On January, 28 an unscheduled meeting of the shareholders took place. The results of the event became of active interest to the local and federal media, as significant changes were effected. Today, there’s a new edition of the joint-stock company‘s Regulations available on the corporate website www.apkhleb.ru. OJSC “PAVA” Vice-president commented on the amendments.

- Sergey Nikolaevich, why was it necessary to have an extra meeting of the shareholders?

- First of all, decisions taken during the last meeting must change the corporate structure and improve the quality of the corporate management. We move steadily and consistently to our main objective – improving management and increasing transparency of OJSC “PAVA”.

- What main changes did the OJSC Regulations require? What will be their impact on the company?

The main question on the agenda was adopting the developed statutes and the new code of corporate conduct. We had been working on them for more than just a month, since the IPO preparation started. Therefore, we took into account the experience we’d had on the market during the offering of both shares and bonds of the company. Besides, we paid attention to the investors’ wishes. As a result, the main document of a joint-stock company was reviewed – the code of corporate conduct which regulates relations of the issuing company with investors, management of the company, controlling bodies.

Proceeding from the principles laid down in the code, statutes about dividend policy were adopted. This can be regarded as a second-important document. It thoroughly explains the principles the company will be guided by when announcing and actually paying the dividends. After the adoption of the statutes our preferred stockholders are entitled to receive the amount of dividends no less than 10% of the company’s net profits.

We also envisage paying quarterly interim dividends. Common stockholders will receive dividends calculated according to the total amount of payments, no less than 5% of the company’s net profits at year-end. So, 15% of the company’s net profits as a minimum will be paid out to all stockholders.

Thus, we give an opportunity for investors to plan their income relying on the stated amounts of payments and forecasts of the company’s activities. It should be noted that the minimal guaranteed limit of dividends is not such a frequent practice among Russian issuers. We figure that this measure will tell favourably on investors’ interest in our company.

What’s more, by introducing this minimum, we set an objective for ourselves: to earn sufficient profits that will allow us to both invest in the company’s development and pay out dividends. We’ll have to be more careful managing costs, increase the efficiency of production and distribution. However, we do it voluntarily, because our main purpose is raising the company’s value, and as a consequence – well-being of our shareholders.

- What else must attract investors’ attention?

Furthermore, other changes in the Regulations were approved at the meeting. They work in the line of a continuous effort of making this company more transparent. We managed to sidestep the previous disagreements in different parts of the Regulations related to procedure of issuing additional shares and increasing the equity capital.

Now we have clearly defined what is included in the competence of the Board of Directors. A statute was adopted regulating the procedure and calling of the shareholders’ meeting where such issues were specified as notifying the participants of the meeting, convocation, procedure, setting up different bodies, voting.

This statute leaves no room for different machinations and manipulations, which sometimes occur at the meetings of other issuers on the Russian stock market. For further convenience we changed the term of shareholders’ notification about meetings. It was increased to 30 days against 20 before that.

This will give the participants of the meetings more time to prepare and plan in advance, whether they will take part in the event personally or through their representatives.

- What was the reason that the shareholders decided to abolish the managing company “Agropromresursy”?

For over 2 years before this meeting we had a system operating whereby a legal entity “Agropromresursy” was the management company. After the IPO and numerous meetings with investors, investment companies and banks we realized that this system is less transparent, than the traditional one with a single executive body – director general.

In practice, in holdings where various spheres of business co-exist, a management company is justified and its use brings an additional effect. In case of our company this is not true.

Having considered all “pros” and “cons” we decided that the most effective way will be to have a certain person as an executive body instead of a legal entity which is a rather abstract construction.

Therefore, at the meeting we brought up an issue of terminating the contract with the management company. It will be brought into effect in the following way: all employees of the management company OJSC “Agropromresursy” will take over the same job positions in OJSC “PAVA”. This procedure is totally in keeping with the Russian Federation labour code and will not entail any negative consequences for the employees. On the contrary, in the work record card there’ll be an entry about a job in OJSC “PAVA”, a well-known company, familiar to many, in lieu of “Agropromresursy”, a lesser-known one.

– Why did you have to change the registered address?

This is a small technical correction. Up to now our registered address as stated in the requisites was Galbstadt village of a German district in the Altay Territory. Today the registered address corresponds to the postal address and is in Barnaul, since all our executive bodies and the company’s central office are situated in this city for 4 years now.

This correction will not cause any additional problems and will not tell negatively on the company’s relations with creditors and its own personnel. On the contrary, it will make working with the tax office and extra budgetary funds more convenient and effective, as it will take much less time from now on to receive a letter of information, a confirmation or a duplicate of a document. Not only for the company, but for the employees, too.

– Did you manage to peg the Board of Directors’ remuneration to the company’s proceeds which is a common courtesy in other joint-stock companies? This would be the reason for “PAVA”’s top-management direct interest in increasing profits.

Yes we did, but at the meeting the extent of remuneration to the Board of Directors was stated along with the procedure of payment according to the code of corporate conduct. We firmly established the percentage of the main parameters for shareholders: the price of equity and the company’s profits.

Thus, the interest of top managers will be a motivation for the growth of these figures. The number of transactions and the volumes of trading in our company’s shares are increasing, there’s a clear upward tendency in the liquidity of our stock and we’ll make all possible efforts to maintain a continuous rise in demand for OJSC “PAVA” shares.