taif group of companiesfs.rts.ru/content/annualreports/125/2/nknc-2007-eng.pdf · 2008. 8. 6. ·...
TRANSCRIPT
TAIF Group of Companies
There is a desire to be with nature at least awhile in those rare moments of rest
Table of contents6 Address of the Chairman of the Board of Directors
8 Address of the General Director
10 Open Joint-Stock Company Nizhnekamskneftekhim 112 About Company
14 Position in Chemical Industry and World Market Standing
20 Most Important Events 2
26 Activity Results 328 Key Financial- Economic Indices
32 Balance Sheet
34 Profit and Loss Statement
36 Notes to Financial Statements for 2007
42 Auditor’s Report
44 Findings of the Auditing Committee
46 Investment Activities 448 Priority Trends of the Company Activities and Expected Future Development
49 Financing and Credits
50 Risks Related to the Company’s Business 552 Industrial Risks
54 Country and Regional Risks
56 Financial Risks
58 Legal Risks
60 Risks Related to the Company’s Activity
62 Corporate Activities 664 List of Corporate Documents
64 Capital Stock
67 Bonded Loans
68 Dynamics of Dividend Payments on Equity
69 Market Capitalization
72 Credit Ratings
73 Major Indices of Subsidiaries Activity
74 Management 776 Board of Directors
80 Management Board
84 Audit Commission
86 Personnel 8
94 Social Responsibility 9
102 Environmental Activity 10
108 Energy Saving 11
112 Press Coverage About Us 12
116 Contact Information 13
Address of the Chairman of the Board
6
ОА
О «
Ни
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» Го
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Dear shareholders!
For Nizhnekamskneftekhim Inc. the past year, 2007,
became another step of implementing the Company’s
strategic development program in the scope of the
tasks implied in the decree of the Security Council
of the Republic of Tatarstan of June 9, 2005, «On the
progress of execution of the Program of the Republic
of Tatarstan for development of oil, gas & chemical
complex for years 2004 through 2008», as well as
the starting point for shaping growth prospects for a
period of 2008 through 2012.
The Management of the Company effected a number
of actions related to modernization and perfection
of operations for the sake of higher performance,
increased monomer and polymer capacities, wider
product range, lower costs and deleted non-core as-
sets. Certain successes were achieved in streamlin-
ing of the corporative management system based on
IT introduction. All this resulted in profit and equity
value growth in the long run.
I note fruitful results of the reported year, however, I
want to emphasize that many things have to be done
yet to achieve the objectives. At the same time, I
express confidence in successful outcome of Nizh-
nekamskneftekhim Inc. efforts to cope with all the
challenges by virtue of their competitive advantages,
namely, effective technologies, high-quality products,
professionalism of their staff and your support, dear
shareholders.
General Director TAIF Inc.
Chairman of the Board of Directors
Nizhnekamskneftekhim Inc.
A.K. Shigabutdinov
7
Address of the General Director
8
ОА
О «
Ни
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» Го
дово
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Dear shareholders, colleagues, partners!
Assessing the operational and commercial activi-
ties of Nizhnekamskneftekhim Inc. during the year
of 2007 I note with satisfaction that they were very
successful and productive. In spite of unprecedented
growth of utilities prices we maintained positive dy-
namics in every principal development aspect.
Year 2007 yielded finished products to a tune of
over 55 billion Rubles, which in terms of volume is
12 % higher than the previous year. Sales proceeds
amounted to over 58.6 billion Rubles, net profit - over
4.1 billion Rubles. For the first time in the Company’s
history the annual export earnings exceeded 28.6 bil-
lion Rubles (over 1.1 billion US dollars), that is, it went
up 17 % compared to 2006 level.
We achieved the operations highest output of BR-Nd,
single-stage isoprene, ethylene oxide, styrene, poly-
styrene and ethylene.
In the scope of the butyl and halogenated butyl rub-
ber total capacity scale-up plan we started up a new
chloromethyl compressor and the 7-th polymeriza-
tion system. We commissioned an in-house power
source – cogeneration gas turbine unit GTU-75. We
started lithium catalyst based polybutadiene rubber
production (BR-Li). We mastered polyether output for
polyurethane systems and began deliveries of polym-
erization grade hexene-1 to consumers.
Ethylene Plant revamp activities were underway, as
well as construction of the Polyethylene Plant and
Polystyrene Plant III.
Being a city-forming enterprise, Nizhnekam-
skneftekhim Inc. kept on participating in solutions
of Nizhnekamsk city social problems during the last
year, namely, we contributed much in construction
of the municipal water purification facility, which
became operational in November 2007, and began
creating an automated environmental monitoring
system.
In 2007 the Company was awarded the Super Grand
Prix based on the results of the International Exhibi-
tion “Tires, technical rubber goods, rubbers – 2007”,
became the National Technological Prize “The Star of
High Technologies” winner and won the All-Russian
“The Best Russian Exporter” and “Customs Olym-
pus” competitions, was honored with titles “Leader
of Environmental Activity in Russia” and “Russian
Organization of High Social Efficiency”.
Nizhnekamskneftekhim Inc. management is com-
mitted to follow the same path in future by fulfilling
strategic plans, enhancing its international status,
increasing the equity capital and strictly honoring the
interests of the shareholders. We shall find support
in the Company’s strategic development program
aimed at dramatic change of the mid-term corpora-
tive operations pattern and at bringing of the output
to 130 billion Rubles.
In 2008 it is planned, among other things, to com-
plete revamp of the Ethylene Plant, to commission
the Polyethylene Plant and Polystyrene Plant III, to
continue the combined project activities for retrofit-
ting and capacity increase of butyl, halogenated butyl
and polybutadiene plants.
In 2007 Nizhnekamskneftekhim Inc. team celebrated
the 40-th anniversary of the day of the first output.
We are proud to have become the leader of the Rus-
sian petrochemical industry during this period and
will spare no pains to enhance competitiveness of our
products both on the foreign and home markets, to
fulfill our contractual commitments to our partners.
On behalf of Nizhnekamskneftekhim Inc. Board and
on my behalf I express sincere gratitude to all share-
holders for effective support and cooperation. I hope
that our combined efforts will continue to be fruitful
and successful.
General Director
NIZHNEKAMSKNEFTEKHIM Inc.
V.M. Busyguin
9
A team knowing target to float to has a fair wind.
Seneca
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Open Joint-Stock CompanyNizhnekamskneftekhim
| About Company
| Position in Chemical Industry and World Market Standing
11
1
“Nizhnekamskneftekhim” INC – a dynamically advanc-
ing highly technological petrochemical company making
part of the “TAIF” Group. The Company’s birthday is 31
July 1967.
18 August 1993, it was registered by the Tatarstan
Republic Ministry of Finance and entered into the Reg-
istry of Joint Stock Companies being established in the
Tatarstan Republic territory, under № 388.
5 November 2002, it was reregistered by the TR Inter-
regional Tax Inspectorate № 20 of the RF Tax Collection
Ministry and entered into a Consolidated State Registry
for legal entities, under a state principal registra-
tion № 1021602502316. A taxpayer identification №:
1651000010.
To date, “Nizhnekamskneftekhim” INC is one of the
largest petrochemical companies of Europe. The pro-
duction complex embodies:
10 Major Plants; —
10 Base Divisions (Railway Transport, Ethylene —
Pipeline Systems, and others);
5 Centres including Research & Technology and —
Design;
7 General-Purpose Shops. —
Reprocessing a broad fraction of light hydrocarbons and
other petrochemical feedstock, the Company produces
monomers, polymers, synthetic rubber and other pet-
rochemical goods.
About CompanyOpen Joint-
Stock Company
Nizhnekamskneftekhim The range of marketable products alone comprises over
100 items. Major of them are:
Monomers
Ethylene —
Propylene —
Styrene —
Butadiene —
Synthetic Rubber and Resin
Butyl Rubber BK-1675N —
Chlorobutyl Rubber CBK —
Bromobutyl Rubber BBK —
Isoprene Rubber SKI-3 —
Ethylene-Propylene Rubber EPDM —
Butadiene Rubber SKD-N —
Butadiene Rubber SKD-L —
Polymeric Petroleum Resin —
Plastics
Polystyrene —
Polypropylene —
Ethylene- and propylene-based liquid derivatives
Ethylene Oxide —
Propylene Oxide —
Ethylene Glycols —
Ethylene Glycol Esters (ethyl cellosolve, ethyl —
carbitol)
Propylene Trimers and Tetramers —
Polyethers —
Surfactants (Neonols) —
Alpha-Olefins and so forth —
12
| About Company
| Position in Chemical Industry and World Market Standing
«Nizhnekamskneftekhim» INC holds a dominant
position among the Russian petrochemical industry
companies in producing a number of goods.
The Company products are exported to more than
50 countries worldwide Major business partners of
“Nizhnekamskneftekhim” INC are:
Goodyear —
Dow —
Michelin —
Mitsui —
Pirelli —
Continental —
Akzo Nobel and other companies of repute —
Environmental Management is a priority domain
of the Company activities. All production facilities
of “Nizhnekamskneftekhim” INC have certificates
of conformity to ISO 14001:2004. The Company has
devised a long-term Environmental Management
Program which it adheres to in its practical activities.
A Quality Management System of “Nizhnekam-
skneftekhim” INC has been certified to comply with
the requirements of ISO 9001:2000.
Health and Occupational Safety Management System
has been certified to comply with the requirements of
OHSAS-18001:199.
Awards
Order of Lenin (1981); international prizes “For
Commercial Prestige”, “For Best Brand Name”, “For
Technology & Quality” (1997); kudos “Gold Mercury”,
“Russian National Olympus” (2000 & 2003); national
kudo “Best Company’2006”; title “Best Russian
Exporter of the Year” (2001, 2004, 2005); Grand Prix
of IX International Exhibition “Oil, Gas, Petrochem-
istry’2004”, XII International Exhibition “Energy &
Energy-Saving PowerTek’2007”; super Grand Prix of
International Exhibition “Tires & Rubber’2007”.
Nizhnekamskneftekhim INC Annual Report, 2007 13
2002
2003
2004
2005
2006
2007
0 200 400 600
$m
800 1000 1200
1,114
957
791
650
453
372
Year-wise export earnings
“Nizhnekamskneftekhim” INC is a major producer and exporter of petrochemi-
cal products in the Russian Federation. In 2007, 52% of made products (in money
terms) was export-marketed.
Due to the current Strategic Development Program aimed at launching new pro-
duction facilities, expanding the existing capacities and extending a grades range,
“Nizhnekamskneftekhim” INC is continuously scaling up supply volumes both to
domestic and overseas markets. The Company’s exported-product sales volumes
have been steadily increasing for several years. Over the past 5 years, an average
annual growth rate of export sales constituted 25%, and in tote, beginning 2003,
the exports volume increased 2.5 times.
Position in Chemical Industry and World Market Standing
Open Joint-
Stock Company
Nizhnekamskneftekhim
14
The heavy-tonnage products, supplied to overseas markets, are synthetic types of
rubber (isoprene, butyl, halobutyl and butadiene), styrene, polystyrene, polypropyl-
ene, monoethylene glycol, neonols. In 2007, polyethylene glycol gained its position in
the overseas market.
Synthetic rubber covers 50% of products exported by “Nizhnekamskneftekhim” INC.
This product is extremely required on overseas markets. Synthetic rubber shipment
volumes to overseas Buyers are growing from year to year. In 2007, rubber exports
increased 19% compared to 2006.
“Nizhnekamskneftekhim” INC successfully cooperates with the largest overseas tire
companies among which are Michelin, Goodyear, Pirelli, Continental, Bridgestone
and concern Belshina. If in 2006 their share in synthetic rubber export volumes
constituted 24% it then considerably augmented to 41% in 2007, and expected at the
level of at least 57% in 2008.
Isoprene rubber SKI-3
For many years, NKNK has been supplying isoprene rubber SKI-3 to foreign mar-
kets. Industrial facilities to produce isoprene types of rubber (synthetic analogues
of natural rubber) were well developed in the Soviet Union. That necessity was
dictated by the remote location of the USSR from the markets of natural rubber
required for the country’s defense industry. Given that, 5 SKI Plants were con-
structed in the country. Only three of them have survived until now. Among them,
NKNK is an indisputable leader in production and supplies to foreign markets.
| About Company
| Position in Chemical Industry and World Market Standing
Nizhnekamskneftekhim INC Annual Report, 2007 15
This rubber is remarkable for its stable high quality and is in permanent demand
with foreign consumers. It is used in large volumes by such famous foreign com-
panies like Goodyear, Michelin, Continental, Bridgestone, Pirelli and others. Share
of “Nizhnekamskneftekhim” INC, as a producer, on the international market is
the highest. In 2007, it capacity-equaled approximately 30.1%, and constituted
approximately 34% in the global market supplies (including RF). NKNK’s share in
the domestic production volumes and supplies to the home market amounted to
43.7% and 45.6% respectively.
Production of isoprene rubber has been certified to comply with the quality man-
agement system ISO-9001.
Butyl rubber BK-1675N
Butyl Rubber Plant as part of “Nizhnekamskneftekhim” INC is widely known all
over the world. Butyl rubber is mainly applied to produce automobile inner tubes.
In the Russian Federation this type of rubber is produced only at Nizhnekamsk
and Togliatti. It should be noted that for many years “Nizhnekamskneftekhim”
INC maintains the leading positions in Russia both in production and sales of the
product. In 2007, the Company’s share in the butyl rubber domestic production
constituted 59.6%, and in supplies to the Russian market - 71.8%.
A principal demand for butyl rubber is concentrated on the Asian market. Due
to the high and sustained quality, “Nizhnekamskneftekhim” INC managed to
strengthen its positions on the external market. The Company’s butyl rubber
share on the global market (including RF) equals approximately 29%.
Halobutyl rubber
In 2004, after commissioning a Halobutyl Rubber (GBK) Unit “Nizhnekam-
skneftekhim” INC became a third producer and supplier of halobutyl rubber.
Approximately 90% of this type of rubber is applied to produce tubeless tire liners.
With a yearly-increasing tubeless tire production, the demand for GBK is steadily
increasing at an average of 6% a year. Major users of “Nizhnekamskneftekhim”
Open Joint-
Stock Company
Nizhnekamskneftekhim
16
INC butyl rubber are the overseas large tire producers. In 2007, the shipment
share of “Nizhnekamskneftekhim” INC GBK to the overseas largest users consti-
tuted 36%. In 2008, that share is expected to equal at least 70% of the total export
volume.
In 2007, the share of “Nizhnekamskneftekhim” INC on the butyl rubber global
market constituted 5.3%
Production of butyl rubber has been certified to comply with the quality manage-
ment system ISO-9001.
Butadiene rubber SKD-N
Butadiene rubber is second-in-volume synthetic rubber consumed worldwide af-
ter SBR. Its share in the overall structure of synthetic rubber consumption world-
wide constitutes 25%. Approximately 70% of BR is applied to produce tires (treads,
buttresses and suchlike). But more preferable for that purpose becomes NdBR.
“Nizhnekamskneftekhim” INC put into operation precisely such kind of a produc-
tion unit in 2004. To have SKD-N Unit launched fully meets the Company’s strategy
targeted at setting up a production complex with a complete range of synthetic
rubber grades for tire and general mechanical rubber goods industries satisfying
the highest requirements of our time.
Over the period of a little bit more than 3 years, SKD-N has been successfully tried
by a number of largest users and now is shipped mainly to the overseas market.
As of 2004, SKD-N supplies augmented more than 2.5 times, and the butadiene
rubber global market share of “Nizhnekamskneftekhim” INC equaled 3.3% in
2007. “Nizhnekamskneftekhim” INC shared 33.3% of the SKD-N Russian produc-
tion and 15.5% of domestic supplies in 2007.
Production of SKD-N has been certified to comply with the quality management
system ISO-9001.
| About Company
| Position in Chemical Industry and World Market Standing
17Nizhnekamskneftekhim INC Annual Report, 2007
Styrene
“Nizhnekamskneftekhim” INC is a leading producer and exporter of sty-
rene in the Russian Federation. Production of styrene has been certified to
comply with the quality management system ISO-9001. Styrene is applied
to produce many types of goods, e.g., EPS, HIPS, GPPS, ABS-plastics, dif-
fering block polymers, synthetic rubber, latex, and so forth.
The main foreign competitors of “Nizhnekamskneftekhim” INC on the
European styrene market are Dow, BASF, AtoFina, EniChem, Ellba, Repsol,
Shell. Share of NKNK in the world styrene production volumes is about 1%.
Share of “Nizhnekamskneftekhim” INC in the All-Russian styrene produc-
tion volume is approx 47%. “Nizhnekamskneftekhim” INC reprocesses
more and more styrene into polystyrene.
