Minutes of 05.05.2015 №215

MINUTES No. 215

OF THE MEETING OF THE BOARD OF DIRECTORS


Date and time of the Meeting of the Board of Directors (date and time of the vote count):

April 29, 2015, 18 hours 00 minutes

(Moscow time)

Date of the Minutes:

May 5, 2015

Form of the meeting:

voting in absentia.

Place of the vote count:

RusHydro JSC, 7, Malaya Dmitrovka St.,

Moscow, the Russian Federation

Number of elected members of the Board of Directors:

13

Members of the Board of Directors,

who participated in the meeting:

B. I. Ayuev,

M. S. Bystrov,

E. P. Volkov,

V. I. Danilov-Danilyan,

E. V. Dod,

V. M. Zimin

L. V. Kalanda,

V. M. Kravchenko,

D. S. Morozov,

V. V. Pivovarov,

M. I. Poluboyarinov,

S. V. Shishin,

A. N. Shishkin


According to the Federal Law "On Joint-Stock Companies" and the Company's Charter, the quorum for the Meeting of the Board of Directors is present.


AGENDA OF THE MEETING:

  1. Reducing the operating expenses (costs) by no less than 2-3 per cent annually.
  2. Approving the list of investment projects for conducting public process and price audit in 2015-2016.
  3. Holding of concurrent positions by the members of the Management Boardin the management bodies of other entities.
  4. Approving transactions made by the Company.
  5. Conducting annual analysis of the results of establishing the unified Treasury of RusHydro Group.
  6. Participation and termination of participation of RusHydro JSC in other entities.
  7. Defining the position of RusHydro JSC (representatives of RusHydro JSC) on items in the agendas of management bodies of subsidiary and dependent companies.
  8. Defining the procurement policy of RusHydro JSC.

THE RESULTS OF VOTING ON AGENDA ITEMS:


Item 1: Reducing the operating expenses (costs) by no less than 2-3 per cent annually.


Resolution:


To instruct the Chairman of the Management Board – CEO E. V. Dod to ensure the following by June 30, 2015:

  1. Developing a set of measures (list of measures) aimed at achieving the target for reducing the operating expenses (costs) by no less than 2-3 % annually (hereinafter, the "Target for Reducing OE"), as well as determining the target values for indicators of implementing these measures.
  2. Including the list of measures, values for indicators of implementing these measures, as well as the values of the Target for Reducing OE starting with its value for 2015, into the Long-Term Development Program of RusHydro Group (hereinafter, the "LTDP") subject to the provisions of Methodological Recommendations for drafting long-term development programs of strategic joint-stock companies and federal state unitary enterprises included in the special lists approved by Directives of the Government of the Russian Federation No. 91-r of 2/23/2003 and No. 1060-r of 6/20/2011, as well as open joint-stock companies, in the authorized capitals of which the share of the Russian Federation exceeds on aggregate 50 %, as approved by the Instruction of the Government of the Russian Federation No. ISh-P13-2583 of 4/15/2014.
  3. Including the target values of the Target for Reducing OE into the list of key performance indicators of the managers' activities (LTDP KPIs) to be considered in adopting decisions on labor remuneration and personnel decisions, as well as the link between the achievement of the values of the Target for Reducing OE and the level of remuneration for managers.
  4. Introducing when necessary, the changes in the employment agreement (contract) with the sole executive body of the Company with regard to the inclusion therein of obligation to achieve the values of the Target for Reducing OE defined in the Long-Term Development Program of the Company.

Voting results:


FOR – 13 (B. I. Ayuev, M. S. Bystrov, E. P. Volkov, V. I. Danilov-Danilyan, E. V. Dod, V. M. Zimin, L. V. Kalanda, V. M. Kravchenko, D. S. Morozov, V. V. Pivovarov, M. I. Poluboyarinov, S. V. Shishin, A. N. Shishkin).


AGAINST – 0.


ABSTAINED – 0.


The resolution is adopted.


Item 2: Approving the list of investment projects for conducting public process and price audit in 2015–2016.


Resolution:

  1. To approve the list of investment projects implemented and scheduled for implementation as part of the investment program of RusHydro JSC, (Annex No. 1 to the Minutes) for conducting public process and price audit for 2015–2016.
  2. For investment projects specified in Annex No. 1 to these Minutes, prior to receiving a positive report of the process and price audit of Non-profit Partnership Scientific and Technical Council of UES, to perform the activities and works only in the amounts necessary to draft the design documentation, in accordance with the Ruling No. 87 of February 16, 2008, "On Composition of Design Documentation Sections and Requirements to its Contents", and pass the process and price audit.

Voting results:


FOR – 12 (B. I. Ayuev, E. P. Volkov, V. I. Danilov-Danilyan, E. V. Dod, V. M. Zimin, L. V. Kalanda, V. M. Kravchenko, D. S. Morozov, V. V. Pivovarov, M. I. Poluboyarinov, S. V. Shishin, A. N. Shishkin).


AGAINST – 0.


ABSTAINED – 1 (M. S. Bystrov).


The resolution is adopted.


Item 3: Holding of concurrent positions by members of the Management Board in the management bodies of other entities.


