Minutes of 22.06.2017 №254

MINUTES No. 254

OF THE MEETING OF THE BOARD OF DIRECTORS


Date and time of the Meeting of the Board of Directors (date and time of counting the votes):

June 21, 2017, 6:00 p.m.

(Moscow time).

Date of drawing up the Minutes:

June 22, 2017

Form of meeting:

absentee voting

Place of counting the votes:

7, Malaya Dmitrovka, Moscow

Number of elected members of the Board of Directors:

13 persons.

Member of the Board of Directors who took part in the vote:

A.D. Avetisyan,

M.S. Bystrov,

P.S. Grachyov,

S.N. Ivanov,

V.M. Kravchenko,

V.V. Pivovarov,

N.R. Podguzov,

N.D. Rogalyov,

Yu.P. Trutnev,

A.O. Chekunkov,

S.V. Shishin,

A.N. Shishkin,

N.G. Shulginov.

In accordance with the Federal Law “On Joint-Stock Companies” and the Company's Articles of Association, the quorum for a meeting of the Board of Directors is present.


The member of the Board of Directors of the Company V.M. Kravchenko . Took part in the voting on items 1-2, 3 (3.2.- 3.9), 4-11 of the agenda; the member of the Board of Directors of the Company N.R. Podguzov Took part in the voting on the item 3.7. of the agenda.


AGENDA OF THE MEETING:


1. On consideration of the consolidated Business Plan (including the consolidated Investment Program) of the RusHydro Group for 2017-2021 and approval of the Target values for the annual key performance indicators of members of the Management Board of PJSC RusHydro for 2017 and Target values of key performance indicators of the Long-Term Motivation Program of PJSC RusHydro of the first cycle for 2017-2019.


2. On interim results of implementation of the Company’s Business Plan for 2017 taking into account actual figures for the first quarter of 2017 (including reports on implementation of the Investment Program (in particular, the Comprehensive Modernization Program for Generating Facilities) and the Annual Comprehensive Procurement Plan for the first quarter of 2017).


3. On the Company's priority activities.


3.1 On granting the loan to PJSC Magadanenergo.


3.2 On consideration of the corporate management assessment results.


3.3 On the acquisition or lease of aircraft, including with passenger cabins of high comfort.


3.4 On approval of the procedure for agreeing with the Ministry of the Russian Federation for the Development of the Far East of investment programs and other plans for the development of infrastructure implemented by the Company in the Far Eastern Federal District.


3.5 On the status of implementation of priority projects for the construction of 4 facilities in the Far East (Yakutskaya GRES-2 (the 1st stage), CHPP in Sovetskaya Gavan, Sakhalin GRES-2 (the 1st stage) as of March 31, 2017.


CONFIDENTLY

3.6


CONFIDENTLY

3.7


CONFIDENTLY

3.8


3.9 On consideration of a Report of activity of the Management Board of the Company for 2016.


4. On approval of the report on the results of activity of the PJSC RusHydro Board of Directors for 2016-2017 corporate year.


4.1: On approval of the report on the results of activity of the Committee on reliability, efficiency and innovation under the Board of Directors of PJSC RusHydro for 2016-2017 corporate year.


4.2 On approval of the report on the results of activity of the Audit Committee under the Board of Directors of PJSC RusHydro for 2016-2017 corporate year.


4.2.1 On amending the Regulations on the Audit Committee under the Board of Directors, approved by the decision of the Board of Directors of PJSC RusHydro (Minutes No. 239 of June 23, 2016).


4.3 On approval of the report on the results of activity of the HR and Remunerations (Nominations) Committee under the Board of Directors of PJSC RusHydro for 2016-2017 corporate year.


4.3.1: On amending the Regulations on the HR and Remunerations (Nominations) Committee under the Board of Directors, approved by the decision of the Board of Directors of PJSC RusHydro (Minutes No. 239 of June 23, 2016).


4.4: On approval of the report on the results of activity of the Committee for the Far-Est energy development issues under PJSC RusHydro Board of Directors for 2016-2017 corporate year.


4.5: On approval of the report on the results of activity of the Strategy Committee under the Board of Directors of PJSC RusHydro for 2016-2017 corporate year.


