TAIF GROUP OF COMPANIES STABLE SOCIETY, BUSINESS ACTIVITY AND RESPONSIBILITY Table of contents 01 04 ABOUT THE COMPANY THE COMPANY AND BUSINESS PARTNERS 08 About the company 09 Structure of the company 45 The Company activities in the field 11 Company’s development strategy of produce quality and safety 14 Risk management 47 Practical approach to procurement activities 17 Economic efficiency 47 Customer satisfaction 19 Products 49 Marketing communications 22 World and domestic market standings 05 02 THE COMPANY AND EMPLOYEES CORPORATE SOCIAL RESPONSIBILITY 54 Company labour capital 58 System of personnel education 28 Corporate social responsibility 63 Social partnership 30 Interaction with stakeholders 65 Social programs for Company employees 03 06 THE COMPANY AND SHAREHOLDERS SAFETY AND HEALTH OF EMPLOYEES 38 Corporate management 39 Management bodies of the Company 74 Occupational and industrial safety policy 76 Occupational and industrial safety training system 77 Employees’ life and health preservation is the Company priority 78 Social benefits embodied in the collective agreement 07 ENVIRONMENTAL ACTIVITIES 82 Environmental image of the Company 135 Glossary 85 Basic environment protection measures 138 List of abbreviations 90 Environmental monitoring 142 Feedback questionnaire 91 Results of environment-related activity 08 10 APPENDICES THE COMPANY AND COMMUNITY 146 Financial performance of the Company 147 Personnel of the Company 94 Public relations 150 Information on the status of occupational accidents 96 Social programs developed jointly 151 GRI indicators in the area of environment protection with the community and utilization of materials 101 The Company and the science 104 Important events of the year in the Company 156 Contact information 09 ABOUT THE REPORT 112 Replies and liabilities of the company according to the results of interviews with stakeholders 114 About the Report 116 Independent opinion on Verification of the Sustainable Development Report 121 Opinion of RUIE Non-financial Statement Council on the results of review of PJSC «Nizhnekamskneftekhim» Sustainability Report for 2014 aimed to public verification 124 Table of standard GRI elements PJSC «Nizhnekamskneftekhim» | Sustainability report | 2014 Address of the Chairman of the board of Directors DEAR COLLEAGUES AND PARTNERS, I would like to bring to your notice with foreign analogues was opened in PJSC regular Sustainability Report of PJSC «Nizhnekamskneftekhim» «Nizhnekamskneftekhim» We are working in these directions and Despite the diffi cult economic situation, will follow them in future. We believe PJSC «Nizhnekamskneftekhim» has that winning and holding of leading demonstrated the ability to maintain positions in the petrochemical industry stability in challenging and changing by PJSC «Nizhnekamskneftekhim» became business environment. The Company possible due to the fact that its activity is fully fulfi lled all the social and fi nancial based on the principles of corporate social commitments, provided important advances responsibility, openness and continuous in the development of production. dialogue with the public and staff . The obtained results would not have Summing up 2014, I express sincere thanks been possible without the constant to all who contributed to the overall communication with partners. In 2014, the performance of the Company, presented in number of conferences, meetings with this report. consumers, shareholders and investors, with employees, with civil society organizations, the media, with all parties interested in the successful business of the Company signifi cantly increased. PJSC «Nizhnekamskneftekhim» remains a reliable trading partner on the world market. It is evidenced by long-term agreement for the supply of synthetic rubber to world «PJSC tire companies, contracts with major direct «Nizhnekamskneftekhim» plastics processors. Among our priorities are provision of holds the position among high standards of environmental and the largest companies in the industrial safety, occupational safety and personnel development. Company is petrochemical complex of actively involved in the development of Nizhnekamsk municipal district, is one of Russia, which gives reason the largest taxpayers in the region, plays a key role in the Kamsky innovative territorial to be optimistic about the and production cluster as a producer of future» raw materials for auto components and consumer goods, enhances partnerships with educational institutions. Maintaining a policy of risk reduction, PJSC «Nizhnekamskneftekhim» continues to work V.M. Busygin on import substitution. In October 2014 a Chairman of the Board of Directors catalyst production plant that will compete PJSC «Nizhnekamskneftekhim» 4 Stable society, business activity