2017 Actions Enhancing Shareholder Relations and Securing Shareholder Rights

Exercise of Rights by Shareholders

Rosneft’s corporate governance framework ensures that all shareholders rights are exercised as required by the Russian legislation, recommendations of the Bank of Russia’s Code, and the Company’s Charter and internal documents.

Key rights of Rosneft’s shareholders include:

The right to govern the Company by voting at the General Shareholders Meeting of Rosneft

The right to elect Rosneft’s Board of Directors as established by the Russian legislation

The right to receive part of the Company’s profit as dividend

The right to receive necessary information on the Company on a timely and regular basis

The right to freely dispose of shares without any hindrance and be provided with reliable and effective means of recording rights to shares

The Right to Govern Rosneft by Voting at the General Shareholders Meeting of Rosneft

Rosneft creates the most favorable conditions to attend the General Shareholders Meeting.

The Charter provides for holding General Shareholders Meetings through joint attendance both in Moscow (Rosneft’s Head Office) and in capital cities of the Company’s major regions of operation such as St. Petersburg, Krasnodar, Sochi, Stavropol, Saratov, Orenburg, Tyumen, Krasnoyarsk, Khabarovsk, Vladivostok, and in Krasnogorsk (the Moscow region).

Shareholders may, according to the procedure and within the time limits set out in the Russian legislation, Rosneft’s Charter and internal documents:

  • propose items to be included in the agenda of General Shareholders Meetings and candidates to governing and supervisory bodies
  • review information and materials provided for General Shareholders Meetings
  • attend General Shareholders Meetings and vote on all items of the agenda.

Shareholders may exercise their right to govern Rosneft by attending General Shareholders Meetings in person and/or by submitting filled-out voting ballots to the Company or its registrar, LLC Reestr-RN.

Shareholders whose rights to Company shares are recorded by nominees may participate in General Shareholders Meetings by giving their nominees voting instructions (if such nominees are authorized to vote under an agreement with the Company’s shareholder), or by attending the meeting in person and voting on agenda items using voting ballots provided during shareholder registration.

At General Shareholders Meetings, all shareholders may express their views on agenda items, put questions to speakers, members of the Board of Directors, the Chief Executive Officer, members of the Audit Commission, the auditor, candidates to governing and supervisory bodies, analysts, and consultants, and receive answers during (or, if in writing, after) such General Shareholders Meeting as soon as practicable.

Resolutions adopted at the General Shareholders Meeting held in person are announced after the count of votes on agenda items and brought to the attention of stakeholders through publication in the Rossiyskaya Gazeta and Komsomolskaya Pravda newspapers and on the Company’s website.

The Right to Elect Rosneft’s Board of Directors as Established by the Russian legislation

As required by the applicable legislation, the Company has in place a simple and easy-to-follow procedure for shareholders to propose items to be included in the agenda of the General Shareholders Meeting and nominees to Rosneft’s Board of Directors and Audit Commission. This procedure is set out in the Charter and the Regulations on the General Shareholders Meeting of Rosneft.

Shareholders may propose items to the agenda of the Annual General Shareholders Meeting and nominees to Rosneft’s Board of Directors and Audit Commission within 60 days after the end of the financial year, which is twice as long as the period required by the Russian legislation (30 days).

The Right to Receive Part of the Company’s Profit as Dividend

Each of Rosneft shareholders is entitled to an equal and fair share in the Company’s profit distributed as dividends.

The Company’s Dividend Policy sets out clear rules of determining which part of profit will be distributed as dividends, conditions under which dividends may be declared, determining the size of dividends on shares, and paying out dividends declared.

In 2017, Rosneft paid out all dividends on time and in the amount declared.

The Company paid out outstanding declared dividends for previous years to those shareholders (and heirs of shareholders) who claimed such payouts but had been unable to receive them for the lack of valid payment details, and who had updated their details in the Shareholder Register and/or with the nominee shareholder.

TThe Right to Receive Necessary Information on the Company on a Timely and Regular Basis

Information on Rosneft’s operations is disclosed to shareholders in line with the requirements of the applicable Russian legislation, regulations of the Bank of Russia, which describe the process of disclosing information to shareholders, and the Company’s internal documents.

The procedure and timeline for disclosing information to shareholders are detailed in Rosneft’s Regulations on Provision of Information to Rosneft’s Shareholders. All shareholders have equal and unhindered access to documents.

When providing information to shareholders, the Company maintains a reasonable balance between the interests of shareholders and its own interests which imply preserving the confidentiality of important commercial information and other legally protected information that may materially affect its competitiveness.

The Right to Freely Dispose of Shares without Any Hindrance and be Provided with Reliable and Effective Means of Recording Rights to Shares

The Shareholder Register is maintained by a professional registrar, LLC Reestr-RN, acting under a perpetual license for registering security holders. The Company’s registrar has an impeccable reputation and all necessary capabilities, including technical means, to safeguard the rights of shareholders to register and exercise their rights to shares of the Company.

For all matters related to exercising their rights to shares, submission of documents required to update personal data and transact in their securities, shareholders of record may contact service and transfer agent outlets operating in regions where most of the Company’s shareholders reside. These include the Head Office, 11 branches and 2 standalone offices of the Company’s registrar, 29 transfer agent outlets at regional branches of LLC Reestr-RN’s partner registrars, 5 transfer agent outlets at Rosneft’s partner banks, and 2 shareholder contact and service centers of the Company.

LLC Reestr-RN has been operating in the registrar services market for 16 years and ranks among top ten Russian registrars. The company keeps registers for more than 2 thousand issuers, with an inventory of 413 thousand personal accounts to record the rights of their shareholders.

Frequently Asked Questions (FAQs)

In 2017, shareholders asked the Company about:

  1. Shares:
    • Place where rights to shares are registered (Shareholder Register / depository)
    • Contact details of the Company’s Registrar and nominee shareholders
    • Transfer of shares between the register and the depository
    • Procedure for updating the shareholder’s profile
    • Procedure for claiming inheritance rights to shares and recording them in the Register / with the depository
    • Share purchase / sale / transfer by gift / transfer by will
    • Par value and market value of shares

  2. Dividends:
    • Dividend record date
    • Dividend per share
    • Dividend payout timeline
    • Procedure for changing the method of dividend payouts (bank/mail)
    • Payment of unclaimed dividends to shareholders who have timely submitted their dividend claims
    • Assessment and withholding of taxes and issuance of Form 2 (Personal Income Tax)

  3. General Shareholders Meeting:
    • Date, time, place, and agenda of General Shareholders Meetings
    • Date for determining (recording) the list of persons entitled to attend the General Shareholders Meeting
    • Timeline and procedure for notifying shareholders of General Shareholders Meetings
    • Places where materials for General Shareholders Meetings are made available
    • Timeline for sending out of voting ballots, instructions for filling out and submitting them to the Company
    • Rules for attending, and voting at, shareholders meetings for shareholders whose shares are registered with the depository
    • Handouts at General Shareholders Meetings
    • Place of live broadcast of the Annual General Shareholders Meeting and ability to use voting ballots at the place of broadcast
    • Resolutions adopted by General Shareholders Meetings

The Company replied to all questions put by shareholders.