The Board of Directors of Gazprom Neft has two standing committees that ensure the Board operates efficiently: the Audit Committee, and the Human Rresources and Remuneration Committee. The Committees were created to carry out preliminary in-depth research into matters within their competence before these matters are submitted to the Board. The procedures governing the activities of the Committees are described in the respective Regulations.
Audit Committee of the Board of Directors of Gazprom Neft
The Audit Committee assists the Board of Directors in the control of financial and business activities of the Company by assessing the efficiency of internal control systems, including mechanisms that control and determine the preparation, presentation, completeness, and reliability of financial and other reporting, and also by monitoring the Company’s risk management system. The Audit Committee helps to establish a constructive dialog with the third-party auditor, financial and business controllers, and the Company’s internal auditors.
Since 2010, the Audit Committee has worked according to its schedule. Its work is directly related to the Board’s Action Plan and includes examination of financing and investment planning issues.
In 2011, the Audit Committee:
- Examined and submitted to the Board information on the progress and interim results of the Investment Program of Gazprom Neft and its largest subsidiaries up to 2010;
- Examined information on Gazprom Neft’s additional investment projects in 2011;
- Examined the Gazprom Neft Investment Program for 2012 and recommended that the Board approve the program;
- Analysed drafts of the Company’s Business Plan and Budget (financial plan) for 2012, including the financial borrowing program for Gazprom Neft Group, and the estimate up to 2014 (the Board approved the Budget as recommended by the Committee);
- Carried out preliminary examination of the draft Cost Optimization Program for Gazprom Neft in 2012 and estimates up to 2014;
- Analysed progress of the financial borrowing and debt portfolio management program of Gazprom Neft Group in 2011;
- Passed resolutions on Gazprom Neft external financing;
- Examined a number of matters related to loans, guarantees and securities issued by the Company as collateral for its subsidiary and associate units;
- Analysed the terms of a number of transactions with interest;
- Examined a series of corporate issues:
- pre-examined the draft of the 2010 Annual Report;
- analysed the annual accounts of Gazprom Neft for 2010;
- analysed the auditor’s report on the annual accounts of Gazprom Neft;
- examined the nomination of an external auditor and related payable fees;
- examined draft distribution of profits for 2010, and proposals to pay a part of the profits as dividends.
As of December 31, 2011, the Audit Committee had the following members:
- Kruglov, Andrey Vyacheslavovich (Chairman)
- Pavlova, Olga Petrovna
- Dubik, Nikolay Nikolaevich
There were no changes in membership of the Audit Committee in 2011.
Human Resources and Remunerati on Committee of the Board of Directors
of Gazprom Neft
According to the Regulation governing the Human Resources and Remuneration Committee, its main function is to examine all aspects of matters within the competence of the Board of Directors regarding the Company’s employment policy and remuneration payable to members of governing bodies and the Company’s Audit Commission, and to prepare recommendations for decisions by the Board.
During preparation of the Annual General Meeting of Gazprom Neft in 2011, the Human Resources and Remuneration Committee:
- Recommended remuneration payable to the Directors of the Board and the Audit Commission of Gazprom Neft;
- Examined procedural issues relating to the Annual General Meeting of Shareholders.
In 2011, the Company formalized the procedure for the annual efficiency assessment of the Board of Directors. The Human Resources and Remuneration Committee assessed the activities of the Board of Directors in June 2011. In its report, the Committee struck a positive note regarding the Board’s work. The Committee acknowledged that the Board had examined a greater number of issues than previously, and that Board Directors took an active part in discussions and provided assistance to the Board Committees.
Members of the Human Resources and Remuneration Committee during the reporting period were as follows:
- Pavlova, Olga Petrovna (Chairperson);
- Kruglov, Andrey Vyacheslavovich;
- Dubik, Nikolay Nikolaevich.
After the Annual General Meeting in 2011, the newly elected Board of Directors decided to leave the membership of the Human Resources and Remuneration Committee unchanged.