1. Refining and Petrochemicals - Rompetrol.com

General information
Corporate governance provides coherent information on
the framework within which The Rompetrol Group (TRG)
activates at operational and management level, thus ensuring
transparency in the activities it carries out.
Rompetrol Group currently includes 41 companies, joint
stock or limited liability companies, headquartered in twelve
countries. The statutory laws applicable to these companies are
the local ones. In Romania, the main applicable regulations are
Law 31/1990 regarding trading companies and Law 297/2004
regarding the stock market (for companies listed on the stock
exchange).
The companies of the Rompetrol Group are managed in
compliance with the statutory provisions under their own
articles of incorporation and under any and all other relevant
documents.
Shareholders
The sole shareholder of The Rompetrol Group N.V. is
KazMunaiGaz PKOP Investments B.V. (KMG), headquartered in
Amsterdam, the Netherlands.
Corporate Governance « Rompetrol Annual Report 2010 // 37
Administration and decision rights
At the level of the Group’s majority shareholder, there is a unified
management system.TheTRG Board of Directors has five
members, of which one executive member (Chief Executive
Officer – CEO) and four non-executive members.The CEO is
in charge, according to the Articles of Incorporation, of the
daily management of the company and its affiliates.The other
members of the Board of Directors are in charge of the company’s
general policy and management position supervision.
To support its activity, the Board of Directors sets up
specialist committees, such as the Audit Committee and the
Remuneration Committee.
The CEO may delegate its management position for specific
operations/groups of operations to third parties. Thus, at the
level of the TRG there are Deputy CEOs specializing in different
areas of the Group’s activity.
At the level of the Group’s companies, the management can be
performed under dual/unified system, most companies having
implemented the unified management.
The decision right regarding the internal operations of each
company is fragmented using the decision-making thresholds:
CEO, Board of Directors, and General Assembly of Shareholders.
Major performances and achievements in the area of
Corporate Governance in 2010
2010 has been full of events in what regards corporate
governance at Group level, a list of the most significant
performances including:
1. Mandatory Public Tender Offer (MPTO) for Rompetrol
Well Services S.A. and for Rompetrol Rafinare S.A. were
finalized. Hence, during the mandatory offer for Rompetrol
Well Services, TRG acquired 57,694,162 shares, for a total
price of RON 24,808,489.66 and now holds 199,571,650
shares, namely 71.74 % of the share capital of Rompetrol Well
Services (with a total share held at group level, together with
Rompetrol Financial Group, of 203,110,150 shares, namely
73.01 % of the share capital of Rompetrol Well Services).
During the mandatory offer for Rompetrol Rafinare S.A., TRG
bought 4,772,687,313 shares, their total paid price being of
RON 358,097,513.52.
2. Convertible bonds conversion: On September 30,
2010, the General Extraordinary Meeting of Shareholders
of Rompetrol Rafinare S.A. adopted resolutions whereby it
approved the conversion of a number of 20,652,098 bonds
that had not been redeemed by Rompetrol Rafinare S.A. until
September 30, 2010. Through the Resolution no. 29/2010 it
was approved the increase of the share capital of Rompetrol
Rafinare S.A. with the amount corresponding to the nonredeemed
bonds. Following the share capital increase,
the Romanian State represented by the Ministry of Public
Finances became shareholder owning 44.6959% of the share
capital of Rompetrol Rafinare S.A.
3. THE ROMPETROL GROUP CORPORATE CENTER, a new
company of the Group, was incorporated in September
2010, in order to achieve a centralised control over the
activities performed by the entities of the Rompetrol group
of companies, to define a clear organizational structure and
to increase expertise within the group entities by developing
expertise centres throughout finance, IT, HR, Legal, Marketing
and QHSE functions.
Major achievements in integration
In 2010, the integration process of TRG into KMG was continued
by adopting and implementing within the Group of the
following internal procedures, policies and rules:
1. Human Resources Area, such as: Job Description
Overview Procedure, Recruitment and Selection Procedure
and Induction Procedure, Pay and Benefits Procedure,
Training Procedure, Relocation Procedure, Disciplinary Action
Procedure and Job Grading Procedure;
2. Finance Area, such as: Hedge Policy, Rules for
coordination, approval and monitoring of capital
expenditures in the Rompetrol Group, Materiality Threshold
Methodology, Accruals Policy, Performance Management
Procedure and Corporate Audit Policy and Regulation;
3. Legal Area, such as: Legal Contracting Procedure
and Regulation for the Acquisition of Interests of Other
Companies and the Creation of New Legal Entities of The
Rompetrol Group N.V.;
4. Administrative Area: Business Travel Procedure, Document
Management Procedure (Chancellery) and Insurance Policy.
Creation of the new Rompetrol corporate brand
The Board of Directors of TRG approved during the meeting
held on May 26, 2010 the new corporate brand of Rompetrol,
and the trademark registration process was initiated. The logo
was designed to visually highlight the membership of The
Rompetrol Group to the parent company KazMunayGas – the
national Oil & Gas company of Kazakhstan.
Development of operations and business activities specific
to Corporate Governance
During 2010, the divestment continued during the restructuring
program of TRG, as follows:
- FinGroup, a company offering non-banking credits to
consumers, was sold to a company outside of the Rompetrol
group, in June 2010;
- Romcalor, a company of the Rompetrol group in charge
with sale of products representing ecological heating oils,
after operational integration into Rompetrol Downstream,
was closed down, in May 2010;
- Rompetrol Industrial Parks, a company in charge with
leasing and sub-leasing of immovable or rented goods, was
voluntarily liquidated and closed down in September 2010;
- Sale of 60% TRG shares in Geopetsa Servicios Petroleros S.A.,
a company operating in Ecuador, was approved during the
Board of Directors meeting held on September 13, 2010;
- Palplast Moldova participations owned by the Rompetrol
group companies were sold to a company outside of the
Rompetrol group in December 2010.
Guidance and development trends for 2011 and the
immediate future
TRG will continue to implement the standard governance,
policies by adopting internal procedures, rules, policies and
regulations documents and standards, in accordance with best
practice in this area.
The creation of the shares services centre at group level will be
further continued on basis of The Rompetrol Group Corporate
Center, newly incorporated company of the group, by further
consolidation and centralization of group shared functions.
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