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« June, 2016
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Activity of Audit Committee

Activities of the Audit Committee were based on six-month plans.

The Committee met 9 times in the course of the year, including five meetings in the form of joint presence and four meetings in absentia.

In each quarter, the Audit Committee carried out preliminary reviews of the consolidated financial accounts of Rosneft prepared in accordance with US GAAP (later IFRS) and also reviewed audits or overviews of these accounts. The Committee approved the work plan of the Internal Audit Department for 2012 and a report on the results of its work in 2011.

The Committee also gave consideration in the reporting year to:

  • resolution on the Internal Audit Department of OJSC Rosneft;
  • setting the price for ordinary shares of OJSC Rosneft for purposes of a buy-back of shares by the Company in line with the norms of the Federal law on Joint-Stock Companies, in accordance with the Extraordinary Shareholders Meeting decision dated April 30, 2012 on major transactions approval;
  • anti-corruption policy. The policy sets out main goals and tasks, and approaches for achieving them, as well as main risks associated with anti-corruption work and actions to manage such risk. The Committee recommended the Board of Directors to approve the document, which was prepared in compliance with the requirements of acting Russian law and applicable anti-corruption laws of Great Britain and any other country where the Company does business or is planning to do business.
  • company policy for combating corporate fraud. The policy sets goals and tasks for the Company and defines main approaches for carrying them out, as well as main risks associated with combating corporate fraud and actions to manage such risks. The Committee recommended the Board of Directors to approve a document prepared in compliance with the requirements of current Russian law and with applicable anti-corruption law of Great Britain and any other country, where the Company does business or intends to do business;
  • reviewing the tender results among auditing organizations and giving an assessment of candidates to carry out audit of financial accounts of Rosneft and its subsidiaries, and of consolidated financial accounts in accordance with RAS. Recommendations were made on remuneration for the auditor’s services in 2012.
  • (on a preliminary basis jointly with the Audit Commission) reviewing: conclusions of the Internal Audit Commission for 2011 (based on checks of Company operations and finances; checks of annual accounts; and of the accuracy of data in the Annual Report); recommendations to the Annual General Meeting of Shareholders concerning the procedure for distribution of Company income, the amount of dividends to be paid for 2011, and the procedure for their payment; an assessment of the opinion of the Rosneft auditor concerning the Company’s financial accounts for 2011 (including sub-divisions and subsidiaries);
  • recommending the Board of Directors to approve a method for calculation of a cost reduction applicable to procurement of goods (works, services) per unit of production by at least 10 % annually for three years in real terms in 2010 prices, compliant with instructions issued by the President and Government of the Russian Federation.

The Audit Committee also prepared recommendations to the Rosneft Board of Directors on the following issues: preliminary approval of the Rosneft Annual Report for 2011 and of financial accounts for 2011.

In the course of 2012, the Chairman of the Audit Committee held regular meetings with senior managers of Rosneft, with representatives of external auditors, and with the Head of Internal Audit and Control Service of the Company.