Getting further together 2013-2014 KMG International Sustainability Report

2 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | INTRODUCTION Message FromMessage OurCEO Corporate Governance Senior Vice President ViceSenior Interview With Our With Interview Introduction 01

6 4 3 Materiality Assessment Materiality Major ProjectsMajor and Memberships and Memberships About This Report About This Our Stakeholders Code ofConduct Our Operations Code ofEthics Achivements Who WeAre Affiliations 02

16 15 14 13 12 12 10 8 Occupational Health Occupational Training andCareer Human Resources Our Approach Development Management Our PeopleOur and Safety 03

24 23 19 18 Major AchievementsMajor Environmental Environmental Environment in 2013-2014 Objectives Indicators Strategic 04

28 27 26 Investments inthe Joint PartnershipsJoint Future Objectives Our Approach Engagement Community Community Employee 05 Awards 42 42 41 40 37 36 Quality andCustomerQuality Monetary Fines Monetary Management Legal Actions Supply Chain Marketplace Controls and 06

46 46 45 44 Third-Party Opinion Reporting TeamReporting Feedback Form Abbreviated Stakeholder Stakeholder GRI Annex Financials Appendix Contacts Glossary 07 Notes

62 61 61 59 51 50 49 48 3 Message From Our CEO

Based on sound corporate governance, a We care deeply about the economic, career programs. comprehensive compliance network, and a environmental and social impact of our activities Furthermore, our responsibility towards preventive risk management framework, we on our employees, stakeholders and community has been translated into numerous strive to conduct our business in accordance communities where we are active. Therefore, we projects which have contributed to the with the highest ethical standards and in full have continued widespread tracking of specific development of the areas where we operate, compliance with applicable laws. measures related to energy, water, waste, either through the Together for Each and Even though this is KMG International’s first material use and community support so that we Everyone program in Romania and Republic of stand-alone Sustainability Report, our past can better analyze and improve our Moldova, or through direct contributions of achievements over the years in terms of performance. The challenges we faced led us to employees, sponsorship of sports activities sustainability stand witness to our commitment intensify our efforts and the results are more (support for the Montpellier football team in and the strategic focus we have placed in proof of our responsibility and commitment to France; in Georgia – we endorse the national K1 ensuring the durable development of our Group all of our stakeholders. champion Giga Chikadze and 13-year-old tennis and our communities. We are constantly improving our environmental player Ani Shanidze) cultural events (partner of With over 7,500 employees in 12 main One of the key recent developments, of which policy, in order to reduce potential damage and George Enescu International Festival and markets, we are running operations we are proud, is the fact that, following a highly pollution and ensure we can keep the Contest) and educational activities. in refining, petrochemical production, complex revamping and upgrade program at environment as clean as possible for current and We bring our sustainability expertise to every retail, trading, upstream and industrial Petromidia Refinery, KMG International has future generations. Thus, we have managed to activity and project we undertake. From safe reduce our SO2 emissions by 90.63% and services. This diversity helps us gain a become the first local fuel producer to align to work practices, energy efficiency and carbon the Euro 5 fuel emissions standard and the improved our waste recovery rate, reaching a management to anti-corruption practices and unique perspective on the opportuni- refinery improved its overall energy efficiency. percentage of 97.7%. Also, one of our major community involvement, we have established ties created by growth and develop- performances is represented by the alignment Safety is a core principle at KMG International processes and best practices to guide our to the national and European environmental ment of the business cycle, as well as and the success of every activity we undertake is operations. requirements with regard to the emissions of the economic, environmental and so- measured by our ability to conduct our work We here at KMG International are committed to sulfur oxides, nitrogen oxides and dust. safely every day. We are committed to continually improving our sustainability cial challenges and their impact on our Additionally, we have obtained significant continually improving our health and safety practices and performance, as it benefits not activity. We gain first-hand experience reductions in wastewater discharged and total practices and procedures, and to enhancing only our stakeholders and our business, but of the interdependencies and the cru- waste, of 25% and 32.26% respectively. training on specific preventive actions. Thus, our mainly the community. cial need for collaboration between the KMG International employees are our most internal policies and crisis procedures are Our 2013-2014 Sustainability Report – Getting important asset and that is why we have wide range of stakeholders involved updated periodically and our people are Further Together - details our economic, focused extensively in improving their working in our operations. Our sustainability provided with comprehensive trainings every environmental and social commitments and environment, as well as their professional year, so as to minimize the potential health and captures our relationship with the world. I practices are built on this understand- expertise and prospects. In this direction, we safety risks posed by the nature of our activities. warmly invite you to read our report and learn ing, deeply ingrained in the way we do began the implementation of a comprehensive One of our most prized achievement to date is more about how KMG International is working business. human resources management system to that our safety indicators have shown a positive towards achieving global economic growth and identify skill gaps and provide development evolution and KMG International recorded no development, while supervising and managing opportunities for employees that support our Zhanat Tussupbekov fatal incident in any of its areas of operations issues that could impact our stakeholders. since 2010. business strategies. As of 2014, all of our Chief Executive Officer employees are included in performance and

2 3 4 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | INTRODUCTION Senior Vice President ViceSenior Azamat Zhangulov andmarketplace. ty environment,the workplace, communi- referInternational to ourpeopleand strategicThe sustainability areas ofKMG market. gas players inthenationalandregional come oneofthemostsustainableoil& stands witnessfor to be ourefforts Our evolution over thepast few years and society. we haveimpact ontheenvironment tion to future generations to control the we have theresponsibilityandobliga- from responsibility. More specifically, I strongly stems believe sustainability - Interview Interview With Senior Our Vice President ciency ofouroperations, reduceciency ouremissions Not onlydidwe manageto increase theeffi- & gasplayer inthenationalandregional market. ness for to becomeasustainableoil ourefforts Our evolution over thepast few years standswit trading. operations, from refining to upstream, retail or accomplished significant achievements inallour business strategy andwe are proud to have ofour aspect inevery principles sustainability several years now we have strivedto incorporate For andmaximizingourpositive impact. impact and targets means minimizingournegative into ourstrategy sustainability Incorporating to theGroup’s overall businessstrategy? How your does strategy sustainability link the needsofallourstakeholders. productswhilesatisfying solutions andhigh-end to people, providingand opportunities efficient inshapingit,providing employment its part andneedsto play ofsociety Our businessispart society. we havethe impact ontheenvironment and and obligationto future generationsto control More specifically, we have theresponsibility stems fromI believe sustainability responsibility. value. added development bring and community the fieldsofeducation,environment protection company, programs whilevarious developed in must never beregarded asaburden for the Corporate responsibilityisaninvestment and ronmental ofcorporations. andsocialimpact relies ontheenvi - when financialperformance This istheageofsustainabledevelopment, What represent sustainability does to you? - making progressmaking towards reaching ourgoals. and adapting, inorder sure to make thatwe are gettingfeedbackvolves action, planning, taking The successmodelthatwe have developed in - and collaborate offuture inview improvement. seek to engagethem,to measure our progress isonlyone exampleofhow we report tainability inmoving forward. theirsupport garner This sus- sustainable sothatwe canfindways together to understand ourchallengesinbecomingmore to usthatourstakeholders isimportant It success. environment andsociety, butalsoourbusiness the willnotonlyimpact our productportfolio feedstock, develop ourpeopleandmanage resources, thattheway we we secure know our thatusesfinite natural inanindustry Working for sustainability.cially important regarding andwe finditespe ourperformance, istransparency One ofourguidingprinciples with your stakeholders? How doyou address issues sustainability business strategy andwe intend to gofurther. isoneofthemajorpillarsour Sustainability and abetter future for numerous people. tremendously, providing better opportunities grams, aswell asourCSRplatform have grown andcareerin. Ourinternships development pro we operatein ourpeopleandthecommunity ofourbusiness,in thetechnical aspects butalso standard. However, we have notonlyinvested fuel producer to align to Euro5 fuelemissions and waste, butwe alsobecamethefirstlocal - - ees, Day Action BlackSea orvolunteering inthe forsuch asOpenDoors thechildren ofemploy - ofemployees actions, withtheparticipation environmental issuesthrough dedicated CSR activities, butalsoonraisingawareness on andpollutionprevention preservation diversity focused notonlyonwaste management, bio Constanta. As such,ourenvironmental projects ia-adjacent communitiesofCorbu, Navodari and andPetromid SiutghiolSea, DanubeDelta Lake, - of environmental protection, withfocus onBlack Also, theimportance theGroup acknowledges environmental requirements. alignment ofproductionplantsto European forsuccessfully endedthetransitionperiod the the firstspecialized company Romanian which ing theupgrade inPetromidia we Refinery, are Moreover, we canproudly announcethatfollow- ofreducingwith thepurpose emissions. Unit, reduction system attheCatalytic Cracking nanced aprojectfor theinstallationofaparticle technical projects, in2014,Rompetrol fi- Rafinare of terms thementionedperiod. In marked oursustainabledevelopment which supporting To bebrief, Iwillexemplify some oftheprojects communities we operate in. development ofthe theharmonious supporting solutions to environmental issuesaswell asat increasing awareness andproviding efficient ments intechnology) andCSR,aimedatboth governance –whichare bothtechnical (invest in eachbusinessunit–retail, refining, corporate locations for environmental protection projects At Group level, there are plansandbudgetal- areas period? throughout thereporting the nature unfolded oftheprojects inthese worktainability in2013and2014? What is What were focus thespecial areas ofsus- - - 5 national environmental campaign ‘“Let’s Do It, How do you intend to continue your activity operations, we are investing in technology and that there is always room for more and we have Romania!“. in the upcoming years in terms of sustaina- operational infrastructure to ensure that we are to challenge ourselves constantly as we strive For 2015, we have planned 10 environmental bility? What are your sustainability goals? more energy efficient and maximizing our use to be a sustainable company with a long-term projects for the retail sector. All of these entail In our approach to sustainability we look beyond of resources. vision and strategy. In terms of meeting safety modernization and upgrade works which will basic safety and environmental considerations, Also, in order to improve our overall efficien- and environmental standards, we are proud to be launched/continued in 2015 with a direct or taking into account all aspects of our operations, cy, we have developed the Change for Good be one of the most responsible players in the indirect environmental and safety component. as well as the need to generate a positive impact program, which aims at an improved efficiency market. However, sustainability includes many other aspects. Being sustainable means to simul- Total investments in environmental projects through our activity. by 2018 of the entire flow of operations, specific taneously lead in the social, environmental and amount to over 100 million dollars annually. Measurement is an important component of to the refinery – petrochemical trading, raw financial fields. But, through the continual effort our management approach as we are constantly material supply; retail – marketing; upstream – We also continued our corporate social responsi- of each and every one of our employees, we are looking for opportunities to improve our perfor- industrial services. bility program “Together for Each and Every- making improvements every day, getting further mance. We are especially focused on safety. Our one”, aimed at developing local communities. towards a better future. With more than 300,000 beneficiaries since its performance in this area has already improved Where do you stand on meeting national beginning in 2009, 101 projects implemented significantly in the past few years. However, and international requirements in connec- in sustainable environment and healthcare, the our ultimate goal is to achieve zero recordable tion to sustainability matters? injuries and zero incidents globally. program has provided funding to the communi- We have achieved a great deal over the years ties in excess of USD 1.5 mln. With respect to our environmental performance, in terms of aligning to local and international we also target improvement. Throughout our sustainability standards. However, we are aware

4 5 6 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | INTRODUCTION exchange listed companies). (for stock- thecapitalmarket concerning commercial companies andLaw 297/2004 regulations are Law 31/1990concerning themainapplicable Romania, and activity. In law andprovide therulesfor administration complywiththelocal applicable to eachentity ofAssociation andtheregulations The Articles soleshareholder isKMGInvestments BV.Its inNovember wasincorporated 1999. Group NV) NV(former theRompetrol KMG International Operational Profile all activities. of level, thetransparency thusensuring atoperationalandmanagingactivates inwhichKMGInternational framework coherent information the concerning Corporate Governanceprovides Corporate Governance Libya, Iraq, Oman,Gibraltar). Libya, Iraq, Ukraine, Turkey, Singapore, Switzerland, Netherlands, Georgia, France, Spain,Bulgaria, The Kazakhstan, (Romania, in 15countries branches andjoint-ventures) headquartered stock companies-plus8 orlimited liability 52entities(44legal-joint comprised At theendof2014,KMGInternational in15countries. headquartered plus 5branchesandrepresentative offices) joint stock companies– orlimited liability 49entities(44legal– comprised At theendof2013,KMGInternational activities, theBoard ofDirectors isincharge with its order tomanagement position.In support of theCompany ofthe andfor thesupervision Directors are responsible for thegeneralpolicy The membersoftheBoard non-executive of strategy andpolicies. thecompany’ssetting andachieving objectives, affairs ofthecompany’s enterprise, includingfor the company’s managementandthegeneral Board memberstogether are responsible for specificto theGroup. ofactivities types Executive specialized Managers indifferent level there At are KMGInternational Deputy thirdgroups parties. ofoperationsto certain operations/ forhis managing function certain represent thecompany. The CEOmay delegate provisions, theCEOaloneisauthorized to subsidiaries. According to thestatutory management ofthecompany andits ofAssociation, for theeveryday the Articles The CEOisresponsible, inaccordance with independent). de Leon Diego(Non-Executive Ramon Director, (Non-Executive Director, independent),Mendes Director, independent), Wolff EmileEduard Frederik Lodewijk Frowein (Non-Executive Zhangulov (Non-Executive Director), Johan Tussupbekov (Chief Azamat Executive Officer), Non-Executive(Chairman, Director), Mr. Zhanat of Directors includesMr. DaniyarBerlibayev Current structureoftheCompany’s Board members. –CEO)andfiveExecutive non-executive Officer members ofwhichoneexecutive (theChief a unifiedmanagementsystem, including6(six) NVhas The managementofKMGInternational Management levels: company isdividedatdifferentevery decisional operationsof uponinternal The decisionalright implemented withintheGroup subsidiaries. The unifiedmanagementsystem isalso Committee Committee. orRemuneration founding specialized theAudit committees like structure were thefollowing: onKMGInternational’simpact corporate 2013,themajorchangesthathadasignificant In Major Corporate Changes General Manager andFinancial Manager General Manager Board ofDirectors/Sole Director Shareholders’ Meeting General country. inthis services of developing theindustrial SRL wasregistered inPavlodar, asaresult process wasstopped) andalso Rominserv (theliquidation Kazakhstan Rominserv of wasdecidedto resume theactivity It share capital which currently holds99,9998505%ofthe interest Oilto inRom Rompetrol SA Rafinare Ecologice SRLsoldtheir Ecomaster Servicii OilshareChanges inRom capital:Rominserv, development plan Group’s ofthestrategic ,part E&Pactivity & Production role SRLwithanew for the ofRompetrol Exploration Incorporation Group level atthe performed for services theindustrial -financialandholdingactivities main activity BV, NV; 100%owned by KMGInternational Engineering ofKazMunayGas Incorporation corporate achievements:corporate by thefollowing2014 wasmarked major office in Ukraine, Odessa. office inUkraine, KMG Trading AG openedarepresentative divested inNovember 2014. andAGAT50% ofRompetrol Ukraine Ltd SRL(Romania). Rominserv KMG Engineering bought99,9996623%in Kazakhstan. KMG Engineering bought100%inRominserv NV.KMG International sold theirshares inRompetrol SAto Rafinare Rompetrol SAandRompetrol Well Services Ecologice SRLattheendofJuly, 2014. The divestment ofEcomaster Servicii asitsmainactivity. natural gasextraction for activities petroleum and with support inPrahovaheadquartered County, Ploiesti, SRL, ofRompetrolThe Drilling incorporation Rompetrol SRL. NV,KMG International respectively to KMG Corporate Center, changedtheirnameto company,services The Rompetrol Group The Rompetrol Group NVandtheshared March 6,2014wasthedate whenboth 7 6 7 8 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | WHO WE ARE Trading Services andIndustrial Retail andMarketing Corporate BrandsOur and Spain. brandinFrance andundertheDyneff Moldova, “Rompetrol” Georgia, brandin Romania, Bulgaria, pointsunderthe 1,100 fueldistribution The company’s operates retail over network annually. processing ofover capacity 5milliontons region –Petromidia Năvodari –whichboastsa andtheBlackSea inRomania refinery modern owns thelargest andmost KMG International and transportation. suchasdrilling, EPCM, services other oilindustry operations inexplorationandproduction, andtrading, withadditional marketing Africa. inrefining,The Group primarily isactive throughout Europe, Central Asia andNorth company withoperations in15countries The N.V.KMG International (formerlynamed OperationsOur

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Refining & Petrochemicals Rompetrol Rafinare (Petromidia) Rompetrol Vega The Petrochemical Division

