Internal Audit Department

The Internal Audit Department performs internal monitoring of the Company’s financial and business activities.

Main functions of the Internal Audit Service
CONDUCTING INTERNAL AUDITS, INCLUDING:
  • Assessments of the operating efficiency of business processes and the system of internal controls
  • Audits of construction activities
  • Audits of corporate level processes
  • IT audits
  • Audit of the effectiveness of the systems for the safeguarding of petroleum products at petroleum storage depots and filling stations
  • Confirmation of compliance with the requirements of legislation and internal regulatory documents, including the annual report on the compliance of corporate procedures with legislation on insider information
  • Inspection of the safeguarding of the assets of OJSC Gazprom Neft
  • Monitoring of corrective action measures
ORGANISATION OF THE INTEGRATED RISK MANAGEMENT SYSTEM (IRMS), INCLUDING:
  • Identifying, analysing, assessing, revising and updating risks faced by OJSC Gazprom Neft
  • The development and updating of the methodological framework of the IRMS (analysis of individual and systemic risks, preparation of recommendations)
  • Monitoring and assessment of the effectiveness of measures to manage key risks and the risks of business divisions (Units) of OJSC Gazprom Neft
  • The introduction of the IRMS to the core management business processes (business planning, project risk management and target-specific management)
FRAUD PREVENTION ACTIVITIES, INCLUDING:
  • Special audits that aim to uncover instances of fraud
  • Preparation of fraud prevention recommendations
  • Organisation and support of a fraud prevention hotline

Accountability of the internal audit service, interaction with the executive management bodies of the issuer and the Board of Directors (Supervisory Board) of the issuer

The Internal Audit Department is functionally subordinate to the Audit Committee of the OJSC Gazprom Neft Board of Directors and administratively (linearly) subordinate to the Company’s CEO.

The Company’s Board of Directors coordinates the appointment and dismissal of the Head of the Internal Audit Department.

The Internal Audit Department regularly reports on its activities to the Audit Committee and Board of Directors and also provides information about significant shortcomings identified based on the results of audits of the risk management, internal management and corporate governance systems.

Interaction between the internal audit service and the external auditor of the issuer

The Internal Audit Department coordinates its work with the external auditor during all stages of the audit cycle. Information is continuously exchanged with the external auditor on the work plans, audit results, etc.

Company’s compliance with Russian legislation on combating the misuse of insider information and market manipulation

Gazprom Neft arranges its activities in accordance with existing legislation as regards compliance with requirements, restrictions and prohibitions established by Russian legislation to combat the misuse of insider information and market manipulation by the Company, its employees and structural units.

In 2013, the Gazprom Neft Board of Directors approved a new version of the Regulation on Insider Information that takes into account the main amendments to Russian legislation.

The Company has approved a List of Insider Information based on the approved List of the Federal Financial Market Service and also determined the procedure for access to insider information and the rules for protecting its confidentiality as well as monitoring compliance with the requirements of the law.

The Internal Audit Department is the entity responsible for monitoring the execution of the law and its head is appointed by the Board of Directors in accordance with the Company Charter.

In accordance with the requirements of legislation, the Company has established the Corporate Compliance Department, which is responsible for maintaining a list of insiders and sending it to exchanges, informing insiders about their inclusion in the list of insiders and on their exclusion from this list and also discloses insider information in accordance with federal laws.

The Company’s website has an Insiders section in which the following information is disclosed: the Regulation on Insider Information, the List of Insider Information, an updated list of Gazprom Neft securities, on transactions about which insiders must notify the Company and the Federal Financial Market Service and insider notification forms.

Insider information is disclosed on the Company’s website at the address: ir.gazprom-neft.ru under the heading “Significant Facts and Insider Information”.

The list of insiders is maintained in the form of a register that makes it possible to quickly (in the event orders are received with a request for the list of insiders for a particular date or period) execute the regulator’s orders as well as provide effective internal control over insiders’ compliance with the requirements of federal laws.

The ordinary shares and bonds of Gazprom Neft are the financial tools with respect to which the Company is an insider, and the persons on the list of insiders must notify Gazprom Neft, other legal entities and the Russian Federal Financial Market Service about transactions using such financial tools.