Minutes of 29.05.2015 №217

MINUTES No. 217

OF THE BOARD OF DIRECTORS MEETING


Date and time of the Board of Directors meeting (date and time of establishing the results of voting):

May 29, 2015, 18 hours 00 minutes

(Moscow time)

Date of the Minutes:

June 1, 2015

Form of the meeting:

voting in absentia.

Place of establishing the results of voting:

JSC RusHydro, 7 Malaya Dmitrovka St.,

Moscow, 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


In accordance with the Federal Law "On Joint-Stock Companies" and the Charter of the Company, the quorum for holding the meeting of the Board of Directors was present.



AGENDA OF THE MEETING

1. Results of 2014 business-plan execution (including reports on implementation of investment program (including comprehensive modernization program) and Annual Comprehensive Procurement Program for 2014).

2. Approval of the report on implementation of JSC RusHydro Innovative Development Program for 2011 – 2015 with the outlook for 2021 in 2014.

3. Approval of the Company’s transactions.

4. Organizational Structure of JSC RusHydro.

5. Execution of the Company’s KPIs in the 1st quarter of 2015..





RESULTS OF VOTING ON THE ITEMS IN THE AGENDA

Item 1: Results of 2014 business-plan execution (including reports on implementation of investment program (including comprehensive modernization program) and Annual Comprehensive Procurement Program for 2014)



Resolution:

To approve the Report on results of 2014 business-plan execution (including reports on implementation of investment program (including comprehensive modernization program) and Annual Comprehensive Procurement Program for 2014) (Annex 1 to the Minutes).



Voting results:

FOR – 11 (B.I. Ayuev, 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 – 2 (M.S. Bystrov, D.S. Morozov).

The resolution has been adopted.



Item 2: Approval of the report on implementation of RusHydro’s Innovative Development Program for 2011 – 2015 with the outlook for 2021 in 2014.



Resolution:

1. To approve the report on implementation of RusHydro’s Innovative Development Program for 2011 – 2015 with the outlook for 2021 (Annex 2 to the Minutes) in 2014.

2. To move the deadline for review of the updated Innovative Development Program of JSC RusHydro and its subsidiaries by the Board of Directors to December 1, 2015 (Annex 3 to the Minutes).



Voting results:

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

AGAINST – 0.

ABSTAINED – 3 (M.S. Bystrov, V.M. Kravchenko, D.S. Morozov).

The resolution has been adopted.

The dissenting opinion of member of the Board of Directors V.M. Kravchenko on Item No. 2 is attached to the Minutes.



Item 3:Approval of the Company’s transactions.:

3.1. Approval of an interested party transaction of the Company.



Resolution:

1. To determine the price (monetary value) of property provided as additional contributions to the share capital of LLC VolgaHydro as part of interrelated interested party transaction in the amount of up to four hundred eighty-seven million seven hundred thousand (487,700,000) rubles.

2. To approve the provision by JSC RusHydro of additional contribution(s) to the share capital of LLC VolgaHydro qualified as an interrelated interested party transaction on the following terms:

Subject matter of transactions: Providing additional contributions to the share capital of LLC VolgaHydro as part of its increase;

Period for additional contributions:Within the period specified in the application of JSC RusHydro, a member of LLC VolgaHydro, which provides the grounds for adopting a decision on the increase of the authorized capital of LLC VolgaHydro.

Price of transactions: The amount of additional contributions, by which is increased the nominal value of interest held by JSC RusHydro, is defined in clause 1 of this resolution and amounts up to four hundred eighty-seven million seven hundred thousand (487,700,000) rubles;

Form of additional contribution: Cash.

Other terms: The interest of JSC RusHydro held in the share capital of LLC VolgaHydro as a result of additional contributions will not change and amounts to 40 %.



Voting results:

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

AGAINST – 0.

ABSTAINED – 1 (V.M. Kravchenko).

Provision by JSC RusHydro of an additional contribution to the authorized capital of LLC VolgaHydro is recognized as a non-arm's-length transaction in accordance with Article 81 of the Federal Law "On Joint-Stock Companies", because M.A. Mantrov, First Deputy Chairman of the Management Board of JSC RusHydro and B.B. Bogush, First Deputy CEO – Chief Engineer of JSC RusHydro, simultaneously hold the positions of members of the Board of Directors of LLC VolgaHydro.

