In an effort to enhance the effectiveness of the internal control system and improve corporate governance, Gazprom Neft PJSC developed the Gazprom Neft PJSC Internal Control Policy, which is the primary document identifying the goals, objectives, components, and principles for the establishment and operation of the Company’s internal control system. The Policy is published along with the Company’s other internal documents at this page.
The Policy was tentatively endorsed by the Audit Committee of the Gazprom Neft PJSC Board of Directors and approved by the Board of Directors in 2017.
The Company succeeds in achieving its goals in the most optimal way possible due to the high level of involvement of the Company’s executive bodies and senior management as well as the heads of structural units and Company employees in organizing and supporting the effective operation of the internal control system.
The internal control system ensures:
- the minimization of risks that impact the achievement of the Company’s goals;
- the development, introduction, proper implementation, monitoring, and improvement of control procedures at all levels of the Company’s business operations and management;
- awareness among the appropriate level of management bodies about shortcomings in control along with a suggestion for corrective measures to remedy deficiencies;
- the continuity of the Company’s operations as well as the most effective performance of the Company’s activities, its sustainability, and development prospects, including the Company’s timely adaptation to changes in the internal and external environment;
- a uniform and systematic methodological approach as well as high-quality information and analytical support for the adoption of management decisions at the Company;
- the proper distribution of responsibility, powers, and functions between the subjects of internal control and the prevention of duplicated functions;
- the timely resolution of conflicts of interest that arise in the process of the Company’s activities.
The subjects of internal control at the Company and the distribution among them of the appropriate functions to organize and support the effective operation of the Company’s internal control system are primarily determined as follows.
As part of coordinating and supervising the management of the Company’s operations, the Board of Directors performs the functions of ensuring an appropriate control environment, introducing a culture of internal control, and maintaining high ethical standards at all levels of the Company’s activities. The Board of Directors determines the principles and approaches used for the organization and operation of the Company’s internal control system and conducts a high-level analysis and assessment of its effectiveness, including an annual review of how effectively the internal control system is organized and operates and, if necessary, the preparation of recommendations on how to improve it.
Information concerning the effectiveness of the internal control system is provided to shareholders within the Company’s annual report and also as part of the Gazprom Neft PJSC Internal Audit Department’s report on its performance results.
The Audit Committee performs the function of preparing recommendations for the Board of Directors on matters concerning the organization, operation, effectiveness assessment, and improvement of the Company’s internal control system, risk management and corporate governance at the Company, analyses the Company’s reporting and internal audit results for compliance with the legislation of the Russian Federation, International Financial Reporting Standards, Russian Accounting Standards, and other regulatory legal acts, and considers any established or alleged unethical practices by the Company’s employees.
The Company’s executive bodies and senior management perform functions that aim to organize the development and effective operation of the internal control system; create a proper control environment, introduce a culture of internal control, and support high ethical standards at all level of the Company’s activities; distribute powers and duties and assign responsibility among the heads of structural units for establishing, introducing, supporting, monitoring, and improving the effective organization and operation of the Company’s internal control system; conduct a regular performance assessment of the Company’s employees and train personnel on internal control in connection with changes to the internal and external conditions of the Company’s operation.
The heads of the Company’s structural units and employees perform functions that aim to develop, document, introduce, fulfil, monitor (self-assessment), and improve control procedures within the framework of their relevant competencies and in the zone of their responsibility and also provide timely notification to supervisors about incidents when it is impossible to perform control procedures for any reason and/or changes must be made to control procedures due to changes to the internal and external conditions of the Company’s operation.
The Internal Audit Department performs the following functions:
- an independent and objective assessment of the effective organization and operation of the Company’s internal control system, risk management, and corporate governance based on a risk-oriented approach;
- developing recommendations to eliminate deficiencies identified in the course of audits and monitoring their introduction;
- consulting support for stakeholders within the Company with respect to the organization and operation of the Company’s internal control system;
- reporting the assessment results of the internal control system and proposals for its improvement to the Company’s Audit Committee and executive bodies.
The Audit Commission monitors the compilation of reliable financial statements and other information about the Company’s financial and business activities and property status.