Notice of holding competitive selection of candidates for the position of an Independent Member
of the Supervisory Board of State-owned Enterprise Ukrenergo National Power Company

Pursuant to the Procedure for competitive selection of candidates for the position of an independent member of the supervisory board of a state unitary enterprise and their appointment, and for 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 Ministers of Ukraine No. 142 of 10 March 2017, and pursuant to the Order of the Ministry of Energy and Coal Industry of Ukraine No. 752 of 18 December 2017 on competitive selection of candidates for the position of an Independent Member of the Supervisory Board of State-owned Enterprise Ukrenergo National Power Company, the Ministry of Energy and Coal Industry of Ukraine hereby calls for competitive selection of candidates for the positions of four Independent Members of the Supervisory Board of State-owned Enterprise Ukrenergo National Power Company to have the competences described here below and meet the requirements to the candidates.

Name of the company: State-owned Enterprise Ukrenergo National Power Company (hereinafter Ukrenergo).

Location of the company: 25 S. Petliury St., Kyiv, 01032

Ukrenergo’s key areas of activity:

Ukrenergo was established pursuant to the Order of the Ministry of Energy of Ukraine No. 54 of 15 April 1998 on the basis of the SOE National Dispatch Centre of the Power Industry of Ukraine with affiliation of the restructured SOE State Electric Company “Ukrelektroperedacha” as a power company entrusted with functions such as dispatching and process control over the United Energy Systems of Ukraine (UESU) and transmission of electricity via main power networks from generating facilities to regional power networks of power companies (Oblenergos). Ukrenergo’s activities include transmission of power to 4 EU countries, as well as cross-border power transmissions between the UESU and power systems in 3 CIS countries. The Company includes 8 regional power systems across Ukraine and has over 10 thousand employees. It also has high-tech equipment at its 137 extra high voltage (220–750 kV) substations with the total installed capacity of over 78 thous MVA and more than 21 thous km of 220-750 kV EHV main grids and cross-border interconnections. Annual transmission of electricity via Ukrenergo’s main power networks is more than 110 bln kWh.

Ukrenergo will operate as a state-controlled enterprise. Ukrenergo will draft the power network development plans and submit such plans and submit these plans and proposals regarding the tariff (cost-based or incentive-based) to be approved by the NEURC according to the EU Energy Directives. Ukrenergo will operate subject to the EU legal and regulatory requirements as well as energy regulations and corporate governance recommendations of the Organisation for Economic Co-operation and Development (OECD) for state-owned enterprises.

Ukrenergo’s key areas of activity include TSO functions as well as management and operation of main networks, in particular:

§     centralised dispatch (operation and process) control over the UESU and organisation of information sharing with the market operator and participants, TSOs of the neighbouring countries, ENTSO-E and the Energy Community in accordance with the scope and the procedure established by the market regulations, transmission system code, revenue metering code and other regulations;

§     operational mode planning for the UESU in line with the market rules and transmission system code;

§     improvement and development of Ukraine’s electricity market, balancing market and ancillary services market;

§     ensuring efficient operation and process service and repairs of the main and cross-border power networks, reducing physical resource expenditures and network power losses; ensuring operation of the ancillary services market and procurement of ancillary services to comply with the operational safety standards of the UESU;

§     participation in operation monitoring of the fuel (coal, natural gas, fuel oil) flow at TPPs of generating companies, as well as in the improvement of the balance forecasting model for power, fuel and expenditures at TPPs of generating companies in line with market transformations;

§     participation in drafting of forecast balances of power, fuel and expenditures at TPPs of generating companies (annual, quarterly and monthly); preparation thereof for approval; provision of performance monitoring and preparation of opinions and proposals on their optimisation;

§     shaping and implementation of the unified technical policy for the development and introduction of the telecommunications network, data transmission channels, protection relay systems and emergency automation, automated dispatch control systems, systems of accounting for and control of power quality;

§     ensuring parallel operation of the UESU and foreign power systems and integration of the UESU into the ENTSO-E.

The required competences of Members of the Supervisory Board of Ukrenergo:

1)            Competitive energy market regulatory policies

2)            Operational efficiency

3)            Business strategy and development

4)            Finance and audit

5)            Transmission grid management

6)            Risk management

7)            Compliance and corporate governance

Each position of an independent member of the Supervisory Board provides for a particular set of competences. Selection of independent members of the Supervisory Board will be conducted subject to the principles of transparency, fairness, publicity of the selection results, independence, diversity of areas of competence and sets of professional skills of such Supervisory Board members. This process will not allow selecting of two independent members of the Supervisory Board with the same set of competences. Each candidate may submit an application specifying particular competences necessary for the Supervisory Board member according to the above list. Candidate having competences required for two or more positions of independent members of the Supervisory Board must specify the competences for which the application is submitted.

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

Ukrenergo’s Supervisory Board consists of seven members, four of which must meet the independence criteria and requirements established by the law, while the rest of the members are nominated by the State.

