Authorised Capital and Securities

Authorised Capital

As at 31 December 2018, the authorised capital of the Company amounted to RUB 7,249,343 (seven million two hundred and forty-nine thousand three hundred and forty-three roubles) and was split into 7,249,343 shares, including:

  • 5,694,468 ordinary shares at par value of 1 rouble each
  • 1,554,875 preferred shares at par value of 1 rouble each

The Russian Federation represented by the Federal Agency for State Property Management owns 100% of Transneft’s ordinary voting shares. Preferred shares of the Company are non-voting and entitle their owners only to receive fixed dividends based on the Company’s performance during the year.

On 27 February 2018, as part of the issue of ordinary shares in 2017–2018 in the form of a closed subscription in favor of the Russian Federation, the Company and the Federal Agency for State Property Management entered into an agreement to acquire ordinary registered book-entry shares of the additional issue subject to a payment in kind in the form of 10,000 ordinary shares of CPC Company (registered in the Cayman Islands’ Company Registrar), which is 100% of the total number of shares placed (issued) by CPC Company, and 10,000 ordinary shares of CPC Investments Company (registered in the Cayman Islands’ Company Registrar), which is 100% of the total number of shares placed (issued) by CPC Investments Company. Gazprombank, JSC acted as a broker in the agreement for and on behalf of the Issuer.

Re-registration of the shares of the above-mentioned foreign companies into the ownership of Transneft was carried out on 14 March 2018. The additionally issued shares were written off from the issuing account and credited to the current account of the Federal Agency for State Property Management on 30 March 2018. The placement results report was registered by the Bank of Russia on 26 April 2018, and changes in the Charter in terms of the size of the authorised capital were registered by the Federal Tax Service of Russia on 22 May 2018.

As a result of the issue, the Company received the right to indirect ownership of CPC-R and CPC-K shares (7%), whose balance sheets include the assets of Caspian Pipeline Consortium (PCP) intended for the transportation of oil through the territory of two countries — Russia and Kazakhstan.

Information about the Company’s securities as of 31 December 2018
Type of shares Total number Par value of all shares, RUB State registration number of the issue and date of state registration
Ordinary shares March 2018 saw placement of 125,720 additionally issued shares, state registration number 1-01-00206-А-003D dated 11 January 2018. The placement report was registered on 26 April 2018. 5,546,847 5,546,847 No. 1-01-00206-A dated 20 December 2007
21,901 21,901 No. 1-01-00206-А-002D dated 17 November 2016 Additionally issued shared were placed on 2 February 2017, the placement report was registered on 20 March 2017.
125,720 125,720 No. 1-01-00206-А-003D dated 11 January 2018 Additionally issued shared were placed on 30 March 2018, the placement report was registered on 26 April 2018.
Preferred shares 1,554,875 1,554,875 No. 2-01-00206-A dated 20 December 2007

Shareholders of the Company whose share in the authorised capital of Transneft is more than 2% The information is presented based on the list of persons registered in the shareholder register of Transneft as at 31 December 2018. If the Company’s shares amounting to two or more percent of the authorised capital or ordinary shares are registered in the shareholder register of the Company in the name of a nominee, this fact is specified. Pursuant to the Federal Law On Securities Market, the list of holders of the Company’s securities can be provided if it is needed to perform the obligations stipulated by federal laws.
As at 31 December 2018, the Company had no obligations stipulated by federal laws, performance of which required the list of securities’ holders to be compiled and obtained.
Name Entity type Location Share in the authorised capital Share for ordinary shares Share for preferred shares
The Russian Federation represented by the Federal Agency for State Property Management Ultimate beneficiary 9 Nikolsky Per., 103685, Moscow 78.5515% 100% None
National Settlement Depository (nominee) Nominee, legal entity 12 Spartakovskaya Ul., 105066, Moscow 20.8415% None 97.1700%
Legal entities controlled by Transneft Legal entities, holders of quasi-treasury shares 0.0215% None 0.1004% (1,561 preferred shares)
Others 0.5855% None 2.7296%

The Russian Federation enjoys no special right to participate in the management of the Company (the golden share).

As at 31 December 2018, the following were registered in the shareholder register:

  • 2,620 natural persons
  • 27 legal entities, including 1 nominee
The Company’s authorised capital structure as of 31 December 2018 (%)

Stock Exchange Information on Trading the Company’s Shares

Preferred shares of the Company are included in the Level One listing of the Moscow Exchange, they are among the key indexes of the Exchange, and make a component of the MSCI Russia (Morgan Stanley Capital International) index.