Polystyrene
“Nizhnekamskneftekhim” INC launched a PS Unit in 2003, licensed by
American company Fina Technology, using the original import equipment.
Due to the high quality and adequately selected range of grades, “Nizh-
nekamskneftekhim” INC occupied leading positions in the Russian market.
In 2007, it shared 53.3% in the RF total production volume, and 35% in the
RF market supplies. The Company’s global market supply share makes
0.8%.
Production of polystyrene has been certified to comply with the quality
management system ISO-9001.
Open Joint-
Stock Company
Nizhnekamskneftekhim
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Monoethylene glycol (MEG)
“Nizhnekamskneftekhim” INC is one of the major producers of monoethylene
glycol in the Russian Federation. In 2007, NKNK produced approx 28.6% of the
Russian total monoethylene glycol. The main West European competitors of NKNK
in MEG are Dow, Ineos, BASF, Shell. Share of “Nizhnekamskneftekhim” INC in the
world production and supply volumes is less than 1%.
Production of MEG has been certified to comply with the quality management
system ISO-9001.
Polypropylene
A PP Unit was commissioned at 2006 year-end. Today, this is the most up-to-date
PP Unit in the RF. Over the past year, the Company successfully developed domes-
tic and overseas PP markets. In the RF it occupies the leading positions producing
32% of the total PP. Share of “Nizhnekamskneftekhim” INC in supplies to the RF
constituted 20.6%.
Production of polypropylene has been certified to comply with the quality manage-
ment system ISO-9001.
Neonols (oxyethylated nonylphenols)
Neonols belong to surfactants applied as a base to produce diverse synthetic
detergents.
“Nizhnekamskneftekhim” INC is a single producer of neonols in the Russian
Federation and CIS, and is one of the leading players on the international neonol
market. NKNK’s share in the world market of oxyethylated nonylphenols consti-
tutes over 10%.
Production of neonols has been certified to comply with the quality management
system ISO-9001.
| About Company
| Position in Chemical Industry and World Market Standing
19Nizhnekamskneftekhim INC Annual Report, 2007
Happiness is a result of labor and reward for it.
Aristotle
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Most Important Events of 2007
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Most important events of 2007
JANUARY
Butyl Rubber Plant commissioned a second rubber
finishing line “Welding” as per the Program to expand
butyl and halobutyl rubber total production up to 120
Ktpa. All processes at the Unit are highly automated
and mechanized.
Styrene and Polyether Resin Plant produced a mil-
lionth ton of propylene oxide since the Unit had been
put into operation.
The Conference of the labor collective of “Nizh-
nekamskneftekhim” INC reviewed the implementa-
tion of the 2006 bilateral obligations and adopted a
2007 labour agreement with all social guarantees
remained.
Most Important
Events of 2007
FEBRUARY
Michail Popov, First Deputy President of “NOVATEK”
JSC, and Vladimir Busygin, General Director of
“Nizhnekamskneftekhim” INC, signed a Protocol of
Intention, which defines major objectives in develop-
ing cooperation between the two companies for the
period until 2009 and long-term period until 2012.
Specialists of “Nizhnekamskneftekhim” INC, “Basell”
and “Tecnimont” successfully completed the per-
formance guarantee tests for the homopolymer
grade at the PP Production Facility.
MARCH
Vladimir Busygin, General Director of “Nizhnekam-
skneftekhim” INC, became winner of the TR contest
“The Law Territory” in nomination “For Substantial
Contribution to Maintaining Law-Enforcement Activi-
ties”.
22
APRIL
At the regular annual shareholders conference of
“Nizhnekamskneftekhim” INC, R. Minnikhanov stated
that “Nizhnekamskneftekhim” INC had successfully
materialized the objectives put forward by the TR
Government and Security Council. That very same
day, Ethylene Plant inaugurated startup of cracker
SRT-VI.
“Nizhnekamskneftekhim” INC hosted a session, with
the TR Deputy Prime Minister Ravil Muratov attend-
ing, which reviewed the ways of introducing a new
system of personnel industrial training.
The Company subdivisions had their Environmental
Management Systems audited. The experts of Czech
Quality Association CQS, which is a certification
authority of IQNet, assessed the systems as positive
in conforming to the international standard require-
ments.
MAY
Divinyl & HC Feed Plant put in operation a Divinyl Unit
to reprocess butanes into isobutane and isobutylene
fractions. Due to that a feedstock reprocessing line
“throughput” increased by 15-20%.
National Association of Inspection and Welding certi-
fied 30 welding procedures applied at Maintenance
Works.
JUNE
Oligomer Plant produced 1-hexene of polymeriza-
tion purity. The first lot of the product was shipped to
users.
“Nizhnekamskneftekhim” INC was honored with a
diploma “For Best Debut and Professional Booth
Work” per the results of the Exhibition “CHEMINEX/
Chemical Industry” in the context the Russian Na-
tional Industrial Forum “Industrial Technologies for
Russia 2007”.
Over the past month, Ethylene Plant operated with a
maximum possible feed charge and a record monthly
ethylene output of 47,733 t and propylene – 23,505 t.
“Nizhnekamskneftekhim” INC hosted a group of
specialists from TOO “KazRosGaz” – a JV of OAO
“Gazprom” and AO “National Company “KazMu-
nayGaz”. The Parties discussed the issues of mutual
cooperation.
I. Larionov, Deputy General Director-Head of Corpo-
rate Property & Investment Department of “Nizh-
nekamskneftekhim” INC attended IX Conference
of the Russian financial market players “Regional
Infrastructure of Securities Market: Problems and
Prospects”, which took place in Kazan.
Nizhnekamskneftekhim INC Annual Report, 2007 23
JULY
The work of thousands of petrochemical employees
turned a 40-year anniversary of the Company into a
festival which on a large scale continued for two days.
A letter of gratitude was addressed to the person-
nel of “Nizhnekamskneftekhim” INC for an ample
contribution to the development of the petrochemi-
cal industry. Head of the Company Vladimir Busygin
was awarded a medal “For Valiant Labour”. Scores
of employees were given the awards of the Russian
Federation and Republican value.
AUGUST
August 1, the Ice-Hockey Palace of “Nizhnekam-
skneftekhim” INC hosted a solemn anniversary cer-
emony attended by M. Shaimiyev – the TR President,
A. Reus – the RF Deputy Minister of Industry and
Energy, managers of overseas and Russian compa-
nies – partners of “Nizhnekamskneftekhim” INC, as
well as the Company veterans.
August 1, M. Shaimiyev – the TR President took part
in inaugurating a cogeneration unit (GTU-75) featur-
ing a combined cycle to produce electric power and
steam, which means for the Company as the first
step in generating captive electric and heat energy.
SEPTEMBER
The Personnel Department of “Nizhnekam-
skneftekhim” INC was honoured with a title “Best
Personnel Unit’2007” per the results of the All-Rus-
sian contest.
A Filling Station of Divinyl and HC Feed Plant put into
service a rail weighbridge enabling to weigh rail cars
in static and dynamic conditions.
At its Charity Forum, “Nizhnekamskneftekhim” INC
on a large scale presented its charitable and spon-
sorship activities. Donations collected at the Fair and
at the Store of Good Deeds were forwarded to Kinder-
garten No.29 for children with poor hearing, correc-
tion kindergartens, to families with many children
and to support a cadet school.
OCTOBER
The Company Management took a decision to re-
condition a summer-time recreation centre “Leafy
Grove” to transform it into a year-round unit.
Most Important
Events of 2007
24
NOVEMBER
Annual Report and corporate website of “Nizh-
nekamskneftekhim” INC were honored with a prize
at X Annual Federal Contest for annual reports and
websites in nomination “For Comprehensive Informa-
tion at Website and in Annual Report”.
November 20, M. Shaimiyev – the TR President took
part in launching a Town Water Treatment Plant.
Synthetic Isoprene Rubber Plant started to produce a
new type of rubber — LiBR.
DECEMBER
General Director V. Busygin was awarded an honor-
ary medal “For Active Participation in Development
and Implementation of Ecology Programs” and a Cup
per the results of the All-Russian contest.
The Youth Organization of the Company won at the
republican show-contest for the best youth organiza-
tion of the TR Labour Federation.
“Nizhnekamskneftekhim” INC was recognized
as a winner in nomination “Leader of External
Trade’2007” per the results of the All-Russian contest
“Customs Olympus’2007”.
In line with the program on ethylene expansion up to
600 Ktpa, Ethylene Plant of “Nizhnekamskneftekhim”
INC put into operation an additional “cold” box E-EA
3004 intended to recover light HC fractions from con-
tact gas. It enabled to augment charging into crack-
ing heaters, and, accordingly, ethylene and propylene
output.
25Nizhnekamskneftekhim INC Annual Report, 2007
Consciousness of labor fruitfulness is one of the best pleasures.
Leo Tolstoy
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Activity Results
| Key Financial- Economic Indices of the Activities
| Balance Sheet
| Profit and Loss Statement
| Notes to Financial Statements for 2007
| Auditor's Report
| Findings of the Auditing Committee
27
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Key financial — economic indices
KEY FINANCIAL-ECONOMIC INDICES OF THE ACTIVITIES OF NIZHNEKAMKNEFTEKHIM
Output of marketable products in 2007 mounted to 55.2 billion rubles, exceeding
the level of the last year for 9.2 billion rubles. The growth of commercial output
compared with the level of 2006 has made 112.0 %. in comparable prices.
The products and services have been sold for the amount of 58.7 billion rubles.
Export share of commercial output mounted to 52 %.
Production of key products in kind
Activity Results
No. Description Measuring unit 2005 2006 2007
1. Commercial output mln. rubles 39,825.6 46,027.0 55,192.1
2. Sales of products, total mln. rubles 42,062.3 47,527.0 58,726.1
- including sales of marketable products mln. rubles 39,638.9 46,586.8 56,468.1
3. Expenses per 1 ruble of marketable products copecks 83.85 87.65 87.92
4. Before tax profit mln. rubles 3,500.9 4,692.6 5,616.5
5. Maintenance costs of social welfare institutions mln.rubles 606.7 692.4 748.7
6. Number of production personnel Man 18,953 19,039 18,955
7. Average monthly rate of wages of production personnel
Rubles 15,027 17,173 20,290
No Description Meas. units 2004 2005 2006 2007 2007/2006 in %%
1. Synthetic rubber SKI Tons 181,129 164,733 163,700 178 890 109.3
2. EPDM Tons 9,638 11,693 11,207 9,377 83.7
3. SBR – N Tons 29,318 62,107 72,332 82,996 114.8
4. Butyl rubbers Tons 81,415 94,617 107,726 107,156 99.5
5. Butadiene Tons 61,053 87,152 93,666 101,380 108.2
6. Ethylene Tons 450,133 465,339 480,691 511,069 106.3
7. Propylene Tons 199,100 203,132 212,640 260,041 122.3
8. Benzene Tons 171,705 179,762 187,593 195,690 104.3
9. Styrene Tons 250,980 276,800 283,264 287,814 101.6
10. MEG Tons 138,262 117,156 99,265 113,613 114.5
11. Ethylene oxide Tons 270,008 272,266 276,492 278,619 100.8
12. Propylene oxide Tons 67,250 69,142 68,518 72,234 105.4
13. Polyethers Tons 68,458 79,259 78,407 83,943 107.1
14. Propylene trimers Tons 59,539 49,048 42,827 28,932 67.6
15. Propylene tetramers Tons 22,496 17,355 17,817 10,950 61.5
16. Neonols Tons 122,708 122,846 121,870 117,899 96.7
17. Polystyrene Tons 48,589 78,871 106,986 123,031 115
18. Polypropylene Tons 0 0 19,944 155,029 0
19. Polyethylene Glycol Tons 0 0 6,104 22,964 0
28
0
0.5
1
1.5
2
2.5
Quick liquidity ratio
Overall liquidity ratio
1.9
1.3
1.3
0.8
1.95
1.13
2.3
1.6
2004 2005 2006 2007
| Key Financial- Economic Indices of the Activities
| Balance Sheet
| Profit and Loss Statement
| Notes to Financial Statements for 2007
| Auditor's Report
| Findings of the Auditing Committee
Intensity of operation of production facilities
Dynamics of liquidity indices
Liquidity ratios remain within normative that is the evidence of the Company am-
ple funds availability for repayment of its short-term liabilities.
No. Production Capacity. %, % to the last year
2005 2006 2007
1. Synthetic rubber SKI-3 68.7 68.2 74.5 109.2
2. Butyl rubber 102.9 117.1 116.5 99.5
3. Ethylene 103.9 107.3 114.1 106.3
4. Propylene 105.8 110.0 135.4 123.1
5. Styrene EBS 85.9 90.5 88.1 97.3
6. Styrene SMPO 122.8 123.2 128.7 104.5
7. Propylene oxide 118.2 117.1 123.5 105.5
8. Ethylene oxide, first production line 72.8 71.2 67.3 94.5
9. Ethylene oxide, second production line 92.4 95.5 98.9 103.6
10. Polyether, Styrene and Polyether Resin Plant 104.4 101.6 106.2 104.5
11. Monoethyleneglyco l-1 84.4 68.0 83.4 122.6
12. Polystyrene 157.7 107 123 115
13. Polypropylene - - 103.4 -
Nizhnekamskneftekhim INC Annual Report, 2007 29
8.7 12
.6
58.6
0
10
20
30
40
50
60
70Wear factor (%)
Renewal factor (%)
Retirement factor (%)
21.2
0.6
47.4
11.9
1
0.87
20062005 2007
49.2
200
400
600
800
1,000
1,200
691.
7
148.
8
743.
1
184.
9
866.
7
208.
0
1,13
8.4
258.
2
Availability of funds, in thousand rubles
Average monthly labor productivity of one worker, in thousand rubles
02004 2005 2006 2007
Dynamics of efficiency indices of the production
The flow of fixed assets
Activity Results
30
20,3
43.6
22,1
63.3 25
,183
.7 28,2
79.1
5,000.0
10,000.0
15,000.0
20,000.0
25,000.0
30,000.0
20052004 2006 20070.0
| Key Financial- Economic Indices of the Activities
| Balance Sheet
| Profit and Loss Statement
| Notes to Financial Statements for 2007
| Auditor's Report
| Findings of the Auditing Committee
Dynamics of net assets, mln.rubles
Information on payments to the budget, RUR thou
The Company is effecting timely and in full current payments to budgets of all
levels within the terms specified by the legislation.