4.6: On approval of the report on the results of activity of the Investment Committee under the Board of Directors of PJSC RusHydro for 2016-2017 corporate year.


5. On approval of the report on the functioning of the corporate system of internal control and risk management of the Company.


6. On consideration of the report on the progress of the implementation of the set of measures (list of measures) for the introduction of professional standards in the activities of the Company.


7. On approval of the report on implementation of the Innovation Development Program of PJSC RusHydro for 2016-2015 with an outlook for 2025 for 2016.


8. To approve the Report on disposal of non-core assets of the Company for Q1 of 2017.


9. On determining the amount of payment for the services of the Company's Auditor.


10. On determination of the position of PJSC RusHydro (representatives of the Company) on the agenda items of the meetings of the subsidiaries' governing bodies:


11. On recognition as independent of candidate to the Board of Directors (Member of the Board of Directors of the Company).


RESULTS OF VOTING ON THE AGENDA ITEMS:


Item 1: On consideration of the consolidated Business Plan (including the consolidated Investment Program) of the RusHydro Group for 2017-2021 and approval of the Target values for the annual key performance indicators of members of the Management Board of PJSC RusHydro for 2017 and Target values of key performance indicators of the Long-Term Motivation Program of PJSC RusHydro of the first cycle for 2017-2019.


Resolution:

1. To consider the consolidated Business Plan (including the consolidated Investment Program) of RusHydro Group for 2017-2020 (Appendix 1 to the Minutes).

2. To approve:

2.1. Target values of annual key performance indicators of the Management Board of PJSC RusHydro for 2017 (”Return on equity (ROE), %”, “EBITDA, million of roubles”, “Workforce productivity (thousand rub/man-hours” KPI) (Appendix No. 2 to the Minutes).

2.2. Target values of key performance indicators of the Long-Term Motivation Program of PJSC RusHydro of the first cycle for 2017-2019 (“Free Cash Flow (FCF), mln RUB” KPI). (Appendix No. 3 to the Minutes).


Results of voting:

‘In favour’ - 10 (M.S. Bystrov, P.S. Grachyov, S.N. Ivanov, V.V. Pivovarov, N.D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov)

Against — 0

“Abstained” — 2 (A.D. Avetisyan, V.M. Kravchenko).


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 2: On interim results of implementation of the Company’s Business Plan for 2017 taking into account actual figures for the first quarter of 2017 (including reports on implementation of the Investment Program (in particular, the Comprehensive Modernization Program for Generating Facilities) and the Annual Comprehensive Procurement Plan for the first quarter of 2017).


Resolution:

To approve the report on interim results of implementation of Business Plan for 2017 taking into account actual figures for Q1 of 2017 (including reports on implementation of the Investment Program (in particular, the Comprehensive Modernization Program for Generating Facilities) and the Annual Comprehensive Procurement Plan for the first quarter of 2017) (Appendix 4 to the Minutes).


Results of voting:

‘In favour’ - 10 (M.S. Bystrov, P.S. Grachyov, S.N. Ivanov, V.V. Pivovarov, N.D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov)

Against — 0

“Abstained” — 2 (A.D. Avetisyan, V.M. Kravchenko).


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 3: On the Company's priority activities.


Item 3.1.: On granting the loan to PJSC Magadanenergo.


Resolution:

In order to provide financing for the investment project for technological connection of the 220 kV Orotukan-Palatka-Tsentralnaya to the Magadan Power System, to approve granting of loan to PJSC Magadanenergo by the Company and the conclusion of the loan agreement on the following material terms:

Parties:

Borrower - PJSC Magadanenergo;

Lender – PJSC RusHydro;

Subject of the Agreement:

The Lender transfers a sum of money into ownership of the Borrower (the Loan amount) and the Borrower undertakes to repay the Loan amount to the Lender.

The Loan amount:

Not exceeding RUB 569,310,000 (Five hundred sixty-nine million three hundred ten thousand roubles) 00 kopecks.

Repayment period of the Loan:

on demand, but not later than 5 (five) working days from the date of receiving by the Borrower of the Lender's requirements regarding the repayment of the Loan.

Interest rate for using the loan:

0 % p.a.

Intended use of the loan:

financing the working capital for securing financing for the technological connection of 220 kV “Orotukan - Palatka - Tsentralnaya” to the Magadan Power System.