Retail & Marketing Rompetrol Downstream (Romania) Rompetrol Gas (Romania) Rompetrol Moldova Rompetrol Bulgaria Satu Mare Rompetrol Georgia Vatra Dornei Dyneff France & Spain Șimleu Silvaniei

Zalău Trading & Supply Chain Management KMG Trading Arad Rompetrol Ukraine Rompetrol Turkey Greșu Sibiu Nereju Focșani Industrial Services Zărnești Rominserv Ploiești Palplast Zegujani Năvodari Rominserv Valves IAIFO Craiova Mogoșoaia Rompetrol Quality Control

Romania Upstream Our home market and base of operations. Rompetrol SA Rompetrol Well Services

8 9 10 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | WHO WE ARE Response and Rescue andRescue Response continued to supply Mobile Emergency Emergency Mobile Major Projects &AchievementsMajor Projects KMG International KMG International Service (SMURD). Service JetA1 fueltoJetA1 the unfolded atSf. Pantelimon January hospitals inBucharest. Healthcare projects and Marie S.Curie and Marie February technological works. the Zegujani block. exploration well in Upstream Division Division unfolded started drilling an drilling started $55 mln worth of $55 mlnworth Petrochemicals Refining and Refining March March becomes KMG Trading becomes AG, consolidates all Vector Energy AG trade operations. April Petromidia becomes Romania alignedRomania to the first refinery in the firstrefinery EU environmental per ton), accountsfor 43%of lowest processing cost($21 Petromidia reaches refinery standards. May launched. is Each andEveryone program Togetherfor 5th editionofCSR April Petromidia refinery installation atthe carbon-capture commissions $53mln completes and Rompetrol Rafinare April national output. June value: ofUSD225,000. programEveryone intotal Together for Each and inthe 16 projectsselected July complex inAtyrau. petrochemical agreement for new consultancy signs Rominserv July Group. with Total partnership in Port-la-Nouvelle in project for oilterminal Completed $50mln July filling stations. by 12 and Bulgaria inMoldova network Expanded distribution July refinery inKazakhstan. refinery upgrade atPavlodar works agreement forservice signs $1.72bln Rominserv August filling stationconcept. redesign andnew Rompetrol brand September Festival.Music the George Enescu of the mainpartner was KMG International September Shymkent refinery.Shymkent upgrade at works agreement forservice signs Rominserv October reaching 59intotal. stations inMoldova, filling new opens two KMG International November Value of exports carried Value carried ofexports Group’s to contribution Rafinare, theleading exporter in Romania. inRomania. exporter out by Rompetrol the state budget. $1.7 bln $1.4 bln 11 June 15% Civil Society Gala award for Hike in turnover for “10 years, 1 million km, 15,000 September Rompetrol Rafinare. kids in kindergarten“ project Rompetrol was the main 40% January developed by OvidiuRo with partner of the George Decrease in losses for Launch of Snoezelen KMG International. Enescu International Rompetrol Rafinare. multisensory stimulation Music Competition. October center in Bucharest in KMG International completed the $86.4 mln partnership with Hospice work on an emergency disptacher EBITDA reported by House of Hope. (CSR) April and rescue center for injured Rompetrol Rafinare. July wildlife in the Dobrogea region. Opening of new fuel $2 bln distribution station in KMG International partenred Value of exports made by Işalniţa, a USD 1.6 mln with HOSPICE House of Hope Rompetrol Rafinare. investment. for an internal fundraising marathon called Rompetrol $1.94 bln Run for Hospice. February Group’s contribution to the October state budget of Romania. Opening of the first May Implementation of ESP filter respiratory rehabilitation over 5 mln t KMG International at the CO-Boiler installation of center, within the Peak refining capacity celebrated the 5th the catalytic cracking unit at Pneumophtisiology attained at Petromidia anniversary of its Petromidia refinery. Hospital Constanta. (CSR) refinery. “Partnership for SMURD”. 100 mln t March July Feedstock processed by The Rompetrol Group NV Petromidia refinery since its Rebranding of 38 filling November start in 1979, a record rebrands to stations by replacing the Initiation of divestment performance in Romania’s KMG International NV. visual identity elements with procedures for Palplast Sibiu, refining sector. Rompetrol remains the the new Rompetrol logo as Rominserv Valves Iaifo Zalău group’s leading brand. well as exterior renovations. 90,000 t and Global Security Systems. Peak production of March polypropylene at the August Petrochemicals Division. KMG International May launched the 2014 KMG International has 2.43 mln t Rompetrol Rafinare edition of its completed the divestment of posts 48% rise in Record Diesel production. internship program. Ecomaster Servicii Ecologice turnover thanks to to Oil Depol. 85.7% increased sales and Median yield for white positive operating products. results. 99.8 Energy Intensity Index.

10 11 12 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | WHO WE ARE the challengeswe faceandthedirectionsof Besides achievements andresults, we present in parallelwiththosefor previous years. purposes, indicators arecomparability presented onanannualbasis. Forissue reports andtheintention isto 2014period December 2013– coversoperations. theJanuary It Group andmembercompanieswithsignificant ofKMGInternational performance marketplace to theeconomic, social, environmental and covers relatedThe allsignificant report aspects performances. ontheirsustainabledevelopment to report shareholder alsousesGRI ofKMGInternational, the Kazakhstan, activities, asKazMunayGas the needofdeveloping consistent reporting this area. Moreover, we basedourdecisionon recognized barometer asthebestpractice in around principles theworld, being reporting guidelinesand commonly usedsustainability are asthey themost developing thisreport guide for the relevant determining content in Guidelinesasa Reporting G4 Sustainability Initiative’sWe usedtheGlobalReporting (GRI) Guidelines. G4 Initiative with theGlobalReporting prepared inaccordance Report, Sustainability This isthefirsteditionofKMGInternational’s About This Report About This environment, andmarketplace. community ourpeopleandtheworkplace, International: strategicsustainability areas ofKMG followsThe structureofthereport the prospects. order andfuture toourefforts prioritize We assessmentin themateriality conducted which are ofhighrelevance for ourstakeholders. produces together withtheaspects impact, to identify alltheareas where KMGInternational business strategy, we have ouranalysis extended To trends translate globalsustainability into our ofourperformance. balanced view potential development, inorder to provide a state authorities suppliers other operators clients community employees regulatory bodies regulatory large clients corporate other interests. management ofourprojects, operationsand may beaffected by decisionsregarding the groups whohave aninterest in,orbelieve they allindividualsand comprise These stakeholders organizations andassociations. individuals orasmembersofvarious and membersofthecommunity, eitheras customers, opinionshapers, suchasthemedia, shareholder, to ourown employees, unions, asaregulatorin itsdualcapacity anda stakeholders,ranging fromkey theGovernment, of hasawidevariety KMGInternational market, As majorplayer andregional intheRomanian Our StakeholdersOur operations. is evolving andgrowing alongwithour transparent manner. ourapproach Nevertheless, inatimelyand questions andconcerns ofways andrespond to inavariety stakeholders Furthermore, we striveto proactively engage matters. strategy and managementofourmaterial into into accountandincorporated taken the areunderstanding oftheirneedssothatthey and dialogue, whichwould facilitate thesurvey stakeholders, by meansofafluidandconstant We ofallour theexpectations aimto learn European Commission advertising agencies advertising trade associations local authorities shareholders trade unions media NGOs 13 Materiality Assessment impact on the Group

It is crucial that we understand the perception of and NGOs. We invited them to evaluate the high our stakeholders with reference to our topics covered by the GRI indicators in terms of responsibilities. For this reason we conduct importance for our business as well as topics of medium surveys in order to identify their expectations personal interest which they would like to see importance to stakeholders low and major themes of interest they would like to disclosed in the report. The second step was to be more often informed about in their relation scale all the predefined items based on average with the Group. results and list the topics suggested by the In order to establish the materiality aspects for respondents. The information for the report was this report, we addressed questions about a gathered based on the priority level assigned wide range of issues which have an impact on after the consultation with stakeholders. stakeholders and which derive from our The results and the levels of disclosure were responsibilities as a large oil & gas player. Besides represented by taking into consideration the the market surveys and discussions with our scale of each topic, based on the common vision customers, as well as the direct communication of stakeholders and the sustainability reporting with authorities, the materiality assessment team. involved a qualitative research with employees

indicators in descending order of score

Economic LA14-15 supplier assessment Community EC7-8 indirect economic impacts LA16 labor grievance mechanisms SO1-2 local communities EC1-4 economic performance HR1-2 investment SO7 anti-competitive behavior EC5-6 market presence HR4 freedom of association SO8 compliance EC9 procurement practices HR7 security practices OG10-13 sector specific OG1 sector specific HR9 internal assessment SO3-5 anti-corruption SO9-10 supplier assessment People Environmental SO6 public policy LA5-8 occupational healh & safety EN15-21 emissions SO11 grievance mechanisms LA9-11 training and education EN30 transport LA12 diversity & equal opportunity EN22-26 effluents and waste Marketplace LA4 labor relations EN8-10 water PR1-2 customer health and safety OG9 sector specific EN1-2 materials PR3-5 product and service labeling HR10-11 supplier assessment EN3-7 energy PR6-7 marketing communications LA1-3 employment EN11-14 biodiversity PR8 customer privacy LA13 equal pay for men and women EN27-28 products and services PR9 compliance HR3 non-discrimination EN31 overall OG14 sector specific HR5 child labor EN29 compliance HR6 forced/compulsory labor EN32-33 supplier assessment HR8 indigenous rights EN34 grievance mechanisms HR12 human rights grievances OG2-8 sector specific

12 13 14 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | WHO WE ARE ethics, andisbuilt upon thefollowing principles: rules outliningourapproach to thebusiness Therefore, theCode setsupthebasic ofConduct accountable for andouractions. ourwork accept responsibilityandholdourselves dealings. We dowhatwe say we willdo. We the highestethicalstandards inallbusiness are honestwithothers andourselves. We meet ofourcredo. are andhonesty apart Integrity We involvement. behavior, respectfor andsocial humanrights rule oflaw, respectfor of norms international interests,respect ofstakeholder respectfor the accountability, transparency, ethicalbehavior, Through responsibilitywe understand and responsibility. integrity, andvalueslike clear principles honesty, possible withoutasolidfoundation builton However, successcannotbe ourlong-term areas. andMediterranean Sea Europe andobtainastrong positionintheBlack one ofthelargest independentoilcompaniesin asever,hard-working andouraimisto become petrochemicals. We are asambitiousand trading &supplychain,refining and exploration andproduction,retail &marketing, Procurement, Management), Construction drilling, EPCM(Engineering, Industry: to theOil&Gas pertaining ofactivities variety multinational Group ofcompaniesengagedina hasrapidlygrownKMG International into a Code ofConduct guide allouractivities. guidelines for multinational enterprises andtheOECD Nations GlobalCompact global practices. intheUnitedThe principles practices:Best We adhere to thebest to theimprovement ofsocialinvolvement; andwe contribute ouractivities undertake values ofthelocalcommunitieswhere we rights, theculture, thetraditionsand respect, protect andpromote thehuman for community: thelocal Respect responsibility andentrepreneurship; through thatencouragesocial activities leadership amongtheyouth, especially Education andleadership: business; our contractors, theenvironment andour communities thathostus, ouremployees, forevaluate andmanagetherisks the management: Risk ouractivities; where we undertake employees, suppliersandcommunities ofour care ofthehealth,safety andsecurity WeHealth, safety andsecurity: good take development ofallourstakeholders; withandinvolvedin contact inthe Continuous involvement: We are always constant improvement; our employees for andprovide their support for ouremployees:Respect We striveto identify, We promote We respect We We well-defined setofvalues: well-defined because itstems from andisshapedby a andbelieve thatoursuccessispossible sector We are adynamicleaderintheregional oil with allourstakeholders. it isalsofundamentalinshapingtherelationship business ethicsdoesnotonlycreate growth, but believe thatmeetingthehighstandards of citizens. We, community, theKMGInternational public scrutiny to becomegoodcorporate changesandcompaniesarestructural under far-reachingalmost constantlyexperiencing We live inafast-paced where world businessis and regulations governing theenvironment our suppliersadhere to allthe nationallaws Environmental Bothwe protection: and we do.excellence ineverything todetermination succeedanddeliver business stems from ourstrong willandour Determination: The strength ofour for ouractions. responsibility andtake all ourstakeholders citizen.valued corporate We are honestwith anda partner trustworthy a worldwide Care, integrity We andresponsibility: are experience. creativityand spirit, contemporary are always by determined theirdynamism, on theneedsofouremployees. Ouractions We people: Our placethehighestpriority or indirectly impact allourstakeholders. or indirectlyimpact to leadership inallouractions,whichdirectly at thehigheststandards andare committed perseverance to offer productsandservices experience, ourtechnology and Commitment to leadership:We useour the stakeholders. exceed –ourown andthoseof expectations results quality which about achieving continuously improve. We are passionate we doandwe striveto in everything We quality: High are committed to quality social development. tocontribute economicand long-term aim to ensure thatourbusinesspractices engagement withthelocalcommunities, we developing profitable business andactive standards ofintegrity. Also, through andmaintainthehigh Human Rights intheUniversal of Declaration set forth Wetheprinciples Sustainability: support wherever we operate. orthey and proper managementofresources, 15 Code of Ethics

KMG International believes a strong policies and procedures and any adopted donations, exceeding hospitality. Our Advice Seeking and Grievance commitment to ethics and compliance drives standards applicable to the company. Our compliance policy is meant to prevent and to Mechanisms responsible behavior and enhances financial approach is to use a rigorous process to identify ensure a fair, transparent activity and also to Our goal is for every employee to feel confident performance. Corruption, anti-competitive potential risks that might occur during project maintain a good reputation as an employer and in seeking advice and reporting any good faith behaviors and non-compliance are ethical issues execution and develop risk-mitigation strategies business partner. ethical concern without fear of retaliation, and to that could have significant implications for our that proactively address these risks. The purpose of our Anti‑Bribery and conduct timely and thorough investigations in long-term success. The Group has no tolerance for corruption and Anti ‑Corruption Policy is to not only prevent order to maintain our high standards for ethics Our comprehensive ethics and compliance conducts its operations with integrity, fairness bribery and corruption at Group level but also to and compliance. program guides our employees and business and transparency. We want our employees and increase employee awareness and In this respect, KMG International employs partners and enables us to manage our the third parties we collaborate with to understanding with regard to bribery and various advice seeking and grievance compliance and ethics risks. This dynamic understand our expectations of them, anticipate corruption, promote integrity, accountability mechanisms, in order to provide employees the program involves leadership and oversight, risk ethical conduct risks, accept personal and proper management of the business in an optimum tools in any business situation. Thus, in assessments, policies and procedures, extensive responsibility and be committed to doing the ethical and transparent manner. addition to their immediate supervisor, communication and training programs, right thing. The Anti‑Bribery and Anti-Corruption Policy is employees have the opportunity to seek monitoring, reporting and other initiatives. For the projects we pursue, we proactively applicable to all Group entities, employees and guidance with the line manager and functional KMG International Code of Ethics is the develop and implement mitigation strategies for business units, collaborators (lawyers, corporate departments (HR, Compliance). centerpiece of the company’s commitment to risks with the potential to affect our company consultants and experts, contracted personnel, Dedicated email addresses are to be used and conducting its global business legally and with and stakeholders. A modern international persons engaged under a management and/or the advice is treated in a confidential manner. high standards of integrity, comprising the company cannot expect to have strong financial civil contract), third parties, or any other person Clients, partners, suppliers and subcontractors organization’s values, principles, standards and performance without responsible governance associated with the Group. are also encouraged to report any suspected norms of behavior. It has been developed based and risk management. Communication and training are among the misconduct involving or affecting KMG on best practices and was approved by the most critical components for the success of any International, whether or not the concern highest governance body (Board of Directors). Anti-Bribery and ethics and compliance program, which is why involves the supplier or contractor. Starting 2014, training on the Code of Ethics is training on anti-corruption issues is delivered to The company also uses a whistle blowing provided on an annual basis to all employees, Anti-Corruption Policy all employees (including governance body mechanism that is managed by the Compliance each acknowledging its principles and KMG International Anti‑Bribery and members) and all entities (regions) on a regular department. An external email is used by committing to comply with the Code’s Anti ‑Corruption Policy was developed in 2014 in basis while the Anti‑Bribery and Anti‑Corruption employees and business partners to report provisions by giving a signed statement. The compliance to the applicable anti‑corruption Policy is communicated to all Group entities, and concerns about unethical or unlawful behavior Code is published internally and is available in laws, being aimed at protecting the reputation any associated third parties. of the Group and all its entities by minimizing and matters related to integrity, in a strictly both Romanian and English. We continually improve and enhance our the risks of bribery and corruption within its confidential manner. This mechanism is internal policies concerning ethics and business. regulated by internal policies and contains Risk Management compliance by monitoring our evolving risks non-retaliation provisions. Trainings on accessing KMG International prohibits all forms of and benchmarking best practices in our KMG International is committed to ensure the mechanism and reporting have been commercial bribery, including any kind of company while aligning to national and compliance with all relevant laws, regulations, provided to all employees in the company. facilitation related to business conduction, gifts, international regulations in the field.

