Board of Directors Committees

In accordance with the decision of the Russian Railways Board of Directors dd. November 25, 2013, the Strategic Planning Committee of the Russian Railways Board of Directors, the Audit and Risk Committee of the Russian Railways Board of Directors, the HR and Compensations Committee of the Russian Railways Board of Directors were established at the Company. The previously established Audit, Risk and Compensations Committee of the Russian Railways Board of Directors was eliminated.

The Audit and Risk Committee and the HR and Compensations Committee are headed by independent directors.

The Strategic Planning Committee

In the reporting year, the Strategic Planning Committee of the Russian Railways Board of Directors conducted 8 meetings. The Committee prepared recommendations to the Russian Railways Board of Directors for decision-making, including the following:

• Russian Railways Group development strategy until 2030;
• Consolidated financial plan projects of Russian Railways and its main subsidiaries and affiliated companies and the Russian Railways investment programme for 2014 and the planning period 2015 and 2016;
• Results of the public technological and price audit of Russian Railways investment projects and review of the corporate standard project “Conducting mandatory technological and price audit of Russian Railways investment projects and its affiliates and subsidiaries;
• Review of preparation and decision-making of tariff, fees and charges setting within price limits established by Federal executive bodies regulating natural monopolies;
• Making amendments in the Russian Railways Charter, the Provision on the Board of Directors, the Federal Law “On Railway Asset Management and Disposal” and Order of the RF Government No 57 dd. February 06, 2004 "On restricted property assets of Russian Railways;
• Principles of Russian Railways Board of Directors participation in affiliates and subsidiaries;
• Implementation of the development strategies of Russian Railways key affiliates and subsidiaries and termination of membership of Russian Railways in certain affiliates and subsidiaries.

The Risk and Audit Committee

The Risk and Audit Committee of Russian Railways Board of Directors (until November 25, 2003 — the Audit, Risk and Compensations Committee of the Russian Railways Board of Directors) conducted 6 meetings in the reporting year.

The Committee prepared recommendations for the Russian Railways Board of Directors to take decisions on the following issues:

• Reduction of the Russian Railways share in certain subsidiaries and affiliates;
• Defining the position of Russian Railways (Russian Railways representatives) at the meeting of directors of subsidiaries and affiliates to approve the budgets of subsidiaries and affiliates;
• Recommendations for the Annual General Meeting regarding the agenda (approval of the company auditor, approval of the annual statement of the Company, annual accounting (financial) reporting of the Company including the report on financial results and distribution of the net profit at year-end and dividend payments);
• Long-term bonus payment to Russian Railways Board of Directors members.

The HR and Compensations Committee

Meetings of the HR and Compensations Committee of the Russian Railways Board of Directors are planned for the first half of 2014 in accordance with the work plan of the Russian Railways Board of Directors. In 2013, the Chairman of the Committee held meetings with the executive bodies of Russian Railways to jointly work out proposals to improve the motivation system and pay bonuses to Russian Railways Board of Directors members.