Description Charged Transferred
Budget of the Russian Federation 3,050,087 3,193,462
including Customs duties 266,791 269,540
Budget of Tatarstan Republic, including targeted budget funds
2,143,896 2,208,890
Local budget 453,765 453,942
Other entities of the Russian Federation 12,846 12,496
TOTAL 5,660,594 5,850,790
31Nizhnekamskneftekhim INC Annual Report, 2007
Balance sheetActivity Results RUR K
ASSETS At financial year beginning At accounting period end
I. Non-circulating assets
Intangible assets 320 253
Fixed assets 19,928,423 23,229,792
Uncompleted construction 4,401,083 5,493,505
Income investments in stocks of materials and capital equipment — —
Long-term financial investments 5,936,786 6,892,057
Deferred tax assets 96,705 109,577
Other non-circulating assets — —
Subtotal 30,363,317 35,725,184
II. Circulating assets
Inventories 5,977,532 5,896,204
including:
Feedstock, materials & other similar values 3,654,043 3,392,442
Livestock nurturing and fattening 26 26
Costs of uncompleted production units 1,515,212 1,790,845
Finished products and commodities for resale 48,453 50,001
Goods shipped 182,826 154
Future period expenses 576,972 662,736
Other inventories and costs — —
VAT on acquired values 1,067,921 855,232
Receivables (expected to be paid in more than 12 months after the report-ing date)
82,479 128,182
Including Buyers & Customers 82,479 128,182
Receivables (expected to be paid within 12 months after the reporting date)
7,493,169 7,610,079
Including Buyers & Customers 4,430,689 2,338,517
Short-term financial investments 313,535 168,915
Cash 625,172 188,178
Other circulating assets — —
Subtotal 15,559,808 14,846,790
BALANCE 45,923,125 50,571,974
LIABILITIES At financial year beginning At accounting period end
III. Capital & Reserves
Authorized capital 1,830,240 1,830,240
Owned stock redeemed from shareholders — —
Additional capital 10,258,941 10,228,345
Reserve capital 112,445 112,445
including:
Reserve funds established as per the Law — —
Reserves established as per the constituent instruments 112,445 112,445
Non-distributed profit (outstanding loss) 12,939,619 16,068,930
Subtotal 25,141,245 28,239,960
32
| Key Financial- Economic Indices of the Activities
| Balance Sheet
| Profit and Loss Statement
| Notes to Financial Statements for 2007
| Auditor's Report
| Findings of the Auditing Committee
Manager Chief Accountant
RUR K
IV. Long-term liabilities
Loans & credits 12,463,550 10,967,559
Deferred tax liabilities 628,683 811,860
Other long-term liabilities — —
Subtotal 13,092,233 11,779,419
V. Short-term liabilities
Loans & credits 523,288 2,772,173
Payables 6,857,386 6,821,239
including:
Suppliers & Contractors 4,095,445 4,321,914
Debts to Company personnel 212,696 294,065
Debts to state off-budget funds 49,612 61,924
Tax and due debts 159,875 156,301
Other lenders 2,339,758 1,987,035
Profit payment debts to partners (founders) 146,545 678,325
Future period revenues 42,424 39,136
Reserves of forthcoming expenditures — —
Other short-term liabilities 120,004 241,722
Subtotal 7,689,647 10,552,595
BALANCE 45,923,125 50,571,974
Report on availability of values included in off-balance accounts
Rented fixed assets 93,878 300,613
including leased ones 93,878 165,49
Inventories accepted for responsible storage 8,991 8,991
Goods accepted for commission — —
Debts of insolvent debtors written off as loss 47,293 53,294
Liability and payment security received — —
Liability and payment security issued 9,408,759 3,115,414
Available housing deterioration 12,976 14,719
Deterioration of external accomplishment facilities and other similar facilities
3,392 4,457
Intangible assets received for application — —
Cost of other values 194,929 268,294
33Nizhnekamskneftekhim INC Annual Report, 2007
Profitand loss statement
Consolidated Profit and Loss Statement
in thousand rubles
Activity Results
Metrics For the accounting period For the similar period of the previous year
Designation Code
1 2 3 4
PROFIT AND LOSS FROM ORDINARY ACTIVITIES
Proceeds (net) from selling goods, products, labor, services (less VAT, excises & similar compulsory pay-ments)
10 58,726,102 47,526,951
Cost of goods, products, labor, services sold 20 -47,080,119 -37,375,998
Gross profit 29 11,645,983 10,150,953
Business costs 30 -1,630,000 -1,673,738
Administrative costs 40 -2,986,815 -2,631,336
Profit (loss) from sales 50 7,029,168 5,845,879
OTHER PROFIT AND LOSS
Interest receivable 60 53,904 193,640
Interest payable 70 -737,937 -835,683
Profit for partnership with other organizations 80 68,539 64,878
Other receipts 90 4,406,435 4,139,953
Other losses 100 -5,203,629 -4 716,056
Pretax profit (loss) 140 5,616,480 4,692,611
Deferred tax assets 141 12,872 7,734
Deferred tax liabilities 142 -183,178 -114,836
Current income tax 150 -1,364,483 -1,206,312
Income tax and other similar payments 160 14,692 -55,506
Net profit (loss) of the accounting period 190 4,096,383 3,323,691
FOR REFERENCE
Recurrent tax liabilities (assets) 200 190,007 191,282
Basic earnings (loss) per share 201 0 1.99
Diluted earnings (loss) per share 202 0 0
34
Description of Certain Receipts and Expenditures
in thousand rubles
Manager Chief Accountant
| Key Financial- Economic Indices of the Activities
| Balance Sheet
| Profit and Loss Statement
| Notes to Financial Statements for 2007
| Auditor's Report
| Findings of the Auditing Committee
Metrics Code For the accounting period For the similar period of the previous year
Designation profit loss profit loss
1 2 3 4 5 6
Penalties, fines and forfeits, acknowledged or for which court (arbitration court) decisions were obtained in respect of recovery thereof
210 36,894 51,950 26,707 46,922
Previous years profit (loss) 220 496,534 628,351 4,048 204,103
Reimbursement of losses caused by failure to fulfill obligations or by undue fulfillment thereof
230 8,295 0 662 0
Exchange rate difference for foreign currency transactions
240 1,480,532 932,600 1,299,037 427,463
Deductions to valuation reserves 250 Х 0 Х 19,059
Amortization of receivables and accounts payable with expired limitation period
260 18,107 18,811 55,244 1,238
Nizhnekamskneftekhim INC Annual Report, 2007 35
Notes to Financial Statements for 2007Activity Results
Financial accounting is performed in accordance with Federal Law of Russian
Federation dated 21.11.1996 No.129-FZ on Financial Accounting, and other regu-
lation documents.
Notes to Accounting Balance Sheet (Form No.1 BO)
In order to compare data for the previous financial period the figures in entries of
Accounting Balance Sheet (Form No.1 BO) have been changed without changing of
balance-sheet total:
Balance item Balance entry Amount as of the end of financial period 2006
Amount as of the beginning of financial period 2007
Deviation +;-(column 3 – column 4)
1 2 3 4 5
Long-term financial investments
140 5,896,739 5,936,786 -40,047 (loans granted to physical person)
Total for Section I 190 30,323,270 30,363,317 -40,047
Accounts receivable (expected to be paid during 12 months after reporting date)
230 122,526 82,479 40,047
Accounts receivable (expected to be paid during 12 months after reporting date)
240 6,587,311 7,493,169 - 905,858 (taxes and dues payments)
Other current assets 270 905,858 0 905,858
Total for Section II 290 15,599,855 15,559,808 40,047
36
| Key Financial- Economic Indices of the Activities
| Balance Sheet
| Profit and Loss Statement
| Notes to Financial Statements for 2007
| Auditor's Report
| Findings of the Auditing Committee
Fixed assets
Re-evaluation of fixed assets was not performed.
Asset acquisition during the year of 2007 is 5,257
million rubles, asset retirement during the year of
2007 is 340 million rubles.
Asset value for the reporting period was increased
by 1,409 million rubles at the expense of recon-
struction of production units.
Cost of undepreciated fixed assets is 308 million
rubles including domestic buildings of 273 million
rubles, motorways of 35 million rubles.
Initial value of fixed assets received under the
contracts, which provide obligation fulfillment
(payment) with non-monetary assets, is consid-
ered as the cost of valuable property transferred or
subjected to transfer by organization. It is defined
on the basis of cost, at which company defines
cost of equivalent valuable property in comparable
conditions.
In case of failure to define cost of transferred or
subjected to transfer valuable property, the cost
of fixed assets received by company under the
contracts, which provide obligation fulfillment (pay-
ment) with non-monetary assets, is defined on the
basis of cost, at which the similar objects of fixed
assets are purchased in comparable conditions.
Cost of fixed assets objects is paid off through am-
ortization accrual.
Amortization of fixed assets objects is accrued on a
straight-line basis.
Amortization for the fixed assets objects accepted
for financial accounting before January 1, 2002
is accrued on the basis of useful life established
at registration, according to the Uniform Code of
Amortization Charges for Restoration of Agricultural
Fixed Assets Funds ССО, approved by Directive of the
USSR’ Council of Ministers dated 22.10.90 No. 1072.
Amortization for the fixed assets objects accepted for
financial accounting after January 1, 2002 is accrued
on the basis of useful life established by Directive of
Russian Government No.1 dated 01.01.2002 on Clas-
sification of Fixed Assets included in Depreciation
Groups.
37Nizhnekamskneftekhim INC Annual Report, 2007
Intangible assets
Amortization is accrued on a straight-line basis. Amortization charges are record-
ed by collecting certain sums on individual sub-account. Useful life established by
company is:
4 years on average for patents; —
10 years for trademarks. —
Financial investment
Financial investment is accepted for accounting at
initial cost.
Retirement of financial investment, for which the cur-
rent market value is not defined, is made according
to initial cost for each unit in accounting of financial
investments.
For debt securities, the current market value of
which is not defined, writing off the difference
between initial cost and par value during circulation
period in proportion to payable income for company’s
financial results under conditions, is not applicable.
Financial investment includes contribution of 394
million rubles to Ordinary Partnership in accord-
ance with the contract. Purpose of joint cooperation
is construction of water treatment station at the 3rd
pumping unit in Nizhnekamsk.
Activity Results
38
0
1,000
2,000
3,000
4,000
5,000
6,000
8,000
7,000
up t
o 2
year
s
up t
o 3
year
s
up t
o 4
year
s
up t
o 5
year
s
up t
o 6
year
s
over
7 y
ears
155
739
112
1,53
7
1,61
9
6,80
5
Long-term liabilities
At placing of notes (obligations) to receive loan money
the sum of interest or discount due to noteholder is
included to miscellaneous expenses on straight-line
basis (monthly) with no use of unexpired costs ac-
count.
Credit and loan expenditures in form of interests are
calculated as of the end of each month.
Additional costs connected with loan and credit pro-
curements are recorded in such reporting period the
specified costs were made.
Loan and credit procurement costs, directly con-
nected with acquisition and (or) construction of
investment asset, are included into original cost of
this asset. Such costs are amounting to 168 million
rubles.
Should procured credits and loans are used for pay-
ment of inventories, the accrued interests for credits
and loans are recorded as the miscellaneous costs.
Due date for the main types of long-term loan li-
abilities:
Research and development activity
Writing off the expenditures for performed research
and development work, process work is made on
straight-line basis.
Expenditures for research and development are
included in overhead expenses on straight-line basis
(via accounts of the 30th order) during one year (for
research and development expenditures before 2006
— during three years, for research and development
expenditures in 2006 - during two years) from the
first day of month following the month, in which these
researches were completed according to contractual
conditions or to assignment for these research and
development works, and started to actually use.
| Key Financial- Economic Indices of the Activities
| Balance Sheet
| Profit and Loss Statement
| Notes to Financial Statements for 2007
| Auditor's Report
| Findings of the Auditing Committee
39Nizhnekamskneftekhim INC Annual Report, 2007 39
Inventory stocks
Recording of stock, materials and other similar
valuable property is made on the basis of actual cost
including cost specified in supply contract, ordering
costs and miscellaneous costs.
Flow recording of in-house manufactured semi-prod-
ucts and evaluation of them and of shipped goods
is performed in balance-sheet at accounting price
which is planning and standard value of production
(variable costs). Accounting price of in-house semi-
products is adjusted on monthly basis.
Goods purchased for resale are recorded in balance-
sheet at actual price.
Retirement of stock, materials and goods is per-
formed on the basis of average (moving) cost.
Reserves for reduction of valuable property cost are
created for each item of inventories and formed at
the cost of financial results per difference value be-
tween current market cost adjusted for material state
of inventory stocks and actual cost of inventories.
Notes to balance entries:
in entry 213 «In-process inventory costs» com- —
pleted scope of in-process works (as per State
Contract) is recorded as 83,300 thousand rubles);
record in entry 140 «Long-term financial invest- —
ment» expresses financial investment with
regard to long-term investment for one year and
loan at interest assigned to employees of the
Corporation with due date after 01.01.2009;
«Target financing and returns» are recorded in —
entry 660 «Other short-term liabilities»;
«Advances received » and «Other payables» are —
recorded in 625;
credit balance for account 69, except sub-ac- —
count «Federal budget settlements for Uniform
Social Tax», is recorded in entry 623 «State
extra-budgetary fund liability»;
credit balance for account 68 and credit balance —
for account 69 «Federal budget settlements for
Uniform Social Tax» in amount of 22,648 thou-
sand rubles are recorded in entry 624 «Tax and
fee liabilities»;
entry 960 «Securing of obligations and payments —
made» expresses guarantees issued to other
companies, amount of unsecured letter of credit
and collateral.
Activity Results
40
Notes to Form No.2 «Profit and Loss Report» of Balance Sheet:
In financial accounting proceeds are recognized at transfer of ownership.
Accounting of business expenses is made in Balance Sheet account “Merchandis-
ing costs” for corresponding sub-accounts.
Business and administrative costs are monthly charged off to reduction of sales
proceeds for the current month.
entries 020, 029, 040 are adjusted according to changes in accounting policy; —
result of currency sold in amount of 25 million rubles is recorded in entry 100; —
refund of profit taxes for previous years in amount of 37 million rubles and —
other similar payments are recorded in entry 160;
basic earnings per share for 2006 are 1.99 rubles as recorded in entry 201, —
dividend rate for reporting period is not declared, therefore basic earnings
per share are not calculated.
| Key Financial- Economic Indices of the Activities
| Balance Sheet
| Profit and Loss Statement
| Notes to Financial Statements for 2007
| Auditor's Report
| Findings of the Auditing Committee
41Nizhnekamskneftekhim INC Annual Report, 2007
Activity OutcomesActivity Results
Auditing Organization “AUDI”
420111, Kazan, Pushkin St., 18
Tel./Fax: (843) 236-86-71
e-mail: [email protected]
Auditor’s Report to Open Joint Stock Company Nizhnekamskneftekhim on Financial (Accounting) Statements.
Auditor: Limited Liability Auditing Company “Audi”.
Location: Pushkin St., 18, Kazan, 420111, tel.: (843)
236 86 71.
State Registration Certificate № 1021602853326 was
issued to OOO Auditing Company “Audi” by Inter-Dis-
trict Inspectorate of the Russian Federation Ministry
for Taxes and Dues №14 for the Republic of Tatarstan
on 06.12.2002.
The license for carrying out general audit №
E006382 was issued by the RF Ministry of Finance on
07.09.2004.
The license is valid until 07.09.2009.
OOO Auditing Company “Audi” is a member of the
Professional Auditors’ Union “IPAR”, certificate №846
dated August 18, 2005.
OOO Auditing Company “Audi” has Quality Certificate
№102 in respect of auditor’s services, issued by the
Professional Auditors’ Union “IPAR” on October 12,
2005.
Term of Certificate: until 12.10.2008.
Body being audited:
Name: “Nizhnekamskneftekhim” INC
Legal Address: Nizhnekamsk, Republic of Tatarstan,
423574.
Location: Industrial Area, Nizhnekamsk, Republic of
Tatarstan, 423570.
State Registration Certificate of “Nizhnekam-
skneftekhim” INC №1021602502316 dated 05.11.2002.
We audited the attached Financial (Accounting) State-
ments of “Nizhnekamskneftekhim” INC for the period
from January 1, 2007, to December 31, 2007, inclusive.
The Financial (Accounting) Statements of “Nizh-
nekamskneftekhim” INC comprises:
Accounting Balance Sheet (form № 1) as of Janu- —
ary 1, 2008;
Profit and Loss Statement (form № 2) from Janu- —
ary 1, 2007, up to December 31, 2007;
Statement on the Capital Changes (form № 3) —
from January 1, 2007, up to December 31, 2007;
Report on Cash Flow (form № 4) from January 1, —
2007, up to December 31, 2007;
Appendices to the Accounting Balance Sheet —
(form № 5) for the period from January 1, 2007,
up to December 31, 2007;
explanatory notes. —
Preparation and submission of this Financial (Account-
ing) Statements is the responsibility of “Nizhnekam-
skneftekhim” INC being the Executive Body.
Out duty is to express the opinion on reliability of this
Statements, in all essential respects, and on compli-
42
| Key Financial- Economic Indices of the Activities
| Balance Sheet
| Profit and Loss Statement
| Notes to Financial Statements for 2007
| Auditor's Report
| Findings of the Auditing Committee
ance of the accounting order with the Russian Federa-
tion Legislation based on the audit carried out.
We performed our audit in line with:
RF Federal Statute № 119-FZ of 07.08.2001 —
“About Auditing Activity”;
Effective Federal Regulations (Standards) of —
Auditing Activity;
Domestic Standards of Auditing Activity of OOO —
Auditing Company “Audi”;
Statutory Acts of the Authority Regulating Activity —
of the Body being Audited.
The audit was planned and performed in order to
obtain reasonable assurance that the Financial (Ac-
counting) Statements are free of significant falsifica-
tion. The audit was carried out on the selective basis
and included examining, on a test basis, evidence
supporting figures given in the Financial (Accounting)
Statements and disclosure therein information about
financial and economic activity, estimation of adher-
ence to principles and rules of making up the Financial
(Accounting) Statements, review of basic estimation
metrics, obtained by the management of the body
under audit, as well as estimation of the Financial (Ac-
counting) Statements concept.
The following data domain of business accounting
were audited: accounting of non-current and working
assets, accounting of funds and reserves, accounting
of long-term and short-term liabilities, accounting of
financial outcomes.
Based on the results of examination, the consolidated
auditor’s report was made out, as well as “Written
Information Letter of OOO Auditing Company “Audi” to
the Top Management of “Nizhnekamskneftekhim” INC
on the Auditing Results for 2007 Accounting Period”
was presented.
We believe, the audit performed provides a reason-
able basis to express our opinion on reliability of this
Financial (Accounting) Statements and on compliance
of the accounting order with the Russian Federation
Legislation.