14 15 16 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | WHO WE ARE 2008. Rompetrol hasbeenamembersince Rafinare within ECHA–European ChemicalsAgency. onchemicalsandtheirsafeRegulation use), REACH regulations (theEuropean Community Managing allpetroleum products, based on Europe (CONCAWE) Conservation ofCleanAir and Water in etc. market governance, taxations, competition,labor task forces onenvironment, energy, corporate Operating different committees and working ChamberofCommerceAmerican (AmCham) associations: local industry numerous international, regional and memberships andinvolvement with operationsaswell asthrough to-day throughother stakeholders ourday- Externally, we engagewithclientsand Memberships andAffiliations Kazakhstan. of the fuelandenergy oftheRepublic sector for thedynamicandsustainabledevelopment of Promoting thecreation offavorable conditions KazEnergy practitioners. andindividual firms and directmarketing to mediacompanies,- from agencies advertisers communications entire ofmarketing spectrum the commoninterests inthe ofallsubjects A uniquestrategic whichdefends partnership, International Advertising Association (IAA) community. andtheforeign makers policy investment Committed to facilitatingthedialogue between Foreign Investors Council (FIC) Romania. facilitate oilcompaniesin cooperationbetween Aiming to provide required theframework to Romanian Petroleum Association (ARP) Engineers. member oftheAssociation ofOilandGas inHouston-USA, aswell as headquarters ofOilEngineers –SPE,bothofthemwith Society Contractors –IADC,theInternational Drilling Association of oftheInternational Member (ACFR) Romanian Association Contractors ofDrilling in advertising. of theCouncil isrepresented by self-regulation and independentorganization. The mainactivity A professional, nonprofit non-governmental, Romanian Advertising Council (RAC) volume ofRomania. export-import to expandthe likely framework, and banking toActing create alegislative economic, financial (ANEIR) andImporters National ofExporters Agency support ofdomesticcompaniesinforeignsupport trade. through the development ofKazakhstan Entrepreneurs, itsmissionisto tiothe contribute NationalChamberof A branchoftheKazakhstan Commerce (KAZCIC) ChamberofInternationalKazakhstan entities. andinternational Romanian a conduitfor dialoguewithauthorized aswell asto provideexplore opportunities new professionals, players to allowing industry Romania’s mostexclusive ofenergy gathering The Petroleum ClubofRomania technology. toin Romania thehigheststandards andlatest environment intheupstream oilandgassector atransparentAimed atachieving working (ROPEPCA) CompaniesProduction Association Romanian Petroleum Exploration and 17 16 17 18 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | OUR PEOPLE HR Management needs. meet ourcurrent andfuture business environment thatwillenableusto provide a transparent andinclusive andefficient workforceperforming and anddevelop ahigh- preserve thisrespect,ourgoalisto attract, In changing world. we remain responsive to arapidly into account, inorder to ensure that theirintereststo andtake theirviews and professional development, listen competitively, invest intheirpersonal and withrespect,we reward them isessentialthatwe treat themfairly It energy, creativityandlocalinsights. competitive advantagethrough their Our peoplehelpusgainandbuild environment. safe, ethicalandmutually trustworthy and diverse workforce, operatingina qualified toattributed ourskilled, a successfulbusinessatthislevel is decisive roleto conduct inourability A Africa. Central Asia andNorth throughout Europe,12 mainmarkets employees operatingin15countries, hasmore than7,500 KMG International Our ApproachOur Romania atGroupRomania level. program in aimingatstreamlining theactivity implementation ofthe “Change for Good” forOur mainobjective the 2015isto extend law. nationality, ageorany protected otherfactor by develop professionally regardless ofgender, employee to beproductive andsecure andto forand create eachandevery opportunities observance our commitmentsto humanrights Our policies, procedures support andpractices implementation ofsafety measures. through andthe evaluation aconstant risk at mosttimes, ifnot eliminated. This aimismet environment couldbeavoided inwhichtherisks We are to determined create awork potential. acquire higherchancesofmeetingtheirfull environment, sothatourpeople working employees. We alsomaintainateam-based approaches amongstits out-of-the-box encouragesleadershipand KMG International valuesandemployees’both corporate benefits. From thisperspective, ouraimisto optimize provide aprofessional development platform. our employees, care for theirwell-being and trust andcoordination. We of protect therights inclusion,equality,guided by valueslike mutual We have environment, builtabalancedwork employee talentsandskills. and specificprograms for thedevelopment of wagesandbenefits competitive market-based provides thegrounds for practices, fairwork comprehensive HumanResources strategy legislation.with nationalandinternational Our operates infullcompliance KMG International 19 Human Resources Management

Workforce Structure We provide people with the opportunity to the “46-60 years” category, closely followed by Employee nationality develop their professional and personal skills, “36-45 years” and “26-35 years”. Although there at Group level The size of our workforce followed a rather offering a range of development opportunities has been an increase in new hires in the “18-25 stable trend during 2013 and 2014, a slight 2014 and training courses. We are committed to years” category, it is still underrepresented, increase, by approximately 1%, being visible in Georgian creating a working environment where compared to the three already mentioned. 2014. KMG International workforce numbers 9% everyone has the opportunity to learn, develop 7,599 employees (data available in December Moldovan and contribute. 2014).The stability in our employee numbers 6% and the slight growth tendency reflect the According to EC directives, KMG International Total headcount age distribution French operations which fulfill the reporting at Group level 4% successful path of our business, achieved Kazakh despite the competitive labor market, where the requirements (over 500 employees and over EUR 2014 1% skills and experience we require are in short 20 million turnover) are those based in Romania, <18 Libyan France & Spain (Dyneff) and Georgia. Thus, the 0% 1% supply. >60 Romanian following reporting data will focus mainly on 2% other We make a concentrated effort to hire and train 18-25 76% these three locations. 2% local employees, including senior managers, in 9% our office and project locations. By hiring locally, From the demographical standpoint, KMG 45-60 International employed an average of 7,599 33% we demonstrate our commitment to sustaining 26-35 Employee gender distribution people in 2014, compared to the 2013 average the growth of communities where we work. 28% at Group level of 7,474 people. Once we recruit people, our aim is to give them 2014 challenging and rewarding careers in a working The most prominent age group in the 36-45 28% environment that is supportive and motivating. company’s workforce structure is represented by female 33%

male 67%

7474 7599

5864 5415 Headcount evolution total Romania 2013 2014

18 19 20 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | OUR PEOPLE higher values, with1.37%for female employees lower thanin2013,retention rates recorded 2014,although return-to-work rates wereIn male employees compared to 0.23%. employees compared to 1.79%and0.19%for return-to-work rates, with1.35%for female to work. Thus, retention rates are lower than were stillemployed theirreturn 12monthsafter of whichonly78female and 11maleemployees employees returned to from work parental leave, 2013,103femaleIn employees and13male to theoperationsofGroup inRomania. to thistopic isconnected information pertaining France,(Romania, SpainandGeorgia), theonly significant operationsfor KMGInternational following parental leave, with incountries Regarding return to andretention work rates compared to 554female and904malein2014. the following: 622female and995malein2013 At Group level, splitmalefemale ofturnover is female hires, compared to 67vs. 146in 2013. malehireswith only82new in2014vs. 133new numbers are hires, stillhigherthanmalenew decreased from 33.08%to 30.85%,these in 2014thepercentage offemale hires new a bitdifferent from therest ofoperations. Even if thingslook However, inFrance &Spain(Dyneff), 6.53% in2013(488). represented 5.37%in2014(408),compared to hires new 2013, to 3.82% in2014.Male from 3.60%ofthetotal Group populationin femaleRomania hires new increased in2014 region oftheGroup’s operations. Thus, in the situationisdifferent dependingonthe hires new distribution, ofmale-female terms In decreased by 2%,from oneyear to another. in Georgia thepercentage hires ofnew increased with1%and France &Spain(Dyneff) decreased from 757in2013to 698,whilein hires 2014,thenumberofnew inRomania In <18 <18 <18 150 167 18-25 18-25 18-25 293 177 2013 2013 2014 63 100 2013 2014 Georgia France &Spain Romania Employee New hires turnover by gender by gender New hires by agegroup 0 0 0 2014 405 429 290 269 female female Romania Romania 488 408 722 628 male male 145 63 45-60 45-60 45-60 28 24 8 13 108 123 175 104 133 146 138 185 252 231 female female 26-35 26-35 26-35 35-45 35-45 35-45 74 86 49 43 29 53 >60 >60 >60 2 0 4 3 8 7 <18 <18 <18 18-25 18-25 1 0 26-35 399 384 2013 2014 Georgia 89 75 88 109 28 3 France &Spain Romania Employee turnover by agegroup 0 131 120 18-25 France & France & 100 60 67 82 Spain Spain male male 0 0 female female 35-45 53 20 45-60 26-35 63 78 16 23 45-60 27 3 173 179 297 259 173 216 354 341 Georgia Georgia 174 37 45-60 26-35 35-45 35-45 93 87 26 37 male male >60 >60 >60 3 0 1 21 and 0.19% for male employees. Nevertheless, Labor Practices The Supplier Code of Conduct is applicable to Child Labor 2014 saw an increase in female employees’ any party that contributes to the products, Code of Conduct KMG International observes and abides by retention rates. services and other business activities. The minimum age laws and regulations prohibiting KMG International’s strong commitment to Supplier Code of Conduct shall be applied to the hiring of underage persons on any of its ethics and compliance sets the parameters for the Group’s suppliers throughout the projects or in any global offices, and the human rights and fair labor practices that apply contractual agreement. Any violations of this company’s policies and practices reflect this across the Group. Code may jeopardize the supplier’s business male approach. The Group has legitimate internships, As of June 2014, KMG International approved relationship with KMG International, up to and 2014 13 5 apprenticeships and other related programs and the introduction of the “Supplier Code of including termination. strives to ensure that all programs meet laws 2013 Conduct” for all its contractors and suppliers, and regulations related to hiring and with the purpose of ensuring that KMG Non-Discrimination compensation. female International and all its subsidiary suppliers are 103 66 in full compliance with all applicable national KMG International values every member of its We do not utilize or support child labor in any and international laws and regulations on workforce and has policies that promote a way and we follow standard requirements in all protecting human rights, safe working workplace where every person is treated with countries in which we operate. Employees conditions, promoting fair employment dignity and respect. We also expect that returning conditions, responsible management of employees will treat each other with dignity and Forced Labor to work environmental issues and high ethical standards. respect as stated in our company policy. KMG International does not promote, condone, Nevertheless we acknowledge the possibility for By this, KMG International requires its suppliers practice or tolerate the use of forced or incidents to happen in this direction but, at the and their subcontractors to comply with the compulsory labor and the Group’s policies and male same time, we commit to provide fair and quick Supplier Code of Conduct and to verify practices are reflective of this approach. The 2014 11 8 solutions, in accordance to the legal framework compliance by providing information and Group takes measures to adhere to all applicable of our operations and our Group’s Code of 2013 allowing access to their premises. local laws and regulations regarding forced or Conduct. compulsory labor, including those related to female 78 82

Employees retained

20 21 22 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | OUR PEOPLE operations oritssuppliers’ andsubcontractors’. orforced laborincidentsinanycompulsory ofits ofany significant forknowledge risks wages andbenefits. The Group hasno market, the corresponding salary grids are thecorresponding salary market, average increase/decrease ofeachreference compared to theprevious year. Basedonthe out to understandchangesinthemarket iscarried Annually, benchmarking anexternal Wages, Compensation, Benefits Resources Department. complaints to beaddressed to theHuman c. My Voice mechanism –personalspecific Department. complaints to beaddressed to theCompliance b. Compliance mechanism–personalspecific Management. complaints to beaddressed to Group mechanism –anonymous a. Whistle-blower address, asfollows:e-mail mechanisms,grievance eachonewithseparate and regulations andprovides 3different of types are policies notincompliancewithitsinternal that any to activities report other stakeholders encouragesemployees and KMG International Mechanisms Grievance work. and/or tradeunions, inwhichwe incountries involvement, whichmay includelaborunions accordance withthelaw related to third-party organizations. third-party areThese rights in coercion orharassment,whethernotto join to choosewithoutfearrights ofretaliation, employees’The Group acknowledges legal Collective Bargaining Freedom ofAssociation and Benefits policy. Variable pay may consistof: regulated through theprovisions ofthePay and is reward elements)canbeapplied. Basesalary (bonuses). Additionally, benefits(cash/ non-cash pay andvariable composed ofbasesalary is Policy states thatthepayment package force, whichensures: aPay(local orexpatriates), &BenefitsPolicy in entities,Romanian andfor alltheiremployees At Group has, level, for KMGInternational allthe adjustment. reference arethey usedasfurther for any pay Committee Remuneration and International grids are approvedupdated salary by theKMG realities.updated to reflectcurrent market The and payment rulesfor thefollowing variable company level, whichsettlethecalculation Collective LaborAgreements (CLA) at company level; are settledseparately within procedures at operational, salesand projectsjobs, which Different Bonusschemesfor production, forRemuneration Top Management; Policy for Performance Evaluation and ProcedurePerformance Management and Performance bonus-regulated through in pay. differences market levels) whileconsidering equitable(basedonthejob Be internally employees’ lineofsight; and operations, andthatare within that areto businessstrategy directlylinked basedonmeasures Reward performance targets thanwhenitisbelow targets; individual andorganizational level) exceeds Pay (bothat more whentheperformance customers; to thecompanycontribution andto the Pay for employees’ roles andvalue-added specific requirements ofeachcountry. fromto entity, entity These basedonthe vary reward(cash/ elements)canapply. non-cash pay (bonuses).Additionally,and variable benefits iscomposedofbasesalary payment package regardingprinciples remuneration apply: For alltheotherforeign basedentities, thesame the provisions ofCLAs inforce. Termination payments are available according to Benefits relate to: or other third party suppliers, etc.)or otherthird party expenses, discountsfor company products andcommuting care, transportation insurance, healthandmedical and disability vouchers for employees’ children, life, illness benefits(mealtickets,gift /inkind Non-cash death allowance) medical care, retirement,kindergarten, and relocation, pregnancyandpostpartum, birth, Cash benefits(vacationbonus, marriage, allowance, allowance, nightshift etc. pay elements:profit sharing, overtime

diverse representation. usindeliveringmoreprocesses to support positions, andhave talentdevelopment women andlocalnationalsinseniorleadership We monitor actively therepresentation of orphysical ability.ethnicity reward for allemployees regardless ofcolor, career development, promotion, trainingand We inrecruitment, provide equalopportunity were throughout kept 2013and 2014. France &Spainand90%inGeorgia. Proportions and Georgia) represents 90%in 60%inRomania, Francelocations ofoperation(Romania, &Spain from atsignificant thelocalcommunity ofseniormanagementhiredThe proportion operations.nationals inourinternational leadership, we employ ahighnumberoflocal our aimto foster andcultivate diversity employees with andjobcandidates. keeping In for all equal employment opportunities iscommitted to and diversity KMG International Diversity and Equal Opportunity 23 Training and Career Development

KMG International provides training and Female employees benefited, in average, of 9.8 occupations (COR) – some positions need were evaluated from the performance point of development programs and processes that give hours of training, while male employees mandatory training courses (e.g.: electrician, view and received regular performance employees an opportunity to advance their benefited, in average, of 7.5 hours. welder, turner, LPG operator, crane operator). assessments. From 2014, the performance careers over the long term and stay relevant in Managers benefited, in average, of 41.31 hours Thus, in the Refining Business Unit, in 2013, 884 assessments were extended to all employees the ever-changing job market conditions. of training, while Execution level employees employees from Rompetrol Rafinare and 265 (100%). In 2013, at KMG International level, the average benefited, in average, of 29.31 hours (calculated employees from Rompetrol Petrochemicals In 2014, from the employee population who number of training hours per employee was for 2014 as total number of hours of training/ participated in at least one training session. Most received regular performance assessments, 33% 11.7. number of managers, not as average meaning of the trainings (82%) were conducted in the were females and 67% males. technical area (for which the issuance of a CFA, Female employees benefited, in average, of 12.9 total number of hours of training/total nr. of 2014 was the year in which the career PMP, ACCA certificate of completion is hours of training, while male employees managers, respectively calculated as total management process was started in KMG requested), compared to personal development benefited, in average, of 11.1 hours. Managers number of hours of training/nr. of execution International, by establishing a pool of talents. (developing leadership and management benefited, in average, of 13.6 hours of training, level employees trained, not as average Starting 2015, the career management program qualities, communication skills development, while Execution level employees benefited, in meaning total number of hours of training/total will be continuously implemented within the time management courses, etc), that have a average, of 11.4 hours. number of execution level employees). Group. smaller share (18%). In 2014, at KMG International level, the average In accordance with Law 319/2006 and the In 2013, in KMG International only managers number of training hours per employee was 8.2. nomenclature for the classification of

