Address from the Chairman of the Board of Directors
The year 2015 for the Company was marked by difficult management decisions, on the one hand, and by achievement of all the target indicators specified in the business plan, on the other hand. Passing the 10th anniversary mark of its operation and development, PJSC MOESK demonstrated traditional level of stability and flexibility against the background of changing financial and economic conditions.
Due to the joint decision-making efforts of its executives, the Board of Directors and shareholders, PJSC MOESK managed to deliver good year-end results. A significant role in this process was played by the crisis management activities and proactive measures aimed at reduction of the Company’s costs. Thus, the Board of Directors made a resolution to reduce the operating costs annually by at least 2-3%.
In 2015, in addition to provision of reliable power supply to the consumers in Moscow region, PJSC MOESK made a significant contribution to improvement of technological connection procedure and availability of grid infrastructure. Understanding the necessity to improve the quality of delivered services, the Board of Directors approved the PJSC MOESK Consumer Service Quality Standard.
The Company also developed its non-tariff income sources, including those associated with provision of additional services to the clients. Moreover, considering the scale of current technological connection activities, it is safe to say that the Moscow region today is one of the areas which show continued dynamic development both in the industrial sector, including the small and medium businesses, and in the residential housing construction sector. In line with these processes, the issue of electric power transmission losses was also addressed. In 2015, these activities were marked by the Board of Directors as a priority field.
Ensuring the financial stability of the Company in 2015, the Board of Directors approved the action plan for increasing the operational efficiency and improvement of financial and economic condition as well as the Business Plan of PJSC MOESK, which includes the investment program and information on the key operational risks for 2016 along with the forecast for 2017-2020.
A special effort was made to fulfill activities associated with centralization and automation of treasury department functions in order to ensure implementation of the unified payment discipline across PJSC “Rosseti” group of companies.
Despite the overall challenging situation in the Russian economy in 2015, PJSC MOESK continued its active work to maintain the investment community’s interest in the Company and raise information transparency through organization of conference calls and meetings with investors.
To facilitate its perception by investors, for the first time in its operation history the Company made a resolution to approve the PJSC MOESK Group Business Plan based on RAS and IFRS principles for 2015 and forecast indicators for 2016-2019.
For a number of years in a row, PJSC MOESK has been demonstrating its commitment to compliance with the Corporate Governance Code: shareholder rights and necessary balance of interests.
Thus, in 2015, PJSC MOESK fully and timely paid dividends in the amount of 2.1 bln rubles or 25% of the net profit according to the RAS based on the work results in the previous period. To ensure adoption of justified decisions by the Board of Director, the representatives of the Company shareholders appointed new members of committees in charge of reliability, strategy and development, audit, personnel and remuneration, and technological connections to electric grids.
The high level of organization/ support of management bodies and their internal interaction with PJSC MOESK in 2015 is recognized by Expert RA rating agency which assigned the A++.gq rating (“Exceptionally highlevel of governance quality”) to the Company.
Additionally, over the year the Company approved the updated internal documents on its investment policy, integrated security assurance and communication policy. Adoption of the Uniform Procurement Standard was another important resolution. The target model of system for operational and process management of distribution grid complex was analyzed. A number of internal structural transformations were implemented, including in the Company’s Moscow branches and executive bodies.
In total, over the reporting period, the Board of Directors of PJSC MOESK considered 391 matters associated with the Company operation and held 25 meetings, including 4 physical meetings.
In 2016, the Company will continue implementation of projects for development of its system of technological connections to the grids along with its activities for modernization of PJSC MOESK assets to improve the quality of its services. Special priority will be given to improvement of availability and transparency of information on the Company activities, including in the course of Company investment program implementation.
I would like to express my sincere gratitude to the shareholders, members of the Board of Directors and executives of the Company for their great teamwork, high level of cooperation and commitment, professional approach to development of electric grid complex in Moscow region.
O. M. Budargin
Chairman of the Board of Directors