In our opinion, the Financial (Accounting) Statements
of “Nizhnekamskneftekhim” INC present fairly, in
all material respects, the financial position as of
31.12.2007 and the results of financial and economic
activity for the period from January 01, 2007, to De-
cember 31, 2007, inclusive, in line with the require-
ments of the Russian Federation Legislation in the
part of the Financial (Accounting) Statements prepara-
tion.
The auditor’s examination was finished on March 7,
2008.
Auditing Organization Manager
(Auditor’s Qualification Certificate
K 016611 of 24.06.04)
S.E. Markaryan
Audit Manager
(Auditor’s Qualification Certificate
№ K017780 of 05.08.04)
A.G. Garyntsev
43Nizhnekamskneftekhim INC Annual Report, 2007 43
Findings
Of the Auditing Committee on the Results of Financial and EconomicActivity of “Nizhnekamskneftekhim” INC for 2007,Nizhnekamsk, March 18, 2008
The Auditing Committee of “Nizhnekamskneftekhim”
INC was elected at the general stockholders’ meeting
on April 26, 2007, based on Article 85 of the Fed-
eral Law “About Joint Stock Companies”, Statute of
“Nizhnekamskneftekhim” INC.
Auditing Committee Chairman:
Olga Vladimirovna Ignatovskaya
Auditing Committee Members:
Aleksey Ivanovich Belyaev —
Dmitriy Ivanovich Teslenko —
Rashit Gashikovich Salakhutdinov —
Nailya Zalyalyutdinovna Gilmutdinova —
During check-out procedure, the Committee reviewed
Annual Report, Annual Accounting Statements of
“Nizhnekamskneftekhim” INC for 2007, and Auditor’s
Report — OOO Auditing Company “Audi”, certifying
reliability of the Company’s Financial Statements.
Activity Results
In the course of such audit, it was defined, that:
“Nizhnekamskneftekhim” INC activity in 2007 1 |
was in compliance with the Russian Federa-
tion Legislation. The Accounting Statements
were prepared based on the effective Russian
Federation Accounting Rules. The accounting
policies as of 2007 was approved by Order №
787 dated 29.12.2006 of the General Director
of “Nizhnekamskneftekhim” INC.
Sales revenue in 2007 amounts to 58,726,102 2 |
thou. Rubles, profit on sales – 7,029,168 thou.
Rubles, pretax earnings – 5,616,480 thou.
Rubles, net income – 4,096,383 thou. Rubles.
44
The Company’s balance sheet assets as of 3 |
31.12.2007 equal to 50,571,974 thou. Rubles,
including the following:
Non-current assets amount to 35,725,184 —
thou. Rubles, among them 23,229,792 thou.
Rubles fall within fixed assets – 65.0% of the
Company’s total non-current assets;
Working assets amount to 14,846,790 thou. —
Rubles, among them 5,896,204 thou. Rubles
fall within inventories – 39.7% of the total
working assets, 7,738,261 thou. Rubles fall
within receivables – 52.1% of the total work-
ing assets;
Capital and Inventories amount to 28,239,960 —
thou. Rubles;
Long-term liabilities amount to 11,779, 419 —
thou. Rubles, among them 10,967,559 thou.
Rubles fall within loans and borrowings;
Short-term liabilities amount to 10,552,595 —
thou. Rubles, including 6,821,239 thou. Ru-
bles, which fall within payables.
Salaries were regular, the current arrears of
wages was equal to 294,065 thou. Rubles.
Net asset value of “Nizhnekamskneftekhim” INC 4 |
as of 31.12.2007 amounted to 28,279,096 thou.
Rubles. Increments of net assets for 2007 was
equal to 3,095,427 thou. Rubles.
The Company’s Accounting Statements allow to figure
out the complete and objective concept on financial
and economic activity of the Company and outcomes
thereof. No facts of breach of the order of Finan-
cial and Accounting Statements presentation were
disclosed. The accounting is in compliance with the
Russian Federation Legislation. The Company keeps
to the term of making Statements.
Based on audit and analysis of activity of “Nizh-
nekamskneftekhim” INC, the Auditing Committee,
taking into consideration the opinion of the Com-
pany’s auditor, has sufficient ground to confirm reli-
ability of the data, contained in the Annual Report and
Annual Accounting Statements for 2007.
| Key Financial- Economic Indices of the Activities
| Balance Sheet
| Profit and Loss Statement
| Notes to Financial Statements for 2007
| Auditor's Report
| Findings of the Auditing Committee
Chairman of Auditing Committee:
O.V. Ignatovskaya
45Nizhnekamskneftekhim INC Annual Report, 2007 45
There is nothing strong like idea the time of which has come.
Thomas Edison
46
Niz
hnek
amsk
neft
ekhi
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C A
nnua
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ort,
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7
Investment Activities
| Priority Trends of the Company Activities and Expected Future
Development
| Financing and Credits
47
4
Investment activities
Priority trends of the Company activities (results of the reported year) and expected future development
Completion of revamping of ethylene plant bring-1 |
ing the ethylene production up to 600,000 t/y.
Completion of construction of a polyethylene pro-2 |
duction plant with the capacity of 230,000 t/y.
Completion of construction of the third stage of 3 |
polystyrene plant with capacity of 50,000 t/y.
Continuation of work on comprehensive project 4 |
for revamping and expansion of rubber produc-
tion units:
Production of butyl rubber and halobutyl —
rubber — up to 120,000 t/y.
Production of ND catalyzed PBR - up to —
100,000 t/y.
Production of styrene-butadiene rubber and —
lithium catalyzed PBR with total capacity up
to 100,000 t/y.
Continuation of work on setting-up the produc-5 |
tion of ABS-plastics with the capacity of 60,000
t/y.
Continuation of work on the project of production 6 |
of expandable polystyrene with the capacity of
40,000 t/y
Continuation of work on implementation of 7 |
comprehensive enterprise management system
based on R/3 software package, SAP AG com-
pany.
Implementation of energy saving program up to 8 |
2010 year.
Implementation of activities of ecological pro-9 |
gram.
Implementation of comprehensive strategic pro-10 |
gram of development until the year of 2012.
Investment Activities
48
Financing and credits
Construction of polyethylene plant 1 |
Financing of expenditures related to the project was arranged through the
credit facility under SACE guarantee (120 million US dollars for the term of 10
years arranged by Citibank).
Revamping of ethylene complex 2 |
Long-term credit facilities (6 – 10 years) of Bayerische Hypo und Vereinsbank
AG were established for financing of contracts for imported equipment totally
amounting to 33.125 million euro and credit facility from Moscow International
Bank for 13.6 million euro.
In the course of the year the short-term borrowed assets provided by ZAO KB 3 |
Citibank and ZAO UniCredit Bank were used for budgeting of capital invest-
ment program, also credit funds of HSBC bank in the amount of 30 million US
dollars were used in 2007.
In 2007 the Company made the advanced repayment of credits totally amount-4 |
ing to 122.88 million US dollars.
| Priority Trends of the Company Activities and Expected Future
Development
| Financing and Credits
Nizhnekamskneftekhim INC Annual Report, 2007 49
Having future requires being able to do something new.
Peter Drucker
50
Niz
hnek
amsk
neft
ekhi
m IN
C A
nnua
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ort,
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7
Risks Related to the Company’s Business
| Industrial Risks
| Country and Regional Risks
| Financial Risks
| Legal Risks
| Risks Related to the Company's Activity
51
5
Industrial risks
“Nizhnekamskneftekhim” INC conducts its business
in the petrochemical industry sector. Raw mate-
rial and power industry have the highest ratio in the
structure of costs in this branch. The major risks
could be the price changes of raw material, energy
and products manufactured.
In 2007 the world prices for crude oil were grow-
ing under the influence of close balance of demand
and supply, geopolitical risks (war in Lebanon, tense
situation in the North Korea and Iraq), as well as
speculative behaviour of market players. Average
annual price of Brent crude oil reached 72.63 dollars
per barrel, which is 11% higher than in 2006. Accord-
ing to the last forecast of Purvin & Gertz the average
annual price of Brent grade in 2008 will grow to 85.44
dollars per barrel, which is 18% higher than in 2007.
The prices of crude oil render immediate impact on
the straight-run naphtha – basic feedstock for pet-
rochemistry. In 2007 the European prices of naphtha
had a tendency to rise that resulted in the next all-
time highest prices of some aromatic hydrocarbons
and their derivatives: benzene, styrene, polystyrene
etc. Average annual price increased by 20% com-
Risks Related
to the Company’s
Business pared to 2006. The highest growth was registered in
the 4-th quarter of 2007 when the price quotations of
straight-run gasoline reached absolute record - 870
dollars/ton, FOB Rotterdam. According to Chemical
Market Associates Inc. it is expected that the price of
naphtha in 2008 will rise by 16% in comparison with
2007.
Thus, “Nizhnekamskneftekhim” INC. as well as other
enterprises of the branch, operates in conditions
fraught with risks, mainly caused by escalating prices
of raw material and utilities. Risks, connected with
possible change of prices of the company’s products,
depend on the conditions of the global petrochemical
market. Normally the growth of prices for finished
products in the world market falls behind the growth
of feedstock prices.
The main risk factor in 2007 was the highest ever
price of petrochemical feedstock. However, the
growth dynamics of production sales export was
maintained in 2007: “Nizhnekamskneftekhim” INC
increased the export in money terms by 16% com-
pared to 2006. The increase of export volumes was
promoted by 19% growth of synthetic rubber, 93% of
plastics, 6% of ethylene oxide and its derivatives, 3%
of oligomer products and others.
The market of rubber and plastics is assessed by our
Company as being steady in 2008 maintaining the
high level prices. Due to reduction of European ca-
pacities of polystyrene and polypropylene production
in 2006 – 2007 and also the delay of implementation
of some declared projects of cracking units in Asia
and Middle East as well as production of styrene and
monoethylene glycol, it is possible to forecast that the
52
| Industrial Risks
| Country and Regional Risks
| Financial Risks
| Legal Risks
| Risks Related to the Issuer’s Activity
favorable balance will be maintained in the foreign
market in the near-term outlook. The strengthening
cooperation of “Nizhnekamskneftekhim” INC with
the major consumers of rubber products (Miche-
lin, Pirelli, Goodyear, Continental, Bridgestone, JSC
Belshina) allows to schedule general increase of
volumes of production and sales of synthetic rubber,
including available hydrocarbon production, such as
butyl, halobutyl and butadiene rubber, and also new
kinds of rubber (SBR and Lithium PBR) having good
potential in the global market. And this in its turn
shall minimize the risk of reduction of sales volumes
of the main product group – synthetic rubber that is
50% of export.
Besides, the high degree of vertical integration of
“Nizhnekamskneftekhim” INC allows prompt adapta-
tion of the portfolio of the company’s production for
varied conditions of the market with the purpose of
receiving the maximum profit from sales.
Substantial advantage of “Nizhnekamskneftekhim”
INC in the export activities, which allows minimiza-
tion of the potential risk caused by high prices of raw
material and products, is that our Company does
not fix the price for long-term period when conclud-
ing contracts for certain product volumes, which
permits to respond dynamically to the situation with
raw material. In case of unfavorable foreign market
conditions our Company has the opportunity to direct
a part of deliveries to the domestic market and vice
versa.
Resolution of issues of raw material and power
supply is promoted by close cooperation with the
companies of a petrochemical and energy complex,
and also the policy of the higher management of the
Republic of Tatarstan aimed at the active governmen-
tal support of the entire oil-gas-chemical complex of
the Republic.
Nizhnekamskneftekhim INC Annual Report, 2007 53
Risks Related
to the Company’s
Business “Nizhnekamskneftekhim” INC is one of the largest
enterprises of petrochemical industry in the Russian
Federation. Political and economic situation in the
modern Russia has a significant effect on the activi-
ties of our joint-stock company.
The economic situation of the Russian Federation
is characterized by sustained growth and stability.
It should be emphasized that for the last years the
risk of social and political instability in the country
has substantially declined, which basis were the low
incomes of the people being under social security
(education, medicine, law-enforcement agencies,
retirees). “Nizhnekamskneftekhim” INC gives large
attention to questions related to social risks, and
conducts active social policy in the region.
Country and regional risks
There are no risks related to geographical features
of the country and region, in which the company
conducts its basic business, since the place of dis-
position of the plant is characterized by absence of
danger of natural disasters. Besides, in view of the
level of development of a transport infrastructure,
there are no risks of the cease of the communication
due to geographical inaccessibility and remoteness.
The convenience of disposition allows smooth ship-
ping of products by railway and motor transport from
warehouses of the Company.
In the present-day conditions the state of domes-
tic chemical and petrochemical industry in many
respects depends on export volumes. Therefore the
most beneficial segments of chemical and petro-
chemical complex were and still remain the produc-
tion enterprises operating not only on the home
market but also the ones with strong export potential.
54
| Industrial Risks
| Country and Regional Risks
| Financial Risks
| Legal Risks
| Risks Related to the Issuer’s Activity
“Nizhnekamskneftekhim” INC holds the leading
position among the Russian producers and export-
ers of petrochemicals. Basically there is a permanent
demand for all products produced by “Nizhnekam-
skneftekhim” INC on the external market, whose
capacity is many times higher than the domestic
market. In case of any failures in operation of domes-
tic consumers of products, “Nizhnekamskneftekhim”
INC has the opportunity to redistribute the flows of
goods of the Company between the foreign and the
domestic markets. Besides, the extensive geogra-
phy of product deliveries to foreign markets allows
the redistribution of product deliveries, if necessary,
between the individual countries.
“Nizhnekamskneftekhim” INC exports its products to
50 countries worldwide. The main share of products
is supplied to the countries of Europe, non-suscepti-
ble to serious political risks and natural disasters, as
well as the USA.
As to other major export markets, including the
countries of South-East Asia (South Korea, Taiwan,
China, India), at present the political stability is
observed in these countries-consumers of prod-
ucts of “Nizhnekamskneftekhim” INC along with
positive rates of economical growth, which ensures
the steady demand for products of “Nizhnekam-
skneftekhim” INC.
Thus, owing to a convenient site and advanced trans-
port and other infrastructure, and also to high export
potential, the Company has all possibilities to reduce
to the minimum the regional and country risks re-
lated to its business.
Nizhnekamskneftekhim INC Annual Report, 2007 55
Risks Related
to the Company’s
Business Exposure of “Nizhnekamskneftekhim” INC to risks
associated with change of the interest rates, ex-
change rate of foreign currencies, in connection
with business of the company or in connection with
hedging, conducted by the Company for the purpose
of reduction of adverse consequences of impact of
above risks:
Risk of change of the interest rates
Some long-term transactions of “Nizhnekam-
skneftekhim” INC use floating interest rates (based
on LIBOR or EURIBOR) therefore there is a risk of
cost increase of such borrowings.
Factor of decrease: such transactions (credit
transactions, where floating interest rates are used)
provide for the mechanism of switching to fixed inter-
est rate.
Risk of the exchange rates
The main part of credit liabilities of “Nizhnekam-
skneftekhim” INC is nominated in US dollars. There-
fore there is a certain currency risk related to the
increase of exchange rate of US dollar/ruble.
Factor of decrease: about 60% of total revenue of the
company is based on the export sales of products.
The main currency of export sale proceeds is US dol-
lar, which certainly reduces this currency risk.
Financial risks
Besides, there is a risk to “Nizhnekamskneftekhim”
INC, related to the fact that the main prices for
products are defined in US dollars while the consid-
erable part of expenses incurred by the Company is
in rubles. Use of instruments for hedging of currency
risks in the Company’s practice would help reduce
this risk.
Inflation impact on securities payment as well as presumed actions of the Company directed to reduction of this risk
There is no considerable affect of current inflation
rate on the Company’s financial status. Price esca-
lation caused by the change of inflation rate shall
proportionally increase both the production costs and
the proceeds of the Company.
In case of unfavorable change of general inflation
figures “Nizhnekamskneftekhim” INC intends to re-
duce the delays of payments for its counterparties to
optimize the control of accounts receivable and costs.
The critical inflation values (according to Company
opinion) is over 25% a year, however the Company
estimates the probability of inflation escalation in
Russia in the midterm as fairly low in view of anti-
inflationary policy pursued by the Russian Federa-
tion government and the Central Bank of Russian
Federation
56
| Industrial Risks
| Country and Regional Risks
| Financial Risks
| Legal Risks
| Risks Related to the Issuer’s Activity
In case of unfavorable change of interest rates
(raising) “Nizhnekamskneftekhim” INC considers to
gradually reduce the volumes of short-term loans
and credits, there is also a possibility of gradual
switching over to long-term credit resources with
floating interest rate.
Valuation of contracts with foreign counter-agents is
performed in US dollars, in case of the dollar’s fall in
relation to national currency the Company’s returns
in rubles could decrease. But the exchange risks,
including the risk of the dollar downing relative to
ruble, are included in all newly concluded contracts.
