Bashneft's Board of Directors approves a new dividend policy

Bashneft’s Board of Directors has approved a new version of the Regulations on Dividend Policy, which stipulates that the Company must seek to allocate no less than 25% of its net profit under International Financial Reporting Standards (IFRS) for dividend payments every year.

'Strong operational performance and a stable financial position have enabled Bashneft to allocate over 46% of its IFRS net profit for 2014 for dividend payments this year, which is considerably higher than the minimum level of payments to shareholders set for state-owned companies,' emphasized Alexey Teksler, Chairman of the Board of Directors. 'Bashneft will continue to adhere to the fundamental principle of its dividend policy, which consists in maintaining an optimum balance between the interests of shareholders, the Company’s need for sustainable development and a reasonable level of debt.'

In accordance with the Regulations, Bashneft’s Board of Directors and the management shall give priority to ensuring that dividend payments total no less than 25% of the Group’s IFRS Net Profit; in addition, they shall focus on maintaining the Company’s financial soundness, complying with covenants regarding liabilities and maintaining a reasonable debt load (with the Net Debt/EBITDA ratio not exceeding 2).

The Board of Directors has also decided to hold an Extraordinary General Meeting of Shareholders of Bashneft by absentee voting on December 1, 2015 and set the date for compiling a list of eligible participants for October 16, 2015. The Board of Directors is expected to approve the agenda of the General Meeting of Shareholders after receiving the relevant directives from the Government of the Russian Federation.

The Board of Directors has approved a new version of the Code of Corporate Governance of PJSOC Bashneft. The document reflects amendments to the Company’s Charter made by the Annual General Meeting of Shareholders on June 30, 2015 and the provisions of the Code of Corporate Governance of the Central Bank of the Russian Federation recommended by the Federal Agency for State Property Management for adoption in state-owned companies as a priority. The new Code of Corporate Governance of PJSOC Bashneft is available on the Company’s website at www.bashneft.ru (the Investors & Shareholders section).