Minutes of 17.09.2010 №108

MINUTES No. 108

OF THE BOARD OF DIRECTORS MEETING


Date and time of the Board of Directors meeting

(date and time of vote counting):                                      September 15, 2010, 6.00 p.m.

                                                                                     (Moscow time)

Minutes Dated:                                                                September 17, 2010

Form of vote:                                                                  absentee vote

Site of vote counting:                                                       Mosсow, Arkhitektora Vlasova Str., 51

Number of elected members of the Board of Directors:         13

Members of the Board of Directors
present at meeting:                                                         S. I. Shmatko

                                                                                    A. B. Ballo

                                                                                    S. S. Beloborodov

                                                                                    E. P. Volkov

                                                                                    E. V. Dod

                                                                                    V. M. Zimin

                                                                                    B. Yu. Kovalchuk

                                                                                    V. V. Kudryavy

                                                                                    G. M. Kurtser

                                                                                    A. B. Malyshev

                                                                                    M. V. Seliverstova


In compliance with the Federal Law on Joint-Stock Companies and the company's Articles of Association the quorum for conducting the Board of Directors Meeting is present.


AGENDA OF THE BOARD OF DIRECTORS MEETING:

 

1. Termination of the contract with the company's Registrar.

2. Approving the company's transactions:

2.1. Approval of an interested-party transaction.

3. Determination of company's (company's representatives) opinion regarding the agenda of the Board of Directors Meeting and General Shareholders' (participants) Meeting of subsidiaries and affiliates (SA) of the company.

3.1. Determine the opinion regarding the issues related to a major transaction made by JSC OGK-1.

4. Approval of the updated Investment Programme of JSC RusHydro for 2010.

 

RESULTS OF VOTING ON AGENDA:


Matter 1: Termination of the contract with the company's Registrar.

 

Decision:

1.1. Terminate the contract for services for keeping and storing the register of the company' shareholders concluded with JSC CMD (the company's Registrar).

1.2. To delegate the task to the Chairman of the Management Board:

1.2.1. Specify contract termination terms with the company's Registrar.

1.2.2. Arrange competitive tenders for selection of a new Registrar of the company in order to keep and store the company's register of shareholders.

1.3. Consider it expedient to delegate keeping and storing the register of shareholders of the subsidiaries and affiliates of JSC RusHydro to a registrar defined in accordance with clause 1.2.2 of the present decision.


Voting results:

"For" - 11 (S. I. Shmatko, A. B. Ballo, S. S. Beloborodov, E. P. Volkov, E. V. Dod, V. M. Zimin, B. Yu. Kovalchuk, V. V. Kudryavy, G. M. Kurtser, A. B. Malyshev, M. V. Seliverstova)

"Against" - 0

"Abstained" - 0

Decision made.


Matter 2: Approval of an interested-party transaction:


Decision:

2.1. Determine the price of services rendered under the contract concluded between JSC INTER RAO UES
(Customer-1) and JSC FGC UES (Customer-2), JSC RusHydro (Customer-3) - jointly referred to as the Co-customers, of the one part, and JSC Institute of Enterprise Issues, CJSC Deloitte Touche CIS, JSC Nexia Pacioli Consulting - jointly referred to as the Co-executors (consortium), of the other part, which is an interested party transaction in the amount of more than 88,854,000 (eighty-eight million, eight hundred and fifty-four thousand) rubles including VAT (18 per cent).

The payment for services is distributed among the co-customers as follows:

JSC INTER RAO UES - up to 29,618,000 (twenty-nine million six hundred and eighteen thousand) rubles including VAT (18 per cent),

JSC FGC UES - up to 29,618,000 (twenty-nine million six hundred and eighteen thousand) rubles including VAT (18 per cent),

JSC RusHydro - up to 29,618,000 (twenty-nine million six hundred and eighteen thousand) rubles including VAT (18 per cent),

2.2. To approve a transaction as an interested party transaction under the following essential terms:

2.2.1. Transaction parties:

- JSC INTER RAO UES (Customer-1), JSC FGC UES (Customer-2), JSC RusHydro (Customer-3) - Co-customers.

- JSC Institute of Enterprise Issues, CJSC Deloitte Touche CIS, JSC Nexia Pacioli Consulting - Co-executers (consortium).

2.2.2. Subject of the Transaction:

The co-executors shall appraise a market value of the following facilities:

- one ordinary share of the issuers in accordance with Appendix 1 to the present decision;

- one preferred share of the issuers (where applicable) in accordance with Appendix 1 to the present decision;

- share blocks (participation shares) of the issuers in accordance with Appendix 2 to the present decision.


