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Notice of holding competitive selection of candidates for the position of an Independent Member of the Supervisory Board of Mahistralni Gazoprovody Ukraine PJSC

August 31, 2017, Kyiv - The Ministry of Energy and Coal Industry, according to the Procedure of holding competitive selection of candidates for the position of an independent member of the supervisory board of a state-owned unitary enterprise and their appointment, and holding competitive selection of candidates for the position of an independent member of the supervisory board of a business partnership in whose authorized capital the State owns more than 50 percent of shares (interests), who are proposed by an entity in charge of managing state property to be elected as independent members of the supervisory board, as approved by the Resolution of the Cabinet of Minister of Ukraine No. 142 of 10 March 2017, and the Order of the Ministry of Energy and Coal Mining No. 449 of 30 June 2017 “On approval of the Regulations on the principles of formation of the Supervisory Board of Mahistralni Gazoprovody Ukraine PJSC, announces a competitive selection of candidates for the positions of four independent members of the Supervisory Board of MahistralniGazoprovody Ukrainy PJSC (transmission system operator).


Name of the company: Mahistralni Gazoprovody Ukrainy Public Joint-Stock Company (hereinafter MGU PJSC).

Location of the company: 3-a Ivana Honty St., Kyiv, 04112.

Key business activities of MGU PJSC:

MGU PJSC has been created pursuant to the Resolution of the Cabinet of Ministers of Ukraine “On unbundling of natural gas transmission and storage (injection, withdrawal) operations” No. 496 of 01 July 2016 as the national gas transmission system operator to take over the property used for the purposes of natural gas transmission and registered on the balance sheet of Ukrtransgaz PJSC, subsidiary of Naftogaz of Ukraine NJSC. The gas transmission system of Ukraine provides gas transits from Russia to the European Union, countries of the Balkan Peninsula, transmits imported and domestic gas to Ukrainian consumers and underground gas storage facilities. Its annual transmission capacity is 281 bcm (billion cubic meters) of gas at the entry point and 146 bcm at the exit point, the length of its pipelines exceeds 38,000 km, it includes 72 compressor stations with 702 gas compressor units with the 5,448 MW capacity. The GTS also includes: 1,473 gas distribution plants, 12 underground gas storage facilities with the working capacity of 31 bcm.

MGU PJSC will provide transparent and non-discriminatory third party access to gas transmission system and be controlled by the independent energy regulator — the National Energy and Public Utilities Regulatory Commission (hereinafter the NEPURC). 100% of shares in MGU PJSC are owned by the State, and the Ministry of Energy and Coal Industry is authorized to manage the equity rights of the State in the authorized capital of MGU PJSC. MGU PJSC will function as an enterprise regulated by the State. MGU PJSC must develop gas transmission network development plans and submit these plans and proposals regarding the tariff (cost-based or incentive-based) to be approved by the NEPURC according to the EU Energy Directives. MGU PJSC carries out its activities subject to legal and regulatory requirements and energy provisions of the EU acquis and recommendations of the Organization for Economic Co-operation and Development on corporate governance of state-owned enterprises.

The key areas of activities of MGU PJSC are transmission and management of assets of main pipeline transport according to the principles of competitive energy market and the EU Directives, in particular:

§          Transmission of natural gas in accordance with the Ukrainian law and EU acquis under the Treaty establishing the Energy Community;

§          Storage (injection, withdrawal) of natural gas in accordance with the Ukrainian law and EU acquis under the Treaty establishing the Energy Community;

§          Operation, reconstruction and maintenance, putting into and out of operation of main gas pipelines, gas compressor stations, including cross-border gas pipelines, and other related facilities and natural gas storage facilities;

§          Development of the gas transmission system development plan, including design and construction of main pipelines, bleeders, cross-border gas pipelines and their facilities, communication and energy supply lines, automation systems in accordance with the early demand projections and with the approval by the NEPURC;

§          Implementation of existing and development and proposing of improved gas market rules, gas transmission network codes and interconnection agreements with gas TSOs of the neighbouring countries;

§          Ensuring proper utilization of the natural gas transmission system and underground gas storage facilities, including the creation of sufficient capacity of cross-border gas pipelines for the integration of the gas infrastructure of Ukraine and the EU in order to meet the economically and technically feasible demand for such capacity and ensuring the security of natural gas supply;

§          Reconstruction, upgrading and re-equipment of underground natural gas storage facilities, gas collection, purification and drying plants and underground natural gas storage facilities;

§          Overall providing a transparent, reliable, cost-optimized, economical and sustainable natural gas infrastructure enabling non-discriminatory access to the gas transmission network on the basis of transparent business practices according to the competitive gas market rules and the EU principles for domestic and international consumers for the benefit of the Ukrainian people in compliance with the EU Energy Directives.