22 23 24 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | OUR PEOPLE OCCUPATIONAL SAFETY includes thefollowing: healthandsafety Committee onworkplace For example, theGroup’s BusinessUnit Refining Safety. Law no.319/2006 Healthand onOccupational representatives oftheemployees, according to representatives ofthelaboradministrationand health andsafety committees composedby there are ofKMGInternational eachentity In in theGroup there are assessmentsinplace. risks from 2012.Formid-2011 andweekly allentities since2010,monthlyfrom quarterly reported At Group level, accidentstatisticshave been represents amatter oftheutmostimportance. why thesafety ofour employees andcontractors andthatis to health,safetyof risk andsecurity whichinvolvesbusiness inasector ahigherlevel We are aware our thatwe conduct ofthefact Occupational HealthandSafety Incidents Safety rates Safety Fatalities (FTL) Total Cases (TRI) Recordable Injury Lost Cases (LTI)Time Injury Days Away from Work Cases (DAFWC) Medical Treatment Cases (MTC) First AidCases (FAC) Fatal (FIR) Rate Incidents Injury Severity Rate (SR) Rate Severity Injury Frequency (FR) Rate Injury Total (TRIR) Rate Recordable Injury Lost Frequency (LTIF)Time Injury Non-Core Business Units, weekly/ monthly/ Non-Core BusinessUnits, weekly/ As for theRetail, Trading &SupplyChain,and 2013 CSSM. HS Coordinator, of whoisalsoSecretary practitioner; Labor Medicine safety fieldofwork; specific responsibilities inthehealthand 7 (seven) workers’ representatives with Manager); QHSEManager, Director; HR Inspection Plant Director, Plant Utilities Director, Plant Plant Director,safety (Refinery Petrochemical responsibilities healthand for workplace Employer representatives with (CSSM); HealthandSafetyWorkplace Committee Director,General whoisalsoPresident ofthe 1.37 1.37 1.37 1.37 REFINING 0 3 3 3 0 0 0 2014 0 0 0 0 0 1 0 0 0 0 0 2013 UPSTREAM 0 0 0 0 0 1 0 0 0 0 0 2014 0 0 0 0 0 1 0 0 0 0 0 2013 NON-CORE 0.26 0.26 0.26 0.26 0 1 1 1 0 1 0 2014 0.59 0.59 0.59 0.59 0 2 2 2 0 2 0 performance indicators registeredperformance atGroup level All theoccupationalhealthandsafety activity recorded since2010. inKMGInternational No events resulting inloss ofhumanlife were agreements signed withtradeunions. Labor Code provisions), andtheformal and Safety, Governmentdecisions, national legal requirements (Law Health onOccupational are regulatedKMG International according to oftheentitiesin All healthandsafety activities perentity.each workplace outannuallyfor assessmentsarerisk carried Moreover, and medicalchecks, medicalreports process). audit plans by internal/second/third party andfollowrates/incident reporting up/measure are compiled(safety QHSEreports quarterly standard. operations to ensure are thatthey according to andproceduresprinciples throughout its continually evaluates itshealthandsafety way we dobusiness. KMGInternational component ofourstrategy andintegral to the to thelowest levels isanessential possiblerisk Successfully managing healthandsafety issues subcontractors. within theGroup entitiesandinrelation to our occupational healthandsafety policy, both good results dueto applyingauniform showed apositive evolution. We have achieved 25 24 25 We are aware of the importance of the Strategic environment in our work. That is why we act as a responsible member of Environmental society and comply with the relevant Objectives Romanian and European regulations in this field. The main goal of KMG International in terms of Our primary concern, as a responsible environmental protection is to develop its activities in complete conformity with the player in the market, is to ensure the environmental legislation applicable for each sustainability of human existence by country where the Group operates, applying the carefully balancing social, economic general principles of environmental protection, and environmental capital in a through conservation and sustainable practices. continuously changing world. Our role In this respect, KMG International has developed in achieving this goal is to meet the a comprehensive environmental strategy which focuses on various areas of interest, closely needs of the society for oil and gas at a related to the Group’s activities and operations, ENVIRONMENT fair cost, in safety conditions and with which include the following major directions: minimum impact on the environment. Align activities and facilities with national In our strive to minimize our impact on and international legal requirements in the the environment and create value for field; all stakeholders, we also aim to provide Minimize environmental incidents; the proper education to the host Minimize consumption of natural resources; communities with regard to sustainable Reduce waste volumes generated, especially living and development. for hazardous waste; Optimize operations and technologies for Sustainability has always been one greater energy efficiency and reduce various of the guiding principles of KMG pollutant emissions, especially greenhouse International and is an increasing part gases; of its success. However, to improve Improve the certified environmental our environmental performance, management system (ISO 14001) legislative compliance is essential. Thus, implemented in all our entities; we employ focused programs and key Continue the training of specialized personnel in the field; performance indicators to guide our progress and improve performance. Ensure excellent communication within the Group, and with the relevant stakeholders (state authorities, NGOs, local communities, Marian Nicolae etc.). Head of QHSE 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL

26 27 further establishes operational conditions and Also in 2014, we started the procedures for Electrostatic precipitator” was completed in Major parameters (level of air emissions, water and soil obtaining the environmental permit for the new accordance with Decision No. 379 / 05.06.2012 Achievements quality, waste management measures). solution (on site stabilizer/solidifer) for the issued by the Constanța Environmental Greenhouse gas emissions permits were project “Rehabilitation and improvement of acid Protection Agency. The goal was to install in the In 2013-2014 renewed for RRC Petromidia (refinery and tar lagoons area, inside Rompetrol Rafinare catalytic cracking unit a system which reduces petrochemical plant) and free allocations for - Vega Ploiesti” . the content of dust in the flue gas leaving the KMG International is committed to conduct all new installations (from new entrants’ reserve) Furthermore, the project “Empty Lagoon no.3” CO-Boiler - 138F-H4. The solution used was to activities in such a way as to safeguard the were obtained in 2014. was continued during 2014. mount an electrostatic filter (ESP) retaining dust on the gas pipe exiting the CO-BOILER, an natural environment. The company has The completion of the investment package In 2014, Petromidia refinery was issued a water investment with a positive impact on managed its environmental performance resulted in the increased performance of permit with a two-year validity, while Vega environmental protection. Performance tests are efficiently, generating valuable results, presented Petromidia Refinery, which now produces only refinery obtained its 1-year water permit. below. to be carried out during 2015. Euro 5 fuels. In line with the REACH Regulation, petroleum In 2014, Rompetrol Rafinare organized CSR In 2013, Petromidia Refinery became the first Another major performance of the Group is products files were updated in accordance with projects, with the participation of employees specialized Romanian company which represented by the alignment to the national requirements of the European Chemicals (Open Doors for the children of employees, successfully ended the transition period for the and European environmental requirements with Agency. Black Sea Action Day, volunteering in the alignment of production plants to European regard to the emissions of sulfur oxides, nitrogen In 2014, the demolition project of the DMT plant national environmental campaign ‘“Let’s Do It, environmental requirements. The same year, the oxides and dust. refinery received a new integrated environment within the Petrochemical Division was Romania!“, and others). authorization from the Constanta Environmental In 2014, the Permit for 3rd Category Declaration completed; the environmental and demolition Protection Agency, valid for a 10-year period. was acquired, allowing the Refining Business permits for the demolition project of the OEG This acknowledges that the Petromidia platform Unit to perform activities with classified installation were also obtained. KMG International is the first local fuel plants are operated at the highest performance substances like: H2SO4, HCl, Toluen, Also in 2014, the project “Install a particulate producer to align to the EURO 5 emissions and environment protection standards, and MethilEthylCeton (MEC) reduction system at Catalytic Cracking Unit - standard.

26 27 Environmental in the year 2013 was of 4,181,620 tons, of which reaching 13,800 tons/day. are generated by energy consumption. This is 3,781,270 tons of crude oil and 400,350 tons As for Vega Refinery, the production schedule for why, KMG International requires operations of all Indicators other raw materials. This represented 91.47 % of the year 2013 was designed for a total its companies to incorporate energy use the program set up for the budget of the year processing capacity of 319,344 tons, of which considerations into their business plans and to 2013. assess, prioritize and implement technologies Guided by best practices and international 317,663 tons raw materials from Petromidia and systems to improve energy use. As a result experience that demonstrate the benefits of a In 2014, the volumes processed by Petromidia Refinery and 1,681 tons raw materials purchased of our continuous efforts in this direction, our strategic and targeted approach to planning and increased compared to 2013, with 5,053,098 from outside KMG International. production has become more energy efficient reporting, KMG International prepared this tons processed, of which 4,426,022 tons crude The actual processing carried out in 2013 was of over the years. report in accordance with the G4 Sustainability oil and 627,076 tons other raw materials. 240,553 tons, of which 238,694 tons from the Reporting Guidelines (core option) of the Global Petromidia Refinery and 1,859 tons non-group. One of the projects to be implemented in view Reporting Initiative (“GRI”). This represented 75.3 % of the program set up of energy costs optimization is the development 2014 other feedstock of a combined heat and power production unit We are working to reduce the environmental for the budget of the year 2013. 2013 0.40 0.62 on the platform of Petromidia Refinery in impact of our operations as we help to meet the In 2014, the processed volumes reached 254,410 Navodari. The power plant will operate both on growing energy demand. We have strict tons of raw materials. natural gas and on gas produced by the refining environmental standards to manage crude oil Of these amounts, the percentage of recycled operations. greenhouse gas emissions, reduce our use of input materials used to manufacture the 3.78 4.43 The energy consumption structure changed ENVIRONMENT energy, minimize our consumption of fresh 5.05

organization’s primary products and services 4.18 after the implementation of the investment water and protect biodiversity. was 0.4% in 2013, with 16,915 tons of recycled Petromidia package and modernization of Petromidia material (slop), respectively 0.4% for the first 10 feedstock Refinery. Currently, there is a higher fixed months of 2014, with 15,975 to of recycled Materials (mln t) component of the energy structure for coke on material (slop) used. The Group is interested in the maintenance and catalyst & PSA off-gases, 21% in total energy in continuous improvement of the integrated At the end of 2014, Petromidia refinery reached 2014 vs. 16% in 2011. Energy efficiency can be quality-environment-health-safety management a historic milestone of processed raw materials Energy Management further improved by optimizing power and system, with results in the improvement of the – more than 5 million tons. Some of the historic Our goal is to improve energy use, given how a thermal energy (fuel gas and steam) image of the organization, and of relations with records of the company in 2014 included the significant part of the overall operational costs consumption. public authorities and the social-economic increase in Diesel fuel production – 2.43 million community as a whole, in the limitation of civil tons (1.91 million tons in 2013 and 1.6 million and criminal liability, by meeting the legal tons in 2012), Diesel fuel yields – 48.8% (46% in fuel gas 2013 2014 requirements and regulations concerning 2013, 39.6% in 2012), but also white products 58% 61% quality-environment-safety. yields – 85.7% (85.5% in 2013, 85.4% in 2012). At steam 6% 2% In this respect, Rompetrol Rafinare has all the same time, the refinery achieved an automotive fuels placed on the market certified improved Energy Intensity Index - 99.8 (102.8 in coke on catalyst & and the certification of the Quality, Environment, 2013, 115 in 2012). Moreover, through the PSA off-gases power Petromidia Occupational Health and Safety Management petrochemical division, Rompetrol Rafinare 21% 16% 17% 19% energy basket systems was maintained during 2013 and 2014. reached full polypropylene capacity – 90 Vega thousand tons in 2014 (79.8 thousand tons in fuel gas power The production schedule of Rompetrol Rafinare 91% 91% 9% 9% energy basket - Petromidia for the year 2013 was designed with 2013 and 86.3 thousand tons in 2012). a total processing capacity of 4,571,787 tons, of The refinery operated at peak capacity in 2014, which 4,261,763 tons of crude oil and 310,024 without any scheduled or accidental stop (365 tons other raw materials. Processing carried out 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL days), the quantity of processed raw materials

28 29 power offsites 2013 2014 negative evolution starting with 2012, due to energy consumption index started to drop since 12% 11% the increase in capacity of the Hexane Unit, 2013, to 17.9% in 2014, compared to 19.6% in along with the lower throughput. However, 2013 and 21.3% in 2012. following the implementation of new projects We can notice a consistent reduction in energy and energy efficiency measures, the index consumption for the Downstream division of started recording a positive impact in 2014. the group from 2013 to 2014, while water power steam Petrochemicals Compared to Vega’s total energy consumption consumption kept a rather stable value. 38% 34% 54% 51% energy basket in 2013, of 3.49 GJ/to and 659 tones throughput/ As for the Upstream Business Unit, there was a day, the values recorded by Vega’s consumption decrease in the yearly gas consumption from The Energy Intensity Index of Rompetrol Rafinare throughput and lower costs. in 2014 were at 2.92 GJ/to and 837 tones 267,698 cu m natural gases in 2013, to 213,314 throughput/day. – Petromidia dropped by 9.88 points from 2008 The reduction of operating costs, in parallel with cu m natural gases in 2014. Also, in terms of until 2014. In fact, the improvement in energy the increase of the mechanical and operational Regarding the Petrochemical Division, which is diesel consumption we could notice a slight indicators goes back to 2012, due to the increase availability allowed a significant improvement in mainly influenced by unit pellet production decrease, from 2,058,292 liters in 2013, to in complexity of the Petromidia Refinery, the Energy Intensity Index of Petromidia (quantity and grades), continuous operation 2,039,845 liters in 2014. The objective is to keep following the implementation of the investment Refinery, which reached its best value so far. (utilities consumed during non- operation the consumption of energy and natural package, and to energy efficiency measures and increase the EIP), seasonality (higher resources under control, which is why, by The Energy Indicator of Vega Refinery saw a projects, which in turn generated a higher consumption of steam during winter time), the environmental policy, we undertake reducing

Petromidia energy intensity index Petrochemicals energy efficiency index Downstream power consumption 2014 (energy units/GDP) (GJ/t of pellets evolution) (mln toe) 2013 119.5 119.5 21. 3 1 114.9 109.7 109.2 20.4 102.8 19.6 97.1 19.1 18.7 18.1 17.9

0

Petromidia energy efficiency index Vega energy efficiency index (GJ/t of throughput) (GJ/t of throughput)

3.93 3.49 3.85 3.83 3.76 3.24 3.68 3.17 3.58 3.35 2.78 2.7 2.57 2.5

28 29 consumption of resources by using them in an Petromidia 0.61 0.65 effective way. energy basket 0.64 0.60 0.75 0.72 0.71 All Retail & Marketing, Trading & Supply Chain (GJ/t) Management and Non-core entities of the 2.23 2.32 2.39 2.08 2.07 group monitor power consumption and coke on catalyst 2.17 1.91 according to the group strategy and the legal & PSA off-gases fuel gas requirements propose measures to streamline 0.23 0.23 0.27 0.25 0.28 0.24 0.08 steam 0.72 0.73 their programs considering the specific power 0.58 0.58 0.65 0.64 0.65 consumption activity.