Indices of the financial statements of “Nizhnekamskneftekhim” INC that are mostly subject to changes resulted from financial risks, and also risks affecting the indices of the fiscal accounting of our joint-stock company, probability of their origin and behavior in the financial statements
Sections of the financial statements of “Nizhnekam-
skneftekhim” INC that are mostly subject to changes
caused by the specified risks: section of accounts
payable, net profit as well as cost price. In case of
occurrence of above-stated financial risks, the net
profit can decline, the debt service expense would in-
crease and consequently the cost value too. Probabil-
ity of such risks is insignificant. The specified factors
will necessitate attraction of extra money resources,
and that again will result in the increase of accounts
payable.
Fast growth of inflation and interest rates for bor-
rowed assets could greatly impact the figures of
financial statements of “Nizhnekamskneftekhim” INC
(change of total balance). Regardless of economic
stabilization in Russia in recent years one cannot rule
out the possibility of above risk occurrence.
Nizhnekamskneftekhim INC Annual Report, 2007 57
Risks Related
to the Company’s
Business Conducting its economic activity in the territory of the
Russian Federation, “Nizhnekamskneftekhim” INC is
exposed to legal risks, connected with:
change of currency regulations; —
change of the tax laws; —
change of rules of the customs control and du- —
ties;
change of the judicial opinion on the issues —
related to the company’s business (including
licensing), which can adversely affect the results
of its business.
Besides, Russian legal structure has some specific
risks, such as the presence of contradictions between
the regulations of same level and/or different levels,
lack of identical interpretation of standards, high degree
of actual power of executive bodies as well as possible
lack of experience of judges when delivering the judg-
ment.
Risks associated with changes of the currency legislation
Sudden change of currency control could complicate the
appropriate execution of obligations under agreements
(contracts), earlier concluded with contracting parties
(Russian and foreign), which call for making payments
on these in foreign currency and it could necessitate the
conclusion of the supplementary agreements for such
contracts. In this context “Nizhnekamskneftekhim” INC
is largely dependent on the changes of currency legisla-
tion. It should be noted that the Federal law #173-F3
dated 10.12.2003 “On currency exchange regulation and
Legal risks
control” compared to the previous law has expanded
the rights of participants of foreign economic activity
and created a foundation for further liberalization of
currency relations. The last changes of the currency
legislation were introduced quite recently therefore it is
unlikely that there will be next change in the short-term
future. Accordingly, it is not likely that the position of
the Company will go down because of any change of the
currency legislation.
Risks related to change of the tax legislation
As well as any other economic entity “Nizhnekam-
skneftekhim” INC is the participant of the tax relations.
“Nizhnekamskneftekhim” INC is one of the major
taxpayer of the Republic of Tatarstan making payment
of federal, regional and local taxes.
General principles of taxation in the Russian Federation
being the basis of the tax system in Russia have been
established by part one of the Tax code of the Russian
Federation. Part one of the Tax code of the Russian
Federation defines general rules that should be fol-
lowed by the subjects of tax legal relations and assigned
their rights and obligations as well as legal procedures
served to observe the rights and duties.
Among the most substantial changes that could have
an adverse effect on the Company business one could
point out any changes or amendments to legislative
acts on taxes and duties concerning the increase of tax
rates and also imposition of new categories of taxes.
Such changes as well as other changes of tax legislation
could result in the increase of tax payments and, as a
consequence, the decrease of the net profit of the Com-
58
| Industrial Risks
| Country and Regional Risks
| Financial Risks
| Legal Risks
| Risks Related to the Issuer’s Activity
pany. “Nizhnekamskneftekhim” INC assesses the legal
risks related to changes of tax legislation at the average
level. The Company always reacts to any changes of tax
legislation to ensure absolute and strict observance
of its requirements and the Company also perfectly
respects the revenue laws concerning its activity, how-
ever, this does not eliminate a potential risk of diver-
gence of views with relevant regulatory organizations on
the matters permitting ambiguous interpretation.
Risks related to change of rules of the customs control and duties
As the most part of the equipment acquired for produc-
tion is imported, or is made of foreign manufacture
components, the change of rules of the customs control
and duties could result in certain risks for our joint-
stock company associated with appreciation of the
acquired fixed assets.
At present basically new legal base of the customs
procedures is created in Russia complying with uni-
versally acknowledged standards, that provides for
direct regulation of legal relations in the customs area
based on the rules of RF Customs code #61-F3 dated
28.05.2003 and in the system of direct action rules. For
the purpose of improvement of operation of customs
authorities of the Russian Federation the large scope of
work was carried out for preparation of regulatory and
legal framework on the basis of RF Customs code, prac-
tice and experience of administration of international
legislation. Such changes in the customs legislation are
evaluated positively since they increased the transpar-
ency of customs procedures and simplified them.
No major changes of customs duties are foreseen for
products exported by the Company. Such risks are as-
sessed by the Company as minimal.
The risks related to change of the judicial practice on issues, associated with activity of the company (including licensing matters), which could have an adverse affect on the results of its business
Changes of requirements on licensing of the principal
activities of “Nizhnekamskneftekhim” INC, as well
as the change of the judicial practice on the matters
related to activities of the company (including licens-
ing issues), can have a negative effect on the business
activities of the Company in the event when because
of these changes the Company fails to receive (extend)
licenses required for its further business, or the current
licenses are withdrawn in a judicial procedure, however,
probability of occurrence of suchlike events is insignifi-
cant.
Probability of changes of judicial practice related to
activities of “Nizhnekamskneftekhim” INC (including
licensing issues) is considered negligible and shall not
have a material effect on its business. In case any modi-
fications are introduced in the judicial practice related to
activities of the Company, then the company shall plan
its financial and economic activities accordingly.
Nizhnekamskneftekhim INC Annual Report, 2007 59
Options for extension of licenses of our joint-stock company for certain lines of business or for projects that are restricted in any business (including natural resources)
Expiration of licenses causes the problems of per-
forming the licensed activities of the Company. Our
joint-stock company adheres to the requirements
of licenses, takes all necessary actions to obtain the
licenses and to maintain their validity and minimize
the probability of suspension, change or withdrawal
of a license - to avoid such risk the Company per-
forms the respective systematic work for timely re-
newal of licenses (re-issue of licenses). The Company
assesses the risk related to passible non-extention
of the Company Licenses as insignificant.
Risks attributed to changes of legislation or to reso-
lutions of federal or local authorities on licensing is-
sues are beyond control of “Nizhnekamskneftekhim”
INC and the Company shall not guarantee that there
will be no such changes in the future that could
adversely affect its business. However, at present
there are no conditions of legal, economic or political
nature that could cause complications of licensing
procedure or reduce the feasibility of license exten-
sion for “Nizhnekamskneftekhim” INC.
Risks Related
to the Company’s
Business
Risks related to the Company’s business
60
Liability of the Company for debts of third parties including the affiliates of “Nizhnekamskneftekhim” INC
Our Company assesses the risk of probable liability
for debts of third parties including the affiliates of the
Company as negligible.
| Industrial Risks
| Country and Regional Risks
| Financial Risks
| Legal Risks
| Risks Related to the Issuer’s Activity
Probability of loss of consumers with at least 10 per cent share of total sales proceeds of Company’s products (work, services)
In view of the high world demand for crude oil and
petrochemicals and also owing to extensive commer-
cial geography of “Nizhnekamskneftekhim” INC busi-
ness the Company considers that the risks of loss of
heavy consumers are non-significant.
Nizhnekamskneftekhim INC Annual Report, 2007 61
Unity of interests, unity of aims, unity of actions.
Henry Ford
62
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hnek
amsk
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Corporate Activities
| List of Corporate Documents
| Capital Stock
| Bonded Loans
| Dynamics of Dividend Payments on Equity
| Market Capitalization
| Credit Ratings
| Major Indices of Subsidiaries Activity
63
6
Corporate activitiesCorporate activities
The List of Corporate Documents currently in force at “NIZHNEKAMSKNEFTEKHIM” INC:
The Articles of “Nizhnekamskneftekhim” INC —
Regulations for the Board of Directors of “Nizhnekamskneftekhim” INC, —
revised version voted for by the General meeting of stockholders 26.04.2007
Regulations for the General meeting of stockholders ОАО “Nizhnekam- —
skneftekhim” INC., revised version voted for by the General meeting of
stockholders 26.04.2007
Statute on the Audit Commission activities of “Nizhnekamskneftekhim” INC., —
revised version voted for by the General meeting of stockholders 26.04.2007
Statute on Information Policy of “Nizhnekamskneftekhim” INC —
Statute on Dividends payoff Policy of “Nizhnekamskneftekhim” INC —
Statute on Administration of Internal Management of “Nizhnekam- —
skneftekhim” INC
Statute on Independent Directors of “Nizhnekamskneftekhim” INC —
“Nizhnekamskneftekhim” INC. in its corporate activities is guided
by the Code of Corporate Behavior recommended by FCSM RF Instruction
No. 421/p, dated 04.04.2002, and by the Code of Corporate Behavior
of “Nizhnekamskneftekhim” INC.
Capital Stock
The capital stock of “Nizhnekamskneftekhim” INC. as of 10.03.2008 is
Rbl.1,830,239,750 and split into 1,830,239,750 shares, Rbl.1 par value each, includ-
ing 1,611,256,000 ordinary (voting) registered shares and 218,983,750 preference
registered shares. All shares are placed with the public; there are no assessable
capital stock placed with the public. The capital stock is fully paid up.
The Articles of “Nizhnekamskneftekhim” INC. provide for availability of
27,400,000,000 declared ordinary registered shares and 218,983,750 declared
preference shares, Rbl.1 par value each, and within this number shares may be
issued additionally.
64
1 | ОАО Svyazinvestneftekhim (Management of "TAIF-Invest" Ltd.; in nominal holding of Central Depositary of RT)
461,307,20025.2% 28.6%
2 | Telecom-Management Ltd.
15.2% 17.3% 278,562,490
3 | MKB Avers OAO (nominal holder)
29.4% 33.4% 538,491,806
4 | Depository Company UralSib ZAO
8.1% 9.3% 148,876,375
173,325,3999.5%
5.3%
5 | ZAO DКК (nominal holder)
118,195,015
6.5%
2.1%
6 | Other legal entities and nominal holders
2.6%
1.4%
111,481,465
7 | Individuals (over 10,000 shareholders)
SHARES TOTAL:
1,830,239,750100%
Including voting shares
1,611,256,000100%
% to Capital Stock (%)
% voting shares (%)
Shares quantity
| List of Corporate Documents
| Capital Stock
| Bonded Loans
| Dynamics of Dividend Payments on Equity
| Market Capitalization
| Credit Ratings
| Major Indices of Subsidiaries Activity
Distribution of “Nizhnekamskneftekhim” INC shares as of March 01.03.2008
Nizhnekamskneftekhim INC Annual Report, 2007 65
Corporate activities
Securities issue data
No. Share type Number of shares in issue
Number of paid off shareson issue
Method of placement
Cost of placement Governmental body,in charge of issue registration, registration No.
Status of issue
Privatization plan by Decree №41 of RT State Committee for Property dd 11.08.93
1. ordinaryRbls.. 10.
6,445,024 6,445,024 private offering Rbls. 10 руб. at nominal value, Rbls 6,40 at a.discount
RT Ministry of Finance № 11-1п-423dated 18.08.93
Annulled
2. preferredRbls.. 10.
875,935 875,935 free of charge RT Ministry of FinanceNo. 11-1n-423 dd.18.08.93
Собрание акционеров 23.04.98
3. ordinaryRbls 1.
64,450,240 — conversion — FCCB of Russia № 1-02-00096-А от 28.12.98.
Placed
4. preferredRbls 1.
8,759,350 — — FCCB of Russia № 2-02-00096-А от 28.12.98.
Собрание акционеров 20.04.01
5. ordinaryRbls 1.
1,546,805,760 — distributed among shareholders
— FCCB of Russia 1-02-00096-А от 15.08.03.
Placed
6. preferredRbls 1.
210,224,400 — — FCCB of Russia № 2-02-00096-А от 15.08.03.
66
| List of Corporate Documents
| Capital Stock
| Bonded Loans
| Dynamics of Dividend Payments on Equity
| Market Capitalization
| Credit Ratings
| Major Indices of Subsidiaries Activity
“NIZNEKAMSKNEFTEKHIM” INC. bond issues
In November 2001, “Nizhnekamskneftekhim” INC. resorted to the first
Rbls.300,000,000 bond issue repaid in November 2002.
On 24.05.2002, “Nizhnekamskneftekhim” INC. placed the second
Rbls.1,500,000,000 bond issue that was repaid on the 24.05.2005.
On 02.09.2003, “Nizhnekamskneftekhim” INC. placed the third Rbls. 2,000,000,000
repaid 01.09.2007.
On 04.04.2005, “Nizhnekamskneftekhim” INC. placed the 4th Rbls. 1,500,000,000
bond issue with a 7 year maturity and half-year coupon payments. The half-year
coupon payments of the forth bond issue have been made before being offered
(02.04.2009) on 03.10.2005, 03.04.2006, 02.10.2006, 02. 04.2007 and 01.10.2007 at
the rate payments of 9.99%.
On 22.12.2005 “Nizhnekamskneftekhim” INC. completed placement of the first US
$200,000,000 Eurobond issue with a 10 year maturity and half-year coupon pay-
ments. The coupon payments’ schedule is strictly observed.
67Nizhnekamskneftekhim INC Annual Report, 2007
0
2
4
6
8
10
12
14
16
Year
0
20
40
60
80
100
120
140
160
Year
1994
5.5
5.5
1995
6 6
1997
1996
41515
1998
0.4
1.5
1999
0.5
1.5
2000
1.5
1.5
2001
0.05
40.
06
2002
0.05
40.
06
2003
0.06
20.
062
2004
0.18
550.
1855
2005
0.17
650.
1765
2006
0.54
480.
5448
2007
0.67
150.
6715
In Rbls.
In %to nominal
value
Ordinary registered shares Preferred registered shares
1994
55 55
1995
60 60
1997
1996
4015
0
150
1998
4015
0
1999
5015
0
2000
150
150
2001
5.4
6
2002
5.4
6
2003
6.2
6.2
2004
18.5
518
.55
2005
17.6
517
.65
2006
54.4
854
.48
2007
67.1
567
.15
Corporate activities
Dynamics of dividend payments on equity issues ОАО Nizhnekamskneftekhim
Total accrued dividends for the year 2007 amounts to 1,229,006 thousand Rubles
(BD recommendations). Extraordinary general meetings of stockholders of “Nizh-
nekamskneftekhim” INC. were not held in 2007.
68
Ordinary Preferred
22.1
1112
9.96
183
Total: 1,830,239,750
0
5
10
15
20
25
Market price as of 28. 12. 2007. Rbls.
Capital issues allowable for sales
1,611,256,000
218,983,750
Capitalization Rbls.
35,626,674,766.72
2,181,478,890.26
Total: 37,808,153,656.98
| List of Corporate Documents
| Capital Stock
| Bonded Loans
| Dynamics of Dividend Payments on Equity
| Market Capitalization
| Credit Ratings
| Major Indices of Subsidiaries Activity
Market capitalization “Nizhnekamskneftekhim” INC.
Information on Market capitalization “Nizhnekamskneftekhim” INC. 31.12.2007
Market capitalization of “Nizhnekamskneftekhim”
INC. shares is based on the buying price (demand)
on closing of the last selling day of the accounting
business period of aforementioned shares at the ОАО
Stock Exchange RTS.
One can find data on sales of ordinary and preference
shares of “Nizhnekamskneftekhim” INC., аs well as
data on current sales at the Web-site of ОАО Stock
Exchange RTS at the following address:
http://www.rts.ru. (http://www.rts.ru/ru/archive/agr-
securityresults.html).
For searching sales information one can use code
of the instrument (registered ordinary share) of
“Nizhnekamskneftekhim” INC. — nknc; preferred
registered shares of “Nizhnekamskneftekhim” INC. –
nkncp).
Note: from 12.10.2007 ordinary shares of “Nizh-
nekamskneftekhim” INC. are passed to sales in the
Quotation List «A2» ОАО Stock Exchange RTS.
