ANNUAL REPORT 2005 - Lukoil

tural reorganization and salary increases for employees in organizations, that only recently joined
LUKOIL, led to 13.6% increase of average employee incomes in the Group (including all payments and
bonuses).
As well as ensuring a decent working salary, the Company encourages employee performance at
work via a broad range of social programs and measures. These include:
health care and medical treatment, including voluntary medical insurance;
opportunities for rest and relaxation for employees and their families, and organization of sport
and health activities;
help to employees in obtaining their own accommodation;
social support for women and families with children;
social support for young specialists;
non-state pension provision for employees, consisting of employer contributions to the LUKOIL-
GARANT private pension fund ($14 million in 2005). The system of non-state pension provision
with employer and employee contributions was further extended in 2005, and 62,000 employees
were participants of the scheme by the end of 2005.
SOCIAL RESPONSIBILITY
An efficient system of social security for employees helps to attract qualified specialists to the
Company, reduces employee turnover, strengthens corporate culture and provides a foundation for
strong operating performance.
The Company continues to deliver on commitments, which it undertook voluntarily and on its own initiative
under the LUKOIL Social Code. This is a code of principles and norms of socially responsible
behaviour towards all parties, whose interests are affected by Company business.
These additional commitments are directed towards employees, retired employees, and shareholders,
as well as business partners, the state and society.
In order to increase transparency of its social policy the Company has issued a Report on Sustainable
Development in the Russian Federation in 2003–2004. The publication complies with the international
Net Income
per Employee,
$ thousand/employee
Employment Structure by Business Segments
(as of 1 January, 2006)
50
40
30
Petroleum product marketing 16% Other activities 5%
Petrochemicals 9%
LUKOIL foreign
organizations 14%
20
Oil refining 8%
Head office 1%
10
0
2003
2004
2005
Oil & gas production 47%
71