Gazprom sets up working group to introduce cost management system
While delivering his Report during Gazprom’s Annual General Shareholders’ Meeting, Alexey Miller, the Company’s Management Committee Chairman particularly focused on activities aimed at reducing corporate expenditures. In accordance with the tasks and objectives set at the Meeting, a Directive was signed to establish a Working Group responsible for developing a corporate cost management system.
The Working Group will endeavor to reform the corporate cost management system, including to develop sectoral cost planning and control methodologies and to draft and implement cost optimization (reduction) programs.
Andrey Kruglov, Deputy Chairman of Gazprom’s Management Committee and Head of the Company’s Finance and Economics Department was named as Chairman of the Working Group that was comprised of heads of Gazprom’s core business departments.
The Working Group received instructions to develop and submit for the consideration of Gazprom’s Management Committee Chairman a Draft concept of the Gazprom Group’s cost management system and a Draft cost optimization (reduction) program as well as to produce proposals on an automated data processing facility.
Within 2003, Gazprom adopted a range of corporate documents and stepped up measures enhancing intra-corporate spending control:
- established an organizational system of building the corporate budget and controlling its execution on all levels;
- introduced a monthly, quarterly and annual cash flow planning system;
- developed a forecasted corporate business plan for 3 years and Gazprom’s financial model covering 15 years of forecasted operations;
- set up and launched the Department of Intra-Corporate Audit and Control over Subsidiaries’ Businesses;
- ratified the Leasing Development Regulations allowing the Company to substantially reduce expenses on equipment and machinery procurement;
- adopted a decision to develop project financing while implementing large-scale projects with the view of minimizing the Company’s debt burden;
- elaborated a new financial structure making it possible to manage finance and exercise contol over expenses in an efficient manner.
Information Directorate, OAO Gazprom