Vega energy basket 7.22 6.74 6.80 6.75 (GJ/t) 6.58 6.56 6.74 2.64 2.73 2.30 2.52 2.28 2.30 1.93

11.93 steam 9.57 9.30 10.42 9.96 10.51 9.21 ENVIRONMENT

power offsites power

Emissions Starting with January 1, 2014, the integrated KMG International also uses cleaner fuels for its environmental permit of SC Rompetrol own energy consumption in carrying out its We report GHG emissions from our oil and gas Petrochemicals was transferred to SC Rompetrol production processes. assets on an operated and net equity basis. The Rafinare SA, based on the Decision of EPA majority of our direct emissions are associated As a result of the continuous improvements in Constanța. with fuel combustion and flaring. processes and management, as well as During 2014, the 2013 and 2014 allowances significant investments in new technologies, In regard to climate changes, KMG International were downloaded in BU Refining GHG accounts. KMG International accomplished the alignment has successfully complied with the EU and In February 2014, the certificates for 2013 (CO2 to the national and European environmental international legislation. Greenhouse gas emission) were returned to the European requirements with regard to the emissions of emissions resulting from the EU-ETS market Register of greenhouse gas emissions (EUTL - sulfur oxides and nitrogen into the atmosphere. scheme installations have been verified by European Union Transaction Log). accredited auditors, complying with EU In 2014, the project “Install a particulate regulations. In July, the CO2 Monitoring and reporting plan reduction system at Catalytic Cracking Unit - for 2015 was submitted to MMSC. Electrostatic precipitator” was completed in New Permits for the Greenhouse Gases have accordance with the Decision No. 379 / been issued in 2013, valid until the end of 2020 Our main air emissions, besides GHG include 05.06.2012 issued by the Constanța (Phase III - 2013-2020), both for Rompetrol sulfur dioxide and nitrogen oxides. They result Environmental Protection Agency. Rafinare – Petromidia and Rompetrol Rafinare from the combustion processes in refining and – Vega. E&P activities. Apart from providing cleaner fuels, The goal was to install in the catalytic cracking 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL

30 31 unit a system which would reduce the content of dust in the flue gas leaving the CO-Boiler - 2014 2013 NOx 2014 NOx 138F-H4. The solution used was to mount an 2013 PM 2012 115.34 2013 1.002 electrostatic filter (ESP) for retaining dust on the 123 120 71.29 0.114 gas pipe exiting the CO-Boiler, an investment with a positive impact for environmental NOx SO2 SO2 protection. Performance tests are to be carried 428 464 2.59 0.084 out during 2015. 5.89 1.485 818 SO2 118 1.85 As for Non Core Business Unit emissions, we can 267 277 notice a slight increase in 2014 compared to 861 77 1.60 2013, from 0.8467 SO2 in 2013, to 0. 859 in 2014, respectively from 1.0025 NOx in 2013 to 1.1235 Petromidia Petrochemicals Non-core emissions emissions emissions in 2014. (t) (t) (t)

CO2 CERTIFICATES POSITION PHASE II PHASE III (2008-2012) (2013-2014)

2008 2009 2010 2011 2012 2013 2014 Total emissions 885,297 778,902 750,931 810,399 904,206 910,120 0 Petromidia Refinery 764,658 668,371 632,162 660,727 782,742 747,198 883,963 Petrochemicals Division 81,773 68,900 80,715 110,144 75,645 44,690 41,514 Vega Refinery 38,866 41,631 38,054 39,528 45,819 41,013 43,419 UT Midia 77,219 78,721

Total allocations 954,631 954,631 965,965 954,631 965,965 843,980 880,368 Petromidia Refinery 801,693 801,693 813,025 813,025 813,025 648,768 637,499 Petrochemicals Division 98,814 98,814 98,814 98,814 98,814 71,833 70,585 Vega Refinery 54,125 54,125 54,126 54,126 54,126 33,771 33,159

30 31 Water Management Industrial water is used in 25 units (of which six Zalău amounted to 31,143 cu m in 2014. in conservation) of Petromidia Refinery, 4 units We understand the importance of managing BU Retail - Downstream uses 12 units of water of Petrochemicals, 13 units (of which two in resources responsibly. As part of our from drilled wells. conservation) of Vega Refinery. BU Upstream - environmental commitment, we aim to reduce We continue to look for opportunities to Rompetrol Well Services has been using drilled our freshwater use. We operate in compliance improve efficiencies in water management in water wells for industrial and domestic water with water and environmental permit our operations, analyzing the best options to since 2012 for two working points: Ploiesti and requirements. minimize consumption in both our water Timișoara. Estimated consumption for Timisoara: management strategy and facility installations The technological industrial water supply of 166 cu m per year; Ploiești 3,650 cu m per year. and equipment. For example, in terms of waste Vega refinery is represented by water withdrawn Rompetrol S.A. uses only water from the local water management, 2014 saw a decrease in from P1 and P4 Sources (water drilling in the network, approximately 360 cu m per year, while both treated waste water volumes used and reserve, capture plants, treatment plants). the water consumption of Rominserv Valves Iaifo reused treated waste water at Petromidia.

Water 2014 Petromidia waste sources water treatment

ENVIRONMENT (mln cu m) 2013 (mln cu m)

2014 wastewater surface water 2013 treated & reused from Carasu station 2.173 1.479 0.35 6.62 municipal water supply (RAJA Constanța) 4.86 0.26 wastewater treated & discharged 5.515 4.141

Downstream water consumption 2014 Non-core waste (mln cu m) 2013 water treatment (mln cu m) 1.2 2014 2013 wastewater treated & discharged 0.069 0.047

0 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL

32 33 Waste Management competent authority in the field. 2014 Total waste generated Throughout the refining, manufacturing and In 2013, the activity of the refinery generated 2013 (t) marketing of our products, KMG International 28,440 tons of waste (of which 20,962 tons were generates both liquid and solid waste. We sludge from emptying out lagoon no. 3). The evaluate opportunities to avoid, reduce, and petrochemical activity in the same year retail & trading 6,476 5,189 re-use the amount of waste that is created and generated 4,500 tons of waste (including partial DMT waste). we seek to minimize hazardous wastes as much upstream & non-core as possible. In 2014 the total waste generated by Petromidia 8,346 4,851 In 2013, KMG International completed the reached 29,738 tons, of which 16,096 tons of project to remediate a historically petroleum sludge from emptying out Lagoon no.3. In 2014 contaminated site located on the Petromidia there were 79.40 tons of waste from Vega platform, in compliance with the environmental Refinery and 5,943 tons of waste (4,955 tons legislation. The company’s investment in the recyclable) from the DMT demolition project. Biodiversity implementation of the project involving Hazardous and non-hazardous waste generated The company recognizes the importance of remediation of the area amounted to USD at our operating sites is managed through our preserving the Black Sea biodiversity (in the area 1 million. local operating management systems. around Petromidia refinery) within the context of Remediation works were carried out by In 2013, there were 5,151 tons of hazardous energy demand increase, sustainable specialized companies and were performed over waste generated by the refining division and development and improved quality of life in the two years in an area of 5,000 sq m, treating waste 1,830 tons of non-hazardous waste, while the surrounding areas of its installations. containing heavy oil products at concentrations total generated waste of the petrochemical The Waste Water Treatment Plant (WWTP) is below the accepted threshold, in division amounted to 4,523 tons, of which 4,363 located at the border of the Danube Delta accordance with environmental legislation. tons recovery waste and 112 tons removal Biosphere with its two ponds, which represent The decontamination procedures consisted in waste. the tertiary biological stage of the wastewater the enzyme treatment of the contaminated area In 2014, the amount of hazardous waste treatment system (before water discharge into and were performed in parallel with the oil decreased, to 3,800 tons, but the volume of the Black Sea). These ponds are populated recovery and clean water pumping for our own non-hazardous wastes increased to 4,061 tons. with numerous bird species, an important treatment plant. Also, there was waste recorded in relation to characteristic of the Biosphere. Project phases involved initial investigations (test DMT: 25 tons of hazardous waste and 7,247 tons In order to preserve biodiversity in the area and performing, choosing the appropriate treatment of non-hazardous waste. maintain the efficiency of the biological option), proper execution, corrections of Hazardous waste transported in 2014, namely treatment stage KMG International performs enzyme dosages according to the different 20,822 tons, was recycled or removed through annual cleaning activities on ponds and degrees of contamination of land and authorized companies. rush-bed cut-off. Moreover, KMG International has various actions in place, in order to prevent environment reconstruction. Following the In 2013, RPSA - Libyan Branch reported one spill. any environmental damage to the surrounding remediation, the perimeter was grassed over, A mud tank full of crude oil (100 bbls) was areas, such as prevention of ground and surrounded by trees and restored overturned in the desert (Libya). The area was underground pollution, and avoid the use of any to industrial use. rehabilitated. The oil sand was sent to landfill. raw materials throughout refining operations The project was accomplished in compliance In 2014, RWS reported one spill: 5 liters of HCl that might be toxic to the environment. with the Environmental Permit held by 30% flowed from an acidizing unit on a concrete The latest project in this direction supported by Rompetrol Rafinare for the remediation platform. The environment was not affected. execution, reaching the targets set by the KMG International was the development of a

32 33 112-type emergency response and intervention diesel fuels which met the quality standards certification and, starting 2015, the company will Authorization and Restriction of Chemicals). system for distressed wildlife, along with the required on the foreign (Euro 5 products) and be certified for ISO 50001 – energy efficiency In 2014, in line with the provisions of the REACH equipment with solar panels of the veterinary internal market (Bio products). management. Regulation, petroleum product files were medical center within the Natural Science The distribution of the marketed products was updated according to the ECHA requirements. Museum in Constanta. carried out by road and by rail for sales on the Compliance Also, all member companies of KMG internal market. For sales on the external market, KMG International has been a member since International are certified by Germanischer Lloyd the distribution of products was carried out for Products & Services, Transport 2008 of CONCAWE (Conservation of Clean Air for their integrated management systems (ISO the most part via the Midia port but also by road Due to Petromidia Refinery’s upgrade, KMG and Water in Europe), an organization founded 9001:2008, ISO 14001:2008 and OHSAS and rail. Midia Marine Terminal contains berths International only produces Euro 5 fuels and in 1963, that researches multiple aspects of 18001:2007). for the delivery of petroleum products and the only processes sulfurous oil, in the context of an environmental protection in the oil industry. Total environmental costs for 2013 amounted to purchase of raw materials, which ensures safety increase in the raw material processing capacity Once affiliated to CONCAWE, all of the Group’s 2,720,093 USD. In 2014, total expenditure in the acquisition of raw materials and up to 5 million tons/year, confirming the member-companies benefit from assistance in reached approximately USD 20 million for conveyance of petroleum products. completion of the investment package. order to help them comply with the European Petromidia and USD 300,000 for Vega refineries. Rompetrol Downstream, member of KMG The emphasis was set on preparing gasoline and REACH Regulation (Registration, Evaluation, International holds the ISO 22000 – safety food ENVIRONMENT

2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL

34 35 34 35 Our Approach

The strength and evolution of KMG International our services and play an important role in the do not rely on technology but on its people, development of an educated workforce and a who make the Group’s development possible. robust, sustainable supply chain. We work with Therefore, our CSR initiatives are based on the stakeholders in all our areas of operations to same values as those of our people. address challenges and advance the quality of KMG International views social responsibility as life in the communities. voluntary contribution to the development of the society, correlated with the core values, the Community Engagement objectives, the activities, the international laws Our involvement is based on community and the resources of the Group. engagement and consultation, so as to identify As a revered corporate citizen and worldwide the projects which can deliver the greatest value trustworthy partner, we contribute to the to local communities. We support those development of the countries and communities initiatives that help improve local economic COMMUNITY where we operate by creating jobs, employing conditions as it is our belief that economic local workforce and using local suppliers. development leads to the empowerment of However, our commitment surpasses the local communities. economic aspects and implications of our As part of our ongoing business process, we actions. The commitment to CSR provides a engage with our community stakeholders either guiding framework for all KMG International on a project-by-project basis or on a company management decisions and we focus basis through philanthropic and community particularly on harnessing industry best practice programs and initiatives. On a project-by-project by encouraging Group and community basis, we proactively engage local communities, participation in corporate citizenship projects government and municipalities to address focused on raising the standards in the areas of project-related social, economic or business success, environment, health and environmental concerns. safety, responsibility towards the community, This type of community engagement is directed culture, education and leadership. by project management and carried out jointly Key ways in which we contribute to with our clients and partners. On a company communities where we operate include paying basis, we establish relationships with community local taxes, employment, the use and stakeholders to proactively identify needs that development of local services and suppliers, align with KMG International’s strategic focus investment in local infrastructure and social areas. programs, including social investment. We firmly believe that by strategically investing in local communities we can also positively influence our long-term economic performance. Healthy, vibrant communities drive demand for 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL

36 37 development of 101 projects all over Romania Investments in the Community and in the Republic of Moldova over USD 1,500,000, which resulted in direct and indirect benefits for 300,000 people. Our management approach to community conditions (construction of water treatment lessons learned, difficulties encountered, pluses investment includes a community involvement plants, solar panels, rainwater collection, and minuses of collaboration etc. Over 1,000 participants were trained in fundraising and project management and more strategy that is set by executive leadership and rehabilitating eroded soil, water-air-ground All social initiatives implemented have had a than 200 organizations and 3,500 volunteers implemented via programs, initiatives and heating systems for schools and/or hospitals). positive impact on the beneficiaries, and actions joined the program, actively participating in the partnerships, all grouped under the umbrella of There are 3 budgetary limits - 15,000 lei, 45,000 such as the rehabilitation and equipping of units implementation of the selected projects. Overall, our CSR platform – Energy Comes from the lei, 100,000 lei, depending on the complexity of that provide medical services or maintaining/ 280,000 hours of community service were Heart - and of our annual CSR program, Together the initiative. improving environmental conditions in local dedicated to the program, half of which were for Each and Everyone. The submitted projects are subsequently communities have significantly increased the provided by the Group’s employees. More than Together for Each and Everyone is a national assessed and the selection of the winning quality of life, issues noted by beneficiaries in the half of employees (6000 in Romania) have social responsibility program initiated by KMG projects is made on the one hand by a jury final narrative reports, which are publicly contributed to raising funds for other International in 2009, destined to develop and comprised of KMG International representatives published on the program’s blog and Facebook community needs. involve local communities by initiating, and NGO experts (in proportion of 75%) and, on page. Through the long-term partnerships concluded supporting and carrying out mainly the other hand, by public vote on the website Moreover, the experience gained from the KMG International managed to: environmental or healthcare-related projects. It and Facebook app of the project (in proportion projects developed by KMG International (by is open to all communities in Romania, in rural of 25%). The next step is to assess the finalist direct involvement or participation in seminars, Complete the projects, and therefore, to and urban areas equally, regardless of ethnicity projects in the field, approach which entails training workshops) gave community members invest in the development of 101 local of applicants / beneficiaries. Being a social interviews with organizers and partners with the increased knowledge of project management communities in Romania and one in the responsibility program, the target group is aim of knowing the applicants personally and and the courage to apply for new funding. Republic of Moldova (2014); represented by disadvantaged people and understanding local problems and needs, Feedback is provided by partners and volunteers Raise awareness among the population minority groups as well as the entire society. followed by the implementation of the winning throughout the period of project about health/environment issues; projects. The program provides NGOs, local authorities implementation. Promote shared leadership at local level, and civic minded people with the possibility to Projects are implemented only in partnership Internal communication was an important social entrepreneurship and volunteering as submit projects designed to improve the quality with the authorized local authorities and the element of the program resulted in the heart of ways to obtain a sustainable development of of life and environment in local communities. selected NGO/school/hospital and the main the organization, being also the first component society; KMG International’s social involvement objective is to develop local infrastructure implemented (intranet channels, internal Provide integrated support to beneficiaries materializes by providing expertise, consultancy, (hospital renovation, economical heating magazine, email, radio, posters). Rompetrol - training for volunteers, educational implementation tools and financial support for systems etc.) so that the project is sustainable employees were not only among the first activities for children, financial support for socially vulnerable sectors. and the community can further develop other volunteers to have enrolled in the program, but start-up in the community and creating beneficial initiatives. In order to obtain the necessary financial also citizenship ambassadors. KMG International optimal conditions for the medical act and support, projects must be submitted to the Upon completion of each project, the voluntary contribution (more than 1,000 people physicians’ retention. project’s online platform, (www. beneficiary of the sponsorship drafts a financial in 6 years) is beneficial both for employees as Obtain support from local authorities and impreunapentrufiecare.ro). Eligible activities report (planned expenditures vs. incurred members of society and for the Group which include CSR on their agenda. within healthcare projects are represented by expenses), a community impact report (number through their constant feedback, can improve the renovation, rehabilitation, acquisition of of volunteers involved, number of beneficiaries, and develop new projects beneficial to local Partnerships and sponsorship initiatives are also equipment for rural and urban medical centers community information sessions on communities. part of the Group’s annual social responsibility actions, program amounting to USD 2 million that provide healthcare and auxiliary services, environment / health, amount of recycled waste, Since the launch of the program, between 2009 each year, most of this sum being allocated to while environmental projects may include energy saved as a result of project and 2014, the Group allocated for the actions to improve local environmental implementation, etc.) and a narrative form - projects developed in Romania.