In accordance with the Clause 3 of 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 Chairman of the Management Board – CEO of JSC RusHydro 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 has been adopted.



3.2. Approval of the Agreement on purchase and sale of non-interest bearing promissory notes between JSC RusHydro and LLC VolgaHydro, qualified as interested party transaction.



Resolution:

1. To determine that the price of sale of non-interest bearing e promissory notes of JSC JSCB ROSBANK by JSC RusHydro amounts to two hundred sixty-one million five hundred ten thousand two hundred thirty-nine (261,510,239) rubles 57 kopecks.

2. To approve the Agreement on purchase and sale of non-interest bearing promissory notes (hereinafter, the "Promissory Notes") qualified as interested party transaction on the following material terms:

Parties to the Contract:

Seller: JSC RusHydro;

Buyer: LLC VolgaHydro.

Subject matter of the Contract:

The Seller agrees to transfer title to the Buyer under the acceptance certificate and the Buyer agrees to accept and pay for the Promissory Notes specified in Annex 4 to the Minutes;

Contract Price: The value of Promissory Notes to be alienated under the Contract on purchase and sale shall be two hundred sixty-one million five hundred ten thousand two hundred thirty-nine (261,510,239) rubles 57 kopecks.

Other terms:

The Buyer agrees to pay for the value of Promissory Notes to be transferred no later than on June 30, 2015.



Voting results:

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

AGAINST – 0.

ABSTAINED – 1 (V.M. Kravchenko).

The Contract on purchase and sale of interest-free promissory notes to be concluded between JSC RusHydro and LLC VolgaHydro is recognized as a non-arm's-length transaction in accordance with Article 81 of the Federal Law "On Joint-Stock Companies", because M.A. Mantrov, First Deputy Chairman of the Management Board of JSC RusHydro and B.B. Bogush, First Deputy CEO – Chief Engineer of JSC RusHydro, simultaneously hold the positions of members of the Board of Directors of LLC VolgaHydro.

In accordance with the Clause 3 of 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 Chairman of the Management Board – CEO of JSC RusHydro 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 has been adopted.



3.3. Approving the Agreement on custody of interest-free promissory notes between JSC RusHydro and LLC VolgaHydro, which is a non-arm's-length transaction.



Resolution:

1. To determine that the price for custody of non-interest bearing promissory notes indicated in Annex 4 to the Minutes amounts to one hundred eighteen (118) rubles, including VAT (18 %) of eighteen (18) rubles 00 kopecks.

2. To approve the Agreement on custody of promissory notes (hereinafter, the "Custodial Agreement") qualified as interested party transaction on the following material terms:

Parties to the Custodial Agreement:

Bailor: LLC VolgaHydro;

Bailee: JSC RusHydro.

Subject matter of the Custodial Agreement:

The Bailor shall transfer for custody and the Bailee agrees to keep in safe custody and return to the Bailor safely upon first request the non-interest bearing promissory notes beneficially owned by the Bailor and indicated in Annex 4 to this Resolution;

Price of the Custodial Agreement: For the custody of promissory notes transferred under the Custodial Agreement, the Bailor shall pay to the Bailee a fee in the amount of one hundred eighteen (118.00) rubles 00 kopecks, including VAT (18 %) of eighteen (18) rubles 00 kopecks.



Voting results:

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

AGAINST – 0.

ABSTAINED – 1 (V.M. Kravchenko).

The Agreement on custody of promissory notes to be concluded between JSC RusHydro and LLC VolgaHydro is recognized as a non-arm's-length transaction in accordance with Article 81 of the Federal Law "On Joint-Stock Companies", because M.A. Mantrov, First Deputy Chairman of the Management Board of JSC RusHydro and B.B. Bogush, First Deputy CEO – Chief Engineer of JSC RusHydro, simultaneously hold the positions of members of the Board of Directors of LLC VolgaHydro.

In accordance with the Clause 3 of 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 Chairman of the Management Board – CEO of JSC RusHydro 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 has been adopted.