69Nizhnekamskneftekhim INC Annual Report, 2007
09.0
1.20
07
16.0
1.20
07
23.0
1.20
07
30.0
1.20
07
06.0
2.20
07
13.0
2.20
07
20.0
2.20
07
27.0
2.20
07
06.0
3.20
07
13.0
3.20
07
20.0
3.20
07
27.0
3.20
07
03.0
4.20
07
10.0
4.20
07
17.0
4.20
07
24.0
4.20
07
01.0
5.20
07
08.0
5.20
07
15.0
5.20
07
22.0
5.20
07
29.0
5.20
07
05.0
6.20
07
12.0
6.20
07
19.0
6.20
07
26.0
6.20
07
03.0
7.20
07
10.0
7.20
07
17.0
7.20
07
24.0
7.20
07
31.0
7.20
07
07.0
8.20
07
14.0
8.20
07
21.0
8.20
07
28.0
8.20
07
04.0
9.20
07
11.0
9.20
07
18.0
9.20
07
25.0
9.20
07
02.1
0.20
07
09.1
0.20
07
16.1
0.20
07
23.1
0.20
07
30.1
0.20
07
06.1
1.20
07
13.1
1.20
07
20.1
1.20
07
27.1
1.20
07
04.1
2.20
07
11.1
2.20
07
18.1
2.20
07
25.1
2.20
07
01.0
1.20
08
08.0
1.20
08
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
09.0
1.20
07
16.0
1.20
07
23.0
1.20
07
30.0
1.20
07
06.0
2.20
07
13.0
2.20
07
20.0
2.20
07
27.0
2.20
07
06.0
3.20
07
13.0
3.20
07
20.0
3.20
07
27.0
3.20
07
03.0
4.20
07
10.0
4.20
07
17.0
4.20
07
24.0
4.20
07
01.0
5.20
07
08.0
5.20
07
15.0
5.20
07
22.0
5.20
07
29.0
5.20
07
05.0
6.20
07
12.0
6.20
07
19.0
6.20
07
26.0
6.20
07
03.0
7.20
07
10.0
7.20
07
17.0
7.20
07
24.0
7.20
07
31.0
7.20
07
07.0
8.20
07
14.0
8.20
07
21.0
8.20
07
28.0
8.20
07
04.0
9.20
07
11.0
9.20
07
18.0
9.20
07
25.0
9.20
07
02.1
0.20
07
09.1
0.20
07
16.1
0.20
07
23.1
0.20
07
30.1
0.20
07
06.1
1.20
07
13.1
1.20
07
20.1
1.20
07
27.1
1.20
07
04.1
2.20
07
11.1
2.20
07
18.1
2.20
07
25.1
2.20
07
01.0
1.20
08
08.0
1.20
08
0.2
0.1
0
0.3
0.4
0.5
0.6
0.7
0.8
Quoting for buying1 share (NKNC), $
Quoting for selling1 share (NKNC), $
Weighted average price of the deal (NKNC), $
Quotations of ordinary shares of “Nizhnekamskneftekhim” INC. at ОАО Stock Exchange RTS in 2007
Quotations of preferred shares of “Nizhnekamskneftekhim” INC. at ОАО Stock Exchange RTS in 2007
Corporate activities
70
09.0
1.20
07
16.0
1.20
07
23.0
1.20
07
30.0
1.20
07
06.0
2.20
07
13.0
2.20
07
20.0
2.20
07
27.0
2.20
07
06.0
3.20
07
13.0
3.20
07
20.0
3.20
07
27.0
3.20
07
03.0
4.20
07
10.0
4.20
07
17.0
4.20
07
24.0
4.20
07
01.0
5.20
07
08.0
5.20
07
15.0
5.20
07
22.0
5.20
07
29.0
5.20
07
05.0
6.20
07
12.0
6.20
07
19.0
6.20
07
26.0
6.20
07
03.0
7.20
07
10.0
7.20
07
17.0
7.20
07
24.0
7.20
07
31.0
7.20
07
07.0
8.20
07
14.0
8.20
07
21.0
8.20
07
28.0
8.20
07
04.0
9.20
07
11.0
9.20
07
18.0
9.20
07
25.0
9.20
07
02.1
0.20
07
09.1
0.20
07
16.1
0.20
07
23.1
0.20
07
30.1
0.20
07
06.1
1.20
07
13.1
1.20
07
20.1
1.20
07
27.1
1.20
07
04.1
2.20
07
11.1
2.20
07
18.1
2.20
07
25.1
2.20
07
01.0
1.20
08
08.0
1.20
08
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
09.0
1.20
07
16.0
1.20
07
23.0
1.20
07
30.0
1.20
07
06.0
2.20
07
13.0
2.20
07
20.0
2.20
07
27.0
2.20
07
06.0
3.20
07
13.0
3.20
07
20.0
3.20
07
27.0
3.20
07
03.0
4.20
07
10.0
4.20
07
17.0
4.20
07
24.0
4.20
07
01.0
5.20
07
08.0
5.20
07
15.0
5.20
07
22.0
5.20
07
29.0
5.20
07
05.0
6.20
07
12.0
6.20
07
19.0
6.20
07
26.0
6.20
07
03.0
7.20
07
10.0
7.20
07
17.0
7.20
07
24.0
7.20
07
31.0
7.20
07
07.0
8.20
07
14.0
8.20
07
21.0
8.20
07
28.0
8.20
07
04.0
9.20
07
11.0
9.20
07
18.0
9.20
07
25.0
9.20
07
02.1
0.20
07
09.1
0.20
07
16.1
0.20
07
23.1
0.20
07
30.1
0.20
07
06.1
1.20
07
13.1
1.20
07
20.1
1.20
07
27.1
1.20
07
04.1
2.20
07
11.1
2.20
07
18.1
2.20
07
25.1
2.20
07
01.0
1.20
08
08.0
1.20
08
0.2
0.1
0
0.3
0.4
0.5
0.6
0.7
0.8
Quoting for buying1 share (NKNC), $
Quoting for selling1 share (NKNC), $
Weighted average price of the deal (NKNC), $
| List of Corporate Documents
| Capital Stock
| Bonded Loans
| Dynamics of Dividend Payments on Equity
| Market Capitalization
| Credit Ratings
| Major Indices of Subsidiaries Activity
71Nizhnekamskneftekhim INC Annual Report, 2007
Credit ratings
In December 2005, 2 International Rating Agencies assigned credit ratings to “Nizhnekamskneftekhim” INC.
Moody’s investors Service Ltd.1 |
Types of credit ratings assigned Rating mark as of the end date of accounting quarter
Forecast of rating changes
Rating date assignment
Record of rating marks changes
Issuer credit rating В1 Stable 12.12.2005, 26.02.2008
No changes
Issuer long term credit rating on the national scale A2.ru Stable 12.12.2005 No changes
Euro bonds rating 200 million USD / up to the year 2015.*
B2 Stable 12.12.2005 No changes
Types of credit ratings assigned Rating mark as of the end date of accounting quarter
Forecast of rating changes
Rating date assignment
Record of rating marks changes
Issuer default rating В+ Stable 01.11.2006 No changes
Issuer priority-oriented uncovered rating В+ Stable 02.12.2005, 01.11.2006
No changes
Issuer short term credit rating B Stable 02.12.2005, 01.11.2006
No changes
Issuer long term credit rating on the national scale
A(rus) Stable 02.12.2005, 01.11.2006
No changes
Euro bonds rating 200 million USD / up to the year 2015.*
B+ Stable 23.12.2005 No changes
* Eurobond issue data, to which ratings have been assigned:
Denomination Currency Quantity issued Date of issue Date of final redemption Code ISIN
Eutrobonds US Dollars 200,000,000 22.12.2005 22.12.2015 XS 0238468457
Note: Eurobond issue was arranged against security
of “Nizhnekamskneftekhim” INC., NKNK FINANCE
PLC, Ireland, being the issuer.
Corporate activities
Fitch Ratings Ltd.2 |
Note: At present, “Nizhnekamskneftekhim” INC. rat-
ings are under review of Fitch Ratings Ltd. following
the results of “Nizhnekamskneftekhim” INC. activi-
ties in 2006. (according to IAS).
72
| List of Corporate Documents
| Capital Stock
| Bonded Loans
| Dynamics of Dividend Payments on Equity
| Market Capitalization
| Credit Ratings
| Major Indices of Subsidiaries Activity
Major Indices of Subsidiaries Activity
No. Name Proceeds Gross Profit Number of Personnel
RUR K % of Total RUR K % of Total Number % of Total
1 2 3 4 7 8 11 12
5,816,310 100 730,827 100 5,612 100
1 “Polimer-NKNK” Ltd 151,891 2.61 34,344 4.7 133 2.37
2 “Neftekhimagroprom” Ltd 117,000 2.01 -17,736 680 12.12
3 “UOP “Neftekhim” Ltd 275,431 4.74 17,286 2.37 655 11.67
4 “NKNK-Service” Ltd 41,788 0.72 39,763 5.44 38 0.68
5 “Polimerkholodtekhnika” Ltd 90,037 1.55 37,866 5.18 73 1.3
6 “Trust TCHXPC” Ltd 1,168,558 20.09 82,799 11.33 2,032 36.21
7 “Transport-Express” PAP Ltd 141,236 2.43 29,065 3.98 320 5.7
8 “Vtorresoursy” Ltd 30,448 0.52 3,277 0.6 29 0.52
9 “Shop No. 4100” Ltd 59,809 1.03 21,476 2.94 85 1.51
10 “NefteKhimSevilen” JSC 633,566 10.89 41,322 5.65 332 5.92
11 “CKK “Neftekhimik“ Ltd 40,955 0.7 -1,714 102 1.82
12 “SOV-NKNK” JSC 5,281 0.07 -1,095 139 2.4
13 “RMZ-NKNK” Ltd 57 ,683 0.84 -10,582 690 12.3
14 “Neftekhimresoursy-NKNK” Ltd 740 0.03 -102 51 0.8
15 “NKNK-Divinil“ Ltd 3,001,887 51.61 330,474 45.22 253 4.51
73Nizhnekamskneftekhim INC Annual Report, 2007
To foresee means to rule.Peter the First
74
Niz
hnek
amsk
neft
ekhi
m IN
C A
nnua
l Rep
ort,
200
7
Management
| Board of Directors
| Management Board
| Audit Commission
75
7
ManagementManagement
Board of Directors
Radik R. Gaizatullin
Born in: 1964 Title: Finance Minister for the Tatarstan Republic Share in the Issuer Authorized Capital: none Issuer equity share: none
Vladimir M. Busygin
Born in: 1949 Title: General Director of “Nizhnekamskneftekhim” INC Share in the Issuer Authorized Capital: 0.03% Issuer equity share: none
Albert K. Shigabutdinov
Chairman of Board of Directors Born in: 1952 Title: General Director of “TAIF” JSC Share in the Issuer Authorized Capital: none Issuer equity share: none
76
| Board of Directors
| Management Board
| Audit Commission
Nahil U. Maganov
Born in: 1958 Title: First Deputy General Director for Oil & Oil Product Sales & Processing-Head of Oil & Oil Product Sales Department, “Tatneft” JSC Share in the Issuer authorized capital: none Issuer equity share: none
Rafkat A. Kantyukov
Born in: 1953 Title: General Director of “Gazprom transgaz Kazan” Ltd Share in the Issuer Authorized Capital: none Issuer equity share: none
Sergei V. Alekseyev
Born in: 1966 Title: Deputy General Director of “Svyazinvestneftekhim” JSC Share in the Issuer Authorized Capital: none Issuer equity share: none
Aidar R. Metshin
Born in: 1963 Title: Head of Nizhnekamsk Municipal Region, Tatarstan Republic Share in the Issuer authorized capital: none Issuer equity share: none
Nizhnekamskneftekhim INC Annual Report, 2007 77
Management
Ruslan A. Shigabutdinov
Born in: 1976 Title: Deputy General Director of “TAIF” JSC Share in the Issuer authorized capital: none Issuer equity share: none
Ilshat Sh. Fardiyev
Born in: 1960 Title: General Director of “Tatenergo” JSC Share in the Issuer authorized capital: none Issuer equity share: none
Rinat K. Sabirov
Born in: 1967 Title: Head of Department for Oil-Gas-Chemical Complex Issues at the Office of the Tatarstan Republic Cabinet of Ministers Share in the Issuer authorized capital: none Issuer equity share: none
Vladimir V. Presnyakov
Born in: 1951 Title: Deputy General Director for Oil-Refining & Petrochemistry, “TAIF” JSC Share in the Issuer authorized capital: 0.0005% Issuer equity share: 0.0006%
78
The aggregate fee amount paid to the Board members of “Nizhnekam-
skneftekhim” INC for the year 2007 totalled RUR 9,029,394.
Note: Persons who are members of the Board of Directors and Management
Board of “Nizhnekamskneftekhim” INC have their fees included only in the aggre-
gate fee amount for the Management Board of “Nizhnekamskneftekhim”.
The Board of Directors incorporates an Audit Committee and a Personnel & Fee
Committee.
Radik R. Gaizatullin, member of the Board of “Nizhnekamskneftekhim” INC, is
an Audit Committee Chairman; Rinat K. Sabirov, member of the Board of “Nizh-
nekamskneftekhim” INC, is a Personnel & Fee Committee Chairman.
Both Committees function pursuant to the Regulations on those committees
of and approved by the Board of Directors of “Nizhnekamskneftekhim” INC on
24.11.2006.
| Board of Directors
| Management Board
| Audit Commission
Participation of members of the board of directors of Nizhnekamskneftekhim Inc in the board meetings in 2007-2008.
No. Name/No. of minutes of meeting
1 2 3 4 5 (in absentia) 6 TOTAL TOTAL Grand total
Date of meeting 26.04.2007 18.05.2007 27.07.2007 23.11.2007 19.02.2008 19.03.2008 (in presentia) (in absentia)
1 A. K. Shigabutdinov + + - + + + 4 1 5
2 V. M. Busygin + + + + + + 5 1 6
3 S. V. Alekseyev + - + + + + 4 1 5
4 R. R. Gaizatullin - + - + + + 3 1 4
5 R. A. Kantyukov - - + (п.м.) + + - 1 1 2
6 N. U. Maganov - - - - + - 0 1 1
7 A. R. Metshin + + + + + + 5 1 6
8 V. V. Presnyakov + + + + + + 5 1 6
9 R. K. Sabirov + + + + + + 5 1 6
10 I. Sh. Fardiyev - + + - + + (п.м.) 2 1 3
11 R. A. Shigabutdinov + + - + + + 4 1 5
Note: п.м. - member of the board of directors sent his opinion in writing
79Nizhnekamskneftekhim INC Annual Report, 2007
Management BoardManagement
Vladimir A. Belokurov
Born in: 1945 Title: Director of Styrene & Polyether Resin Plant Share in the Issuer authorized capital: none Issuer equity share: none
Azat Sh. Bikmurzin
Born in: 1969 Title: Director of Ethylene Plant Share in the Issuer authorized capital: 0.0004% Issuer equity share: 0.0003%
Vladimir P. Bobonin
Born in: 1938 Title: Deputy General Director for Industrial Engineering & Reconstruction Share in the Issuer authorized capital: 0.0025% Issuer equity share: 0.0018%
Tabriz G. Burganov
Born in: 1951 Title: Director of Synthetic Isoprene Rubber Plant Share in the Issuer authorized capital: 0.0047% Issuer equity share: 0.0043%
Management Board of “Nizhnekamskneftekhim” INC consists of 27 members.
