Progress of the performance management program

2015 opex reduction on 2012, in consort with the strategNo.1-ref, totaled RUB 1,912 mn or 19.33%. To execute the directiveNo.2-ref we decreased 2015 per-unit opex 7.7% or RUB 944 mn YoY. To cut wage expenses the Company negotiated the indexation of 1st grade worker salaries since 01.07.2015 at RUB 6,500 (instead of RUB 6,914, initially stated by industry RAEL Union agreement) with Company’s worker trade union. Pursuant to Rosseti decree No.219 dated as of 03.12.2014 with regard to reduction of administrative costs, salaries of directors and specialists of Company’s and branch HQs underwent no indexation during 2015, salary budget concurrently growing only 6%. Besides, YoY economy was also achieved in: i) energy for economic needs, with RUB 5.5 mn saved due to energy-saving activities (heating shut-off in garages and cabinet driers, reduced temperature at working premises); ii) security services, with RUB 34.2 mn saved due to partial in-house transfer of fire and security alarm services and economy in tenders; iii) repair outsourcing, with RUB 11 mn saved due to economy in tenders.


Company’s dividend policy focuses on enhancement of Company’s investment prospects and market value. The policy balances between interests of the Company and its stockholders. The Regulations on Dividend PolicyNo.43-ref stipulate Company’s dividend policy.

Fundamentals of the dividend policy are:

  • Dividends are basically calculated from the profit, no adjustments for revaluation of financial assets to be made;
  • Maintenance of required financial and technical status of the Company (execution of investment program), provision of Company’s development prospects;
  • Compliance of dividend calculation and distribution practices with laws of Russia and best corporate governance standards;
  • Optimal mixture of interests of the Company and its stockholders;
  • Required enhancement of Company’s investment prospects and its market value;
  • Provision of transparency of dividend calculation and distribution;
  • Dividends are distributed among holders of common shares only if holders of preferred shares collect all dividends as stated by the Company’s charter (if the Company has any preferred shares).
Allocation of 2012-2014 profit*, RUB thous. 2012 actual (AGSM conducted in 2013) 2013 actual (AGSM conducted in 2014) 2014 actual (AGSM conducted in 2015)
Non-distributed profit (loss) of the reported period, incl.: 625,814 354,581 2,006,783
Reserve fund 31,291 17,729 80,260
Enterprise development 438,022 247,673 1,419,426
Dividends 156,501 89,179 507,097
Recovery of losses of previous year 0 0 0

Information on allocation of profit as decided by Annual General Meeting of Stockholders:
AGSM conducted in 2013 (FY2012 results) – AGSM minutes No.6 dated as of 14.06.2013.
AGSM conducted in 2014 (FY2013 results) – AGSM minutes No.7 dated as of 27.06.2014.
AGSM conducted in 2015 (FY2014 results) – AGSM minutes No.8 dated as of 18.06.2015.
Pursuant to the Company’s charter, allocation of FY2015 profit will be decided upon by the Annual General Meeting of Stockholders to be conducted in June, 2016.

Total FY2014 dividends, distributed among stockholders as of the date when this report was prepared, amounted to RUB 502.239.4 thous. (99.047%). RUB 4,857.4 thous. were not distributed among entities entitled to collect dividends, since these entities failed to submit relevant and accurate data, required for dividend transfers.