Performance results of the public joint-stock company Future Financial Group
August 29, 2017 - Public Joint-Stock Company Future Financial Group (MOEX: FTRE) (hereinafter - the Company or the Group), the public company unifying several of the largest non-state pension funds in Russia, announces the unaudited financial results of the Group for H1 2017, which ended on June 30, 2017. These financial results have been prepared in compliance with international financial reporting standards 1.
IMPLEMENTATION OF OPERATING AND STRATEGIC TASKS
As of June 30, 2017, the Group's assets increased by 12% (RUB 40.8 bln) and reached RUB 390 bln, including managed assets 2, which grew by 15% (RUB 44.8 bln), to RUB 334.2 bln against December 31, 2016.
The operating results remained at a level comparable with H1 2016, and amounted to RUB 6.2 bln for H1 2017.
The Group is successfully continuing its campaign for attracting insured people through its diversified network of sales channels throughout Russia. Attracted pension savings for H1 2017 amounted to RUB 43.6 bln 3.
Non-state pension funds owned by the Group collectively occupy the 4th place in Russia by pension savings and the 3rd place by number of insured people. The largest fund of the Group - NPF FUTURE JSC - is in the top 10 of the largest Russian funds and occupies the 2nd place by pension savings and the number of insured people.
KEY INDICATORS FOR H1
Contributions under compulsory pension insurance (CPI) contracts for H1 2017 increased by 38% (RUB 11.8 bln), to RUB 42.9 bln; contributions under non-state pension insurance (NPI) remained at a level comparable with H1 2016.
(against RUB 80.3298 in the comparable period of 2016).
Notice: The investment income is distributed to the accounts of insured people and participants following the results of the calendar year, and will be reflected in the Group's annual statement. Current performance result under CPI and NPI is reflected in the profit and loss statement without distribution, thus being of intermediate nature.
MAIN CORPORATE EVENTS OF H1
On May 17, 2017, the Extraordinary General Shareholders Meeting of the Company made a resolution to increase the Company's authorized capital through placement of additional shares.
Pavel Nezhutin, Director of the Corporate Governance Department of Rostelecom PJSC, Board member of OPIN PJSC, Board member of Noviy Registrator JSC, the winner of the Fifth National Prize "Director of the Year" established by the Russian Independent Directors Association in the nomination Director for Corporate Governance – Corporate Secretary, was invited to the Company's Board of Directors for further improvement of corporate governance quality.
On April 5-7, 2017, the Group's management participated in the annual Exchange Forum of the Moscow Exchange organized with the participation of Sberbank CIB and held on April 5-7 in Moscow.
Starting from May 2, 2017 Expert RA has been using the holding company credit capacity methodology when assigning ratings. Due to termination of the methodology, the Rating Agency RAEX (Expert RA) has withdrawn the Company's rating without confirmation.
EVENTS AFTER THE REPORTING DATE
On July 21, 2017 the Company and its major shareholder, the company FUTURE FINANCIAL GROUP (CYPRUS) LIMITED owning the Company's shares accounting for 75.000003% of its authorized capital, signed a loan agreement for the amount of RUB 3 bln. This is a framework agreement and the loan will be provided by installments in accordance with the Group's needs with the repayment period of each installment to be determined separately. The interest rate under this agreement is 4% per annum. As of the statement release date, the amount of granted loans reached RUB 90.653 thousand, with a repayment period until December 31, 2017.
In August 2017 O1 GROUP LIMITED, being the Group's indirect shareholder, repaid the loan attracted by the Company from ROST BANK JSC in the amount of RUB 0.5 bln. The loan claim right was transferred to the shareholder.
CEO of FUTURE Financial Group PJSC Marina Rudneva commented:
"At the end of H1, the Group demonstrated stable results comparable with previous periods. We continued development, both by means of organic growth drivers, such as investment income and attracting insured people, and by synergy from previous M&A transactions, which allowed us to improve our expertise considerably.