Resolution:


To agree on the holding by George I. Rizhinashvili, member of the Management Board, first Deputy CEO of RusHydro JSC, of a concurrent position of member of the Supervisory Board of RusHydro International B. V.


Voting results:


FOR – 13 (B. I. Ayuev, M. S. Bystrov, E. P. Volkov, V. I. Danilov-Danilyan, E. V. Dod, V. M. Zimin, L. V. Kalanda, V. M. Kravchenko, D. S. Morozov, V. V. Pivovarov, M. I. Poluboyarinov, S. V. Shishin, A. N. Shishkin).


AGAINST – 0.


ABSTAINED – 0.


The resolution is adopted.


Item 4: Approval of transactions made by the Company:


4.1. Approving the Share Purchase Agreement between Zagorskaya PSHPP-2 JSC and RusHydro JSC, which is a non-arm's-length transaction.


Resolution:

  1. To establish that the price of acquisition by RusHydro JSC of additional ordinary registered shares of Zagorskaya PSHPP-2 JSC shall be one (1) ruble per one (1) additional ordinary registered share for a total amount in the nominal value of nine billion (9,000,000,000) rubles.
  2. To approve the Share Purchase Agreement between Zagorskaya PSHPP-2 JSC and RusHydro JSC as a non-arm's-length transaction on the following material terms:

Parties to Transaction: Zagorskaya PSHPP-2 JSC: the Issuer; RusHydro JSC: the Acquirer.


Subject matter of Transaction:


The Issuer agrees to transfer to the property of the Acquirer no more than nine billion (9,000,000,000) units of ordinary registered shares placed by private subscription and issued in accordance with the Decision on additional issue of securities of the Issuer registered by the Bank of Russia.


The Acquirer agrees to purchase and pay for the Shares no later than four (4) working days prior to the end date of placement of shares established by the decision on additional issue of shares.


Price of Transaction:


The placement price of additional shares of the Issuer shall be in the amount of one (1) ruble per one (1) additional ordinary registered share;


Other material terms of Transaction:


Form of payment for shares: cash, with the option of offsetting cash claims against the Issuer.


Voting results:


FOR – 10 (B. I. Ayuev, E. P. Volkov, V. I. Danilov-Danilyan, V. M. Zimin, L. V. Kalanda, V. M. Kravchenko, V. V. Pivovarov, M. I. Poluboyarinov, S. V. Shishin, A. N. Shishkin).


AGAINST – 0.


ABSTAINED – 2 (M. S. Bystrov, D. S. Morozov).


The Share Purchase Agreement between Zagorskaya PSHPP-2 JSC and RusHydro JSC is recognized as a non-arm's-length transaction in accordance with the Article 81 of the Federal Law "On Joint-Stock Companies", because V. A. Tokarev, member of the Management Board, First Deputy Chairman of the Management Board of RusHydro JSC, simultaneously holds the position of CEO of HydroOGK Management Company JSC, which is the management company of Zagorskaya PSHPP-2 JSC.


According to Article 83 of the Federal Law "On Joint-Stock Companies", the resolution on this item shall be adopted by the Company's Board of Directors by a majority vote of its independent directors who are not interested parties in this transaction.


The vote of E .V. Dod, member of the Board of Directors and simultaneously the Chairman of the Management Board CEO of RusHydro JSC who, in accordance with the Clause 3 of Article 83 of the Federal Law "On Joint-Stock Companies" is recognized as a dependent director, is not considered in determining the results of voting on this item.


The resolution is adopted.


4.2.: Approving the Share Purchase Agreement between Nizhne-Bureyskaya HPP JSC and RusHydro JSC, which is a non-arm's-length transaction.


Resolution:

  1. To establish that the price of acquisition by RusHydro JSC of additional ordinary registered shares of Nizhne-Bureyskaya HPP JSC shall be one (1) ruble per one (1) additional ordinary registered share for a total amount in the nominal value of no more than seventeen billion one hundred eleven million five hundred thousand (17,111,500,000) rubles.
  2. To approve the Share Purchase Agreement between Nizhne-Bureyskaya HPP JSC and RusHydro JSC as a non-arm's-length transaction on the following material terms:

Parties to Transaction: Nizhne-Bureyskaya HPP JSC: the Issuer; RusHydro JSC: the Acquirer.


Subject matter of Transaction:


The Issuer agrees to transfer to the Acquirer, and the Acquirer agrees to acquire and pay for title over ordinary registered shares of the Issuer in the amount of no more than seventeen billion one hundred eleven million five hundred thousand (17,111,500,000) units placed by private subscription and issued in accordance with the Decision on additional issue of securities of the Issuer, registered by the Bank of Russia, within the period provided by this Decision on additional issue of securities of the Issuer.


Price of Transaction:


The price of acquisition of additional shares of the Issuer shall be one (1) ruble per one (1) additional ordinary registered share for a total amount in the nominal value of no more than seventeen billion one hundred eleven million five hundred thousand (17,111,500,000) rubles.


Other material terms of Transaction:


Form of payment for shares: cash, with the option of offsetting cash claims against the Issuer.