36 37 Projects The first respiratory rehabilitation center in Romania Romania Southeast Romania within the Pneumology Brașov Hospital in Constanța - direct beneficiaries are București In 2013, the Group’s investments in CSR people with severe respiratory diseases, meeting Caraș-Severin initiatives in Romania amounted to USD 1.5 the requirements for participating in a Călărași million. Within the 5th edition of KMG rehabilitation program from Constanța region Cluj Constanța International’s CSR program “Together for Each (over 100 in 2013 alone) and the bordering and Everyone” 16 sustainable projects were Harghita regions, located in the SE of the country. The Hunedoara financed, out of a total number of 218 projects setup of the respiratory recovery unit was submitted to the platform. All projects had two Ialomița carried our from September 2013 to January Neamț overlapping components, namely the 2014 and included the renovation of the disused Suceava restoration of medical care units in rural and attic and partitioning of the existing space, thus urban areas or the construction of water creating physiotherapy rooms, bathrooms, collectors, eco plants for water recycling, solar surgery units. The hospital’s staff contributed to panels for schools, on the one hand, and, on the the implementation of the project on a other hand, educational and cultural activities voluntary basis (over 20 employees), supported Romania for the members of the communities. by architects and Constanța Regional Council, as București

COMMUNITY Caraș-Severin

Of the 16 projects selected in 2013, 11 were an institutional partner of the project. focused on healthcare and 5 on environment Constanța protection. The total allocated budget Giurgiu The establishment and equipping of a amounted to USD 225,000. The winning projects Gorj multisensory stimulation center for Hunedoara were implemented in Brașov, Călărași, Caraș patients with life-threatening diseases Neamț Severin, Cluj, Constanța, Ialomița, Harghita, within Hospice Casa Sperantei - implemented Sălaj Hunedoara, Suceava, Neamț and Bucharest. from August until December 2013, the project Suceava Three of the healthcare projects received involved specialized works for setting up 5 Vâlcea maximum grants, of RON 100,000 (approx. USD rooms within the multisensory stimulation Vaslui 25,000). Some examples of projects: Republic of center, which include a therapeutic room, a Moldova physiotherapy room, bathrooms designed for The establishment of the first center for people with disabilities, a treatment room. The integrated medical and psychological center functions within the hospice in Bucharest services for patients with HIV/AIDS in and at least 60 children with advanced Projects unfolded Romania at the Victor Babeș Hospital for life-threatening diseases and severe physical since the start of the Infectious Diseases in Bucharest - although the disabilities are the direct beneficiaries. CSR program cover hospital had a multidisciplinary medical team almost every county with experience and expertise in the field, the Moreover, several other projects on healthcare in Romania and team had no space to practice in. Through the and environment protection were developed or benefitted over project, one of the hospital’s buildings, unused continued as part of the platform Energy Comes 300,000 people in at the time, was rehabilitated and equipped in from the Heart in 2013. 101 communitiies. order to function as the first medical and psychological center offering care to HIV/AIDS In 2014, as part of the 6th edition of the program patients with neurocognitive disorders caused Together for Each and Everyone, 283 projects

2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL by the disease. were submitted (by local authorities, NGOs,

38 39 hospitals, schools) and evaluated, and 6 in the 73 volunteers, who developed a dynamic and solar panels in a services complex for vulnerable main sponsor of the Montpellier Hérault Sport field of healthcare and 8 environmental projects operational response system by setting up a children in Adunaţii Copăceni (Giurgiu), the Club’s football team, in a partnership which was were selected for implementation. The winning web infrastructure able to take “112 animals in acquisition of a thermal plant using mineral and initiated back in 2009. projects are from Caraș Severin, Constanța, danger” calls. Wild birds and animals are taken by vegetable waste oil that will be collected from Also, through its Rompetrol Georgia subsidiary, Giurgiu, Gorj, Hunedoara, Neamț, Sălaj, Suceava, specialized staff and Scutul Cinegetic local economic operators and the public, for the KMG International supports Giga Chikadze, Vaslui, Vâlcea, Bucharest and Vorniceni village, Association volunteers and transported to the benefit of the rescuers from ISU Dobrogea world champion in kickboxing and twofold the Republic of Moldova. These projects include National Science Museum for medical care. Over (Constanța). champion in karate, and 13 year-old tennis the following: 50 specimens of protected species were saved The company also continued in 2014 the player Ani Shanidze, considered to be one of the in the first three months of the platform’s traditional partnerships with the civil society. most remarkable and encouraging athletes in operation. Emergency ward at Vulcan Hospital – KMG the Georgian tennis world. International offered support for the Furthermore, two wings of the museum Other Countries In Moldova, KMG International carries out charity rehabilitation and refitting of the emergency complex that houses the call center, the animal initiatives through the engagement of its Although KMG International’s CSR activities ward at the Vulcan City Hospital, Hunedoara shelter and the quarantine area were equipped employees in charity actions and is currently in focus mainly on Romania, the Group also has County, which treats around 9,600 patients with energy efficient equipment (solar panels). the process of expanding the Together for Each various such initiatives abroad, in its areas of annually. The value of support granted was EUR Among the selected projects in 2014 - the and Everyone program established in Romania. operations. These include France, Georgia and 10,000. The project, launched in October 2014, modernization of radiology and medical the Republic of Moldova, while the Group’s aim was implemented with the support of imaging laboratory of the Șimleu Silvaniei is to expand them in the near future to all of the volunteers and medical staff and entailed the Hospital (Sălaj), the development of a complex countries it is present in. In France, through its renovation of the 330-sq.m. of the emergency environmental system to collect and reuse the subsidiary Dyneff, KMG International acts as the ward in compliance with national regulations, rain water, a wastewater treatment plant and followed by the installation of new medical equipment and furniture: portable ventilator, crash carts, 12-channel ECG machines and so on. The project was for the direct benefit of the 188 hospital employees, the 24,000 residents of Vulcan as well as residents from nearby towns in Valea Jiului. The project’s education component was aimed at 139 students in local schools, who attended three seminars on healthcare and first aid.

Development of wildlife emergency response system for Dobrogea region entailed the development of a 112-type emergency response and intervention system for distressed wildlife, along with the equipment with solar panels of the veterinary medical center within the Natural Science Museum in Constanța. The total investment amounted to EUR 10,000. The project started in October 2014 and it was carried out with the involvement of

38 39 Joint Partnerships

Over the years, KMG International has (Ovidius University) and at Lazăr Edeleanu High NGOs strengthen the international vocation of the School in Năvodari, organized refinery visits and two brands and their products - fuels and developed solid partnerships with As a socially responsible company, KMG collaborated with relevant student NGOs (such quality music. In 2013, KMG International International is committed to supporting representatives of both the academic as Akcees, in Constanța and Ploiești). Also, the supported the Festival both financially and projects developed in partnership with various world and civil society, which resulted HR team delivered workshops on interviewing in kind, providing the fuel necessary for NGOs. To name a few: in the implementation of countless skills, organized simulations and got involved, transportation during the event. In 2014, the sustainable projects and programs. together with KMG International specialists, in A partnership with SMURD and the General Group provided its support to the George student scientific conferences (Ovidius Inspectorate of Aviation since 2010 to Enescu International Competition. support air emergency interventions, the University Constanța). As of 2003, Rompetrol is a partner and transportation of both medical personnel Universities In 2014, 154 students (increasing from main sponsor for ”Gala Societății Civile” (Civil and patients. The value of KMG International KMG International has developed partnerships approximately 90 students in 2013) participated Society Gala) – the annual investment exceeded 750.000 USD during with key academic institutions in the oil & gas in the Internship program across the entire competition that awards the best this 5-year partnership. sector (oil & engineering departments at the Oil Group, 91 in PEM, 16 students in Vega and 47 in projects of the year, initiated by As of 2005, a partnership with OvidiuRo COMMUNITY & Gas University Ploieşti, Ovidius University other support functions. Of these, 40% were NGOs, unions, individuals etc (since its

Constanţa, Polytechnic University Bucharest), hired upon completion (62). Association to support the national beginning in 2002, 1,703 projects have been campaign “Fiecare copil în grădiniță” (Every offering its support to maintaining Romania’s During the program, a mentor is responsible submitted into the competition). Child in Kindergarten). academic tradition in the sector. The Group has with the intern’s learning and feedback, has Partnership with Hospice Casa Speranței, developed an internship program for talented regular discussions and also manages the In the past 5 years the Group supported and established in 2010, through which various students in the sector, with more than 1,000 evaluations (midterm and final). All the costs of will continue to support the prestigious projects were implemented with the students attending the program in the past ten the Internship program (salaries, George Enescu International Festival and support of KMG International, both in terms years, of which more than 250 became KMG accommodation and transportation) are Competition, held in several cities, every of financial contribution and volunteer International employees, thus being able to start covered by KMG International. September. This association of Rompetrol actions, including Rompetrol Run for a promising career. with such a large scale event was meant to Hospice, a charitable half marathon for KMG The Internship program is part of the Group International employees, in the benefit of DNA and has a notorious tradition within the Hopice palliative care center in Bucharest. Group. The program was extended from the Dacia Romanian Cultural Association production area to other support business lines benefits from KMG International’s support in and starting with 2013 specific activities to preserving and developing the Romanian attract young professionals in the headquarters community in Kazakhstan through annual were also launched in collaboration with dedicated actions and events. targeted Universities. In 2013, KMG International was one of the The program’s approach addresses two main partners of the UNICEF Gala, dedicated directions: firstly, promoting the company’s to helping protect children from violence, culture and development opportunities and abuse and neglect. The Gala was part of the secondly, the actual Internship program. #ENDviolence campaign that UNICEF ran We participated in Career Days in Bucharest (at between November 2013 and February 2014 the Academy of Economic Studies), in Constanța in Romania. 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL

40 41 Employee Engagement

Following the experience gained from the tactics and communication channels stemmed Solve real social problems identified by the the participation of students from low-income Together for Each and Everyone program, from internal studies (Employee Opinion employees and supported by their time and families at George Enescu High School, employees, with support from the management, Survey), which revealed that 93% of employees dedication and the financial resources of the participation in charity marathon on have developed an internal CSR program, Small wanted to support the community, to devote company and employees. Transfagarasan, donations of toys, clothing and Gestures that Count, which implements 1 or 2 time and even their own resources for its Create a positive image of the Group in local food for Easter, June 1, Christmas to philanthropic or environmental protection development. communities through its employees. communities managed by OvidiuRo Association, actions monthly. The program structure was internal selective recycling campaigns etc. The program was launched in 2010 through an Promote volunteerism. replicated on a smaller scale by other group internal communication campaign - intranet, Community beneficiaries of the program include Implement at least 12 projects per year companies in other countries. mail, internal radio, internal magazine, domestic 2,800 underprivileged children, old people, and proposed and selected by employees, with Small Gestures that Count is an internal CSR spots, visits of the campaign Ambassador - talented youth with limited material possibilities. measurable, quantifiable results. umbrella campaign carried out by KMG Ideika (portrayed as a little girl with her head full Approximately 2,000 employees have donated International for its employees across the of ideas, who receives initiatives from colleagues Examples of projects - donations for library money, goods and vouchers, coordinated country. The program aims at increasing the and together they implement them). books in rural schools, Spring & Winter Charity projects and volunteered in the program since Fair, with products made by employees and sold involvement of employees in social The objectives of the program are as follows: its initiation. responsibility projects and encouraging them to domestically (supporting causes chosen by Encourage employee personal propose and manage environmental, health and them), spring/autumn cleaning of polluted development, manager/community leader charity initiatives. The campaign, as well as its areas, blood donation campaign (approx. 50 skills development, team spirit development. liters donated in 2014), charitable concerts with

40 41 Awards Future Objectives

KMG International’s annual CSR program, Volonteurope ACE Awards (October 2013) We are also very proud to announce that several In the immediate future, we aim to focus our Together for Each and Everyone, has obtained – for continued investment and involvement in of the projects developed by our partners have attention on areas where there is greater social over 20 awards in national and international supporting complex and sustainable also enjoyed official recognition; such is the case demand and improve our performance and our competitions for several of its projects environmental and healthcare projects for local of OvidiuRo, which received the 1st place in the contribution to CSR issues. This will, in turn, throughout the years, as recognition for the joint communities, fostering civic responsibility, Social Responsibility Projects and Campaigns contribute to sustainable development, improve efforts of the Group, local authorities and civil volunteerism and social entrepreneurship. category within the Civil Society Gala, the 2014 relationships with human resources, strengthen society, as well as the volunteers involved. In the Volonteurope is a 32 year-old international edition, for the project “10 years, 1 million social solidarity and ensure trustful relationship reporting period, we are proud to communicate network promoting the values and principles of kilometers, 15,000 children”. This includes the with the community and society at large. some of the received distinctions: volunteering, active citizenship and social justice “Ready, willing and able,” “Every child in school” Moreover, we plan to further develop our social European CSR Award Scheme – Silver Award at local, regional, national and European level, and “Every child in kindergarten” projects, responsibility actions to all countries where the for Excellence (May 2013), organized by the both in the Member States of the European developed by the NGO and supported by KMG Group is active in order to help improve the prestigious organizations CSR Europe and Union and the Council of Europe. International for over ten years, in the benefit of quality of life of all communities where we Business in the Community. The jury particularly Romanian CSR Awards (2013) - 1st place for 15,000 children. conduct operations. COMMUNITY

appreciated the innovative, sustainable and Together for Each and Everyone. The evolution of the program, the partnerships replicable projects, with measurable impact on Romanian CSR Awards (2014) - 1st place for with local authorities and progress recorded by business and society. The methodology followed SMURD Partnership, and 1st place for the OvidiuRo in its initiative to transform the “Every judging criteria such as innovation, leadership internal employee engagement campaign - child in kindergarten” program into public policy and partnership and specifically targeted were Rompetrol Sports Academy. were the main reasons why KMG International the successful partnerships between companies has honored its commitment for ten years. and non-profit stakeholders. 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL

42 43 42 43 Our operations are aimed at achieving Supply Chain follows: crude from KMGT in value of USD 3.13 with regard to integrity, human rights, labor responsibility in the marketplace bln. The other feedstock purchases reached a standards and environment responsibility and total value of USD 212.9 mln. we expect all of our suppliers and which is why our global strategy subcontractors to maintain high ethical provides comprehensive directions The figures for 2014 show a similar evolution to Supply chain activities are developed in the previous year, with crude acquired from standards in compliance with our Supplier Code on developing our customer and compliance with our corporate guidelines and KMG and other suppliers amounting to USD 3.09 of Conduct. operational strategic priorities as we policies, in a professional, confidential and bln. At the same time, we can notice a slight Furthermore, through our Supply Chain Monitor, work with customers and suppliers to ethical manner. Moreover, we are committed to decrease in other feedstock purchases, with a we conduct extensive screening when selecting conducting business with ethical and socially ensure responsible business operations. total value of USD 127.4 mln. suppliers and subcontractors and routinely responsible suppliers and integrating principles monitor our business relationships and address In accordance with KMG International’s and practices of sustainability and responsibility We base our procurements on competitive bidding and the principles of transparency, any red flags that arise. major player status in the oil and gas into the procurement of goods, services and activities. non-discrimination and equal treatment of We recognize that managing and monitoring industry in the region, we continually bidders. compliance with our standards in the supply KMG International’s Procurement Department drive performance improvements and We are committed to using suppliers that chain is challenging and complex. Following a works continuously to make our operations risk-based approach, we endeavor to follow up change to positively impact all our sustainable, being aware of the importance of operate consistently in accordance with our stakeholders. values, comply with applicable national laws and and monitor suppliers with whom we have social justice and environmental protection. direct contracts.

