On 7 April, Rusneftegaz hosted our annual general meeting in Moscow for a contingent of our executives and key stakeholders, who engaged in crucial discussions regarding our current activities. These talks followed the publication of our 2016 financial statements in the days prior, prepared in accordance with all material International Financial Reporting Standards, otherwise known as IFRS, and were audited pursuant to all relevant laws. On the day itself, all proposed resolutions were passed, including a motion to approve our director’s report, which proactively demonstrates the success we have achieved over the past twelve months. It was also resolved to retain the services of our external auditor, in addition to approving the additions of Sergei Kolesnikov and Eduard Rudakov as independent directors, who will thus commence such roles with immediate effect. Beyond the discussed amendments to this body, the board will keep its present composition with all existing members retaining their respective positions, although the constitution of our audit committee has been updated to reflect the changes in our management. It was also agreed at the yearly conference that no dividend should be paid for the results recorded last year, as this allows us to expedite our investment plans for the remainder of our five-year strategy. Such endeavors will yield increasingly efficient operations that will be capable of operating more profitably than today. After the event, our Deputy Chief Executive Officer, Aleksandr Filyurin, issued the following remarks:
“First and foremost, I would like to congratulate Sergei and Eduard on their election and welcome them to our board. Both of them are incredibly talented and bring great skills to our organization. I am looking forward to working with them in the years ahead. I would also like to place on record the thanks that the board and I have for everyone who works for Rusneftegaz. It has been another incredible year for us, and we could not have done it without them. We have achieved great things this year; all our plans that we made when we first joined are now falling into place. We are making major investments in almost every area of this company and there is no doubt that we will begin to see the impact of that within the next few years. When we first arrived here, a lot of the infrastructure we inherited was really outdated, but to be honest with you, now some of it is truly state-of-the-art stuff. You only need to look at the state of our electricity division to see how it has been completely transformed; it is definitely much, much better than it was before. Obviously, there is still a lot that needs to be done, but we are very clearly making progress with everything now. We have had great success this year overhauling and streamlining our management structure, which is something that I knew that we needed to do almost from the moment that I started working here. Overall, I am very pleased that everything is beginning to take shape now; it really gives us ground to be optimistic for the future of this great company.”
It must be noted that for next year earnings from oil and gas are projected to increase, principally in alignment with predicted commodity price rises, but also in response to the major investments we have undertaken during the last twenty-four months. However, ongoing volatility in the value of the former means there is a degree of variability in such projections. We also plan to reassert our current policy of reinvesting all our income into useful assets while simultaneously holding sufficient levels of cash. Our latest fiscal forecasts for the next three years suggest that such actions will result in higher profits not only throughout this timeframe, but may ultimately register an even greater impact in future periods. Similarly, our organization will continue to focus our expenditure on increasing power generation and adequately maintaining all our existing oil infrastructure. The continuing unpredictability in the valuation of petroleum products, combined with the political measures taken against both the Russian Federation and the oil and gas industry, means that our executive leadership believes that it is necessary to undertake plans to mitigate the effects of this uncertainty on our operations. Consequently, we foresee much of our growth deriving from electricity production, and in the longer term, we intend to further our expansion both domestically and overseas. Furthermore, we maintain our desire to be able to use our own technical expertise to produce equipment by 2030, as the acquisition of new apparatus is currently the greatest cash outflow reported in our consolidated financial statements for 2016. Likewise, our ambition to be one of the five largest energy companies in Russia by revenue within as short time as reasonably achievable is still our principal objective, with our board intending to commence a plan to achieve this before the end of the decade. Any questions regarding our annual general meeting or any other matters herein may be addressed to us via telephone or email. We necessitate your cooperation and understanding pertaining to this important topic.