Vladimir M. Busygin
[General Director; Chairman of Management Board] Born in: 1949 Title: General Director “Nizhnekamskneftekhim” INC Share in the Issuer authorized capital: 0.03% Issuer equity share: none
Akhtyam T. Amirkhanov
Born in: 1964 Title: Director of Synthetic Rubber Plant Share in the Issuer authorized capital: 0.0007% Issuer equity share: 0.0006%
Rustam M. Akhmetov
Born in: 1959 Title: Deputy General Director for Economics Share in the Issuer authorized capital: 0.0028% Issuer equity share: 0.001%
80
| Board of Directors
| Management Board
| Audit Commission
Alexander M. Vdovin
Born in: 1954 Title: Chief Power Engineer Share in the Issuer authorized capital: 0.003% Issuer equity share: 0.0026%
Ildar A. Gainutdinov
Born in: 1948 Title: Manager of Finance Department Share in the Issuer authorized capital: 0.0014% Issuer equity share: 0.0009%
Rashat A. Galiullin
Born in: 1957 Title: Deputy General Director for Commerce Share in the Issuer authorized capital: none Issuer equity share: none
Shamil Sh. Galaviyev
Born in: 1954 Title: Chief Mechanical Engineer Share in the Issuer authorized capital: 0.008% Issuer equity share: 0.009%
Khamit Kh. Gilmanov
Born in: 1949 Title: First Deputy General Director-Technical Director Share in the Issuer authorized capital: 0.004% Issuer equity share: 0.004%
Igor V. Larionov
Born in: 1970 Title: Dy General Director-Head of Corporate Property & Investment Dept. Share in the Issuer authorized capital: 0.005% Issuer equity share: 0.006%
Gennady M. Makarov
Born in: 1951 Title: Director of Ethylene Oxide Plant Share in the Issuer authorized capital: 0.005% Issuer equity share: 0.006%
Irina N. Maximova
Born in: 1962 Title: Manager of Export Department Share in the Issuer authorized capital: 0.0014% Issuer equity share: 0.0011%
Nizhnekamskneftekhim INC Annual Report, 2007 81
Management
Leonid M. Maltsev
Born in: 1949 Title: Deputy General Director for Production Share in the Issuer authorized capital: 0.005% Issuer equity share: 0.004%
Akhat F. Minnullin
Born in: 1958 Title: Director of Polystyrene Plant Share in the Issuer authorized capital: 0.001% Issuer equity share: 0.0007%
Oleg N. Nesterov
Born in: 1960 Title: Director of Butyl Rubber Plant Share in the Issuer authorized capital: 0.001 Issuer equity share: 0.0007%
Siren’ G. Sakhapov
Born in: 1957 Title: Director of Oligomer Plant Share in the Issuer authorized capital: none Issuer equity share: none
Aidar R. Sultanov
Born in: 1965 Title: Manager of Law Department Share in the Issuer authorized capital: 0.0013% Issuer equity share: 0.001%
Aleksei I. Tokinov
Born in: 1951 Title: Director of Divinyl & HC Feed Plant Share in the Issuer authorized capital: 0.0018% Issuer equity share: 0.0012%
Victor S. Trifonov
Born in: 1965 Title: Director of Polyolefin Plant Share in the Issuer authorized capital: none Issuer equity share: none
82
Nikolai I. Ukhov
Born in: 1951 Title: Director of Information Technology Department Share in the Issuer authorized capital: 0.0036% Issuer equity share: 0.004%
Nurislam F. Fatykhov
Born in: 1948 Title: Deputy General Director for Personnel, Welfare & General Issues Share in the Issuer authorized capital: none Issuer equity share: none
Eugene A. Tsyganov
Born in: 1951 Title: Deputy Commercial Manager-Head of Sales Department Share in the Issuer authorized capital: 0.0015% Issuer equity share: 0.0017%
The aggregate fee amount paid to all Management Board members of “Nizhnekam-
skneftekhim” INC totalled RUR 170,826,627.40.
| Board of Directors
| Management Board
| Audit Commission
Vasily N. Shuysky
Born in: 1957 Title: Labour Committee Chairman Share in the Issuer authorized capital: 0.0007% Issuer equity share: 0.00005%
Ilfar R. Yakhin
Born in: 1963 Title: Chief Accountant Share in the Issuer authorized capital: 0.00002% Issuer equity share: 0.00002%
83Nizhnekamskneftekhim INC Annual Report, 2007
Audit CommissionManagement
Olga V. Ignatovskaya
Born in: 1963 Title: Chief Accountant of “TAIF” JSC Share in the Issuer authorized capital: none Issuer equity share: none
Aleksei I. Belayev
Born in: 1952 Title: Head of Oil Refining & Petrochemical Complex Department of the Tatarstan Republic Ministry for Industry & Trade Share in the Issuer authorized capital: none Issuer equity share: none
Nahila Z. Gilmutdinova
Born in: 1951 Title: Lead Advisor of Economic Analysis Department at the Tatarstan Republic Ministry of Finance Share in the Issuer authorized capital: none Issuer equity share: none
Audit Commission of “Nizhnekamskneftekhim” INC consists of 5 members.
84
| Board of Directors
| Management Board
| Audit Commission
Rashit G. Salakhutdinov
Born in: 1965 Title: Dy Head of Corporate Property & Investment Dept.-Head of Assets Department Share in the Issuer authorized capital: none Issuer equity share: none
Dmitry I. Teslenko
Born in: 1961 Title: Head of Finance & Economics Department of “TAIF” JSC Share in the Issuer authorized capital: none Issuer equity share: none
The aggregate fee amount paid to all Audit Commission members of “Nizhnekam-
skneftekhim” INC totalled RUR 1,139,758.
Nizhnekamskneftekhim INC Annual Report, 2007 85
There are no professions of great future, but professionals with great future.
E.Mackenzie
86
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7
Personnel
87
8
19,000
19,500
20,000
20,500
21,000
20,4
45
20,4
67
19,7
08
Headcount (persons)
Figures in percentage terms (%)
Including (persons):
2005
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2005 2006 2007
2,35
22,
395
2,35
3
2,62
82,
689
2,65
4
367
363
344
15,0
9815
,020
14,3
57
ManagersSpecialists
OfficersWorkers
2006
2007
Managers
Specialists
Officers
Workers
11.5%
12.9%
1.8%
73.8%
11.7%
13.1%
1.8%
73.4%
11.9%
13.5%
1.7%
72.9%
Personnel
Staff policy of “Nizhnekamskneftekhim” INC is directed to achievement of the
Company’s strategic goal – gaining stable profit at the expense of manufacture
of competitive products and rendering services, satisfying needs of overseas and
domestic customers.
Company staff characteristics
Personnel
88
Elementary education
Unfinished secondary education
Elementary professional and secondary education
Secondary professional education
Higher education
2005
21.86
23.47
51.86
2.78
0.03
100%
2006
100%
23.53
23
51.03
2.41
0.03
2007
100%
24.85
22.8
50.25
2.08
0.02
35
36
37
38
39
40
41
42
37
38
41
The number of Doctors of Science and Candidates of Science (persons):
2005
2006
2007
Qualitative split of staff at “Nizhnekamskneftekhim” INC
Nizhnekamskneftekhim INC Annual Report, 2007 89
950
1,000
1,050
1,100
1,150
1,200
1 04
1
1,16
8
1,16
8
Total (persons) Including (persons):
2005
0
50
100
150
200
250
350
300
2006
2007
Hig
her
sch
ools
gra
duat
es
Am
ong
them
:F
ull-
tim
e at
tend
ance
Sec
onda
ry p
rofe
ssio
nal
sc
hoo
l gra
duat
es
Am
ong
them
:F
ull-
tim
e at
tend
ance
Col
lede
s gr
adu
ates
176 19
512
3
155
180
102
137
126 13
7
136
124 13
6
207
247
317
Information on employment of young people under 30
The number of young people under 30 as of January 1, 2008, amounts to 5,268
employees, or 26.7% of the total headcount.
Personnel
90
Average age:
2005
36
38
40
42
44
46
2006
2007
Ave
rage
age
of e
mpl
oyee
s
Ave
rage
age
of m
anag
ers
Ave
rage
age
of s
peci
alis
ts
Ave
rage
age
of w
orke
rs
40.4
40.4
40.3
45.3
40.1
39.8
39.4 39
.839
.839
.8
45.2
44.9
Headcount and age composition of “Nizhnekamskneftekhim” INC staff
91Nizhnekamskneftekhim INC Annual Report, 2007
Above 60
31-50 years old
51-60 years old
18-30 years old
20.9%
25.10%
53.0%
1.0%
21.2%
1.10%
25.9%
51.8%
26.7%
22.1%
49.8%
1.4%
2
5
2
11
2
2
11
2
11
2
5
11
2,000
4,000
6,000
8,000
10,000
12,000
Age categories (persons):
5,12
35,
304
5,26
8
4,27
54,
335
4,34
3
210
226
269
10,8
3710
,602
9,82
8
0
18-3
0 ye
ars
old
31-5
0 ye
ars
old
50-6
0 ye
ars
old
Abo
ve 6
0
2005
2006
2007
Personnel
92
In September 2007, the Personnel Department of “Nizhnekamskneftekhim” INC
was given the title honor of “Best Russian Personnel Department” based on the
results of the cognominal All-Russian Competition.
“Nizhnekamskneftekhim” INC carries out permanent work with the personnel in
respect of recommendation thereof for the positions of managers and specialists.
In 2007, the reserve list contained 638 employees, 131 of them were promoted.
93Nizhnekamskneftekhim INC Annual Report, 2007
Good deeds are behind, the fame is always ahead.
Omar Haiam
94
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Social Responsibility
95
9
Concentrating the basic efforts on an industrial activity, “Nizhnekamskneftekhim”
INC., at the same time, gives enhanced attention to the social issues. Creation of
favorable working conditions, versatile support and increase of social security of
workers and their families are priority issues of social policy of the company.
The guidelines of social programs are reflected in the collective agreement con-
cluded annually between administration and trade-union committee of the com-
pany. In the collective agreement are enumerated guarantees and social benefits
for the labor, working hours and leisure time, occupational safety and health, legal
safeguard, as well as social and economical interests of the youths and creation of
cultural mass work and sport and recreation activities.
In 2007 all obligations fixed in the collective agreement are fulfilled, following the re-
sults of republican contest, it was declared as one of the best among the collective
agreements of other companies. The sum of social payments under the collective
agreement amounted to 411.8 million rubles.
Social
Responsibility
Social policy
Health promotion and rest of employees
In 2007 about 6,000 sanatorium permits for the sum of more than 71 million rubles
have been acquired for employees, including the “Korabelnaya Roscha” sanatorium
- dispensary and “Dubravushka” recreation camp which the company maintains
out of profit. In 2007 about 3,564 workers and their children have recuperated their
health in “Korabelnaya Roscha” (The Ship grove), more than 2,000 permits are real-
ized to those who enjoyed their rest in “Dubravushka” recreation camp.
In order to provide qualitative and duly health services to workers the management
of “Nizhnekamskneftekhim” Inc. has concluded a contract of voluntary medical
insurance with ZAO Spaseniye insurance company. According to this contract the in-
surer provides medical services at the city hospitals No.2 and No.3, Central District
Hospital.
For these purposes the company has allocated 88.5 million rubles in 2007.
“Nizhnekamskneftekhim” INC. is the only company in the city, which has kept all
three children’s summer camps functioning. About 2,360 children spent the sum-
mer time of 2007 down there.
96
Mortgage program
The management of “Nizhnekamskneftekhim” INC. pays great attention to the
major social issue - provision of the workers with the comfortable habitation.
At the company, the Regulation «About the order of realization of habitation pro-
gram» is developed and authorized and 72 apartments have been allocated to the
workers in 2007.
More than 2,000 petrochemical workers have expressed their desire to participate in
the social mortgage program and have registered in the State Housing Stock. They
have received 619 apartments with 161 apartments out of that number in 2007.
On balance, the company has houses for young families. In total - 30 typical
houses - hostels for 3,600 young families.
Care for veterans
The enterprise does not disregard the former workers. Interests of more than 6
thousand pensioners represent the Council of veterans of work and war in their
daily work. The former workers of “Nizhnekamskneftekhim” INC. receive monthly
surcharges to pensions from the fund of the company, receive lump sums at leav-
ing for pension; compensations by the Victory Day, the Day of defenders of Father-
land, the Day of older persons, the Day of the Chemist and personal anniversaries.
For monthly surcharges to pensions in 2007 the company has transferred more
than 16 million rubles. The total sum of payments to pensioners to celebratory
dates has made about 6.2 million rubles.
All pensioners are attached for medical service to the city hospital № 3 where they
receive medical aid from “Nizhnekamskneftekhim” INC., they get preferential
permits for sanatorium-and-spa treatment. In 2007 the company transferred
7.1 million rubles for medical treatment of non-working pensioners.
Pensioners of the company receive free-of-charge the company published news-
papers “Petrochemist” and “The Voice of People”.
Since 2001, veterans - petrochemists receive monthly surcharge from the Nation-
al Non-state Pension Fund, one of the founders being “Nizhnekamskneftekhim”
INC. Total amount of surcharge in 2007 is more than 16 million rubles.
Nizhnekamskneftekhim INC Annual Report, 2007 97
The organization of work with young specialists
At “Nizhnekamskneftekhim” INC. are employed 19.7 thousand persons. The
average wages in 2007 have made 19,738 rubles. Average age of workers at the
enterprise is 40.3 years. The 26.7 % of the total number of people working for the
company are young people in the age below 30 years. The collective of petrochem-
ical workers is annually joined by graduates of basic educational institutions: the
Kazan state university of technology, the Nizhnekamsk institute of chemistry and
technology, the Nizhnekamsk petrochemical college and professional vocational
schools № 44 and № 62.
All young workers are assigned to instructors, this allows them to adapt faster to
production process. In order to involve them in active industrial and public activi-
ties and to quickly solve the problems of young families, in the plants are formed
the Councils for work with young specialists.
In order to encourage students to study better the management of the company
and the trade union committee has established educational scholarships. In 2007
were paid out 192 such scholarships 1,000 rubles each.
The young workers who have come back at the enterprise after service in the
army, are paid an allowance on appointment at the rate of 5 thousand rubles,
young families are allocated loans.
Every year, at the “Nizhnekamskneftekhim” INC. are held competitions on profes-
sional skill, art and amateur songs, tourist meetings, military and technical relay
races.
Young petrochemical workers take part in search and burial of remains of soldiers
fallen in the Second World War. Two times a year the “Neftekhimic” search party
goes on an expedition to Leningrad and Pskov regions.
The panel games club of the company took part in the KIVIN’2008 International
Festival and proved to be the best team among the industrial enterprises of the
republic.
Social
Responsibility
98
In 2007 году the youth organization of the company took the prize-winning place in
the Republican contest for the best youth organization of the Trade Union Federa-
tion of Tatarstan. Our team was also awarded diplomas of winners at III Republi-
can Festival of amateur performances held within the frame work of the contest.
Educational programs
For the organization of vocational training, retraining and improvement of profes-
sional skill of the staff, the educational center for personnel training is found
at the enterprise. It has licenses for educational activity on 74 professions and
trades.
In 2007, in the educational center were trained 8,932 employees, including 7,877
workers.
Artistic creativity
It is a policy of the company to keep cultural and educational activities at a high
level.
At the Arts and Crafts Palace there are 11 art groups: Romantics pop group,
Yashlek song and dance group, Nadezhda war and labor veterans choir, Art youth
theater, Zabavushka children’s folksongs group and others. They number about
450 talented workers of the company and their children. Four creative teams are
the prize winners of the All-Union Festivals. Five of them are awarded the title
of «Folk group». Experienced tutors are in charge of the groups, 8 of which are
awarded the title of «Honored art worker of the Republic of Tatarstan».
In 2007 creative groups of the Arts and Crafts Palace arranged 451 performances
before the public.
At the Arts and Crafts Palace there is the biggest in the city trade union library of
“Nizhnekamskneftekhim” INC., which book collection is more than 70,000 books.
99Nizhnekamskneftekhim INC Annual Report, 2007
Participation in social and economical development of the region
Being a basic urban developing enterprise, the company actively participates in
construction and revamping of important social establishments of the city and
the region. In 2007 the company put on stream the city water treating station with
unique purification system, being the general investor for that project.
The 30 million rubles allocated for development of automated real-time environ-
mental survey system, for air monitoring around the industrial area and in the city
blocks. The company equipped 3 children’s community in the new city blocks with
modern play grounds.
The company renders a charitable help to social establishments of the city. In
the Year of Charity the total amount of the charitable and sponsor’s help in 2007
has made more than 13 million rubles. The company workers and engineers gave
their one day salaries and wages for repairs of the city children’s hospital.
Our company is a sponsor to 21 educational institutions, Including 13 schools, 2
professional vocational schools, petrochemical collage.
For construction of the Parkland on the area of 10 hectares with 10 thousand
trees to be planted, the company already spent 24.5 million rubles.
Social
Responsibility
100
Company anniversary
In the summer 2007 года engineers and workers of the company solemnized the
40-th anniversary of the first product manufactured at the petrochemical complex.
Many different festivities were timed to the anniversary.
In all the plants the youth played mind games «What? Where? When?» dedicated
to construction and development of the petrochemical complex.
More than 2000 petrochemical workers took part in the festival of amateur talent
group «Neftekhim with you and for you». For students of city schools and colleges
a contest of compositions “We are the future of our city and the petrochemical
complex” was organized.
Amateur poets, writers, musicians of the city dedicated their creations to the an-
niversary of the company. A book of the best poems was published and a compact
disk was recorded with musical pieces.
More than 100 children at the age of 4 to 15 presented their paintings to the con-
test «Neftekhim and me is a united family».
During festivities a renovated «Avenue of veterans» was inaugurated on the terri-
tory of the first industrial area. Culmination of the festivities was a petrochemical
workers function with the honored guests: the President of the Republic of Tatar-
stan M. Shaimiyev, RF Deputy Minister of Industry and Energy A. Reus, Managers
of foreign and Russian companies — partners of “Nizhnekamskneftekhim” INC.
101Nizhnekamskneftekhim INC Annual Report, 2007
Living is not breathing but acting.Adam Smith
102
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Environmental Activity
103
10
Environmental management is the priority sphere of activities of “Nizhnekam-
skneftekhim” INC. Being a major producer of petrochemical products the Com-
pany complies with the up-to-date requirements for provision of ecological safety.