The mandatory requirements are the following:

-           higher education, in particular in Engineering and areas such as Power Industry, 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 top-level 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;

-           candidate for the position of an independent member of the supervisory board is not, and has not been for the last five years, a founder, shareholder (participant), manager, member of supervisory board, employee or representative of Ukrenergo or another economic entity engaged in the same or adjacent markets for generation, transmission, distribution and supply of electricity in Ukraine, or member of supervisory board or another officer of TSOs from countries adjacent to Ukraine, or another economic entity which is/was engaged in production and/or supply of natural gas;

-           candidate for the position of an independent member of the supervisory board is not, and has not been for the last two years, an affiliated person (within the meaning of the term prescribed in the Law of Ukraine “On Joint-Stock Companies”) of Ukrenergo, another economic entity which operates/operated the power system of Ukraine or carries/carried out activities in generation, transmission, distribution and supply of electricity in Ukraine, another economic entity which is/was engaged in production and/or supply of natural gas, its shareholder or subsidiary, branch, representative office, other separated subdivision or officials thereof;

-            candidate for the position of an independent member of the supervisory board does not earn, and has not earned for the last five years, from Ukrenergo, another economic entity which operates/operated the power system of Ukraine, another economic entity which is/was engaged in production and/or supply of natural gas, its subsidiary, branch, representative office or any other separated subdivision, any income, except for income in the form of remuneration for discharging the functions of the member of the Supervisory Board; does not hold equity rights in Ukrenergo and/or another economic entity mentioned above(solely or jointly with affiliated persons) and does not represent such holder;

-            candidate for the position of an independent member of the supervisory board is not auditor of Ukrenergo, another economic entity which operates/operated the transmission system of Ukraine, another economic entity which is/was engaged in production and/or supply of natural gas, and has not embraced such position within a certain period of time for the past three years preceding the appointment (election) to the Supervisory Board; does not participate in the audit of the Company, its subsidiary, branch, representative office or any other separated subdivision thereof as an auditor employed as part of the audit organization, and has not participated in such audit within a certain period of time for the past three years preceding such member’s appointment (election) to the Supervisory Board;

-             candidate for the position of an independent member of the supervisory board does not have, and has not had for the past year, civil or civil and labor relations with Ukrenergo, another economic entity which operates/operated the power system of Ukraine, another economic entity which is/was engaged in production and/or supply of natural gas, its subsidiary, branch, representative office or any other separated subdivision thereof directly or as a shareholder (participant), manager or member of the executive board of the economic entity which has or had such relations;

-             candidate for the position of an independent member of the supervisory board must be able to spend enough working hours to participate in activities of the Supervisory Board of Ukrenergo and not be member of supervisory board or governing body of more than five legal entities.

Additional requirements:

-              Understanding of the legislative and regulatory framework regulating the area of the company’s activity; knowledge of the energy sector of Ukraine and the company’s business environment; knowledge of the electricity market, trends and prospects of the industry development;

-              Understanding of the legislative and regulatory framework 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 electricity market, global development trends and prospects.

Expected functions of Members of the Supervisory Board of Ukrenergo:

The Supervisory Board may establish permanent and temporary committees. The following permanent committees must be established by the Supervisory Board: the Audit Committee, the Nomination Committee, the Remuneration Committee. Each Member of the Supervisory Board will perform the following functions:

Development and control over the implementation of the strategy

§     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 electricity market and approval of key organizational changes;

§     Monitoring of the implementation of Ukrenergo’s strategy, among other things by approving a short-term action plan, functional strategies and coordination of priorities proposed by the company’s management;

§     Implementation of risk management policies and procedures;

§     Alignment of draft strategy, annual financial plan of Ukrenergo and relevant progress report as well as decisions relating to business activity of Ukrenergo;

§     Approval of annual budget and business plans of the company as well as control over major capital expenditures, acquisition and transfer 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 in and transparency of Ukrenergo management.

§     Introduction of best international standards of corporate governance for the benefit of Ukrenergo in respect of corporate governance of state-owned enterprises;

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

Control over the activities of the company’s management

§     Ensuring recruitment and employment of the top management (Board of Directors) of Ukrenergo 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; creation 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 Ukrenergo’s management 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 electricity 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 with 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 and best international practices, including supervision over regular independent audits;

§     Selecting an external auditor for the company and determining the terms and conditions of a contract with such auditor, the amount of such auditor’s remuneration;

§     Establishing an internal audit unit and control over its activity;

§     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 according to the legislation of Ukraine, the EU legal and regulatory framework and best international practices;

§     Ensuring public trust by introducing a proper corporate management system and protection of customers in compliance with best international practices.

Transparency and disclosure of information

§     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, the Ukrainian and the EU legal and regulatory framework and best international practices.

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 Mr. Ihor Nasalyk, the Chairman of the Commission for Competitive Selection of Independent Members of the Supervisory Board of Ukrenergo.

The application must contain information about the applicant (surname, name, patronymic, registered address, contact telephone number, e-mail), one or several of his/her competences (from the list of competences of a member of the supervisory board contained in the notice) applied for, 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 or other document confirming that the applicant got formal education at a higher education establishment;

- 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 Ukrenergo (attached);

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

- Information about membership in other supervisory boards (in case the applicant is a member of supervisory boards).

Ukrenergo’s 2016 financial reporting subject to auditing is attached hereto

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 by 02 March 2018

Applications and documents will be accepted Monday to Thursday 08:30 to 17:30, Friday 08:30 to 16:15, except public holidays, at the address: Ministry of Energy and Coal Industry, 4 B. Khmelnytskoho St., room 504а, Kyiv, 01601.

Please e-mail your applications and supporting documents 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 start at the address: Ministry of Energy and Coal Industry, 30 Khreshchatyk St., Kyiv, 01601

In case of any discrepancies arising out of interpretation or application of provisions of this Notice the Ukrainian version shall prevail.