The result of co-executors' services is to submit a report to each co-customer containing an expert conclusion on a market value of appraised facilities and justifying such a market value of appraised facilities.

Type of the property price (Appraisal method) - market value.

Facilities are appraised as of 30.06.2010.

If necessary the co-executors at the co-customers' request undertake to update the market value of appraised facilities as of more recent dates.

The appraisal shall be carried out in accordance with the Federal Law No. 135-FZ dated 29.07.1998 On Appraisal Activities in the Russian Federation and with the Federal appraisal standards:

- The Federal appraisal standard approved by order of the Ministry of Economic Development of Russia On Approval of Federal Appraisal Standards "General Appraisal Understanding, Appraisal Approaches and Requirements" (FAS No. 1) No. 256 dated July 20, 2007;

- The Federal appraisal standard approved by order of the Ministry of Economic Development of Russia On Approval of Federal Appraisal Standards Appraisal Purpose and Type of Costs (FAS No. 2) No. 255 dated July 20, 2007;

- The Federal appraisal standard approved by order of the Ministry of Economic Development of Russia On Approval of Federal Appraisal Standards, Appraisal Report Requirements (FAS No. 3) No. 254 dated July 20, 2007.

Information on the co-executors' employees having the right to carry out a contractual appraisal (further on referred to as the Appraisers), name of a self-regulating organisation, the members of which the Appraisers are, its location, information on compulsory civil liability insurance of the Appraisers as well as the scope, procedure and grounds for occurrence of compulsory civil liability insurance are specified in Appendix 3 to the present decision.

2.2.3. Terms of rendering Services:

The co-executors shall undertake to render services in a timely fashion not exceeding three months from the date on which the facilities appraisal is carried out.

2.2.4. Cost of Services:

The total cost of services does not exceed 88,854,000 (eighty-eight million, eight hundred and fifty-four thousand) rubles, including VAT (18 per cent).

The payment for services is distributed among the co-customers as follows:

Customer-1 (JSC INTER RAO UES) - up to 29,618,000 (twenty-nine million six hundred and eighteen thousand) rubles including VAT (18 per cent),

Customer-2 (JSC FGC UES) - up to 29,618,000 (twenty-nine million six hundred and eighteen thousand) rubles including VAT (18 per cent),

Customer-3 (JSC RusHydro) - up to 29,618,000 (twenty-nine million six hundred and eighteen thousand) rubles including VAT (18 per cent),

2.2.5. Contract Validity Term.

The contract comes into force from the date of its signing and is valid until Parties have their duties completed in full.


Voting results:

"For" - 6 (A. B. Ballo, S. S. Beloborodov, E. P. Volkov, V. M. Zimin, V. V. Kudryavy, M. V. Seliverstova)

"Against" - 0

"Abstained" - 0


Decision made.

Members of the Board of Directors of JSC RusHydro S. I. Shmatko, R. R. Sharipov, A. B. Malyshev, B. Yu. Kovalchuk, G. M. Kurtser recognised as transaction interested parties, did not take part in voting.

The member of the Board of Directors of JSC RusHydro E. V. Dod recognised as transaction interested party and as a person acting as the sole executive body of the company and in this respect not recognised as an independent director, did not take part in voting.

Matter 3: Determination of company's (company's representatives) opinion regarding the agenda of the Board of Directors Meeting and General Shareholders' (participants) Meeting of subsidiaries and affiliates (SA) of the company.


3.1. Determine the opinion regarding the issues related to a major transaction made by JSC OGK-1.


Decision:

Instruct JSC RusHydro's representatives in the Board of Directors of JSC OGK-1 to vote FOR making the following decision on a major transaction made by JSC OGK-1:

Approve an Underwriting Agreement as a major transaction (aggregate of interconnected transactions) of Open Joint-Stock Company The First Wholesale Market Electricity Generating Company (further on referred to as the company) to be governed by laws of England (further on referred to as the Underwriting Agreement) and other transactions, agreements and documents stipulated by the Underwriting Agreement or anyhow connected with it (jointly with the Underwriting Agreement referred to as the transaction) on the following essential terms:

1. Parties and beneficiaries: (a) Goldman Sachs International, Closed Joint-Stock Company Investment Company Troyka Dialog, TD Investments Limited and/or their affiliated persons or other persons that may be indicated in the Underwriting Agreement as underwriters or managers (jointly referred to as the Underwriters), (b) the company and (c) other persons that will be entitled to receive recuperation or compensation of possible expenses, costs and indemnity under the terms and conditions of Underwriting Agreement.

