversity and other types of diversity among the Company employees, workplace safety, and corporate governance issues.
Primary competencies of the Committee
- Assessing compliance with the sustainable development goals
- Identifying the Company’s priorities in the area of sustainable development
- Contributing to the development of the Company’s sustainability, environmental and social responsibility strategy, and reviewing the results of its implementation
- Previewing the Company’s internal documents regulating corporate governance in the Company submitted to the Company’s Board of Directors for approval, as well as other aspects of the Company’s sustainable development activities
- Examining significant sustainability risks and plans to minimise the adverse effects of those risks
- Supervising the implementation of decisions of th Board of Directors on matters related to the tasks and functions of the Committee
- Facilitating the prevention and resolution of corporate conflicts in the Company
- Supervising the preparation and publication of the ESG Report and the Company’s Annual Report with respect to sustainable development, providing recommendations for the approval of the ESG Report
The following three people make up the incumbent Sustainable Development Committee of the Board of Directors, which was elected on 30 June 2022 (Board meeting minutes No. 378 dated 30 June 2022):
- Ekaterina Chernova – Chair of the Sustainable Development Committee
- Anna Vasilenko
- Andrey Marchenko
In 2022, there were four meetings of the Sustainable Development Committee in the form of joint attendance of Committee members, including by videoconference. The meetings were attended by all Committee members.
The meeting discussions covered the treatment of effluents from the recycling plant, approval of the sustainability roadmap for the year, review of the respective section of the Company’s Annual Report, continuous tracking of the sustainability roadmap progress, and the likelihood of the Company receiving an ESG rating.
Following the meetings, Committee members provided the management of the Company with the necessary assignments and instruction on how to approach the roadmap.
Company’s Corporate Governance Actions Planned for 2023
The following matters pertaining to the Company’s business should be taken into consideration and decided by the Board of Directors, in accordance with its action plan for the first half of 2023:
- To examine proposals for the agenda of the annual General Meeting of Shareholders of the Company for 2022 and discuss nominations to the Board of Directors of the Company
- To review of the Company’s IFRS financial statements for 2022
- To examine the year-end 2022 report on the senior management’s performance and drive
- To assess whether the Company’s management completed the tasks assigned to it by the Board and how well they did it
- To give preliminary approval to the Company’s Annual Report for 2022
- To give preliminary approval of the annual accounts/financial statements for the Company’s performance in 2022
- To convene the annual general meeting of the Company’s shareholders
- To make recommendations to the annual General Meeting of Shareholders on the distribution of profits (including the payment (declaration) of dividends) and losses of the Company for 2022
- To approve the Company’s ESG Report 2022
A total of four meetings of the Company’s Board of Directors are scheduled for the first half of 2023 to cover 15 issues.
Four General Meetings of Shareholders will be called and held according to the Corporate Action Plan for 2023 in order to approve internal documents of the Company, dividend payouts, transactions, the Annual Report, annual accounts/financial statements, auditor, compensation for service on the Company’s Board of Directors, as well as to elect Board members.