At a glance
Strategic
Report
Corporate
Governance
Shareholders
and Investors
Financial
Statements
Additional
information
In 2015, MegaFon continued to successfully pursue sustainable growth. Our effective management and coordinated efforts to reach our targets, ensured a solid performance during the reporting period and helped us successfully complete our three-year strategic cycle for 2012–2015. I am proud to say that notwithstanding a very challenging macroeconomic environment MegaFon proved itself capable of adapting to a fast-changing environment, becoming more customer-centric while holding onto its own concepts and ideas.
Our corporate governance framework was established and operates in accordance with requirements, regulations and recommendations of the Central Bank of Russia, the UK Financial Conduct Authority, Moscow and London Stock Exchanges, as well as in line with best global practices. In 2015, the Board of Directors prepared to amend the Regulations on the Audit Committee and the Remuneration and HR Development Committee to align them with recommendations issued by trade regulators, and with best practices. We intend to expand the functions of these committees, taking one more step towards optimising of the Company’s corporate governance framework. In other words, we are consistently providing proof of our commitment to the pillars of corporate governance: transparency, fairness, responsibility, and accountability.
With the financial and information markets, the Company is taking great care to protect insider information and reinforce our anti-corruption efforts. We are closely monitoring all relevant regulators changes while adopting risk management best practices. In addition, we have planned to carry out a comprehensive set of measures aimed at the development of a risk culture in 2016 and 2017 and the assessment of risks in the Company’s material processes and projects, including the Shared Service Centre, Unified Billing and business planning. Particular attention will be given to more fundamental training of the Company’s senior management on risk management and mitigation.
Another important development in improving the effectiveness of the Company’s corporate governance was the implementation of the new “two keys” (“two-in-the-box”) principle for the Russian corporate practice), providing for the appointment of several sole executive bodies acting independently from one another in clearly defined roles. In June 2015, the Annual General Meeting of Shareholders approved a new version of MegaFon’s Charter introducing the position of the Chief Operating Officer responsible for day-to-day management of the business, including business segments, infrastructure, branches and subsidiaries.
In spring 2015, an independent assessment of the Board of Directors’ performance was carried out. Based on the assessment results, the Board of Directors defined a number of priority areas for improving its performance, in particular:
The results of our three-year growth strategy show that the Company achieved significant gains – our strengthened market position, enhanced customer base, and improved business efficiency brought MegaFon to the forefront of innovation.
Today, the Russian telecommunications industry continues to evolve, with changes from the customer demand mix and retail business transformations, through modified approaches taken by mobile operators to infrastructure development, for example, splitting off tower infrastructures into separate companies. And we plan to go a new corporate strategy enable continued growth for the Company at this inflection point, albeit on a different path, one which is adjusted to changes in the economic environment, market demand and evolving needs of our customers.
Protection of the interests and rights of our shareholders and investors lies at the heart of MegaFon’s dividend policy. Since floating its shares on the London Stock Exchange and Moscow Exchange, the Company has regularly paid dividends to its shareholders, starting from FY2012. In 2015, the Annual General Meeting of Shareholders resolved to pay RUB 10 bn in dividends for FY2014 (RUB 16.13 per share or GDR). In addition, the Extraordinary General Meeting of Shareholders resolved to payment of additional RUB 40 bn in dividends for the first 9 months of 2015 (RUB 64.51 per share or GDR). As a result, dividends accrued in 2015 totalled a record RUB 50 bn.
MegaFon provides communications services on a daily basis to ms of our subscribers. We are fully aware of the significance of our services in the daily life of our customers. We have great responsibilities to both the state and society as a whole.
Therefore, we pay particular attention to our interaction with stakeholders – shareholders, customers, partners, and of course, our people. Fairness and respect are the basic principles underpinning our ongoing dialogue with stakeholders. For us, sustainable development is not just another area of activity – it is an integral aspect of MegaFon’s business strategy. Finally, we value our reputation and take pride in the high customer satisfaction rates that we have achieved.
In line with the Board of Directors’ scope of authority set out in the Company’s Charter, in 2016, we intend to continue operating for the benefit of our shareholders, customers, and employees – defining priority areas, improving decision-making management, and streamlining our motivation system.
Despite the challenging macroeconomic situation in Russia, we look to the future with confidence. Our expertise and our insights into market processes and industry trends us well-positioned not just to overcome the current economic downturn but to retain our market position.
I want to thank all MegaFon employees, who were “Truly with Us” in this challenging environment and delivered solid performance for the Company in 2015.
SERGEY SOLDATENKOV,
Chairman of the Board