Compliance with the code of corporate conduct

Corporate governance at Gazprom Neft is based on an unfailing respect for shareholder rights, a high quality of investment planning, a logical system of internal audits and risk management, a high degree of financial and information transparency, and a professional and efficient Board of Directors.

The Company unfailingly observes the provisions of current legislation, which are mainly designed to ensure respect for and effective protection of shareholder rights.

Gazprom Neft ensures equal treatment of its shareholders, who own shares of a single type.

  • All shares issued by the Company are of a single type;
  • Each share gives one vote to its holder.

The Company ensures that shareholders can exercise authority over their stock without restraint, delay or duress.

The Company uses the services of a professional shareholder registration agent, ensuring a reliable and efficient system for registration and confirmation of shareholder rights.

Gazprom Neft operates efficient procedures to convene and conduct General Meetings of Shareholders.

  • At least 30 days notice is given to shareholders regarding forthcoming General Meetings. Notifications of such meetings are communicated by two methods: via hard copy mailout to each shareholder, and via a notice published in the Russian daily newspaper Rossiyskaya Gazeta.
  • Shareholders have the opportunity to examine in advance all information which should be made available to them before the General Meeting (all of the information is posted on the Company’s official website, and Russian and English versions of the information are posted simultaneously). Shareholders can also examine materials at the Company’s main office.
  • Registration of shareholders attending the General Meeting is carried out using the simplest and least prohibitive method: the high proportion of minority holders who attend General Meetings proves that there are no technical obstacles to attendance.
  • Shareholders may vote by proxy at General Meetings.
  • Voting is carried out using voting slips.
  • Cumulative voting is used to elect the Board of Directors.
  • The procedure for voting on each agenda item is explained before voting begins, including detailed explanation of the principle of cumulative voting; the reverse side of each voting slip has an example showing how it must be filled out.
  • Vote counting at General Meetings is done by a professional registration agent.
  • The rules of the General Meeting guarantee equal opportunities for all shareholders to speak out and ask questions on the order of business (including questions to members of the Company’s Management Board, who always attend General Meetings of Shareholders).
  • The results of voting are announced at the General Meeting.
  • Minutes of General Meetings are posted on the Company’s official website and can be freely examined.

The Company ensures the right of shareholders to a share in profits

  • Gazprom Neft has a clear minimum threshold for dividend payments: 15% of the Company’s net profits under US GAAP.

The Company exercises efficient control over its financial and business activities

  • PWC — the world’s largest auditing service provider — is hired to conduct annual financial audits.
  • An Audit Commission is elected, with membership consisting of the parent Company’s internal auditors.
  • Gazprom Neft operates an efficient Internal Audit Department, comprising highly-skilled professionals. Auditors at the Company’s subsidiaries report to Gazprom Neft’s Internal Audit Department.
  • The Board has set up an Audit Committee, to which the Internal Audit Department reports; the Committee meets regularly to discuss Company business matters that are within its scope of competence as specified in the Regulation on the Audit Committee.

The Company exercises efficient control over its financial and business activities

  • PWC – the world’s largest auditing service provider – is hired to conduct annual financial audits.
  • An Audit Commission is elected, with membership consisting of the parent Company’s internal auditors.
  • Gazprom Neft operates an efficient Internal Audit Department, comprising highly-skilled professionals. Auditors at the Company’s subsidiaries report to Gazprom Neft’s Internal Audit Department.
  • The Board has set up an Audit Committee, to which the Internal Audit Department reports; the Committee meets regularly to discuss Company business matters that are within its scope of competence as specified in the Regulation on the Audit Committee.

Gazprom Neft seeks to ensure maximum transparency

  • The Board has approved a Regulation on Information Policy.
  • The Company maintains a bilingual corporate website (www.gazprom-neft.ru for Russian and www.gazprom-neft.com for English).
  • The Company does not conceal any substantial information of a negative character.
  • The Company ensures a high level of disclosure concerning its operations (including the structure of equity, as well as financial and operating information), using available media, such as press releases published in real time.
  • The Company ensures rapid disclosure of information to prevent obsolescence of disclosed data.
  • In publishing information, the Company uses disclosure methods that enable unrestricted, user-friendly and least expensive access to information.
  • When disclosing information, the Company ensures that no audience has priority over other audiences.
  • The Company discloses information/ documents at the request of its shareholders, as prescribed by legislation.

The Company ensures that its governance structure is as efficient as possible

  • The Company’s governance bodies employ highly skilled and certified professionals.
  • The Company’s corporate documents clearly state the competence of each governance body.
  • The Company’s governance bodies do not employ managers from competing companies.
  • The Company’s governance bodies do not employ individuals found guilty of business crimes or crimes against the Government, public services, federal or municipal agencies, and also do not employ individuals who have been subject to administrative penalties for any business or financial crime, tax crime, or securitiesrelated offense.
  • Executive officers are obliged to refrain from any action that may give rise to a conflict of interests, and must report to the Company any information concerning situations/transactions that may lead to a conflict of interest.
  • The Board of Directors reports to the General Meeting of Shareholders
  • The Board has standing committees: the Audit Committee, and the Human Resources and Remuneration Committee. The Company has formed a collegiate body, the Management Board, which reports to the General Meeting and to the Board of Directors.
  • The procedure for meetings of the Company’s governance bodies is clearly regulated in corporate documents.

The Company observes international standards of social responsibility; objectives in the social sphere are integrated into the Company’s long-term strategy

  • Gazprom Neft has prepared and published sustainable development reports over a number of years.
  • The Company implements large-scale programs to improve industrial, environmental and occupational safety.
  • Gazprom Neft takes part in social and economic development of Russian regions.
  • The Company implements a policy of incentivization and personal development for its personnel.