Voting results:


FOR – 10 (B. I. Ayuev, E. P. Volkov, V. I. Danilov-Danilyan, V. M. Zimin, L. V. Kalanda, V. M. Kravchenko, V. V. Pivovarov, M. I. Poluboyarinov, S. V. Shishin, A. N. Shishkin).


AGAINST – 0.


ABSTAINED – 2 (M. S. Bystrov, D. S. Morozov).


The Share Purchase Agreement between Nizhne-Bureyskaya HPP JSC and RusHydro JSC is recognized as a non-arm's-length transaction in accordance with the Article 81 of the Federal Law "On Joint-Stock Companies", because V. A. Tokarev, member of the Management Board, First Deputy Chairman of the Management Board of RusHydro JSC, simultaneously holds the position of CEO of HydroOGK Management Company JSC, which is the management company of Nizhne-Bureyskaya HPP JSC.


According to Article 83 of the Federal Law "On Joint-Stock Companies", the resolution on this item shall be made by the Company's Board of Directors by a majority vote of independent directors not holding an interest in the transaction.


The vote of E. V. Dod, member of the Board of Directors and simultaneously the Chairman of the Management Board CEO of RusHydro JSC who, in accordance with the Clause 3 of Article 83 of the Federal Law "On Joint-Stock Companies" is recognized as a dependent director, is not considered in determining the results of voting on this item.


The resolution is adopted.


4.3.: Approving the Suretyship Agreement concluded between RusHydro JSC and VTB Bank JSC, which is a non-arm's-length transaction.


Resolution:


1. To establish that the price of property that may be disposed under the Suretyship Agreement concluded between RusHydro JSC and VTB Bank JSC (hereinafter, the "Bank"), which is a non-arm's-length transaction (hereinafter, the "Agreement") shall be determined as the aggregate of the following secured obligations of the Borrower (RAO Energy Systems of East JSC) under the Loan Agreement to be concluded for the purpose of financing the project "Construction of facilities for off-site infrastructure of Yakutskaya GRES-2 (Phase 1)" (hereinafter, the "Project"):

  • Maximum loan amount: Six billion six hundred thirteen million (6,613,000,000) rubles 00 kopecks;
  • One-time fee for providing the credit facility payable at the conclusion of the Loan Agreement: no more than 0.5 per cent of the loan amount;
  • Commitment fee on the Loan Agreement: no more than 0.5 per cent per annum to be accrued on the undrawn amount of the loan;
  • Interest accrued on the debt under the Loan Agreement within its term at a rate not exceeding the maximum interest rate for the party provided with the loan to implement the project selected for participation in the Program for supporting the investment projects implemented within the Russian Federation based on project finance in accordance with Decree No. 1044 of the Government of the Russian Federation, dated 10/11/2014, "On Approval of the Program for supporting the investment projects implemented within the Russian Federation based on project finance" (hereinafter, the "Program"), and which shall not exceed the level of interest rate established by the Central Bank of the Russian Federation when providing the authorized banks with loan funds to refinance the loans issued by the authorized banks to end-borrowers (interest rate for specialized refinancing instrument) plus 2.5 per cent per annum. If the Project is excluded from the Program and/or if the Central Bank of the Russian Federation does not provide or ends the provision of refinancing for the loan provided by the Program, the interest rate shall be determined by the Bank unilaterally based on market interest rate indicators;
  • Amount of liability of the Borrower for violating the terms of the Loan Agreement.
The maximum price of property that may be disposed under the Agreement shall be seventeen billion (17,000,000,000) rubles.


2. Approve the Agreement as a non-arm's-length transaction on the following material terms:


Parties to the Agreement:


Creditor – VTB Bank JSC;


Surety – RusHydro JSC;


Beneficiary: RAO Energy Systems of East JSC (Borrower).


Subject matter of the Agreement:


Suretyship for performance by the Borrower of its obligations to the Creditor under the Loan Agreement concluded between VTB BankJSC and RAO Energy Systems of East JSC for financing the project "Construction of facilities for off-site infrastructure of Yakutskaya GRES-2 (Phase 1)" (hereinafter, the "Project").


Main terms of the Loan Agreement:


Maximum amount of credit: Six billion six hundred thirteen million (6,613,000,000) rubles 00 kopecks.


Loan term: no more than 12 years.


Interest rate: no more than the maximum interest rate for the party provided with the loan to implement the project selected for participation in the Program for supporting the investment projects implemented within the Russian Federation based on project finance in accordance with Decree No. 1044 of the Government of the Russian Federation, dated 10/11/2014, "On Approval of the Program for supporting investment projects implemented within the Russian Federation based on project finance" (hereinafter, the "Program"), and which shall not exceed the level of interest rate established by the Central Bank of the Russian Federation when providing the authorized banks with loan funds to refinance the loans issued by the authorized banks to end-borrowers (interest rate for specialized refinancing instrument) plus 2.5 per cent per annum.


If the Project is excluded from the Program and/or if the Central Bank of the Russian Federation does not provide or ends the provision of refinancing for the loan provided by the Program, the interest rate shall be determined by the Bank unilaterally based on market interest rate indicators.


One-time fee for providing the credit facility payable upon conclusion of the Loan Agreement: no more than 0.5 per cent of the loan amount.