The required competences of Members of the Supervisory Board of MGU PJSC:

1)      Competitive energy market regulatory policies

2)      Operational efficiency

3)      Business strategy and development

4)      Finance and Audit

5)      International relations

6)      Risk management

7)      Compliance and corporate governance

 

Requirements to applicants for the position of independent members of the Supervisory Board of MGU PJSC:

The Supervisory Board of MGU PJSC consists of seven (7) members, at least four (4) of which must be independent members, other members of the Supervisory Board are nominated by the State.

The mandatory requirements are the following:

-  Higher education, in particular in the following areas: Oil and Gas, Finance, Economics, Energy, Law, Business Administration (MBA is preferable);

-  At least 10-year overall work experience; at least 3-year experience as top manager (General Director, Chairman or Member of the Board of Directors, Chairman or Member of the Supervisory Board (Board of Directors)) or at least 5-year experience as public servant;

-   Proficiency in Ukrainian and/or English language;

-   Compliance with the requirements to independent members set by the Law of Ukraine “On the State Property Management”, requirements to independent directors set by the Law of Ukraine “On Joint-Stock Companies”, requirements to independent members of supervisory boards approved by the Cabinet of Ministers of Ukraine;

-    A candidate for the position of an independent member of the Supervisory Board must not be and must not have been within the last five years an officer or an employee or a representative of MGU PJSC, other economic operator that operates/operated the gas transmission system of Ukraine (except as a member of the Supervisory Board) or its subsidiary, branch, representative office or other separate subdivision;

-    A candidate for the position of an independent member of the Supervisory Board must not be and must not have been within the last five years an affiliate (in the meaning defined by the Law of Ukraine “On Joint-Stock Companies”) of MGU PJSC, other economic operator that operates/operated the gas transmission system of Ukraine, its shareholder or its subsidiary, branch, representative office, other separate subdivision or their officers;

-    A candidate for the position of an independent member of the Supervisory Board does not receive and has never received from MGU PJSC, other economic operator that operates/operated the gas transmission system of Ukraine, its subsidiary, branch, representative office or other separate subdivision, any income other than income in the form of remuneration for the performance of its functions as a member of the supervisory board; holds no equity rights in MGU PJSC (individually or jointly with the affiliates) and does not represent the interests of such holder;

-    A candidate for the position of an independent member of the Supervisory Board is not an auditor of 
MGU PJSC, other economic operator that operates/operated the gas transmission system of Ukraine, and has not been such within the three years preceding his/her appointment (election) to the Supervisory Board; does not participate in the audit of the company, its subsidiary, branch, representative office or other separate subdivision as an auditor employed by an auditing organization and has not participated in such audit within the three years preceding his/her appointment (election) to the Supervisory Board;

-    A candidate for the position of an independent member of the Supervisory Board does not have and has not had within the last year any economic or civil law relations with MGU PJSC, other economic operator that operates/operated the gas transmission system of Ukraine, its subsidiary, branch, representative office or other separate subdivision directly or as a shareholder, manager or member of the executive body of such economic operator that has or has had such connections;

-                                  A candidate for the position of an independent member of the Supervisory Board must be able to dedicate a sufficient portion of his/her working time to participate in the activities of the Supervisory Board of MGU PJSC and cannot simultaneously be a member of the Supervisory Board or governing body in more than three companies.

 

Additional requirements:

-                                  Understanding of the legislative and regulatory instruments regulating the activities of the company; knowledge of the specific aspects of the company’s activity; knowledge of the natural gas market, trends and development prospects in the industry;

-                                  Understanding of the legislative and regulatory instruments regulating the energy market of the Member States of the European Union, including the unbundling, understanding of the peculiarities and specific aspects of the operation of the international natural gas market, global trends and development prospects;

-                                  Knowledge in the field of audit, organization of internal control and compliance; knowledge of the process of development and implementation of the Business Strategy;

-                                  Experience of work in supervisory boards.

 

Expected functions of Members of the Supervisory Board of MGU PJSC:

The Supervisory Board may establish permanent and temporary committees. The following permanent committees must be established by the Supervisory Board: the Audit Committee, the Remuneration Committee, the Nomination Committee, the Ethics Committee. The Supervisory Board members that are members of such committees must meet the requirements to competences relating to the key functions and responsibilities of respective committees.  Each position of Member of the Supervisory Board has the following key functional elements, which are mandatory for the performance of the following functions:

Strategy development and implementation control

§          Consulting in the process of development and approval of corporate strategies building on evidence-based analyses, supervision over business transformation for achieving the aim of development of competitive gas market and approval of key organizational changes;

§          Analysis of and control over the implementation of the strategy of Mahistralni Gazoprovody Ukrainy PJSC by approving short-term action plan, functional strategies and coordination of priorities proposed by the company’s management;

§          Implementation of risk management policies and procedures;

§          Approval of annual budget and business plans of the company, as well as control over major capital expenditures, acquisition and alienation of property according to the 10-year network development plan approved by the regulator and tariffs adapted thereto;

§          Identifying performance indicators for the company’s management and regular monitoring of achieving the goals aimed at the implementation of the strategy, and timely taking of necessary measures.