Conditions for granting the loan”

non-renewable tranches based on the application of the Borrower.

Conditions for early repayment of the loan:

The Borrower has the right to fully or partially repay the loan ahead of schedule.


Results of voting:

‘In favour’ – 11 (A.D. Avetisyan, M.S. Bystrov, P.S. Grachyov, S.N. Ivanov, V.V. Pivovarov, N.D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov)

Against — 0

Abstained — 0


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 3.2.: On consideration of the corporate management assessment results.


Resolution:

To take note of the corporate management assessment results (Appendix No. 5 to the Minutes).


Results of voting:

‘In favour’ – 12 (A.D. Avetisyan, M.S. Bystrov P. S. Grachyov,S.N. Ivanov, S.N. Ivanov, V.M. Kravchenko, V.V. Pivovarov, N. R. Podguzov, N. D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov).

Against — 0

Abstained — 0


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 3.3.: On the acquisition or lease of aircraft, including with passenger cabins of high comfort.


Resolution:

To amend the Regulation On procurement of products for the needs of PJSC RusHydro (hereinafter – the Regulation), approved by the resolution of the Board of Directors of PJSC RusHydro (Minutes No. 239 of June 23, 2016) (as amended and supplemented by the Board of Directors of PJSC RusHydro No. 240 of August 11, 2016, No. 242 of October 10, 2016, No. 243 of November 14, 2016, No. 246 of December 27, 2016, No. 250 of December 27, 2017)), to amend item 3.5 of the Regulation (“Preferences”) with sub-clause 3.5.9 to read as follows:

“3.5.9. If necessary, only aircraft of domestic production, including with passenger cabins of high comfort, shall be acquired, starting in 2017, or leased, starting in 2019, with the exception of:

- turbojet aircraft with a maximum take-off weight of less than 38,000 kilograms and a flight range of more than 5,000 kilometres;

- with a maximum take-off weight of more than 38,000 kilograms and a flight range of more than 12,000 kilometres;

- turboprop aircraft with a maximum take-off weight of less than 5,700 kilograms and a flight range of over 1,800 kilometres”.


Results of voting:

‘In favour’ – 12 (A.D. Avetisyan, M.S. Bystrov P. S. Grachyov,S.N. Ivanov, S.N. Ivanov, V.M. Kravchenko, V.V. Pivovarov, N. R. Podguzov, N. D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov).

Against — 0

Abstained — 0


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 3.4: On approval of the procedure for agreeing with the Ministry of the Russian Federation for the Development of the Far East of investment programs and other plans for the development of infrastructure implemented by the Company in the Far Eastern Federal District.


Resolution:

1. To approve the Regulations on the procedure for approving investment programs and other infrastructure development plans implemented by PJSC RusHydro in the Far Eastern Federal District with the Ministry of the Russian Federation for the development of the Far East (Appendix No. 6 to the Minutes).

2. To direct the General Director - Chairman of the Management Board of PJSC “RusHydro”, N.G. Shulginov, to ensure publishing of the approved Regulation on the procedure for approving investment programs and other infrastructure development plans implemented by JSC RusHydro in the Far Eastern Federal District in the personal account of PJSC RusHydro on the Interdepartmental portal for the management of state property on time with the Ministry of the Russian Federation for the Development of the Far East before July 3, 2017.


Results of voting:

‘In favour’ – 12 (A.D. Avetisyan, M.S. Bystrov P. S. Grachyov,S.N. Ivanov, S.N. Ivanov, V.M. Kravchenko, V.V. Pivovarov, N. R. Podguzov, N. D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov).

Against — 0

Abstained — 0


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 3.5: On the status of implementation of priority projects for the construction of 4 facilities in the Far East (Yakutskaya GRES-2 (the 1st stage), CHPP in Sovetskaya Gavan, Sakhalin GRES-2 (the 1st stage) as of March 31, 2017.


Resolution:

To take note of information about the status of implementation of priority projects for the construction of 4 facilities in the Far East (Yakutsk GRES-2 (the 1st stage), the 2nd stage of Blagoveshchenskaya CHPP, CHPP in Sovetskaya Gavan, Sakhalin GRES-2 (the 1st stage) as of March 31, 2017 (Appendix No. 7 to the Minutes).