Commitment fee on the Loan Agreement: no more than 0.5 per cent per annum to be accrued on the undrawn amount of the loan.


Price of the Agreement:


To be determined according to Clause 1 of this Resolution.


Term of the Agreement:


The Agreement becomes effective as of the moment of its signing by the Parties. The suretyship is provided for 5,475 calendar days from the date of conclusion of the Agreement.


3. In accordance with the Chapter 46 of the Regulation on Disclosures by the Issuers of Issue-Grade Securities No. 454-P of December 30, 2014, to instruct the Management Board of the Company to disclose information on parties and beneficiaries, material terms and price of the transaction, as indicated in Clauses 1 and 2 of this Resolution, following its execution in accordance with the procedure established by the laws of the Russian Federation.


Voting results:


FOR – 11 (B. I. Ayuev, M. S. Bystrov, E. P. Volkov, V. I. Danilov-Danilyan, V. M. Zimin, L. V. Kalanda, V. M. Kravchenko, V. V. Pivovarov, M. I. Poluboyarinov, S. V. Shishin, A. N. Shishkin).


AGAINST – 0.


ABSTAINED – 1 (D. S. Morozov).


In accordance with Article 77 of the Federal Law "On Joint-Stock Companies" a decision on this item is adopted by the Company's Board of Directors by a majority of votes of independent directors who do not hold an interest in the transaction.


Since the Russian Federation (represented by the Federal Agency for State Property Management) is a shareholder and has an interest in the transaction (series of related transactions) and there are no directors with an interest in the transaction (series of related transactions), during vote counting for this item, the vote of the following person is not counted: E. V Dod, at the same time being the Chairman of RusHydro's Management Board-CEO and deemed a dependent director pursuant to clause 3, Article 83 of the Federal Law "On Joint-Stock Companies".


The resolution is adopted.


4.4.: Approving the non-arm's length transactions between RusHydro JSC and Nizhne-Bureyskaya HPP JSC.


Resolution:


1. To establish that the maximum price of Interest-Free Loan Agreements and/or Interest-Bearing Loan Agreements (related transactions) between the Company and Nizhne-Bureyskaya HPP JSC, which are non-arm's length transactions (related transactions), shall be six billion three hundred six million five hundred seventy-six thousand nine hundred four (6,306,576,904) rubles 08 kopecks and shall be determined as the aggregate of the following values:

  • Loan amount;
  • With regard to the Interest-Bearing Loan Agreement: interest for the use of borrowed funds accrued on the loan amount for the entire term of the Agreement at the rate determined in accordance with the Methodology of pricing for controlled transaction on intra-group debt financing (Annex No. 2 to the Minutes).

2. To approve the conclusion of Interest-Free Loan Agreements and/or Interest-Bearing Loan Agreements (related transactions) between the Company and Nizhne-Bureyskaya HPP JSC, which are non-arm's length transactions (related transactions), on the following material terms:


Parties:


Borrower: Nizhne-Bureyskaya HPPJSC;


Lender: RusHydro JSC.


Maximum price, including any interest for the use of borrowed funds:


Six billion three hundred six million five hundred seventy-six thousand nine hundred four (6,306,576,904) rubles 08 kopecks.


Purpose of loan disbursement: to finance the expenses of the investment project "Nizhne-Bureyskaya HPP" provided for by the approved Cash Flows of the Investment Entity (CFIE).


Terms of the loan:


Lump sum or in tranches based on the Application of the Borrower by transferring funds to the settlement account of the Borrower specified in the relevant Application.


Voting results:


FOR – 11 (B. I. Ayuev, M. S. Bystrov, E. P. Volkov, V. I. Danilov-Danilyan, V. M. Zimin, L. V. Kalanda, V. M. Kravchenko, V. V. Pivovarov, M. I. Poluboyarinov, S. V. Shishin, A. N. Shishkin).


AGAINST – 0.


ABSTAINED – 1 (D. S. Morozov).


The Interest-Free Loan Agreements between Nizhne-Bureyskaya HPP JSC and RusHydro JSC are recognized as non-arm's-length transactions in accordance with the Article 81 of the Federal Law "On Joint-Stock Companies", because V. A. Tokarev, member of the Management Board, First Deputy Chairman of the Management Board of RusHydro JSC , simultaneously holds the position of the CEO of HydroOGK Management Company JSC, which is the management company of Nizhne-Bureyskaya HPP JSC.


According to Article 83 of the Federal Law "On Joint-Stock Companies", the resolution on this item shall be made by the Company's Board of Directors by a majority vote of independent directors not holding an interest in the transaction.


The vote of E. V. Dod, member of the Board of Directors and simultaneously the Chairman of the Management Board CEO of RusHydro JSC who, in accordance with the Clause 3 of Article 83 of the Federal Law "On Joint-Stock Companies" is recognized as a dependent director, is not considered in determining the results of voting on this item.


The resolution is adopted.


