7.3.Key Events of the Year and the Period after the Reporting Date in Corporate Governance
Improving the Process of Disclosing Information and Interacting with Shareholders and Investors:
- In March 2019, the Investor Relations Division was established in Transneft. The Division designs and implements measures aimed at enhancing the Company’s investment appeal and capitalisation.
- In September 2019, the Transneft Corporate Governance Code was approved. The Code defines the principles and general rules of corporate governance in the Company, including Transneft subsidiaries management.
- In September 2019, the Transneft Regulations on Information Preparation and Disclosure was approved. The Regulations determine the information subject to mandatory disclosure, appoint the persons responsible for timely provision and disclosure of information, set internal deadlines for provision of information by the responsible persons, as well as describe the procedure for interaction between business units of the Company when approving, publishing and (or) posting information in the News Feed, on the web page and the Company’s website.
- In accordance with the requirements and recommendations of the Moscow Exchange for information disclosure by issuers whose shares are listed at Level 1, the dividend history was updated on the Company’s website in March 2019. In June 2019, Declarations of candidates/members of the Board of Directors recognised as independent were signed. In July 2019, decisions of the Board of Directors on recognising members of the Board of Directors as independent were disclosed.
Key Risk Management and Internal Control Improvement Measures:
- The Anti-Corruption Division was established in February 2019.
- The updated version of the Transneft Anti-Corruption Policy was approved by the Transneft Board of Directors in March 2019.
- External assessment of the quality of internal audit was conducted from January to April 2019.
- In April 2019, the Transneft Annual Risk Management Report for 2018 was approved.
- In May 2019, Transneft’s Report on Currency and Interest Rate Risks Management for 2018 was approved.
- In May 2019, the report on the results of the work of internal audit for 2018 was approved.
- In September 2019, the updated version of the Regulations on Internal Audit of Transneft was approved.
- In September 2019, the revised version of the Transneft Regulations on the Risk Management Council was approved by the Management Board of Transneft.
- In December 2019, the plan (general guidelines) for internal audit in 2020 was approved.
- In December 2019, the list of critical risks to Transneft for 2020 was approved.
- In connection with the entry into force of amendments dated 01 May 2019 to Federal Law No. 224-FZ On Counteracting Unlawful Use of Insider Information and Market Manipulation and on Amending Certain Legislative Acts of the Russian Federation dated 27 July 2010, it was undertaken to include insider-related provisions in the texts of Company agreements concluded with legal entities that are thereunder authorised to access the Company’s insider information; to prepare the draft Internal Control Regulations for Prevention, Detection and Suppression of Unlawful Use of Insider Information of Transneft and (or) Market Manipulation, as well as other internal documents in the field of counteracting unlawful use of insider information of the Company. The information about the beginning and the end of moratorium on transactions with the use of the Company’s financial instruments was posted on the Company’s website in the For the Insiders special section.
Key Measures to Improve the Structure of Transneft Group:
- 5 companies were reorganised and liquidated/sold.
- 3 companies were established.
- The dispersed ownership of 12 companies was minimised.
The following measures were taken to enhance the efficiency of corporate governance:
- For the first time, a platform for signing decisions of the sole participant/shareholder with an electronic signature using the IRC — R.O.S.T Shareholder’s Personal Account service was developed and introduced in cooperation with IRC — R.O.S.T for Transneft subsidiaries with a single participant/shareholder.
- In Transneft subsidiaries, execution of corporate decisions of the sole participant/shareholder using electronic signatures in the electronic document management system of Transneft subsidiaries was introduced.
Standard changes were made to the articles of association of Transneft subsidiaries:
- The Regulations on the General Meetings of Shareholders/Participants were amended in order to implement the procedure for signing decisions of the sole participant/shareholder by electronic signature.
The Company’s Plans on Further Improvement of Corporate Governance:
- A regular dialogue with analysts and investors to increase their awareness of Transneft’s activities.
- Target meetings with investors in Moscow and in key financial centres of foreign countries with the highest concentration of institutional investors.
- Interaction with investors and specialised agencies on responsible business practices (ESG).
- Updating of internal documents in the field of corporate governance, illegal use of insider information and counteracting and preventing corruption.
- External assessment of the Company’s Risk Management System.