General information on the preferred shares of Transneft
Share category Preferred registered book-entry share
Par value RUB 1
Moscow Exchange ticker symbol TRNFP
ISIN code RU0009091573
Bloomberg Code TRNFP RX

Weight of Transneft’s preferred shares in the stock indexes of the Moscow Exchange, as at 31 December 2018
Index name Weight, %
Broad Market Index 0.71
MOEX Index 0.83
Oil & Gas sectoral index 4.77

Trading results for preferred shares of the Company
Indicator 2016 2017 2018
Trading volume (RUB billion) 103.9 131.7 62.5
Minimum price 132,600 156,000 142,500
Maximum price 235,700 222,500 185,000
Year-end price 197,950 179,900 163,450

Market capitalisation of Transneft’s preferred sharesAs of the end of each year. As reported by the Moscow Exchange (RUB billion)

Dividend Policy and Profit Distribution

On 12 December 2016, Transneft’s Board of Directors approved (Minutes No. 25) the Dividend Policy of the Company (hereinafter referred to as the Dividend Policy). Subject to the Dividend Policy, the following principles shall be observed when determining the amount of dividends paid out for shares of all categories (kinds):

  • Transparency of dividend amount determining procedure
  • Unconditional accomplishment of the Company’s primary objectives stipulated in the Articles of Association
  • Focus on enhancing the Company’s investment appeal
  • Ensuring financial stability and minimising eventual possible negative effects on the Company’s credit ratings
  • Taking the amount of dividends on shares of all categories (kinds) into account when calculating tariffs for oil trunk pipeline transportation services set by the Federal Antimonopoly Service’s rates
  • Sufficiency of the funds available to the Company and obtained from its core business activity to finance operational, investment and financial activities

Pursuant to the approved Policy, the base level of dividend payments amounts to 25% of the consolidated net profit for the reporting year calculated under IFRS and normalised taking into account the share of profit in subsidiaries and jointly controlled companies; income gained from revaluation of financial investments; exchange rate positive balance and other irregular (non-recurring) nonmonetary components of the net profit.

According to the Articles of Association of Transneft, the dividend paid on one preferred share can not be less than the dividend paid on one ordinary share.

According to Directive of the Federal Agency for State Property Management No. 498-r dated 30 June 2018 and No. 625-r dated 30 August 2017, the total dividends in the amount of RUB 82,544,974,829.57 were paid (27,607,496,252.96 for the first half of 2017, and 54,937,478,576.61 for 2017), including:

  • RUB 3,875.49 per one ordinary share (5,568,748 shares), amounting to RUB 21,581,601,039.76 in total
  • RUB 7,578.27 per one ordinary share (5,694,468 shares), amounting to RUB 43,154,216,010.36 in total
  • RUB 3,875.49 per one preferred share (1,554,875 shares), amounting to RUB 6,025,895,213.20 in total
  • RUB 7,578.27 per one preferred share (1,554,875 shares), amounting to RUB 11,783,262,566.25 in total

The dividends resulting from the 2017 performance were paid in full and within the time limit prescribed by the applicable Russian laws.

The amount of dividends for 2017 amounted to 50% of Transneft's normalised net profits under IFRS.

As of 31 December 2018, Transneft has no dividend debt due to the federal budget.

Transneft’s dividend history
Name 2017 (for 2016) 2017 (interim, based on 1H 2017 results) 2018 (for 2017)
Share category (RUB per share) ordinary 4,296.48 3,875.49 7,578.27
preferred, type A  4,296.48 3,875.49 7,578.27
Total number of shares, pcs 7,123,623 7,123,623 7,249,343
Total amount of dividends, RUB 30,606,503,747.04 27,607,496,252.96 54,937,478,576.61
Dividend payout ratio from net profit under RAS 100% 100% 140%
Resolution on dividend payment AGMS dated 30 June 2017 EGMS dated 30 August 2017 AGMS dated 30 June 2018

Dividends paid (RUB million)
2016 2017 2018
Dividends paid 12,801.4 58,214 54,937,5

Information on profit distribution
Name 2016 (for 2015) 2017 (for 2016) 2018 (for 2017)
Retained profit (loss) in the reporting period, including: 12 801,4 30 606,5 58 843,6
Dividends paid (RUB million) 12 801,4 30 606,5 58 843,5
Reserve fund replenishment (RUB million) 0,02
Kept at Transneft’s disposition (RUB million) 0,06