4.5. Approval of non-arm's length transactions between RusHydro JSC and Ust-Srednekanskaya HPP JSC.


Resolution:


1. To establish that the maximum price of Interest-Free Loan Agreements and/or Interest-Bearing Loan Agreements (related transactions) between the Company and Ust-Srednekanskaya HPP JSC, which are non-arm's length transactions (related transactions), shall be one billion four hundred nine million nine hundred sixty-three thousand nine hundred sixty-three (1,409,963,963) rubles 67 kopecks and shall be determined as the aggregate of the following values:

  • Loan amount;
  • With regard to the Interest-Bearing Loan Agreement: interest for the use of borrowed funds accrued on the loan amount for the entire term of the Agreement at the rate determined in accordance with the Methodology of pricing for a controlled transaction on intra-group debt financing (Annex No. 2 to the Minutes).

2. To approve the conclusion of Interest-Free Loan Agreements and/or Interest-Bearing Loan Agreements (related transactions) between the Company and Ust-Srednekanskaya HPP JSC, which are non-arm's length transactions (related transactions), on the following material terms:


Parties:


Borrower: Ust-Srednekanskaya HPP JSC;


Lender: RusHydro JSC.


Maximum price, including any interest for the use of borrowed funds:


One billion four hundred nine million nine hundred sixty-three thousand nine hundred sixty-three (1,409,963,963) rubles 67 kopecks.


Purpose of loan disbursement: to finance the expenses of the investment project "Ust-Srednekanskaya HPP" provided for by the approved Cash Flow of the Investment Entity (CFIE).


Terms of the loan:


Lump sum or in tranches based on the Application of the Borrower by transferring funds to the settlement account of the Borrower specified in the relevant Application.


Voting results:


FOR – 11 (B. I. Ayuev, M. S. Bystrov, E. P. Volkov, V. I. Danilov-Danilyan, V. M. Zimin, L. V. Kalanda, V. M. Kravchenko, V. V. Pivovarov, M. I. Poluboyarinov, S. V. Shishin, A. N. Shishkin).


AGAINST – 0.


ABSTAINED – 1 (D. S. Morozov).


The Interest-Free Loan Agreement between Ust-Srednekanskaya HPP JSC and RusHydro JSC is recognized as a non-arm's-length transaction in accordance with the Article 81 of the Federal Law "On Joint-Stock Companies", because V. A. Tokarev, member of the Management Board, First Deputy Chairman of the Management Board of RusHydro JSC, simultaneously holds the position of CEO of HydroOGK Management Company JSC, which is the management company of Ust-Srednekanskaya HPP JSC.


According to Article 83 of the Federal Law "On Joint-Stock Companies", the resolution on this item shall be adopted by the Company's Board of Directors by a majority vote of its independent directors who are not interested parties in this transaction.


The vote of E. V. Dod, member of the Board of Directors and simultaneously the Chairman of the Management Board CEO of RusHydro JSC who, in accordance with the Clause 3 of Article 83 of the Federal Law "On Joint-Stock Companies" is recognized as a dependent director, is not considered in determining the results of voting on this item.


The resolution is adopted.


4.6. Approving the non-arm's-length transactions between RusHydro JSC and Zagorskaya PSHPP-2 JSC.


Resolution:


1. To establish that the maximum price of Interest-Free Loan Agreements and/or Interest-Bearing Loan Agreements (related transactions) between the Company and Zagorskaya PSHPP-2 JSC, which are non-arm's length transactions (related transactions), shall be two billion eight hundred eighty-eight million three hundred ninety-three thousand one hundred fifty (2,888,393,150) rubles 68 kopecks and shall be determined as the aggregate of the following values:

  • Loan amount;
  • With regard to the Interest-Bearing Loan Agreement: interest for the use of borrowed funds accrued on the loan amount for the entire term of the Agreement at the rate determined in accordance with the Methodology of pricing for controlled transaction on intra-group debt financing (Annex No. 2 to the Minutes).

2. To approve the conclusion of Interest-Free Loan Agreements and/or Interest-Bearing Loan Agreements (related transactions) between the Company and Zagorskaya PSHPP-2 JSC, which are non-arm's length transactions (related transactions), on the following material terms:


Parties:


Borrower: Zagorskaya PSHPP-2 JSC;


Lender: RusHydro JSC.


Maximum price, including any interest for the use of borrowed funds:


Two billion eight hundred eighty-eight million three hundred ninety-three thousand one hundred fifty (2,888,393,150) rubles 68 kopecks.


Purpose of loan disbursement: to finance the expenses of the investment project "Zagorskaya PSHPP-2" provided for by the approved Cash Flows of the Investment Entity (CFIE).


Terms of the loan:


Lump sum or in tranches based on the Application of the Borrower by transferring funds to the settlement account of the Borrower specified in the relevant Application.


Voting results:


FOR – 10 (B. I. Ayuev, E. P. Volkov, V. I. Danilov-Danilyan, V. M. Zimin, L. V. Kalanda, V. M. Kravchenko, V. V. Pivovarov, M. I. Poluboyarinov, S. V. Shishin, A. N. Shishkin).


AGAINST – 0.


ABSTAINED – 2 (M. S. Bystrov, D. S. Morozov).


The Interest-Free Loan Agreements between Zagorskaya PSHPP-2 JSC and RusHydro JSC are recognized as non-arm's-length transactions in accordance with the Article 81 of the Federal Law "On Joint-Stock Companies", because V. A.Tokarev, member of the Management Board, First Deputy Chairman of the Management Board of RusHydro JSC, simultaneously holds the position of CEO of HydroOGK Management Company JSC , which is the management company of Zagorskaya PSHPP-2 JSC.