2. Subject of the Contract: Provided that preliminary particular conditions are fulfilled the underwriters purchase or ensure purchasing from the company and the company sells under the terms and conditions of Underwriting Agreement its ordinary uncertified registered shares at the face value of 0.57478 (zero point five seven four seven eight) rubles each (further referred to as the shares) in form of shares and GDRs in the amount to be defined by documentation for this transaction. In this case the shares may be handed over to a depositary bank, which is the Bank of New York Mellon (further on referred to as the Depositary) or to a person appointed by the depositary in order to release GDRs.

In accordance with the Underwriting Agreement the company shall:

2.1. provide particular representations and warranties in favour of the Underwriters, in such a case these representations and warranties, that will be specified in the Underwriting Agreement, may, among other issues, be referred to the following basic categories: (1) legal status, legal standing and powers of the company and its subsidiaries and affiliates (further on referred to as the Group); (2) economic or any other activities of the Group and its financial standing; (3) truthfulness of the Group▒s financial statements; (4) authorised capital and shares of the Group; (5) completeness and truthfulness of information disclosed by the company in its international prospectus being prepared in connection with offering of Shares and GDRs and information submitted by the company to the Underwriters; (6) transaction (transactions) related to offering of Shares and GDRs to the Russian and foreign investors; (7) adherence of the Group and its executive officers to the requirements of applicable legislation including but not limited to laws of Russia, USA, United Kingdom and other categories specified in the Underwriting Agreement;

2.2. undertake commitments to refund or compensate possible expenses, costs and indemnity to the Underwriters and other persons being entitled to receive recuperation or compensation of possible expenses, costs and indemnity under the terms and conditions of Underwriting Agreement that may provide for, in particular, recuperation or compensation in case the company violates its representations, warranties and commitments contained in the Underwriting Agreements; commitments to recoup or compensate possible expenses, costs and indemnity do not contain any limitations to a possible amount of recuperation or compensation;

2.3. undertake commitments to pay the Underwriters a remuneration defined on the basis of market terms being similar to the terms and conditions of similar transactions by reference to the offering scope and price of Shares and GDRs including an additional remuneration to the Underwriters and reimbursable expenses and costs;

2.4. undertake commitments to refrain from release, sale, carving-out, encumbrance or other disposition of the company's ordinary shares in the process of placing shares and GDRs stipulated in the Underwriting Agreement;

2.5. undertake other commitments connected with offering shares and GDRs by the companies to Russian and foreign investors.

3. Price: The price (monetary value) of the company's property, which may be directly or indirectly alienated by the company (scope of the company's commitments) under the Transaction, has been determined by a decision of this meeting of the Board of Directors and may amount to 25 (twenty-five) or more per cent of balance sheet value cost of the company's assets defined by the data from its accounting statement for the last reporting date, but not more than 50 (fifty) per cent of the balance sheet value of the company's assets defined by the data from its accounting statement for the last reporting date.


Voting results:

"For" - 11 (S. I. Shmatko, A. B. Ballo, S. S. Beloborodov, E. P. Volkov, E. V. Dod, V. M. Zimin, B. Yu. Kovalchuk, V. V. Kudryavy, G. M. Kurtser, A. B. Malyshev, M. V. Seliverstova)

"Against" - 0

"Abstained" - 0

Decision made.

Matter 4: Approval of the updated Investment Programme of JSC RusHydro for 2010.


Decision:

Approve the updated Investment Programme of JSC RusHydro for 2010.

1. Proposals on amending the list of the investment projects which are part of JSC RusHydro's Investment Programme for 2010 (Appendix 4).

2. Financing plan of JSC RusHydro for 2010 (Appendix 5).

3. Financing sources of the Investment Programme of JSC RusHydro for 2010 (Appendix 6).

4. Plan of financing and developing capital investments by capital construction facilities for the third and fourth quarters of 2010 (Appendix 7).


Voting results:

"For" - 11 (S. I. Shmatko, A. B. Ballo, S. S. Beloborodov, E. P. Volkov, E. V. Dod, V. M. Zimin, B. Yu. Kovalchuk, V. V. Kudryavy, G. M. Kurtser, A. B. Malyshev, M. V. Seliverstova)

"Against" - 0

"Abstained" - 0

Decision made.





Chairman of the Board of Directors                                     S. I. Shmatko


Secretary of the Board of Directors                                     M. M. Davydov

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