MARKETPLACE meet KMG International requirements for Supply chain activities, which generate suppliers in the areas of HSE, quality Managing human rights issues also has Cătălin Dumitru mid-term and short-term plans, based on management systems, ethics and anti- implications for the way we manage our supply Vice President production scenarios, forecasts, annual delivery corruption, and corporate social responsibility, chains. We expect our contractors to act plans and daily schedules, cover three major including human rights and labor standards. consistently with our Code of Conduct, which business areas: feedstock purchase, planning & Thus, in 2014, we developed the KMG outlines our requirements. Non-conformance production optimization and volumes allocation with this may ultimately result in the termination & logistics for all subsidiaries. International Supplier Code of Conduct, detailing the company’s values and approach of contract. In 2013 KMG International acquired feedstock as 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL

44 45 Quality and Customer Management

With our products and services, we Product Responsibility hazard, recycling and disposal information. what we do. want to create environmental and The goods and services provided by KMG All products are developed in compliance with While in each entity pertaining to the retail economic added value for our International under the Rompetrol trademark the REACH regulation, being registered in segment we have procedures in place for customers. Our growth has been in are well known and notorious to our partners accordance with the requirements of the measuring customer claims and satisfaction in European Chemicals Agency (ECHA). accordance with ISO 9001:2008 and ISO direct response to our customers, as we and customers and their high quality is recognized, including by the observance of all Fuels are designed according to EN 590:2010, 14001:2008, customer satisfaction with regard to constantly implement their input into legal and competition requirements. revised in 2014 (diesel), and EN 228 (gasoline). the refining sector indicates approximately 90%, as follows: the development and improvement of All companies in the Group comply with the By putting into service the new plants, as well as our products and services. best practice code whereby operators are through the modernizations carried out, Petromidia Refinery: required to provide details of marketed products Rompetrol Rafinare only produces Euro 5 fuels Customer Satisfaction Indicator: 3.27 (out of 4) Market Research in conformity with the NP 004/2003 technical and only processes sulfurous oil. Employee Satisfaction Indicator: 98.5% standard (normative) for design and operating Customer Claim Indicator: 0.17 Every year, KMG International conducts research All Rompetrol Rafinare fuels and VEGA additives the gas station; Law No. 307/2006 on firefighting are certified by the Romanian Automotive Vega Refinery studies aimed at adjusting its action plan in and Law No. 319/2006 concerning occupational Registry according to GD no 928/2012 - Employee Satisfaction Indicator: 100% accordance with market feedback. We health & safety; GD No. 928/2012 - minimum constantly monitor and analyze both our minimum requirements for market introduction Customer Claim Indicator: 0 requirements for market introduction of fuel. of fuel. customers and employees’ levels of satisfaction Petrochemicals and while research by itself does not guarantee In accordance with legal requirements, for all Furthermore, all biofuels volumes purchased by Customer Satisfaction Indicator: 100% the success of our company, it reduces the types of companies in the Group (service Rompetrol in 2014 complied with sustainability Employee Satisfaction Indicator: 96% uncertainty in decision-making and increases companies, refining and petrochemicals, criteria set out in the EU Legislation, being Customer Claim Indicator: 0.25 the probability and magnitude of success. industrial services) products are accompanied sourced from EU producers using mainly by documented and publicly displayed Material European feedstock. That is why research responsibilities in KMG Safety Data Sheets (MSDS), each containing 16 We have not identified any non-compliance International cover a wide area of critical aspects sections according to Regulation (CE) with regulations and voluntary codes for our business: no.1907/2006 (REACH), amended and concerning health and safety impacts of Understanding the market & consumers, supplemented by Regulation No. 453/2010 (EU) products and service information and labeling offering “Market knowledge” in all countries / and Regulation (EC)1272/2008 regarding either in 2013 or in 2014. markets – which results in sustaining the classification, substances and mixtures long term business growth by conducting amending and supplementing Directive 67/548 In terms of marketing communications, strategic research activities; of the European Commission. including advertising, promotion, and sponsorship, by type of outcomes we have Generating ideas & consumer insights by Moreover, Standard Specifications (SS) are identified no incidents of non-compliance with new approaches / methodologies to provided for all products of the companies, regulations and voluntary codes. contribute to the decision-making process in which are also documented and publicly marketing activities; displayed. Each SS contains information on Offering consultancy in taking decisions; product description, properties, limits, test Customer Satisfaction Conducting research follow-up in order to method, quality control, sampling, handling, We have trusted and long-term business check / support the implementation of the storage, transport, while the Material Safety Data relationships with many of our customers. The results. Sheet of each product contains safety, fire satisfaction of our customers is a key element of

44 45 Controls and Monetary Fines Legal Actions

In compliance with the Group policy and the 12,587, approximately EUR 11,562, in substantial In terms of legal actions pending or completed Council Decision No. 97/ 21.12.2011 regarding provisions of Law No. 307/2006, we monitor and monetary fines for non-compliance with laws during the reporting period regarding anti- the allegations of oil companies breaching the report all incidents and openly subject our and regulations, of which USD 6,369 (around competitive behavior and violations of anti-trust competition law provisions and relieve activities to controls conducted by authorities. EUR 5,852) were penalties paid by the Retail and and monopoly legislation KMG International has Rompetrol Downstream from paying the RON As a result, in 2013, KMG International faced a Trading BU and USD 6,218 (approximately EUR been identified as participant in one case, 159,553,612 fine). total of USD 15,204, approximately EUR 13,967, 5,713) by the Refining segment. Total number of through its Rompetrol Downstream entity. In 2013, the Court of Appeals rejected the in substantial monetary fines for controls conducted by different authorities In 2011, Rompetrol Downstream was appeal submitted by Rompetrol Downstream. non‑compliance with laws and regulations. Total reached 686, with the highest incidence, of 620, sanctioned, along with all the other market Furthermore, despite all evidence provided, in number of controls conducted by different being conducted in the Retail and Trading BU. players, by the Competition Council, with total September 2013, the Court of Appeals dismissed authorities reached 574, of which 526 were fines aggregating more than EUR 200 million, Rompetrol Downstream’s claim. On November conducted in the Retail and Trading segment, 12 representing approximately 3% of the turnover 19th, 2014, Rompetrol Downstream filed for in the Refining Business Unit, 5 in Upstream and achieved in 2010. (details - File no. 1536/2/2012 another appeal, this time before the Supreme 31 in the Non-Core segment. - Bucharest Court of Appeal; object - the Court of Justice. As of December 2014, the trial is In 2014, KMG International faced a total of USD complaint to annul the Romanian Competition ongoing. MARKETPLACE

2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL

46 47 46 47 Abbreviated Financials

The abbreviated financial information is derived Check our Group’s Annual Report for the full from the Consolidated Financial Statements financial disclosure. as of and for the year ended 31 December 2013/2014 and should be read in conjunction with these audited Consolidated Financial Statements. On the full consolidated financial statements an unqualified audit opinion was issued.

CONSOLIDATED FINANCIAL POSITION 2013 (USD) 2014 (USD) Total assets 3,299,642,841 2,741,078,210 APPENDIX

Total non-current assets 1,479,430,357 1,415,257,472 Total current assets 1,820,212,484 1,325,820,738 Total liabilities and shareholder equity 3,299,642,841 2,741,078,210 Equity attributable to stockholders of the parent 1,197,428,618 1,161,828,060 Non-controlling interest (295,215,338) (332,578,703) Total equity 902,213,280 829,249,357 Total non-current liabilities 370,836,686 320,394,377 Total current liabilities 2,026,592,875 1,591,434,476

CONSOLIDATED INCOME STATEMENT 2013 (USD) 2014 (USD) Revenue 10,915,510,828 11,249,674,356 Cost of sales (10,543,373,200) (10,829,708,058) Gross profit 372,137,628 419,966,298 Operating Profit (33,616,525) 44,841,330 Income tax (2,727,215) (3,253,992) Loss for the year (119,235,627) (57,927,965) Loss before income tax (109,011,343) (30,221,359) Loss from continuing operations (111,738,558) (33,475,351) Loss from discontinued operations (7,497,069) (24,452,614) 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL

48 Glossary

ACCA - Association of Chartered Certified LTI - Lost Time Injury Accountants LTIF - Lost Time Injury Frequency bln - billion mln - million BU - Business unit MMSC - Ministry of Environment and Climate CFA - Chartered Financial Analyst Change CLA - Collective Labor Agreement MSDS - Material Safety Data Sheets CO-Boiler-138F-114 - Carbon monoxide boiler MTC - Medical Treatment Cases CONCAWE - Conservation of clean air and water NGO - Non Governmental Organization in Europe NOx - Nitrogen Oxides COR - Classification of occupations in Romania OECD - Organisation for Economic Co-operation cu m - cubic meters and Development CSSM - Workplace health and safety committee OEG - Ethylene oxide glycols DAFWC - Days away from work cases OHS - Occupational Health &Safety DMT - Dimethyl terephthalate PEM - Petrochemicals E&P - Exploration & Production PET - Polyethylene Terephthalate ECHA - European Chemicals Agency PMP - Project Management Professional EPA - Environmental Protection Agency PSA off gases - Pressure swing absorption off ESP filter - Electrostatic precipitator gases EU-ETS - European Union-Emissions Trade Scheme QHSE - Quality, health, safety, environment EUTL - European Union Transaction Log RAJA - Autonomous County Water Authority FAC - First Aid Case REACH - Registration, Evaluation, Authorisation and FIR - Fatal Incident Rate Restriction of Chemicals FR - Injury Frequency Rate RPP - Rompetrol Petrochemicals FTL - Fatalities RPSA- Libyan Branch - Rompetrol S.A. Libyan GHG - Greenhouse Gas Branch GRI - Global Reporting Initiative RRC - Rompetrol Rafinare HCl - Hydrochloric Acid RWS - Rompetrol Well Services HR - Human Resources SO2 - Sulfur Dioxide HS - Health & Safety SR - Injury Saverity Rate HSE - Health, safety, environment SS - Standard Specifications KMG - KazMunayGas TRI - Total Recordable Incidents KMGT - KMG Trading TRIR - Total Recordable Injury Rate LPG - Liquefied Petroleum Gas WWTP - Waste Water Treatment Plant

49 Third-Party Opinion

KMG International’s 2013-2014 Sustainability Although the document represents the first Report provides a straightforward and easy to reporting exercise, it offers a balanced and understand overview of the Group’s CSR detailed view of the Group’s main areas of activities, which are based on a structure that impact. Its focus on internal practices and supports sound corporate conduct. We gladly procedures, environment protection actions and welcome KMG International’s initiative to market initiatives gives us a clear perspective on publish their first sustainability report and salute how KMG International understands its role in the Group’s commitment to transparency, as pushing the sustainability agenda within the evident from its comprehensive approach industry and in the Romanian market. towards the G4 GRI Sustainability Guidelines We are looking forward to see KMG International reporting. expand its reporting process with information The report has been discernibly created so as o regarding its commitments on the impact address the need for information of the Group’s throughout the whole product life cycle.

APPENDIX relevant stakeholders, as identified through Additionally we would be interested to learn the

consistent communication with company stakeholders’ view on the Groups’ future representatives, especially in the Romanian trajectory in connection to the sustainability market – the most affected by the company issues they consider relevant. activities, due mainly to the prominence of its Considering the effort and dedication invested operations volume in the country. in this report, we are confident that future The structure of the report reveals not only the editions will offer us additional information on most relevant topics for stakeholders, but also all the Group’s business entities, their activities the Group’s commitment to respond to all and potential impact. We would be thrilled to material aspects identified in collaboration with see KMG International lead the way in reporting Established in 2001, the Association for the former. The design of the report aims to and inspire other companies, as it did so many Community Relations (ARC) helps enhance the accessibility of the topics tackled, times in the past through its sustainability nongovernmental organizations to develop as well as to highlight vital matters in relation to initiatives. their capacity to attract resources from the KMG International’s stakeholder communication community, thus contributing to their viability. and engagement. At the same time, ARC works with the public and companies in order to engage them in a constant and coherent effort to develop communities and non-profit organizations. The mission of ARC is to contribute to the mobility of local financial resources to the benefit of the entire community. To this end, Horia Domnariu Ioana Szatmari ARC works dilligently on building stronger Associația pentru Relații Comunitare Associația pentru Relații Comunitare relationships between non-profit CSR program Director and CSR program Coordinator and organizations, companies and people, so as to

2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL GRI reporting specialist Associate Sustainability Assurance Practitioner support each other in their common interests.

50 GRI Annex Code Description Location in the report Page Status G4 General Standard Disclosures Strategy and Analysis G4-1 Provide a statement from the most senior decision-maker of the organization about the relevance of sustainability Introduction - Message From Our CEO 3 fully reported to the organization and the organization’s strategy for addressing sustainability. G4-2 Provide a description of key impacts, risks and opportunities. Introduction - Interview With Our Senior Vice President 4-5 fully reported Who We Are - Code of Conduct 14 Who We Are - Code of Ethics 15 Organizational Profile G4-3 Report the name of the organization Who We Are - Corporate Governance 6 fully reported G4-4 Report the primary brands, products and services Who We Are - Our Operations 8-9 fully reported G4-5 Report the location of the organization’s headquarters Who We Are - Our Operations 8-9 fully reported G4-6 Report the number of countries where the organization operates, and names of countries where either the Who We Are - Our Operations 8-9 fully reported organization has significant operations or that are specifically relevant to the sustainability topics covered in the report. G4-7 Report the nature of ownership and legal form Who We Are - Corporate Governance 6 fully reported G4-8 Report the markets served (including geographic breakdown, sectors served and types of customers/ Who We Are - Our Operations 8-9 fully reported beneficiaries) G4-9 Report the scale of the reporting organization Who We Are - Corporate Governance 6 fully reported G4-10 a. Report the total number of employees by employment contract and gender. Our People - Human Resources Management 19-22 partially reported b. Report the total number of permanent employees by employment type and gender. c. Report the total workforce by employees and supervised workers and by gender. d. Report the total workforce by region and gender. e. Report whether a substantial portion of the organization’s work is performed by workers who are legally recognized as self employed, or by individuals other than employees or supervised workers, including employees and supervised employees of contractors. f. Report any significant variations in employment numbers (such as seasonal variations in employment in the tourism or agricultural industries). G4-11 Report the percentage of total employees covered by collective bargaining agreements. - - not reported G4-12 Describe the organization’s supply chain. Who We Are - Our Operations 8-9 partially reported Marketplace - Supply Chain 44

51 Code Description Location in the report Page Status G4-13 Report any significant changes during the reporting period regarding the organization’s size, structure, ownership, Who We Are - Corporate Governance 6 partially reported or its supply chain, including: Who We Are - Our Operations 8-9 • Changes in the location of, or changes in, operations, including facility openings, closings, and expansions; • Changes in the share capital structure and other capital formation, maintenance, and alteration operations (for private sector organizations); • Changes in the location of suppliers, the structure of the supply chain, or in relationships with suppliers, including selection and termination. G4-14 Report whether and how the precautionary approach or principle is addressed by the organization. - - not reported G4-15 List externally developed economic, environmental and social charters, principles, or other initiatives to which the Who We Are - Code of Conduct 14 fully reported organization subscribes or which it endorses. Who We Are - Memberships and Affiliations 16 G4-16 List memberships of associations (such as industry associations) and national or international advocacy Who We Are - Memberships and Affiliations 16 partially reported organizations in which the organization: • Holds a position on the governance body; • Participates in projects or committees; • Provides substantive funding beyond routine membership dues; • Views membership as strategic. APPENDIX

Identified Material Aspects and Boundaries G4-17 a. List all entities included in the organization’s consolidated financial statements or equivalent documents. The Group issues consolidated financial reports for all 48 partially reported b. Report whether any entity included in the organization’s consolidated financial statements or equivalent its member companies. The full financial statement is documents is not covered by the report. available in the Group’s Annual Report. G4-18 a. Explain the process for defining the report content and the Aspect Boundaries. Who We Are - About This Report 12 fully reported b. Explain how the organization has implemented the Reporting Principles for Defining Report Content. G4-19 List all the material Aspects identified in the process for defining report content. Who We Are - Materiality Assessment 13 fully reported G4-20 For each material Aspect, report the Aspect Boundary within the organization, as follows: Who We Are - Materiality Assessment 13 partially reported • Report whether the Aspect is material within the organization • If the Aspect is not material for all entities within the organization (as described in G4-17), select one of the following two approaches and report either: – The list of entities or groups of entities included in G4-17 for which the Aspect is not material or – The list of entities or groups of entities included in G4-17 for which the Aspects is material • Report any specific limitation regarding the Aspect Boundary within the organization. G4-21 For each material Aspect, report the Aspect Boundary outside the organization, as follows: Who We Are - Materiality Assessment 13 partially reported • Report whether the Aspect is material outside of the organization; • If the Aspect is material outside of the organization, identify the entities, groups of entities or elements for which the Aspect is material. In addition, describe the geographical location where the Aspect is material for the entities identified; • Report any specific limitation regarding the Aspect Boundary outside the organization.