According to Article 83 of the Federal Law "On Joint-Stock Companies", the resolution on this item shall be adopted by the Company's Board of Directors by a majority vote of its independent directors who are not interested parties in this transaction.


The vote of E. V. Dod, member of the Board of Directors and simultaneously the Chairman of the Management Board CEO of RusHydro JSC who, in accordance with the Clause 3 of Article 83 of the Federal Law "On Joint-Stock Companies" is recognized as a dependent director, is not considered in determining the results of voting on this item.


The resolution is adopted.


4.7. Approving the non-arm's length transactions between RusHydro JSC and Leningradskaya PSHPP JSC.


Resolution:


1. To etablish that the maximum price of Interest-Free Loan Agreements and/or Interest-Bearing Loan Agreements (related transactions) between the Company and Leningradskaya PSHPP JSC, which are non-arm's length transactions (related transactions), shall be one hundred sixty-three million three hundred twenty-eight thousand four hundred ninety-three (163,328,493) rubles 15 kopecks and shall be determined as the aggregate of the following values:

  • Loan amount;
  • With regard to the Interest-Bearing Loan Agreement: interest for the use of borrowed funds accrued on the loan amount for the entire term of the Agreement at the rate determined in accordance with the Methodology of pricing for a controlled transaction on intra-group debt financing (Annex No. 2 to the Minutes).

2. To approve the conclusion of Interest-Free Loan Agreements and/or Interest-Bearing Loan Agreements (related transactions) between the Company and Leningradskaya PSHPP JSC, which are non-arm's length transactions (related transactions), on the following material terms:


Parties:


Borrower: Leningradskaya PSHPP JSC;


Lender: RusHydro JSC.


Maximum price, including any interest for the use of borrowed funds:


One hundred sixty-three million three hundred twenty-eight thousand four hundred ninety-three (163,328,493) rubles 15 kopecks.


Purpose of loan disbursement: to finance the expenses of the investment project "Leningradskaya PSHPP" provided for by the approved Cash Flows of the Investment Entity (CFIE).


Terms of the loan:


Lump sum or in tranches based on the Application of the Borrower by transferring funds to the settlement account of the Borrower specified in the relevant Application.


Voting results:


FOR – 10 (B. I. Ayuev, E. P. Volkov, V. I. Danilov-Danilyan, V. M. Zimin, L. V. Kalanda, V. M. Kravchenko, V. V. Pivovarov, M. I. Poluboyarinov, S. V. Shishin, A. N. Shishkin).


AGAINST – 0.


ABSTAINED – 2 (M. S. Bystrov, D. S. Morozov).


The Interest-Free Loan Agreements between Leningradskaya PSHPP JSC and RusHydro JSC are recognized as non-arm's-length transactions in accordance with the Article 81 of the Federal Law "On Joint-Stock Companies", because V. A. Tokarev, member of the Management Board, First Deputy Chairman of the Management Board of RusHydro JSC, simultaneously holds the position of CEO of HydroOGK Management Company JSC , which is the management company of Leningradskaya PSHPP JSC.


According to Article 83 of the Federal Law "On Joint-Stock Companies", the resolution on this item shall be adopted by the Company's Board of Directors by a majority vote of its independent directors who are not interested parties in this transaction.


The vote of E. V. Dod, member of the Board of Directors and simultaneously the Chairman of the Management Board CEO of RusHydro JSC who, in accordance with the Clause 3 of Article 83 of the Federal Law "On Joint-Stock Companies" is recognized as a dependent director, is not considered in determining the results of voting on this item.


The resolution is adopted.


4.8. Approving the conclusion of additional agreements to the Loan Agreement concluded between RusHydro JSC and MGES KBR JSC, which are non-arm's length transactions.


Resolution:


1. To establish that the price under the Interest-Free Loan Agreements, which are non-arm's length transactions, shall not change in connection with the conclusion of Additional Agreements and, including the related non-arm's length transactions, shall be as follows:

  • Under the Interest-Free Loan Agreement No. OG-156-40-2012 of 6/27/2012: two hundred fifty-two million three hundred fifty thousand (252,350,000) rubles 00 kopecks;
  • Under the Interest-Free Loan Agreement No. OG-156-68-2012 of 9/20/2012: One hundred ninety-four million one hundred seventy-nine thousand one hundred (194,179,100) rubles 40 kopecks;
  • Under the Interest-Free Loan Agreement No. OG-172-15-2013 of 9/26/2013: One hundred forty-two million eight hundred fifty-six thousand one hundred thirty-five (142,856,135) rubles 88 kopecks;
  • Under the Interest-Free Loan Agreement No. OG-172-19-2013 of 10/25/2013: one hundred seventy million three hundred seven thousand three hundred fifty-three (170,307,353) rubles 61 kopecks;
  • Under the Interest-Free Loan Agreement No. OG-189-12-2014 of 3/27/2014: twenty million seven hundred fifty-two thousand eight hundred nineteen (20,752,819) rubles 96 kopecks.