Bonds

Rouble Bonds

Issues of corporate bonds in circulation
Series Date of placement Maturity Date / date of Offer Nominal volume (RUB) Coupon rate (current, % per annum)
03 30 September 2009 18 September 2019/ – 65,000,000,000 12.05
Issues of exchange bonds in circulation
Series Date of placement Maturity Date / date of Offer Nominal volume (RUB) Coupon rate (current, % per annum)
Exchange bonds, series BO-05 21 April 2016 9 April 2026 / 15 April 2021 17,000,000,000 10.10
Exchange bonds, series BO-06 6 September 2016 25 August 2026 / 30 August 2022 17,000,000,000 9.30
Exchange bonds, series BO-07 26 April 2017 17 April 2024 17,000,000,000 8.75
Exchange bonds, series BO-001R-01 10 June 2016 2 June 2023 20,000,000,000 9.90
Exchange bonds, series BO-001R-02 8 July 2016 30 June 2023 10,000,000,000 9.65
Exchange bonds, series BO-001R-03 11 August 2016 3 August 2023 15,000,000,000 9.45
Exchange bonds, series BO-001R-04 6 October 2016 29 September 2022 15,000,000,000 9.30
Exchange bonds, series BO-001R-05 3 February 2017 26 January 2024 15,000,000,000 9.25
Exchange bonds, series BO-001R-06 29 March 2017 24 March 2021 20,000,000,000 9.00
Exchange bonds, series BO-001R-07 3 May 2017 28 October 2020 30,000,000,000 8.75
Exchange bonds, series BO-001R-08 19 October 2017 09 October 2025 25,000,000,000 7.90
Exchange bonds, series BO-001R-09 26 February 2018 21 February 2022 15,000,000,000 7.15
Exchange bonds, series BO-001R-10 13 April 2018 8 October 2021 15,000,000,000 7.00

Credit ratings

Information on credit ratings as of 31 December 2018
Rating agency Rating tier 31 December 2018
Standard & Poor’s In foreign currency: ВВB— (stable outlook)
In national currency: ВВВ (stable outlook)
Moody’s Ваa3 (positive outlook)
Expert RA RuAAA (stable outlook)

In February 2019, Moody’s upgraded Transneft’s rating to Baa2 with a stable outlook due to the increase in the sovereign rating of the Russian Federation by one level (to Baa3).

Shareholder and Investor Relations

The Company seeks most efficient interaction with the shareholders, investors and other stakeholders, ensuring regular, prompt, accessible, complete and unbiased disclosure of information, with emphasis on concurrently providing material information to various categories of stakeholders.

The Company mandatorily discloses information on its activities:

In accordance with the Regulations on the Information Policy, the Company implements a number of activities for voluntary disclosure of information, including:

  • Publishing (placing) information on the Company’s website
  • Managing corporate social media accounts
  • Disclosing information during direct interaction of the Company with shareholders, investors, mass media and other stakeholders
  • Issuing corporate publications
  • Providing comments to questions asked by mass media, securities’ market professionals and other stakeholders, verbally or in writing
  • Preparing and disclosing the Company's Sustainable Development Report compiled in accordance with international GRI standards

The Company maintains a high level of interaction with investors and shareholders. The following measures were implemented in 2018:

  • The new edition of the Regulations on Provision of Information and Documents to Shareholders of the Company was approved. The Regulations were brought into line with the amendments to the Federal Law On Joint-Stock Companies that have come into force in terms of the rules governing the information rights of shareholders. In addition, in order to implement the recommendations of the CGC, the Regulations establish the right of a shareholder owning 25% or more of the Company's voting shares to receive information and documents of Transneft subsidiaries
  • The Company's website was updated; and the list of voluntarily disclosed information was significantly expanded. The Information for Shareholders section contains frequently asked questions, the dividend history and contact information for communication with investors and shareholders, as well as hotline numbers for all questions related to receiving dividends
  • Meetings and consultations with representatives of the analytical and investment community were held, including with the participation of the Company's management. In October, an open webinar was held with the participation of Gazprombank as a professional consultant and organiser
  • A corporate broker contract was concluded with Gazprombank, JSC to provide corporate communications with the investment community, including to ensure regular meetings with analysts and investors
  • Work with shareholders from among individuals is carried out on an ongoing basis in relation to changes in the information of their personal accounts, to transfer of dividends, and to registration of inheritance rights (there were 30 applications in 2018)
  • The subscription fee for the Company's registrar services was reduced by 25%, the price list for additional services was changed (free placement of additional shares in favor of the Federal Agency for State Property Management, free transfer of ownership of shares as a result of inheritance with a market value of inherited shares of up to RUB 10 million for shareholders from among individuals).