Social Benefits

The Company’s business units provide various social benefits and payments to employees beyond what they are entitled to under Russian law. Social benefits at most business units include voluntary medical insurance, insurance against accidental injury, food payments, financial assistance in case of urgent need, and other items.

In 2011, the Company adopted a uniform system of social benefits that harmonized the list of benefits and related procedures. Under the system, practically all business units in the Group will provide accident insurance by the end of 2014.

The Company works closely with trade unions to develop and implement social programs. More than two thirds of the Company’s employees in Russia are trade union members, and the unions are actively involved in issues related to occupational and social rights and interests of Company employees. The Company has an inter-regional trade union organization, which gathers employee responses to the Company’s social and economic policies, and helps to develop employee policy. Mutual obligations of employees and the Company with respect to social and economic issues, industrial safety and employment matters are regulated by collective agreements.