2. To approve the following Interest-Free Loan Agreements subject to additional agreements, which are non-arm's length transactions:

  • No. OG-156-40-2012 of 6/27/2012;
  • No. OG-156-68-2012 of 9/20/2012;
  • No. OG-172-15-2013 of 9/26/2013;
  • No. OG-172-19-2013 of 10/25/2013;
  • No. OG-189-12-2014 of 3/27/2014;

on the following material terms:


Parties:


Borrower: MGES KBR JSC;


Lender: RusHydro JSC.


Subject matter: Provision of interest-free loan to the Borrower repayable on demand but no later than five (5) working days from the date of receipt by the Borrower of the notice of the Lender on the repayment of the loan.


Voting results:


FOR – 11 (B. I. Ayuev, M. S. Bystrov, E. P. Volkov, V. I. Danilov-Danilyan, V. M. Zimin, L. V. Kalanda, V. M. Kravchenko, V. V. Pivovarov, M. I. Poluboyarinov, S. V. Shishin, A. N. Shishkin).


AGAINST – 0.


ABSTAINED – 1 (D. S. Morozov).


The Interest-Free Loan Agreements between MGES KBR JSC and RusHydro JSC are recognized as non-arm's-length transactions in accordance with the Article 81 of the Federal Law "On Joint-Stock Companies", because V. A.Tokarev, member of the Management Board, First Deputy Chairman of the Management Board of RusHydro JSC, simultaneously holds the position of CEO of HydroOGK Management Company JSC, which is the management company of MGES KBR JSC.


According to Article 83 of the Federal Law "On Joint-Stock Companies", the resolution on this item shall be adopted by the Company's Board of Directors by a majority vote of its independent directors who are not interested parties in this transaction.


The vote of E. V. Dod, member of the Board of Directors and simultaneously the Chairman of the Management Board CEO of RusHydro JSC who, in accordance with the Clause 3 of Article 83 of the Federal Law "On Joint-Stock Companies" is recognized as a dependent director, is not considered in determining the results of voting on this item.


The resolution is adopted.


Item 5: Conducting the annual analysis of the results obtained following the establishment of the unified Treasury of RusHydro Group.


Resolution:


To instruct Chairman of the Company's Management Board – CEO, E. V. Dod to ensure the following:


1. To conduct on an annual basis the analysis of results of establishing the unified Treasury of RusHydro Group (hereinafter, the "Analysis");


2. On an annual basis, starting from 2015, to provide a report to the Ministry of Finance of Russia and the Russian Federal Financial Monitoring Service by September 15 on the results of analysis, which must include the following:


2.1. Summary of results of implementing each part of Clauses 2-4 of Directive of the Government of the Russian Federation No. 5110p-P13 of August 8, 2014 (following the provision of a report containing information on completion of measures envisaged by Directive of the Government of the Russian Federation No. 5110p-P13 of August 8, 2014, and on ensuring the start of operation of the unified Treasury; this information shall not be included repeatedly in the next report);


2.2. Information on an economic impact from establishing the unified Treasury and its operation, namely:

  • Reduction of operating expenses, including expenses on servicing the "external debt", through the effective use of intra-group financing;
  • Increase of yields from the investment of uncommitted financial resources.

Voting results:


FOR – 13 (B. I. Ayuev, M. S. Bystrov, E. P. Volkov, V. I. Danilov-Danilyan, E. V. Dod, V. M. Zimin, L. V. Kalanda, V. M. Kravchenko, D. S. Morozov, V. V. Pivovarov, M. I. Poluboyarinov, S. V. Shishin, A. N. Shishkin).


AGAINST – 0.


ABSTAINED – 0.


The resolution is adopted.


Item 6: Participation and termination of participation of the Company in other entities.


Resolution:


1. To establish that the price (monetary assessment) of thirty-five million ninety-seven thousand seven hundred (35,097,700) ordinary shares of Sibenergosbyt JSC, with the nominal value of one (1) ruble per share, to be disposed by the Company shall be in the amount of ten million five hundred thousand (10,500,000) rubles.


2. To approve the termination of the Company's participation in Sibenergosbyt JSC by the disposal of shares on the following terms:

  • Category, type, nominal value, number of disposed shares: ordinary registered shares with a nominal value of one (1) ruble per share in the amount of thirty-five million ninety-seven thousand seven hundred (35,097,700) units;
  • Method of disposal: Direct sale to ESC RusHydro JSC;
  • Sale price: No less than the value determined by an independent appraiser;
  • Value of shares determined by an independent appraiser: ten million five hundred thousand (10,500,000) rubles;
  • Interest of the Company in the authorized capital of Sibenergosbyt JSC prior to disposal of shares in accordance with this resolution: 100 %;
  • Interest of the Company in the authorized capital of Sibenergosbyt JSC after the disposal of shares in accordance with this resolution: 0 %;
  • Procedure (period) for payment for shares: cash payable before the transfer of title over the shares, but no later than 14 days from the date of signing the purchase agreement.

