Rusneftegaz held our 2022 annual general meeting on 8 April at a venue in Moscow, with delegates attending in person for the first time since 2019. While the notion of hosting a teleconference option was deliberated with key stakeholders in private talks, the suggestion was unanimously rejected. The assembly was convened following the publication of our 2021 consolidated financial statements in the preceding days, which, in conjunction with conversations regarding broader business strategy, were the primary focus of the discussions held throughout the main session. Such results were prepared in accordance with International Financial Reporting Standards, otherwise known as IFRS, and were audited accordingly. It was also resolved to approve our director’s report, providing a comprehensive discussion and analysis of the undertakings of last year, in addition to the other aforementioned documents. All tabled motions also passed without any issues arising, including a proposition to re-elect all members of the board of directors. Nevertheless, it was agreed that the audit committee, whose composition remains unaltered from last year, be bestowed with the power to nominate an alternative independent auditor if necessary. This is despite the fact that a proposal to reappoint the current firm was approved, although we are yet to receive a commitment that this particular entity will be able to complete this process in 2023. If this were to occur, our shareholders will be called to an extraordinary general meeting to vote on an amendment to this policy at the appropriate time. During the yearly congress, attendees chose to forego any type of dividend payment for a further twelve months, with management citing the need to reinvest earned funds into expanding many areas of our operations. Consequently, there was broad consensus amongst participants at this gathering that the prospects of our company were excellent and that all of those affiliated with our organization have a valid reason to be optimistic about the future. At the culmination of the showpiece event, our Deputy Chief Executive Officer, Aleksandr Filyurin, delivered these remarks:
“I think first and foremost the board and I would like to place on record our thanks to everyone associated with this great company in what has been an exceptionally challenging period for us. To be honest, we would be in a far worse situation today if it weren’t for the extraordinary efforts that they have made to get us over line in the end. Now, I think that I can speak for almost everyone when I say that I am incredibly happy that the pandemic appears to be over, and we can move on from it and forget that it ever happened. But that said, generally speaking, it didn’t affect us too badly. You only need to look at the financial reports we just published to see that Rusneftegaz had record-high revenues for last year, which considering the circumstances, I think is actually an amazing achievement. Obviously since then circumstances have changed again, and to be very honest, I don’t really want to comment on that at the moment. But I think that it is important to say that we are ready for whatever happens next. Listen, we proved that we could deal with anything during the pandemic, and that hasn’t changed. Okay, so maybe we are going to have to adapt, but that is what we have always done here. We just need to believe in ourselves and stay determined to take on anyone that opposes us, whether that is here or anywhere else.”
Whilst the majority of the totals disclosed in our fiscal statements may be considered favorable at this time, the forecasts for our results next year are undoubtedly far more pessimistic. The deterioration in geopolitical relations that has arisen in the months prior to the release of this financial report is anticipated to not only affect us in the immediate future but also in the years ahead. Since the beginning of 2021 there has been a material deflation in the value of the ruble, and while it has still recovered from its nadir in early March, the de facto purchasing power of the currency continues to be substantially reduced. Although in recent times our organization has undertaken actions to mitigate the effects of such volatility on our enterprise, including through increasing international trading to create receipts deriving from other currencies, these efforts may have been in vain. Despite the fact that our leadership maintains comprehensive contingency plans should controls on products of Russian origin take effect on the global markets, this will be at the cost of heightened expenses for transactions and lowered potential revenues from sales. This period may be an opportunity for Rusneftegaz to commence business in different corners of the globe, but it is likely to occur to the detriment of relationships with long-standing partners and customers.
The major caveat to this is that since the advent of the New Year, commodity prices have also remained unquestionably higher than their existing values for most of the past two decades, which will offset any negative factors weighing on our enterprise. Moreover, it is unlikely that such figures for oil and gas will recede for some time; those jurisdictions that implement embargoes on Russian petroleum and refined products will almost certainly be unable to replace these goods with ease. In fact, it is reasonable to predict that arbitrary prohibition will have a wider economic impact on any such nation, to such an extent that all such measures may be withdrawn sooner than otherwise anticipated. Consequently, next year our firm will continue to execute our international expansion plans with renewed haste and vigor, and will find means to guarantee our business succeeds in new countries and territories. The unceasing fulfillment of both our immediate and long-term strategic goals is paramount to the steadfast development of not only our entity but also our personnel. Ultimately, we intend to be vigilant towards any potential changes that may afflict our organization in the times ahead, but our management is adamant that we retain the financial and intellectual resources to not only face the aforementioned difficulties but surmount them in a dignified manner. All queries in relation to our annual general meeting may be submitted via the conventional channels of email and telephone in due course. We require your cooperation and understanding at this critical time.