Dividends
The Company’s dividend policy is shaped in accordance with the Regulation on the Dividend Policy (new revision approved by the Board of Directors in Minutes No. 18/10 of September 03, 2010).
The Regulation is framed so as to dovetail with the current legislation of the Russian Federation and the Articles of Association of IDGC of Centre, JSC , as well as with the recommendations of the Corporate Governance Code and other by-laws of the Company.
The dividend policy is based on the following principles:
- The calculation of dividends is based on the application of profits excluding the influence of financial investments revaluation;
- the need to maintain the Company at the required financial and technical level (implementing the investment programme), and assure the Company’s development prospects;
- compliance of the dividend distribution and payment practices adopted within the Company with the legislation of the Russian Federation and the best standards of corporate governance;
- a good balance of interests of the Company and shareholders;
- the need to enhance the Company’s investment attractiveness and its capitalisation;
- transparency of the dividend distribution and payment mechanism;
- ordinary dividends are paid only in the event of full payment of preference dividends in accordance with the Articles of Association of the Company (if the Company is authorised to issue preference shares).
In accordance with the current Regulation on the Dividend Policy of IDGC of Centre, JSC , dividends for the reporting financial period shall be paid in the absence of the significant technological breakdowns in the work of the equipment and achievement of the reliability indicator, as well as in simultaneous fulfillment of the following criteria:
- availability of net profit at the end of the financial period;
- availability of net profit at the end of the financial period excluding financial investments revaluation;
- debt to EBITDAEarnings Before Interest, Tax, Depreciation and Amortisation; indicator showing the profit of the Company before deduction of income taxes, accrued interest on loans and depreciation ratio (less than three — if this criterion is not fulfilled the redemption of borrowed assets shall take priority over the payment of dividends ).
In 2007-2009, the General Meeting of the Shareholders of the Company resolved to refrain from distributing dividends for the reporting periods in question. This was due to the fact that the financial performance of IDGC of Centre, JSC in 2007 was calculated net of the DGC’s performance (affiliation of the regional grid companies took place in 2008), as well as due to the need for the Company to implement the investment programme at a time when the procurement of loans and credits for investment financing resulted, during that period, in the unprofitability of investment activities.
For 2010 the Annual General Meeting of the Board of Directors of the Company (Minutes No.01/11 of June 21, 2011) adopted a resolution on payment of dividends in the amount of RUB 610.932 mn. As of December 31, 2011 the amount of the dividends paid out by the Company amounted to RUB 602.169 mn adjusted for taxation.
The Board of Directors of IDGC of Centre, JSC recommended to the Annual General Meeting of the Shareholders to allocate RUB 422,179,414.68 for payment of dividends at the end of 2011.
Dividend history:
| IndicatorIndicators are calculated on the basis of RAS data. | 2009 | 2010 | 2011 (plan) |
|---|---|---|---|
| Dividends, RUB | 0 | 610,932,000.00 | 422,179,414.68 |
| Share of dividend in net profit, % | 0 | 12.96 | 8.11 |
| Dividends per share, RUB | 0 | 0.01447 | 0.01 |
| Earnings per share, RUB | 0.05 | 0.11 | 0.12 |