Voting results:


FOR – 12 (B. I. Ayuev, M. S. Bystrov, E. P. Volkov, V. I. Danilov-Danilyan, E. V. Dod, V. M. Zimin, L. V. Kalanda, V. M. Kravchenko, V. V. Pivovarov, M. I. Poluboyarinov, S. V. Shishin, A. N. Shishkin).


AGAINST – 0.


ABSTAINED – 1 (D. S. Morozov).


The resolution is adopted.


Item 7: Defining the position of RusHydro JSC (representatives of RusHydro JSC) on items in the agendas of management bodies of subsidiary and dependent companies:


Defining the position of RusHydro JSC (representatives of RusHydro JSC) on the item in the agenda of the meeting of the Board of Directors of RAO Energy Systems of East JSC:


concluding a loan agreement between RAO Energy Systems of East JSC and VTB Bank JSC to finance the project "Construction of facilities for off-site infrastructure of Yakutskaya GRES-2 (Phase 1)", which is a major transaction.


Resolution:


To instruct the representatives of RusHydro JSC on the Board of Directors of RAO Energy Systems of East JSC to vote on the item in the agenda of the meeting of the Board of Directors of RAO Energy Systems of East JSC "Concluding a loan agreement between RAO Energy Systems of East JSC and VTB Bank JSC to finance the project "Construction of facilities for off-site infrastructure of Yakutskaya GRES-2 (Phase 1)", which is a major transaction" FOR the adoption of the following resolution:


"Approve the conclusion of the loan agreement to finance the project "Construction of facilities for off-site infrastructure of Yakutskaya GRES-2 (Phase 1)" (hereinafter, the "Agreement"), which is a major transaction, on the following material terms:


Parties to the Agreement:


Creditor: VTB Bank JSC;


Borrower: RAO Energy Systems of East JSC.


Subject matter of the Agreement:


Providing the Borrower with a target loan for a period not exceeding 12 years from the date of signing the Agreement in an amount not exceeding six billion six hundred thirteen million (6,613,000,000) rubles 00 kopecks.


Purpose of using the loan:


Financing the project "Construction of facilities for off-site infrastructure of Yakutskaya GRES-2 (Phase 1)" (hereinafter, the "Project").


Price of the Agreement:


the aggregate of the following values:

  • Loan amount: no more than six billion six hundred thirteen million (6,613,000,000) rubles 00 kopecks;
  • One-time fee for providing the credit facility payable at the conclusion of the Agreement: No more than 0.5 per cent of the loan amount;
  • Commitment fee: No more than 0.5 per cent per annum to be accrued on the undrawn amount of the loan;
  • Amount of interest for the use of loan funds accrued at the rate of no more than the maximum interest rate for the person provided with the loan to implement the project selected for participation in the Program for supporting the investment projects implemented within the Russian Federation based on project finance in accordance with the Decree of the Government of the Russian Federation No. 1044, dated 10/11/2014, "On Approval of the Program for supporting the investment projects implemented within the Russian Federation based on project finance" (hereinafter, the "Program"), and which shall not exceed the level of interest rate established by the Central Bank of the Russian Federation when providing the authorized banks with loan funds to refinance the loans issued by the authorized banks to end-borrowers (interest rate for specialized refinancing instrument) plus 2.5 per cent per annum.

If the Project is excluded from the Program and/or if the Central Bank of Russian Federation does not provide or ends the provision of refinancing for the loan provided by the Program, the interest rate shall be determined by the Bank unilaterally based on market interest rate indicators.


The maximum price of the Agreement shall be seventeen billion (17,000,000,000) rubles.


Loan repayment term:


No later than 12 years after the signing of the Agreement.


Voting results:


FOR – 12 (B. I. Ayuev, M. S. Bystrov, E. P. Volkov, V. I. Danilov-Danilyan, E. V. Dod, V. M. Zimin, L. V. Kalanda, V. M. Kravchenko, V. V. Pivovarov, M. I. Poluboyarinov, S. V. Shishin, A. N. Shishkin).


AGAINST – 0.


ABSTAINED – 1 (D. S. Morozov).


The resolution is adopted.


Item 8: Defining the procurement policy of RusHydro JSC:


Approving the new version of Regulation on Procurement of Products for the Needs of RusHydro JSC.


Resolution:


  1. To approve the new version of Regulation on Procurement of Products for the Needs of RusHydro JSC in accordance with Annex No. 3 to the Minutes.
  2. To recognize as invalid the Regulation on Procurement of Products for the Needs of RusHydro JSC approved by the resolution of the Board of Directors of RusHydro JSC (Minutes No. 139 of 12/2/2011) as amended (Minutes No. 143 of 1/20/2012, No. 158 of 8/10/2012, No. 193 of 2/19/2014, No. 203 of 9/15/2014).

Voting results:


FOR – 13 (B. I. Ayuev, M. S. Bystrov, E. P. Volkov, V. I. Danilov-Danilyan, E. V. Dod, V. M. Zimin, L. V. Kalanda, V. M. Kravchenko, D. S. Morozov, V. V. Pivovarov, M. I. Poluboyarinov, S. V. Shishin, A. N. Shishkin).


AGAINST – 0.


ABSTAINED – 0.


The resolution is adopted.


Chairman of the Board of Directors M. I. Poluboyarinov


Corporate Secretary M. V. Zavalko 


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