The Group is among the market leaders: we occupy fourth place by managed pension savings, and third place by the number of insured people, with our flagship fund NPF FUTURE being number two on the market, both by the scope of assets, and by the number of CPI clients. We continue developing new services, and improving service quality for our clients, the number of which has already reached 5 mln people.
The pension market is currently at its most active development stage, and we consider it important to improve the legal framework in the part of changing the transfer procedure and including the application possibility to the current insurer. This will not only protect the rights of insured people, but also provide conditions for healthy competition.
On June 30, 2017, the first Annual General Shareholders Meeting of the Company took place in Moscow, and the following key decisions were made:
the new composition of the Board of Directors consisting of 7 persons was elected and included: Sergey Areshev, Aleksandr Dolzhitch, Dmitry Mints, Igor Mints, Pavel Nezhutin, Marina Rudneva, Nikolay Sidorov;
BDO Unicon JSC was appointed as auditor of the Company's financial and operating activities in2017 and Q1 2018.
It is also important for us to go through all key parameters of IPC before its launch, including making a unanimous decision on automatic subscription, instruments promoting participation of people in the system, as well as the necessity of establishing a central administrator.
Introduction of the permanent management fee component is also being discussed actively. We support the discussion process, and the approval of the bill with a fee of 0.75% of net assets in the State Duma in July was positive news for us. Introduction of fiduciary responsibility for non-state pension funds along with the remuneration system assuming the management fee will allow protecting the interests of NPF clients in the part of return of pension savings, as well as stimulating business for long-term presence in the industry and its development, in particular, to make investments for longer terms, including into infrastructure projects, thus selecting more suitable instruments. That is why the Group keeps its active position in the dialog with the Government, the Bank of Russia, and key market players and we hope to witness considerable development on each of these matters before the end of the year.
The full text of the abbreviated consolidated unaudited intermediate financial statement of the Company under IFRS for H1, which expired on June 30, 2017, is disclosed on the Company's website: http://futurefg.ru/disclosure/#win_9
For further information please refer to the Company's website (http://futurefg.ru/).
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1 Managed assets - the amount of cash and its equivalent, deposits in banks and financial assets measured at fair value, which changes are reflected in profit and loss.
2 In compliance with the accounting policy of the Group, deferred acquisition costs (commission costs of agents related to execution of mandatory pension insurance and Net profit in H1 2017 amounted to RUB 4.7 bln. As of June 30, 2017, accumulated profit amounted to RUB 1.3 bln. non-state pension insurance contracts) are capitalized and recognized within the time period, when the respective pension savings are received. The Group established this period to be 8 years. Deferred acquisition costs are depreciated by a line method and recognized in the Profit and Loss Statement. Balance indicators as of December 31, 2015, December 31, 2016, and June 30, 2017 have been revised.
3 Without outflow.
3 Additional Issue: 49,174,725 ordinary registered uncertified shares. Offer type: public offering to general public. Offer price: to be determined by the resolution of the Group's Board of Directors upon expiration of the preemptive right to purchase additional shares, but not later than the commencement date of their placement in the amount at least equal to their nominal value. Payment: (1) in cash in the currency of the Russian Federation by bank transfer and/or (2) by handing over to the issuer of the property constituting ordinary registered uncertified shares of one or several joint-stock companies established in the Russian Federation with a license to carry out activities on pension provision and pension insurance. The resolution is effective until November 17, 2017.
FUTURE Non-state Pension Fund, a non-government pension fund mainly providing compulsory pension insurance services and a part of FUTURE Financial Group, has announced financial results for nine months of 2017 (the period ending 30 September 2017), prepared in accordance with industry accounting standards.
Public Joint-Stock Company Future Financial Group (MOEX: FTRE) (hereinafter - the Company or the Group), the public company unifying several of the largest non-state pension funds in Russia, announces the unaudited financial results of the Group for H1 2017, which ended on June 30, 2017
- Providing the conditions for assets growth
- Developing of competitive and stable business
- Offering high-quality products and services