3.4. Conducting transactions related to transfer of property without compensation.



Resolution:

To approve the Agreement on compensation payments, arising from termination or modification in the conditions of water usage by third parties, as transactions related to gratuitous transfer of the Company's property on the following terms:

Parties to the Agreements:

Payer: JSC RusHydro

Payees: municipal bodies specified in Annex 5 to the Minutes.

Subject matter of the Agreement:

Within 2015, the Payer shall make compensation payments to the Payees in the amount of the cost costs of water supply services and for electricity supply in the amount of 50% of the regulatory rate for privileged power consumption set by RST RD (the Republican Tariff Service of the Republic of Dagestan) in the amount of 100 kW/h per consumer per month as provided by the Agreements.

Price of the Agreements:

The amounts of compensation payments to each Payee are specified in Annex 5 to the Minutes.

The maximum amount of all compensation payments shall be fifty million three hundred seventy-seven thousand one hundred thirty-four (50,377,134) rubles 97 kopecks.



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, D.S. Morozov, V.V. Pivovarov, M.I. Poluboyarinov, S.V. Shishin, A.N. Shishkin).

AGAINST – 0.

ABSTAINED – 1 (V.M. Kravchenko).

The resolution has been adopted.



3.5. Approving the Contractor Agreement to be concluded between JSC RusHydro and JSC Hydroproject Institute, qualified as interested party transaction.



Resolution:

1. To determine that the price of works to be performed under the Contractor Agreement between JSC RusHydro and JSC Hydroproject Institute, qualified as interested party transaction, amounts to four million twenty-seven thousand seventy-nine (4,027,079) rubles 22 kopecks, including VAT (18 %) of six hundred fourteen thousand three hundred (614,300) rubles 22 kopecks.

2. To approve the Contractor Agreement between JSC RusHydro and JSC Hydroproject Institute, qualified as interested party transaction, on the following material terms:

Parties to the Contract:

Customer: JSC RusHydro;

Contractor: JSC Hydroproject Institute.

Subject matter of the Contract:

The Contractor agrees, on the Customer's assignment and at its own risk, and by using its own materials, equipment, and tools, to develop the Project for replacement of filter columns in the holes of pump drainage of the HPSPP (hydroelectric pumped storage power plant) building and hand over the results of Works to the Customer, and the Customer agrees to create for the Contractor the conditions of Works specified in the Agreement, accept the results of Works and pay the cost of Works specified in the Agreement.

Price of Works under the Agreement:

As determined in accordance with clause 1 of this Resolution.

Period of Works:

Works Commencement Date: July 7, 2015.

Works Completion Date: October 30, 2015.



Voting results:

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

AGAINST – 0.

ABSTAINED – 1 (V.M. Kravchenko).

The Contract Agreement to be concluded between JSC RusHydro and JSC Hydroproject Institute is recognized as a non-arm's-length transaction in accordance with Article 81 of the Federal Law "On Joint-Stock Companies", because S.A. Kirov, member of the Management Board, First Deputy CEO of JSC RusHydro, simultaneously holds the position of member of the Board of Directors of JSC Hydroproject Institute.

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 Chairman of the Management Board – CEO of JSC RusHydro 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 has been adopted.



3.6. Approving the Contractor Agreement between JSC RusHydro and JSC Hydroproject Institute, qualified as interested party transaction.



Resolution:

1. To determine that the maximum price of works to be performed under the Contractor Agreement between JSC RusHydro and JSC Hydroproject Institute, qualified as interested party transaction, amounts to one hundred seventy-five million one hundred ninety-seven thousand nine hundred sixteen (175,197,916) rubles 98 kopecks, including VAT (18 %) of twenty-six million seven hundred twenty-five thousand one hundred five (26,725,105) rubles 98 kopecks.