The task of minimizing the negative impact on the environment is resolved by way
of introduction of advanced production technologies, revamping of environmental
constructions and perfecting of existing environmental management system.
Waste waters including storm water are decontaminated or purified on the
internal treatment facilities; the major portion of exhaust gases are discharged
to atmosphere after purification or decontamination; unusable solid wastes are
stored on the Company’s landfill.
Environmental monitoring is carried out by internal laboratories authorized to
supervise emissions and state of environment.
The results of many years of monitoring give evidence that the level of air con-
tamination in the Company’s sanitary-hygienic zone does not exceed permissible
rates and the discharged effluents do not have a pronounced impact on the quality
of Kama river water.
Positive results of environmental activity of “Nizhnekamskneftekhim” INC gained
recognition of governmental bodies of the Republic of Tatarstan and the Russian
Federation.
Environmental ActivityEnvironmental Activity
104
0
0.2
0.8
0.6
1.2
0.4
1
1.6
1.4
1.8
2003 2004 2005 2006 2007
tons/million rubles
1.55
1.54
1.41
1.28
1.04
0
0.05
0.2
0.15
0.1
0.25
0.3
2003 2004 2005 2006 2007
tons/million rubles
0.22
6
0.27
4
0.26
8
0.26
4
0.23
5
Specific volume of pollutant emissions
Specific formation of non-recycled waste
Nizhnekamskneftekhim INC Annual Report, 2007 105
Beginning from 2004 our Company has become the prize winner of the Republic-
wide “ECOleader” contests, and in 2007 “Nizhnekamskneftekhim” INC was
awarded the diploma of absolute winner of “ECOleader” contest. From 2005 to
2007 based on the results of All-Russian contest the Company was awarded the
diploma “Leader of environmental planning in Russia”. In 2006 and 2007 “Nizh-
nekamskneftekhim” INC was winning the national prize “Ecomir”.
From 2004 the environment management system has been functioning in full
compliance with ISO 14001 international standard. Environmental planning of
“Nizhnekamskneftekhim” INC is focused on implementation of Ecological policy
adopted in 2003.
Practical activities oriented to implementation of Ecological policy have been de-
tailed in the program of environmental management for the period of 2004-2008.
This program makes provision for further improvements of industrial processes,
replacement of obsolete equipment, further automation of production control
system, revamping of old environmental facilities and construction of new ones.
To ensure the ecological safety of the Company and with regard to its expected
future development till 2012 the new ecological program was prepared in 2007 for
the period from 2007 to 2015.
The most objective factor reflecting the environmental activity of any organization
is the ecological efficiency of its production operation. The ecological expenses
include: pollutant emissions, discharge of waste water to water basin, formation
of non-recycled waste, efficiency of land use. All types of ecological impact are
estimated for 1 million rubles of commercial products, whose value is based on
the prices of 2004.
Environmental Activity
106
0.01
0
0.04
0.03
0.02
0.05
0.08
0.07
0.06
2003 2004 2005 2006 2007
Hectare/million rubles
0.07
1 0.06
8
0.06
2
0.05
4
0.05
200
0
800
600
400
1,000
1,600
1,400
1,200
2003 2004 2005 2006 2007
m3/million rubles
1,34
0
1,35
1
1,35
0
1,10
9
1,09
4
Efficiency of land use
Specific volume of waste water discharged to water basin
107Nizhnekamskneftekhim INC Annual Report, 2007
Rational deeds are made of goodjudgment and purity of intents.
Arthur Schopenhauer
108
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Energy Saving
109
11
Today “Nizhnekamskneftekhim” INC is the heaviest user of utilities among the
industrial enterprises of the Tatarstan Republic, consuming 11.5% of electrical
power and 33% of heat energy generated by the entire “Tatenergo” System.
In line with Energy Saving Program within the period of 2000 – 2007, the Company
put into practice 657 energy saving arrangements with the economic effect total-
ing RUR 1.9 billion.
Saved:
3.7 million Gcal of heat energy; —
174 million kw-hr of electrical power; —
121 thousand tons of equivalent fuel. —
A second energy-auditing, carried out in 2005-2006 by the Center of Energy -Sav-
ing Technologies under RT Cabinet of Ministers, determined the achieved status
and the remaining energy saving potential for preparation of Energy Saving Pro-
gram at “Nizhnekamskneftekhim” INC for the period of 2006-2010.
In March 2006, there was devised and issued a “Utilities Passport of “Nizhnekam-
skneftekhim” INC – industrial user of fuel and energy resources”, effective until
2012.
With a view of further energy -saving implementations and pursuant to the RT
Statute № 24 of March 23, 2006 « On approval of “Energу effiency in the Tatarstan
Republic for years 2006-2010” Program», Nizhnekamskneftekhim” INC has devel-
oped a “2006-2010 Energy-Saving Program”.
The program contemplates for 111 basic energy-saving implementations at the
Company to yield economic effect of RUR 757m.
Energy Saving
Energy Saving
110
Main trends of Energy Saving Program realization:
Improvement of existing energy-saving technologies; —
Implementation of new energy-saving technologies; —
Use of new high-performance catalysts; —
Revamping and upgrading of process equipment; —
Installation of less power consuming pumping equipment; —
Increasing of production capacities; —
Secondary resources conservation; —
Reduction in unproductive losses of feedstock and energy resources; —
Equipping of all production units with automated control systems; —
To improve the reliability of power supply, existing power control boards (PCB –0.4
kV) are replaced with “Siemens” ones.
The implementation of this program started in 2005 and it will run up to 2012.
It is planned to replace 250 PCB’s, 27 distribution boards and transformer substa-
tions.
The Company’s both industrial areas have the control panels installed and put into
service to monitor the power supply system for all NKNK Plants. They enabled to
follow the actual consumption as a whole for the Company and for the individual
subdivisions and to promptly supervise a power consumption regime.
In order to reduce energy costs and raise the competitiveness of its products ,
“Nizhnekamskneftekhim” INC has completed the construction of its own energy
source based on a gas-turbine technology and put into operation one power gen-
erating unit with capacity of 25 MW.
84.1 thousand Gcal of heat energy and 55.8 million kw-h of electric power have
been generated by the Gas-Turbine Unit in 2007.
With new Regulations, introduced for electric power wholesale and retail markets
to operate under the Government Provision No. 530, “Nizhnekamskneftekhim”
INC started activities in new transitional period conditions for energy system
reforming.
Nizhnekamskneftekhim INC Annual Report, 2007 111
The fame is in hands of labor.Leonardo Da Vinci
112
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Press Coverage About Us
113
12
Press Coverage
About Us
Press Coverage About Us
No Topics Publications
1 “JSC Nizhnekamskneftekhim is not susceptible to time influence”
“Izvestiya”, No.8 of 19.01.07, page 9
2 “Administration and Trade Union : lessons of joint activities ”
“Vasha Gazeta”, No. 4, of 24.01.07.
3 “Nizhnekamskneftekhim ”- floor is given to success
“Respublika Tatarstan ”, No.16, of 30.01.07.
4 “Right for justice” “Trud” No.16 of 31.01.07.
5 “Rely on police but don’ t fail yourself “ “Leninskaya Pravda”, No.22 of 31.01.07. (Enclosure “Tatar Inform”)
6 “Rely on police but don’ t fail yourself “ “Nizhnekamskoye Vremya ”, No.5, of 30.01.07.
7 “Development perspectives of the Russian Neftekhimiya”
“Neft. Gaz. Bizness v Tatarstane” No.1 of 2007.
8 “The article of the General Director” “Kataliz v promyshlennosty” No.1 of 2007.
9 “Hard nut” “Sovetskiy Sport ” of 31.01.07.
10 “Nizhnekamskneftekhim is defining the strat-egy till 2012”
“Vremya I Dengi ”, No.20 of 6.02.07.
11 “Yanga programma tiksherelde” (“The new programme has been tested” )
“Vatanym Tatarstan”, No.22 of 7.02.07.
12 “Success is not written in the Contract” “Vremya I Dengi ”, No.22 of 8.02.07.
13 “Success is not written in the Contract” “Rossiiskaya Gazeta ”, No. 28, of 9.02.07
14 “Personnel is the main capital of Neftekhim” “Vremya I Dengi ”, No.28-29 of 16.02.07.
15 “Personnel is the main capital of Neftekhim” “Respublika Tatarstan ”, No.31, of 20.02.07.
16 “Let the prayers come true “ “Vasha Gazeta” , No.9, of 28.02.07.
17 “Let kindness be a fellow traveller” “Nizhnekamskoye Vremya ”, No.10, of 6.03.07.
18 “Millions of pink roses from V. Busygin” “Vasha Gazeta” , No.10, of 7.03.07.
19 “The Big” heart of Neftekhim” “Vasha Gazeta” , No.10, of 7.03.07.
20 “Let kindness be a fellow traveller” “Leninskaya Pravda”, No.53, of 14.03.07. (Enclosure “Tatar Inform”)
21 “Mortgage program of Neftekhim workers “ “Argumenty and Facty ” of 14.03.07.
22 “Nizhnekamskneftekhim – We can make rub-ber ”
“Neft. Gaz. Bizness Tatarstana ”of Decem-ber 2006/February 2007.
23 “Nizhnekamsk industrial area today and tomorrow ”
“Vremya I Dengi ”, No.49 of 20.03.07.
24 “Not susceptible to time influence ” “Tatarstan” No.3-2007
25 “Tabyshnyng ochtan bere”- aktsionerlarga (“One third of the gained to the shareholders ”)
“Vatanym Tatarstan”, No.57-58 of 30.03.07.
26 “We say Nizhnekamskneftekhim, meaning quality”
“Vremya I Dengi ”, No.59 of 3.04.07.
27 “Neftekhim- yugary syifat digan souz” (“Neftekhim means high quality”)
“Vatanym Tatarstan”, No.61 of 4.04.07.
28 “Simply believe in miracle” “Vasha Gazeta” , No.14, of 4.04.07.
29 “The way to responsibility” “ Delovoy Ekologicheskiy Zhournal”, No.1 of 2007
30 “What does life mean? Love …” “Tatarstan” , April 2007
31 “Nails could have been made of these people…” “Nizhnekamskoye Vremya ”, No.20, of 15.05.07.
32 “JSC Nizhnekamskneftekhim : real perspec-tives”
Proekt “Dostoyanie Respubliki” (Atach-ment to “Vedomosti” newspaper )
33 “Two fates” “Tatarstan” No.5-2007
114
34 “The big family of Neftekhim workers” “Vremya I Dengi ”, No.95-96 of 25.05.07.
35 “Nizhnekamskneftekhim : real perspectives” “Respublika Tatarstan ”, No.103, of 26.05.07.
36 “The family celebration of Neftekhim workers” “Vasha Gazeta” , No.22, of 30.05.07.
37 “We are the future of the city and the plant” “Vasha Gazeta” , No.23, of 6.06.07.
38 “Let the stars of Neftekhim never fade” “Vasha Gazeta” , No.26, of 27.06.07.
39 “JSC Nizhnekamskneftekhim will call back the complaints from the European Court of Human Rights ”
“Vremya I Dengi ”, No.125 of 9.07.07.
40 “Business card of Nizhnekamskneftekhim” “Biznes i Vystavky”, No.5-6 of 2007.
41 “Over the thresholds of the market — to world leadership”
“Rossiiskaya Gazeta” , No. 147, 11.07.07
42 “Environment protection priorities ” “Rossiiskaya Gazeta” , No. 154, 19.07.07
43 “Nizhnekamskneftekhim is 40 ”. The series of printed materials on operations, history, social policy and other.
“Elita Tatarstana”, July 2007.
44 “JSC Nizhnekamskneftekhim: the harmony of the past and the future”
“Tatarstan”, No.7 -2007.
45 “To be remembered …“ “Vasha Gazeta” , No.30, of 26.07.07.
46 “Ber sulyshta uzgan yul” (The way passed at one breath )
“Vatanym Tatarstan”, No.154-155 of 31.07.07.
47 “Fiker Sandygynda Nilar Bar?” (What is there in the chest of thoughts?)
“Vatanym Tatarstan”, No.154-155 of 31.07.07.
48 “The strong manage the world leadership” “Rossiiskaya Gazeta” , No. 164, 31.07.07
49 “Personnel is programming success” “Vasha Gazeta” , No.37, of 12.09.07.
50 “Personnel is programming success” “Respublika Tatarstan ”, No.190, of 22.09.07.
51 “Nizhnekamskneftekhim: friendship as a lesson”
“Vasha Gazeta” , No.39, of 26.09.07.
52 “How to make the city beautiful ” “Vasha Gazeta” , No.41, of 10.10.07.
53 “JSC Nizhnekamskneftekhim: the history of one victory ”
“Neft. Gaz. Bizness Tatarstana ” August 2007
54 “Investments in nanotechnologies- experience of Nizhnekamskneftekhim”
“Vremya I Dengi ”, No.199 of 23.10.07.
55 Sources of our springs “Tatarstan”, No.10 -2007.
56 The experience of building IR-service in the company of a real sector
“RZB”, No. 22 of 2007
57 “Dreams come true: this has been proven by Nizhnekamsk Neftekhim workers”
“Vasha Gazeta” , No.48, of 28.11.07.
58 “Dreams are being realized” “Respublika Tatarstan”, No.239, of 1.12.07.
59 “Nizhnekamsknefekhim : from pilot projects to commercial production”
“Vremya I Dengi”, No.227 of 4.12.07.
60 “Industrial area - Perspectives with Nizh-nekamskneftekhim”
“Vasha Gazeta” , No.49, of 5.12.07.
61 “Zolotnik” оf Russia “is with JSC Nizhnekam-skneftekhim”
“Vremya I Dengi ”, No.239-240 of 20.12.07.
62 “The youth of Nеtftekhim – well done !” “Vasha Gazeta” , No.51, of 19.12.07.
63 “Specific features of petrochemical energy systems ”
“Izvestiya Tatarstana”, No.51, December 21-27, 2007
64 “The future of Nizhnekamskneftekhim is in the hands of the young”
“Respublika Tatarstan”, No.255-256, of 25.12.07.
65 “New, environmentally clean production — wa-ter treatment unit of Nizhnekamskneftekhim”
“Stroyexpertiza“ , No.8 December , 2007.
66 “Champions of Neftekhim” “Sovetskiy Sport” , December 2007.
Nizhnekamskneftekhim INC Annual Report, 2007 115
That home is good where guests are welcome. Antuan de Sent Exupery
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Contact Information
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Contact information
Full company name:
“NIZHNEKAMSKNEFTEKHIM” INCORPORATED
Location and postal address:
423574 Republic of Tatarstan, Nizhnekamsk
“NIZHNEKAMSKNEFTEKHIM” INC
Date of “NIZHNEKAMSKNEFTEKHIM” INC state
registration:
Registered on August 18, 1993 by the Ministry of Fi-
nance of the Republic of Tatarstan and entered in the
Registry of joint-stock companies established on the
territory of the Republic of Tatarstan under No. 388.
Re-registered by inter-regional inspectorate No. 20
of the Ministry of Taxes and Charges of the Russian
Federation for the Republic of Tatarstan on Novem-
ber 5, 2002 and entered in the Unified State Registry
of legal entities under the main state registration No.
1021602502316.
Tax-payer identification number: 1651000010.
Auditors:
Full company name:
Limited liability auditing company “Audi” — as per
RAS (Kazan)
Full company name:
Closed Stock Company
“PricewaterhouseCoopers Audit” — as per IFRS
Independent estimator:
Full company name:
Limited liability auditing company
“Center Audita I Konsaltinga”, city of Kazan.
Registry holder:
Full company name:
Closed Stock Company “Mezhregionalnaya Reg-
istrazionnaya Kompaniya” [Branch No. 4, city of
Nizhnekamsk, ul.Korabelnya,1]. License for registry
keeping activities, register No. 10 000-1-00297 is
granted by the Federal Committee for Equity Market
on 20.02.2004 without limitation of validity.
Mass media:
List of mass media, publishing, in accordance with
Clause 9.19 of Nizhnekamskneftekhim Articles of
Incorporation, notifications about shareholders’
meetings: newspapers “Neftekhimik”, Hezmattash
Avazy”, “Leninskaya Pravda”, “Tugan Yak”, “Respub-
lika Tatarstan”, “Vatanym Tatastan”.
Contact
information
Дизайн, верстка, фото ООО «Артик»,2008. E-mail: [email protected]
423574 Republic of Tatarstan, Nizhnekamsk
“NIZHNEKAMSKNEFTEKHIM” INC
Teletype “ MAYAK” 724614, 724620
Tel.: (8555) 37-71-81, 37-78-38
Fax: (8555) 37-93-09, (495) 255-38-21
e-mail: [email protected]. http://www.nknh.ru