Shares and Dividends
Authorised capital and authorised shares
In the reporting year, an additional issue of shares began to be placed, continuing into 2021. The authorised capital of the Company did not change over the reporting year.
The Company did not place any preferred shares.
The Articles of Association of Rosseti Kuban, PJSC states that each registered ordinary share of the Company grands the same scope of rights to its holder. The rights of the shareholders are specified in the Company’s Articles of Association.
Shareholders are bound to abide the statutory requirements of the Russian Federation, the Company’s Articles of Association and other by-laws, not to disclose confidential information and information that constitutes trade secrets, to bear the risk of losses related to the Company’s activities within the value of their shares.
Issuance of Additional Shares
During the reporting year, in accordance with the decision of the General Meeting of Shareholders dated 24 February 2021 to increase the authorised capital, the Company placed additionally issued shares, the state registration of which was made by the Bank of Russia on 1 April 2021.
The listing prospectus containing the conditions of the placement of securities and registered by the Bank of Russia also on 1 April 2021 provided for a maximum placement period of one year from the date of state registration of this additional issue of securities.
On 25 April 2022, the Bank of Russia registered the prospectus of the Company’s securities providing for extension of the deadline for placement of additional shares until 1 April 2023 by extending the deadline for collection of offers to 2 March 2023.
On 20 March 2023, the Board of Directors resolved to approve a securities prospectus for Rosseti Kuban, PJSC, providing for an extension of the term of placement of securities pursuant to paragraph 12 of Article 22 of Federal Law No. 39-FZ dated 22 April 1996 on the Securities Market (Minutes No. 513/2023 dated 20 March 2023); in this connection, placement of additional shares of this issue is suspended until the registration of the securities prospectus by the Bank of Russia.
On 21 March 2023, the approved securities prospectus was sent to the Bank of Russia for registration. Once this prospectus is registered by the Bank of Russia, the placement of additional shares will continue.
Share Capital
The largest shareholders of the Company as at 31 December 2022:
- Rosseti, PJSC, which owns 93.96% of the voting shares of the Company
- DVEUK-UNPG, JSC, which owns 5.73% of the voting shares of the Company
The Russian Federation indirectly owned voting shares of Rosseti Kuban due to its dominant shareholding in the above companies (88.04% in Rosseti and 100% in DVEUK-UNPG).
The Company does not have any other shareholders who own more than 5% of Rosseti Kuban’s shares. The Company has no information about any shareholder agreement made. The Company does not hold any shares of its own. There are no cross-holdings of the Company’s shares.
In addition, there were minor changes (up to 1%) in the structure of the Company’s share capital due to placing additionally issued shares.
The following entities ceased to operate on 9 January 2023:
- Public Joint Stock Company Russian Grids (abbreviated Rosseti, PJSC) – the Company’s largest shareholder
- Joint Stock Company Kuban Main Grids
- Joint Stock Company Tomsk Main Grids
- Joint Stock Company Far East Energy Management Company – UNPG (also a shareholder of the Company) in connection with their merger with Public Joint Stock Company Federal Grid Company – Rosseti (abbreviated name of Rosseti, PJSC, formerly FGC UES, PJSC). The latter is the universal legal successor of the above entities and has acquired ownership of all shares of Rosseti Kuban, PJSC owned by the above-mentioned shareholders of the Company. Thus, the share of Rosseti, PJSC in the total number of outstanding shares of Rosseti Kuban, PJSC since 9 January 2023 is 99.69%.
Equity Market and the Company’s Capitalisation
Shares of Rosseti Kuban, PJSC are traded on tier 3 of the List of Securities Admitted to Trading on the Moscow Exchange; ticker: KUBE, ISIN code: RU0009046767.
The Company’s market capitalisation at the end of 2021 was RUB 22.46 billion and at the end of 2022, including the additionally issued shares, –RUB20.38 billion (calculation based on market price 3).
The maximum level of capitalisation in 2022 was RUB 28.15 billion, the minimum level was RUB 13.75 billion. In the reporting year, the share price declined by 14.9% (closing price calculation) on the back of a 43.12% increase in the MICEX Index and a 27.09% decrease in the MICEX Power Index.
The low trading activity in 2022 is due to the small number of free-floating shares.
The Company’s shares are not included in the stock index calculation bases.
Dividends
The Dividend Policy of the Company is the set of principles and methods used in the Company to determine the ratio between the capitalised portion of the Company profits and the amounts paid as dividends, as well as the system of relations and principles for determining the procedures and the terms of dividend payment, the establishment of Company responsibility for the dividend payment.
The Dividend Policy of the Company is based on the strict observance of the shareholders’ rights as prescribed by the existing laws of the Russian Federation, the Articles of Association, and the internal documents of the Company. The Dividend Policy of the Company is aimed at raising the investment attractiveness of the Company and increasing its market capitalisation. The Policy is based on the balance of the interests of the Company and its shareholders.
The Dividend Policy of the Company is aligned with the Regulations on the Dividend Policy approved by the resolution of the Board of Directors on 31 January 2018 (Minutes No. 297/2018 dated 1 February 2018) and published on the corporate website in the About the Company/ Constituent and Internal Documents section.
Main principles of the Company’s Dividend Policy:
- Compliance with the Company practices for dividend accrual and payment, the laws of the Russian Federation and the standards of corporate governance (decree No. 1094-r of the Government of the Russian Federation dated 29 May 2017)
- Crearing an optimal balance of interests of the Company and its shareholders
- Setting the dividend volume to at least 50% of the net profits determined according to the financial statements, including the consolidated reports prepared following the IFRS and calculated using the procedures set out by the Dividend Policy Regulations
- Ensuring that dividend payments can be made on a quarterly basis if the relevant criteria are met
- Ensuring the maximum transparency (relatability) of the dividend calculation mechanism and dividend payout procedures
- Supporting the positive dynamics of dividend payment volumes provided that the net profits of the Company increase
- Making the information on the Company’s Dividend Policy available to the shareholders and other interested parties
- Maintaining the required level of the financial and technical conditions in the Company (Investment Programme implementation), supporting the Company development prospects
On 5 December 2022, the extraordinary General Meeting of Shareholders of the Company decided to pay dividends on ordinary shares of the Company from the net profit of the Company for 9 months of 2022 in the amount of RUB 1,943,544 thousand in cash.
In accordance with the Company’s Articles of Association, the annual General Meeting of Shareholders will decide on the distribution of profits based on the results of 2022.
The General Meeting of Shareholders of the Company (Minutes No. 45 dated 4 June 2021) decided not to pay dividends based on the 2020 results.
There are no dividend arrears owed by the Company.