2. To approve the Contractor Agreement between JSC RusHydro and JSC Hydroproject Institute qualified as interested party transaction on the following material terms:

Parties to the Contract:

Customer: JSC RusHydro;

Contractor: JSC Hydroproject Institute

Subject matter of the Agreement:

The Contractor agrees, on the Customer's assignment and at its own risk, and by using its own materials, equipment, and tools, to develop the project documentation for modernization (technical upgrade) of the Zagorskaya PSPP and hand over the results to the Customer, and the Customer agrees to create for the Contractor the conditions of Works specified in the Agreement, accept the results of Works and pay the cost of Works specified in the Agreement.

Price of Works under the Agreement:

As determined in accordance with clause 1 of this Resolution.

Period of Works:

Works Commencement Date: April 1, 2015.

Works Completion Date: March 30, 2020.

Term of the Agreement:

The Agreement enters into force upon its signing by the Parties and remains in effect until the Parties fully perform their obligations. The terms of the Agreement apply to relations of the Parties arising from April 1, 2015.



Voting results:

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

AGAINST – 0.

ABSTAINED – 2 (M.S. Bystrov, V.M. Kravchenko).

The Contract Agreement to be concluded between JSC RusHydro and JSC Hydroproject Institute is recognized as a non arm's-length transaction in accordance with Article 81 of the Federal Law "On Joint-Stock Companies", because S.A. Kirov, member of the Management Board, First Deputy CEO of JSC RusHydro, simultaneously holds the position of member of the Board of Directors of JSC Hydroproject Institute.

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 Chairman of the Management Board – CEO of JSC RusHydro 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 has been adopted.



3.7. Approval of Paid Services Agreement between the Company and the Russian Union of Industrialists and Entrepreneurs (RSPP), qualified as interested party transaction.



Resolution:

1. To determine the price (monetary value) of services to be provided under the Paid Services Agreement between JSC RusHydro and the Russian Union of Industrialists and Entrepreneurs (RSPP), qualified as interested party transaction,, in the amount of two hundred twenty thousand (220,000) rubles 00 kopecks, including VAT (18 %) of thirty-three thousand five hundred fifty-nine (33,559) rubles 32 kopecks.

2. To approve Paid Services Agreement, qualified as interested party transaction, on the following material terms:

Parties to the Agreement:

Customer: JSC RusHydro;

Contractor: the Russian Union of Industrialists and Entrepreneurs (RSPP).

Subject matter of the Agreement:

The Contractor agrees to provide to the Customer the services on organizing and performing public certification of non-financial sustainable development report of RusHydro Group for 2014 and the Customer agrees to pay for these services.

Service Provision Period:

From the date of signing of Agreement until December 31, 2015.

Price of Agreement:

two hundred twenty thousand (220,000) rubles 00 kopecks, including VAT (18 %) of thirty-three thousand five hundred fifty-nine (33,559) rubles 32 kopecks.



Voting results:

FOR – 12 (B.I. Ayuev, M.S. Bystrov, E.P. Volkov, V.I. Danilov-Danilyan, 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 Agreement to be concluded between JSC RusHydro and the All-Russian Association of Employers "Russian Union of Industrialists and Entrepreneurs" is recognized as a non-arm's-length transaction in accordance with Article 81 of the Federal Law "On Joint-Stock Companies", because E.V. Dod, member of the Board of Directors of JSC RusHydro, simultaneously holds the position of member of the Board of All-Russian Association of Employers "Russian Union of Industrialists and Entrepreneurs".

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, Chairman of the Management Board – CEO and member of the Board of Directors of JSC RusHydro 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 has been adopted.

Item 4: Organizational Structure of JSC RusHydro.



Resolution:

Take a note and approve changes to the organizational structure of RusHydro in accordance with Annex 6 to the Minutes.



Voting results:

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

AGAINST – 0.

ABSTAINED – 2 (V.M. Kravchenko, D.S. Morozov).

The resolution has been adopted.

Item 5: Execution of the Company’s KPIs in the 1st quarter of 2015.



Resolution:

To approve the report on execution of the Company’s KPIs in the 1st quarter of 2015 (Annex 7 to the Minutes).



Voting results:

FOR – 11 (B.I. Ayuev, 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 – 2 (M.S. Bystrov, D.S. Morozov).

The resolution has been adopted.



Chairman of the Board of Directors M.I. Poluboyarinov

Corporate Secretary M.V. Zavalko
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