Corporate governance

The company and stock market

During the first four months of 2016 investors actively increased their investments into the Russian stock market. But in the middle of the year, on the back of expectations regarding Brexit voting, rise of US Federal Reserve System rate and oil price corrections, investors began to quit the Russian stock market. However, MICEX PWR index behaved otherwise: in May-September the sector was flooded with investor attention. Such behavioral pattern shown by investors may be a mere underestimation and low interest among investors to the sector in the previous years. Positive news regarding dividends amounting to 50% of the net profit shown by the sector companies also pumped the interest of investors to the sector.

Active trading subsided only in October.

Source: 108.16% 78.10% 28.7% MICEX MICEX PWR IDGC of Urals

Situation changed dramatically in November on the back of OPEC’s historical decision to cut oil output and unexpected US presidential elections results. OPEC’s decision to cut oil output boosted crude oil prices that ended in positive impact on rouble-nominated assets. However, the key trigger for foreign investors was US presidential elections won by Donald Trump. According to the data from Emerging Portfolio Fund Research, almost US$ 1.6 billion were invested into Russian funds between the Trump’s victory in November and end of 2016 as a compensation for outflows in previous years.

During 2016 the investment community showed a far greater interest to the Company’s stock, if compared to the previous years.

the annual trading volume in monetary and quantitative terms totaled
annual number of transactions amounted

IDGC of Urals’ trading volume in RUB million during 2016 (main market)

Source: 7,1 4,9 6,7 99,7 159,6 41,4 29,1 17,5 20,8 21,7 28,7 18,4 Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 0 40 80 120 160 200

IDGC of Urals’ trading volume in million shares during 2016 (main market)

Source: 1600 1400 1200 1000 800 400 200 0 74,0 51,3 60,7 1349,3 323,4 211,6 105,3 136,4 151,7 175,2 110,9 837,5 Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.

The key alleged factors of immense interest to the Company’s shares from investors during 2016 are:

  • a)low interest of investors to the Company’s shares in previous years due to several reasons (extreme volatility of the Russian stock market and overall low investment activity caused by geopolitical risks, drop in commodity prices, Fx volatility, general deceleration of Russian economy, unclear regulatory policy towards the sector);
  • b)the highest dividend (50% of RAS net profit) paid by the Company’s in its lifetime.
The price for the Company’s common shares added 78.1% during 2016, starting from RUB 0.0918 (average weighted price of the first trading day of 2016) and ending RUB 0.1635 (average weighted price of the last trading day of 2016). The Company’s market value as of the last trading day (30.12.2016) totaled RUB 14,294,884,413.75.
Здесь вы можете скачать полный отчет 2016, отдельные главы в формате PDF и наиболее важные таблицы в формате Excel.
1About company
1.1Mission and strategic goals
1.2Market share
1.3Key 2016 events
2Board of directors’ progress report
2.1Letter to stockholders
2.2Production capital formation
2.2.1Network exploitation
2.2.2Electricity transmission
2.2.3Technological connection
2.2.4Development of telecommunications and IT systems
2.2.7Efficacy enhancement
2.3Financial capital formation
2.3.1Analysis of revenues and expenses
2.3.2Analysis of financial standing
2.3.3Analysis of receivables and payables
2.3.4Analysis of credit portfolio
2.3.5Description of tariff policy
3Corporate governance
3.1Corporate governance practices
3.2Corporate governance system
3.2.1General meeting of stockholders
3.2.2Board of Directors
3.2.3Board of directors’ committees
3.2.4General director and executive board
3.2.5Remuneration and compensation policy
3.3Oversight system
3.3.1Board of internal auditors
3.3.2Independent auditor
3.3.3Internal control
3.3.4Risk management
3.3.5Security and anti-corruption
3.4Investor and stockholder relations
3.4.1Shareholder capital structure
3.4.2 Shareholder rights
3.4.3The company and stock market
3.4.4Communications with market participants
3.4.6Allocation of profit
4.1Human resources management
4.2Customer support
4.3Supplier relationship management
4.4Public and goverment relations
4.5Environment protection
5.1Prepared under Russian accounting standards
5.2Prepared under international financial reporting standards
5.3Related-party transaction report
5.4Corporate governance code compliance report
5.6Abbreviations and acronyms