Committees of the Board of Directors

The Board of Directors has three committees:

Report on the Audit Committee’s Performance

The Board of Directors set up the Audit Committee, the Nominations and Remuneration Committee and the Strategy Committee for preliminary review of the most critical aspects of the Company’s operations.

The Committees’ activities, competencies and functions, the procedure to convene and hold the Committee meetings and issue resolutions, and the rights and responsibilities of the Committee members are all set out in the Regulation on the Committees of TransContainerReference to document.

In 2018, the Audit Committee held 9 in-person meetings and 1 in form of absentee voting, and discussed a total of 65 issues.

The Audit Committee’s agendas were drafted based on the Board’s instructions and the Committee’s Work Schedule approved at the first meeting of the newly elected Committee. In accordance with the Audit Committee’s Work Schedule, 55 issues were discussed, including those related to financial (accounting) statements, risk management, internal control, corporate governance, internal and external audit, combating misconduct by the Company’s employees or third parties, and handling of the Committee’s organisational matters. Issues outside the scope of the Work Schedule included the financial and legal audit of TransContainer, measures to improve the performance of Kedentransservice, use of materiality criteria for filtering the immovable assets not covered by the Company’s Non-Core Asset Disposal Programme (postponed), and approval of non-audit service contracts with PricewaterhouseCoopers Audit ( PwC Audit) and other members of the same global network.

Interaction with the Revision Commission

The Chairman of the Audit Committee invites the representatives of the Revision Commission to attend the Audit Committee’s meetings held to review matters related to the audit of the Company’s financial and business operations, seeking to engage in a constructive and detailed discussion about the audit findings and identified violations. The Audit Committee considers opinions of the Revision Commission members on the materiality of identified violations and management comments on the reasons behind such violations and proposed remedial actions. The Audit Committee is also charged with monitoring the steps taken to eliminate the violations identified by the Revision Commission.

Interaction with the External Auditor and the Internal Audit Service

The Chairman of the Audit Committee invites the representatives of the Company’s auditor and head of the Internal Audit Service to attend most Audit Committee’s meetings in order to improve interaction between the Audit Committee and the Company’s external auditor / Internal Audit Service. Hence, the members of the Audit Committee have an opportunity to get timely feedback from the auditors on the items discussed at the meetings of the Audit Committee. Moreover, the Company seeks to ensure the highest level of transparency and make information on the Company’s operations available to all stakeholders, including the Audit Committee, the external auditor and the Internal Audit Service.

In addition, the Audit Committee holds regular confidential meetings with the external auditor and head of the Internal Audit Service without inviting the representatives of the management. Such meetings are held pursuant to the approved schedule for confidential meetings of the Audit Committee with the external auditor and head of the Company’s Internal Audit Service. In 2018, the Audit Committee held four meetings, including two meetings with the representatives of PwC Audit, the Company’s external auditor, and two meetings with head of the Internal Audit Service.

In 2018, with a view to ensuring independence and impartiality of external audit function, the Audit Committee suggested that the Board of Directors submit a recommendation to the Annual General Meeting of shareholders encouraging it to approve PwC Audit as a TransContainer’s auditor to carry out an audit of the Company’s RAS and IFRS financial (accounting) statements for 2018. The Audit Committee gave recommendations to the Board of Directors with regard to amount of remuneration for the external auditor.

Report on the Nominations and Remuneration Committee’s Performance

In 2018, the Nominations and Remuneration Committee held 10 in-person meetings discussing a total of 52 matters.

The Nominations and Remuneration Committee’s agendas were drafted based on the Board’s instructions and the Committee’s Work Schedule approved at the first meeting of the newly elected Committee. The Nominations and Remuneration Committee reviewed items related to the policy and practices of remunerating members of the Company’s management, HR planning, nominations, and composition of the Company’s governance bodies. Issues outside the scope of the Work Schedule included preliminary consideration of nominees to the Executive Board and the subsidiaries governance bodies.

Interviews with Candidates to Key Company Positions

To approve nominees to key Company positions, in 2018, the Nominations and Remuneration Committee continued to conduct face-to-face interviews with said candidates. Staging of face-to-face interviews with candidates, along with the in-depth analysis of the candidates’ educational and professional background, help members of the Nominations and Remuneration Committee get a better understanding of the candidates’ professional and personal qualities and their suitability for the Company’s key positions.

Report on the Strategy Committee’s Performance

In 2018, the Audit Committee held 9 in-person meetings and 1 in form of absentee voting, and discussed a total of 42 issues.

Items related to setting the Company’s business priorities, budgeting and budget monitoring, managing the Company’s subsidiaries, investing in other entities, and handling of the Committee’s organisational matters were discussed. The Strategy Committee’s agendas were drafted based on the Board’s instructions and the Committee’s Work Schedule approved at the first meeting of the newly elected Committee.