G4-22 Report the effect of any restatements of information provided in previous reports, and the reasons for such - - not applicable restatements. 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL G4-23 Report significant changes from previous reporting periods in the Scope and Aspect Boundaries. - - not applicable

52 Code Description Location in the report Page Status Stakeholder Engagement G4-24 Provide a list of stakeholder groups engaged by the organization. Who We Are - Our Stakeholders 12 fully reported G4-25 Report the basis for identification and selection of stakeholders with whom to engage. - - not reported G4-26 Report the organization’s approach to stakeholder engagement, including frequency of engagement by type and Who We Are - About This Report 12 partially reported by stakeholder group, and an indication of whether any of the engagement was undertaken specifically as part of Who We Are - Materiality Assessment 13 the report preparation process. G4-27 Report key topics and concerns that have been raised through stakeholder engagement, and how the Who We Are - Materiality Assessment 13 partially reported organization has responded to those key topics and concerns, including through its reporting. Report the stakeholder groups that raised each of the key topics and concerns. Report Profile G4-28 Reporting period (such as fiscal or calendar year) for information provided. Who We Are - About This Report 12 fully reported G4-29 Date of most recent previous report (if any). - - not applicable G4-30 Reporting cycle (such as annual, biennial). Who We Are - About This Report 12 fully reported G4-31 Provide the contact point for questions regarding the report or its contents. Appendices - Stakeholder Feedback Form 59-60 fully reported Appendices - Contacts 61 G4-32 GRI Content Index: Appendices - GRI Annex 51-58 fully reported a. Report the ‘in accordance’ option the organization has chosen. b. Report the GRI Content Index for the chosen option. c. Report the reference to the External Assurance Report, if the report has been externally assured. (GRI recommends the use of external assurance but it is not a requirement to be ‘in accordance’ with the Guidelines.) G4-33 Assurance: To be included in the next Sustainability Report - not reported a. Report the organization’s policy and current practice with regard to seeking external assurance for the report. b. If not included in the assurance report accompanying the sustainability report, report the scope and basis of any external assurance provided. c. Report the relationship between the organization and the assurance providers. d. Report whether the highest governance body or senior executives are involved in seeking assurance for the organization’s sustainability report. Governance G4-34 Report the governance structure of the organization, including committees of the highest governance body. Who We Are - Corporate Governance 6 fully reported Identify any committees responsible for decision-making on economic, environmental and social impacts. Ethics and Integrity G4-56 Describe the organization’s values, principles, standards and norms of behavior such as codes of conduct and Who We Are - Code of Conduct 14 fully reported codes of ethics. Who We Are - Code of Ethics 15

53 Code Description Location in the report Page Status G4 Specific Standard Disclosures Economic performance EC DMA Disclosure on management approach to economic performance, market presence and indirect economic All - fully reported performance G4-EC1 Report the direct economic value generated and distributed on an accurate basis including the basic components Appendices - Abbreviated Financials 48 partially reported for the organization’s global operations G4-EC2 Report risks and opportunities posed by climate change that have the potential to generate substantive changes Environment 25-34 partially reported in operations, revenue or expenditure. G4-EC3 Coverage of the organization’s defined benefit plan obligations. Our People - Human Resources Management 19-22 partially reported G4-EC4 Financial assistance received from government - - not applicable G4-EC5 Ratios of standard entry level wage by gender compared to local minimum wage at significant locations of - - not reported operation G4-EC6 Proportion of senior management hired from the local community at significant locations of operation Our People - Human Resources Management 19-22 fully reported APPENDIX G4-EC7 Development and impact of infrastructure investments and services supported Who We Are - Major Projects & Achievements 10-11 fully reported Environment - Major Achievements in 2013-2014 27 Marketplace - Supply Chain 44 G4-EC8 Significant indirect economic impacts, including the extent of impacts Who We Are - Major Projects & Achievements 10-11 fully reported G4-EC9 Proportion of spending on local suppliers at significant locations of operation - - not reported OG1 Volume and type of estimated proved reserves and production - - not applicable Environmental performance EN DMA Disclosure on management approach to environmental aspects Environment - Strategic Environmental Objectives 26 fully reported G1-EN1, EN2 Materials used by weight or volume and percentage recycled input materials Environment - Indicators - Materials 28 fully reported G1-EN3, EN4 Direct and indirect energy use by primary source Environment - Indicators - Energy Management 28-30 fully reported OG2, OG3 Total amount invested in renewable energy and total amount generated by source - - not reported G4-EN5 Energy intensity Environment - Indicators - Energy Management 28-30 fully reported G4-EN6 Energy consumption efficiency initiatives and improvements Environment - Indicators - Energy Management 28-30 fully reported G4-EN7 Reductions in energy requirements of products and services Environment - Indicators - Energy Management 28-30 fully reported G4-EN8, EN9 Total water withdrawal by source, significantly affected water sources Environment - Indicators - Water Management 32 fully reported G4-EN10 Percentage and total volume of water recycled and reused Environment - Indicators - Water Management 32 fully reported G4-EN11 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value Environment - Indicators - Biodiversity 33-34 fully reported outside protected areas G4-EN12 Description of significant impacts of activities, products and services on biodiversity in protected areas and areas Environment - Indicators - Biodiversity 33-34 fully reported of high biodiversity value outside protected areas. 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL

54 Code Description Location in the report Page Status G4-EN13 Habitats protected or restored Environment - Indicators - Biodiversity 33-34 fully reported G4-EN14 Total number of IUCN red list species and national conservation list species with habitats in areas affected by - - not reported operations, by level of extinction risk OG4 Number and percentage of significant operating sites in which biodiversity risk has been assessed and monitored Environment - Indicators - Biodiversity 33-34 fully reported G4-EN15, EN16 Direct and indirect greenhouse gas emissions (scope 1 & 2) Environment - Indicators - Emissions 30-31 fully reported G4-EN17 Other indirect greenhouse gas emissions (scope 3) Environment - Indicators - Emissions 30-31 fully reported G4-EN18 Greenhouse gas emissions intensity Environment - Indicators - Emissions 30-31 fully reported G4-EN20 Reduction of greenhouse gas emissions Environment - Indicators - Emissions 30-31 fully reported G4-EN21 NO x , SO x, and other significant air emissions Environment - Indicators - Emissions 30-31 fully reported OG5 Volume of formation of produced water Environment - Indicators - Water Management 32 fully reported G4-EN22 Total water discharge by quality and destination Environment - Indicators - Water Management 32 fully reported G4-EN23 Total weight of waste by type and disposal method Environment - Indicators - Waste Management 33 fully reported G4-EN24 Total number and volume of significant spills Environment - Indicators - Waste Management 33 fully reported G4-EN25 Weight of transported, imported, exported or treated waste deemed hazardous under the terms of the Basel Environment - Indicators - Waste Management 33 fully reported Convention 2 Annex I,II, III, and VIII and percentage of transported waste shipped internationally OG6 Volume of flared and vented hydrocarbons - - not applicable OG7 Amount of drilling waste (drill mud and cuttings) and strategies for treatment and disposal - - not reported G4-EN26 Identity, size, protected status, and biodiversity value of water bodies and related habits significantly affected by - - not reported the organization's discharges of water and runoff G4-EN27 Extent of impact mitigation of environmental impacts of products and services - - not applicable OG8 Benzene, lead and sulfur content in fuels - - not reported G4-EN28 Percentage of products sold and their packaging materials that are reclaimed by category - - not applicable G4-EN29 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with Marketplace - Controls and Monetary Fines 46 fully reported environmental laws and regulations G4-EN30 Significant environmental impacts of transporting products and other goods and materials for the organization's Environment - Indicators - Products & Services, Transport 34 partially reported operations, and transporting members of the workforce G4-EN31 Total environmental protection expenditures and investments by type Environment - Indicators - Compliance 34 fully reported G4-EN32 Percentage of new suppliers that were screened using environmental criteria - - not reported G4-EN33 Significant actual and potential negative environmental impacts in the supply chain and actions taken - - not reported G4-EN34 Number of grievances about environmental impacts filed, addressed and resolved through formal grievance - - not reported mechanisms

55 Code Description Location in the report Page Status Social Performance: Labor Practices and Decent Work LA DMA Disclosure on management approach to employment, labor/management relations, training and education and Our People - Our Approach 18 fully reported diversity and equal opportunity and occupational health and safety G4-LA1 Total number and rates of new employee hires and employee turnover by age group,gender and region Our People - Human Resources Management 19-22 fully reported G4-LA2 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by - - not reported significant locations of operation G4-LA3 Return to work and retention rates after parental leave, by gender Our People - Human Resources Management 19-22 fully reported G4-LA5 Percentage of total workforce represented in formal joint management-worker health and safety committees that Our People - Occupational Health and Safety 24 fully reported help monitor and advise on occupational health and safety programs G4-LA6 Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work- Our People - Occupational Health and Safety 24 fully reported related fatalities, by region and by gender G4-LA7 Workers with high incidence or high risk of diseases related to their occupation not reported G4-LA8 Health and safety topics covered in formal agreements with trade unions not reported APPENDIX

G4-LA9 Average hours of training per year per employee by gender, and by employee category Our People - Training and Career Development 23 fully reported G4-LA10 Programs for skills management and lifelong learning that support the continued employability of employees and Our People - Training and Career Development 23 fully reported assist them in managing career endings G4-LA11 Percentage of employees receiving regular performance and career development reviews, by gender and by Our People - Training and Career Development 23 fully reported employee category G4-LA12 Composition of governance bodies and breakdown of employees per employee category according to gender, Our People - Human Resources Management 19-22 fully reported age group, minority group membership, and other indicators of diversity G4-LA13 Ratio of basic salary and remuneration of women to men by employee category, by significant locations of - - not reported operation G4-LA14 Percentage of new suppliers that were screened using labor practices criteria - - not reported G4-LA15 Significant actual and potential negative impacts for labor practices in the supply chain and actions taken - - not reported G4-LA16 Number of grievances about labor practices field, addressed, and resolved through formal grievance mechanisms - - not reported Social Performance: Human Rights G4-HR1 Total number and percentage of significant investment agreements and contracts that include human rights To be reported in the next Sustainability Report - not reported clauses or that underwent human rights screening G4-HR2 Total hours of employee training on human rights policies or procedures concerning aspects of human rights that - - not reported are relevant to operations, including the percentage of employees trained G4-HR3 Total number of incidents of discrimination and corrective actions taken Our People - Human Resources Management 19-22 not applicable G4-HR4 Operations and suppliers identified in which the right to exercise freedom of association and collective bargaining Our People - Human Resources Management 19-22 not applicable may be violated or at significant risk, and measures taken to support these rights 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL

56 Code Description Location in the report Page Status G4-HR5 Operations and suppliers identified as having significant risk for incidents of child labor, and measures taken to Our People - Human Resources Management 19-22 not applicable contribute to the effective abolition of child labor G4-HR6 Operations and suppliers identified as having significant risk for incidents of forced or compulsory labor, and Our People - Human Resources Management 19-22 not applicable measures to contribute to the elimination of all forms of forced or compulsory labor OG9 Operations where indigenous communities are present or affected by activities and where specific engagement - - not applicable strategies are in place G4-HR7 Percentage of security personnel trained in the organization's human rights policies or procedures that are - - not applicable relevant to operations G4-HR8 Total number of incidents of violations involving rights of indigenous peoples and actions taken - - not applicable G4-HR9 Total number and percentage of operations that have been subject to human rights reviews or impact - - not reported assessments G4-HR10 Percentage of new suppliers that were screened using human rights criteria To be reported in the next Sustainability Report - not reported G4-HR11 Significant actual and potential negative human rights impacts in the supply chain and actions taken - - not applicable G4-HR12 Number of grievances about human rights filed, addressed, and resolved through formal grievance mechanisms - - not applicable Social Performance: Society SO DMA Disclosure on management approach to corruption, public policy, anti-competitive behavior and compliance. Community - Our Approach 36 fully reported Disclosure on management approach to community G4-SO1 Percentage of operations with implemented local community engagement, impact assessments, and Community - Investments in the Community 37-39 fully reported development programs Community - Joint Partnerships 40 Community - Employee Engagement 41 G4-SO2 Operations with significant actual or potential negative impacts on local communities Community - Our Approach 36 fully reported G4-SO3 Total number and percentage of operations assessed for risks related to corruption and the significant risks To be reported in the next Sustainability Report - not reported identified G4-SO4 Communication and training on anti-corruption policies and procedures - - not reported G4-SO5 Confirmed incidents of corruption and actions taken About us - Code of Ethics 15 fully reported G4-SO6 Total value of political contributions by country and recipient/beneficiary No contribution was made - not applicable G4-SO7 Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their Marketplace - Legal Actions 46 fully reported outcomes G4-SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws Marketplace - Controls and Monetary Fines 46 fully reported and regulations G4-SO9 Percentage of new suppliers that were screened using criteria for impacts on society To be reported in the next Sustainability Report - not reported G4-SO10 Significant actual and potential negative impacts on society in the supply chain and actions taken - - not applicable OG10 Number and description of significant disputes with local communities and indigenous peoples - - not applicable OG11 Number of sites that have been decommissioned and sites that are in the process of being decommissioned - - not applicable

57 Code Description Location in the report Page Status OG12 Operations where involuntary resettlement took place, the number of households resettled in each and how their - - not applicable livelihoods were affected in the process OG13 Number of process safety events, by business activity - - not applicable G4-SO11 Number of grievances about impacts on society filed, addressed, and through formal grievance mechanisms - - not applicable Social Performance: Product Responsibility PR DMA Disclosure of management approach Marketplace - Quality and Customer Management 45 fully reported G4-PR1 Percentage of significant product and service categories for which health and safety impacts are assessed for Marketplace - Quality and Customer Management 45 fully reported improvement G4-PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and - - not applicable safety impacts of products and services during their life cycle, by type of outcomes G4-PR3 Type of product and service information required by the organization's procedures for product and service Marketplace - Quality and Customer Management 45 fully reported information and labeling, and percentage of significant product and service categories subject to such information requirements

APPENDIX G4-PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and - - not applicable service information and labeling by type of outcomes G4-PR5 Results of surveys measuring customers satisfaction Marketplace - Quality and Customer Management 45 fully reported G4-PR6 Sale of banned or disputed product - - not applicable G4-PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing Marketplace - Quality and Customer Management 45 fully reported communications, including advertising, promotion, and sponsorship, by type of outcomes G4-PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data Marketplace - Quality and Customer Management 45 fully reported G4-PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and Marketplace - Quality and Customer Management 45 fully reported use of products and services OG14 Volume of biofuels produced and purchased meeting sustainability criteria To be reported in the next Sustainability Report - not reported 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL

58 Stakeholder Feedback Form

Please take a few minutes to fill out For every feedback form we this questionnaire on the 2013-2014 receive, we will plant a tree Sustainability Report. We value your opinion in one of the communities as it helps us better manage our efforts and in which we conduct our improve our results. operations.

Which of the following interests you the Corporate Governance & Transparency most? Corporate Responsibility Actions (please mark with an X) Environment Health & Safety Human Resources Stakeholders’ information (shareholders, employees, neighboring municipalities, customers, suppliers, NGOs, etc)

Mark the statements as to how much you The principles and issues are sufficiently agree with the following. covered in accordance with the company’s (1) strongly disagree sustainable development strategy. (2) disagree The content is complete and clear. (3) neither agree nor disagree (4) agree The report’s structure is functional and (5) highly agree sufficient. The information presented is reliable and accurate. The tables and charts are easily understood and depicted in a satisfactory manner. The photographs and images positively enhance the report making it easier to read and more attractive. The printed version conforms to a Sustainable Development publication. I prefer the electronic version of the report. I will recommend the report to others.

59 Assess in the order of priority from 1 to 5 Safety Please specify any issues which haven’t been included in the 2013-2014 Sustainability the following areas in which the company Workplace Report which you would like to see featured in the next issue or areas that need improving. has developed significant initiatives and activities, in your opinion. Protecting the environment Caring for society and the environment Programs to support the local communities Transparency Human rights

Which of the following groups of Employee stakeholders do you belong to? Local community member (please mark with an X) NGO Media Supplier APPENDIX

Customer Business partner Authority representative Other

After reading the 2013-2014 Sustainability Positively influenced Report, has your opinion of KMG Not influenced International been influenced at all? (please mark only one with an X) Negatively influenced

First name Phone Thank you for your Last name Email cooperation. Occupation Website The above data will be collected and used so that we can improve our Sustainability Report as Company Address well as the actions and initiatives regarding the Group’s Corporate Responsibility. Position [email protected] 2013-2014 KMG INTERNATIONAL SUSTAINABILITY REPORT | SUSTAINABILITY 2013-2014 KMG INTERNATIONAL

60 Reporting Team Contacts

Sustainability Manager KMG International N.V. Costinela Drăgan World Trade Center [email protected] Strawinskylaan 807, Tower A, 8th floor +40 21 307 74 17 1077XX Amsterdam, The Netherlands Tel.: +31 205 75 23 90 Legal Fax: +31 205 75 23 99 Nicoleta Ionescu (Gomoi) Email: [email protected] Web: www.rompetrol.com Human Resources KMG Rompetrol Oana Arsene 3-5 Free Press Square Ioana Năstase City Gate Northern Tower, 6th floor 013702 Bucharest, Romania QHSE Tel: +40 21 30 30 800 Camelia Vera Mitrofan Fax: +40 21 31 22 490 Corina Rugină E-mail: [email protected] Felicia Andrei Costin Jugaru Rompetrol Rafinare (Petromidia Refinery) Olivia Niculescu 215 Năvodari Blvd. Silvia Dobre Administrative Building Carmen Ioniță 905700 Năvodari, Romania Dana Tudorache Tel: +40 241 50 60 00 Luminița Zamfirescu Fax: +40 241 50 69 30 E-mail: [email protected] Compliance Web: www.rompetrol-rafinare.ro Marius Sorega Rompetrol Downstream 3-5 Free Press Square Supply Chain City Gate Northern Tower, 2nd floor Maricel Cazacu 013702 Bucharest, Romania Tel: +40 21 206 75 00 Fax: +40 21 206 75 80 Email: [email protected] Web: www.downstream.ro

61 Notes

© KMG International 2015

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