and responsibility Address of the General Director DEAR READERS AND COLLEAGUES, In 2014 PJSC «Nizhnekamskneftekhim» employees with comfortable fl ats is in again demonstrated its capability to the focus of attention. For the reporting implement its development strategy period 256 fl ats are distributed among consistently and eff ectively. Due to measures employees. In 2014 at the request of PJSC taken, implementation of the plan for «Nizhnekamskneftekhim» non-commercial the production of consumable goods, the organization «State housing fund under the growth of labor productivity and wages were President of Tatarstan Republic» planned the provided. All obligations on payments to the construction of more than 3 000 fl ats for the budget were fulfi lled and social programs employees of the Company in 2014—2016. were realized in full scope. Much prominence is given to attraction of personnel to healthy life style. 46 sporting In its activities, the Company demonstrates events covering 8 226 people were held. commitment to the achievement of technological leadership: in 2014 the Culture and responsible practice in the fourth line of PS production was put issues of health, safety, and environment into operation, the production of divinyl- is the priority of the company. In an eff ort styrene rubber was started; new brands of to minimize impact on the environment, polyether were developed. Within the frame the Company consistently implements of the import substitution program the environmental protection measures. The process line for the production of a carrier sustainable internal reserve to improve for isoparaffi n dehydration microspheric eff ectiveness of the activity is the work catalyst was put into operation in PJSC on the implementation of energy saving «Nizhnekamskneftekhim», methods of program. producing analogues of foreign brands of ethylene propylene copolymers with Publication of the subsequent sustainability improved characteristics were developed, report confi rms our commitment to successful tests on the transfer of water comply with high standards of social and treatment to domestic coagulator were ecological responsibility. We are open for «We have clear performed. constructive dialogue with customers, staff , partners and all those who care of the understanding of strategic In achieving its goals, the Company relies future of petrochemical complex of Russian on close cooperation with suppliers of Federation. tasks of the Company raw materials, expansion of contacts for the oncoming year- with consumers. To promote plastics in October 2014 polymeric forum of PJSC establishing its positions «Nizhnekamskneftekhim» was held in Belarus Republic, as well as annual meeting on key markets, cost with rubber processors. optimization, production And, certainly, the main competitive of high quality competitive advantage of the Company is its highly professional personnel. The system of products» continuous training and development is successfully functioning in the Company to maintain their qualifi cation. Azat Bikmurzin The essential social task – provision of General Director 5 PJSC «Nizhnekamskneftekhim» is the largest producer of polyisoprene in the world (42% of world market), one of the four global leaders in production of butyl/halobutyl and polybutadiene rubber 01 ABOUT THE COMPANY 08 About the Company 09 Structure of the Company 11 Company’s development strategy 14 Risk management 17 Economical efficiency 19 Products 22 World and domestic market standings PJSC «Nizhnekamskneftekhim» | Sustainability report | 2014 ABOUT THE COMPANY CORPORATE SOCIAL COMPANY AND COMPANY AND COMPANY AND PROVISION OF EMPLOYEES’ RESPONSIBILITY SHAREHOLDERS BUSINESS PARTNERS EMPLOYEES SAFETY AND HEALTH About the Company Nizhnekamskneftekhim Public Joint-Stock Company (hereinafter at the extraordinary General shareholders meeting on October 29, referred to as «the Company») has been established under the Law of 2014. the Republic of Tatarstan «On reorganization of state and municipal property in the Republic of Tatarstan (on denationalization and Charter of the Company with the new name was registered by privatization)», and in compliance with the Nizhnekamskneftekhim authorized government bodies of Russian Federation on November Industrial Corporation privatization plan, approved by the Resolution 13, 2014. No. 41, dated August 11, 1993, of the State Property Management Committee, Republic of Tatarstan, and in accordance with the Minutes PJSC «Nizhnekamskneftekhim» is a dynamically developing of Meeting No. 25 of the Board of the State Property Management high-tech petrochemical company making part of TAIF Group Committee, Republic of Tatarstan, dated July 20, 1993, registered and is the main enterprise in Nizhnekamskneftekhim