Corporate governance

§          Ensuring public trust to and transparency of management of MGU PJSC;

§          Playing the key role in the introduction of best international standards of corporate governance for the benefit of MGU PJSC in respect of corporate governance of state-owned enterprises;

§          Monitoring the quality of compliance with corporate governance standards, and regularly impact assessment aiming to improve the company’s performance and introduction of necessary changes;

§          Introduction of non-discriminatory access to the gas transmission network and control over the allowing thereof by MGU PJSC based on transparent business practices according to the competitive gas market rules and the EU principles for domestic and international customers.

Control over the activities of the company’s management

§          Ensuring recruitment and employment of the top management (Board of Directors) of MGU PJSC committed and able to implement the company’s strategy, effectively manage the business, ensure the achievement of the approved objectives and introduce the necessary organizational changes;

§          Regular assessment of performance of the top management and, where necessary, rotation and dismissal of managers; management of the pool of candidates for the company’s key positions;

§          Taking decisions on the level of compensations to the top management, applying the schemes of incentives and annual rewards based on the results of assessment of performance and achieving of annual personal objectives and the company’s objectives;

§          Facilitating the Board of Directors of MGU PJSC in ensuring financial stability of the company in crisis;

§          Ensuring that the company’s managers have public trust, observe the principles of transparency, non-discriminatory access to gas infrastructure in compliance with the legal and regulatory framework of Ukraine and the EU.

Alignment of interests

§          Ensuring that the actions and motives of the top management of the company comply with best corporate governance practices, interests of the State and the Ukrainian people;

§          Introduction of best ethical standards and prevention of potential conflicts of interest among the managers, Members of the Board of Directors, the Supervisory Board, including unlawful utilization of corporate assets, abuse in operations relating to related parties etc.

Audit and control

§          Facilitating the introduction of efficient system of timely and accurate reporting in compliance with the existing and future accounting and independent audit standards, facilitating full and transparent disclosure of information according to the Ukrainian and EU energy standards and principles, including supervision over regular independent audits;

§          Facilitating the introduction of proper control systems, in particular risk management, financial and operational control, cyber security, business continuity systems, as well as compliance with the legal and regulatory framework in which the company operates;

§          Ensuring public trust by introducing a proper corporate management system and protection of customers.

Transparency and disclosure of information

§          Facilitating the ensuring of transparency, supervision over the process of information disclosure and the quality of communications on the part of the company according to the competitive market principles and the Ukrainian and the EU legal and regulatory framework.

Consulting

§          Consulting the company’s managers in solving complicated issues, supporting key transformation projects and organizational changes in the company by means of participation in the activities of committees of the Supervisory Board, including the Audit Committee, the Ethics Committee, the Nomination Committee and the Remuneration Committee.

 

To participate in competitive selection, a candidate personally submits and/or sends via e-mail:

 

§          Application for the participation in the competitive selection procedure addressed to the Chairman of the Commission for Competitive Selection of Independent Members of the Supervisory Board of MGU PJSC, Mr. Ihor Nasalyk.

The application must contain information about the applicant (surname, name, patronymic, registered address, contact telephone number, e-mail), consent/refusal to give consent to the disclosure of documents submitted by the applicants after the competitive selection is completed, presence of media and public representatives (see the template attached).

 

The following must be attached to the application:

 

- Copy of personal ID document, copy of the employment record book (if any) or documents confirming the work experience, copy of the document on complete higher education in the relevant speciality;

- Curriculum vitae (resume);

- Consent to personal data processing (attached);

- References (if any);

- Statement of compliance with the criteria of independence of a Member of the Supervisory Board of MGU PJSC (attached);

- Cover letter on performing the functions of an Independent Member of the Supervisory Board of MGU PJSC (to be drawn up in an arbitrary form in Ukrainian/English language not exceeding two pages and to explain the rational for being interested in this vacancy);

- Information about membership in other supervisory boards (in case he/she is a member of supervisory boards).

 

Information about the financial and economic standing of MGU PJSC — information about the balance sheet (Form 1), financial statement (Form 2), cash flow statement (Form 3), statement of owner’s equity (Form 4) must be attached.

The applicant is responsible for the veracity of documents he/she provides.

Applications and documents for the participation in the competitive selection procedure will be accepted until 27.10.2017.

Applications and documents will be accepted at the address: Ministry of Energy and Coal Industry, 4 B. Khmelnytskoho St., room 504-a, Kyiv, 01601

Applications and documents must be e-mailed to: svitlana.kovalenko@mev.gov.ua

For enquiries, please call or mail to: (044) 594-65-33, konkursNR@mev.gov.ua

The competitive selection procedure will commence on 01.11.2017 the address: Ministry of Energy and Coal Industry, 30 Khreschatyk St., Kyiv, 01601.

The results of the competitive selection procedure will be published by 30.11.2017.

In case of discrepancies regarding the interpretation or application of the provisions of this Notice, the text in Ukrainian will prevail.