Results of voting:

‘In favour’ - 10 (M.S. Bystrov, P.S. Grachyov, S.N. Ivanov, V.V. Pivovarov, N.D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov)

Against — 0

“Abstained” — 2 (A.D. Avetisyan, V.M. Kravchenko).


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.

CONFIDENTLY

Item 3.6:


The resolution has been adopted.

CONFIDENTLY

Item 3.7:


The resolution has been adopted.

CONFIDENTLY

Item 3.8:


The resolution has been adopted.


Item 3.9: On consideration of a Report of activity of the Management Board of the Company for 2016.

Resolution:

To take note of the Report of activity of the Management Board of the Company for 2016 Appendix No. 10 to the Minutes).


Results of voting:

‘In favour’ – 12 (A.D. Avetisyan, M.S. Bystrov P. S. Grachyov, S.N. Ivanov, V.M. Kravchenko, V.V. Pivovarov, N. R. Podguzov, N. D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov).

Against — 0

Abstained — 0


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 4: On approval of the report on the results of activity of the PJSC RusHydro Board of Directors for 2016-2017 corporate year.


Item 4.1: On approval of the report on the results of activity of the Committee on reliability, efficiency and innovation under the Board of Directors of PJSC RusHydro for 2016-2017 corporate year.


Resolution:

To approve the report on the results of activity of the Committee on reliability, efficiency and innovation under the Board of Directors of PJSC RusHydro for 2016-2017 corporate year (Appendix No. 11 to the Minutes).


Results of voting:

‘In favour’ – 12 (A.D. Avetisyan, M.S. Bystrov P. S. Grachyov, S.N. Ivanov, V.M. Kravchenko, V.V. Pivovarov, N. R. Podguzov, N. D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov).

Against — 0

Abstained — 0


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 4.2.: On approval of the report on the results of activity of the Audit Committee under the Board of Directors of PJSC RusHydro for 2016-2017 corporate year.


Resolution:

To approve the report on the results of activity of the Audit Committee under the Board of Directors of PJSC RusHydro for 2016-2017 corporate year (Appendix No. 12 to the Minutes).


Results of voting:

‘In favour’ – 12 (A.D. Avetisyan, M.S. Bystrov P. S. Grachyov, S.N. Ivanov, V.M. Kravchenko, V.V. Pivovarov, N. R. Podguzov, N. D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov).

Against — 0

Abstained — 0


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 4.2.1: On amending the Regulations on the Audit Committee under the Board of Directors, approved by the decision of the Board of Directors of PJSC RusHydro (Minutes No. 239 of June 23, 2016).


Resolution:

To amend item 6.8. of the Regulations on the Audit Committee under the Board of Directors of PJSC RusHydro approved by the decision of the Board of Directors (Minutes No. 239 of June 26, 2016) to read as follows:

“6.8. The Committee's members shall be elected for a term before holding of the General Meeting of the Company's Shareholders at which a new composition of the Company's Board of Directors is elected. In the event that all members of the Committee are elected to the new Board of Directors, the composition of the Committee shall be valid until the election of a new Committee. The powers of the Committee and any member of the Committee may be terminated ahead of schedule by resolution of the Company’s Board of Directors.”


Results of voting:

‘In favour’ – 12 (A.D. Avetisyan, M.S. Bystrov P. S. Grachyov, S.N. Ivanov, V.M. Kravchenko, V.V. Pivovarov, N. R. Podguzov, N. D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov).

Against — 0

Abstained — 0


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 4.3.: On approval of the report on the results of activity of the HR and Remunerations (Nominations) Committee under the Board of Directors of PJSC RusHydro for 2016-2017 corporate year.


Resolution:

To approve the report on the results of activity of the HR and Remunerations (Nominations) Committee under the Board of Directors of PJSC RusHydro for 2016-2017 corporate year (Appendix No. 13 to the Minutes).


Results of voting:

‘In favour’ – 12 (A.D. Avetisyan, M.S. Bystrov P. S. Grachyov, S.N. Ivanov, V.M. Kravchenko, V.V. Pivovarov, N. R. Podguzov, N. D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov).

Against — 0

Abstained — 0


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 4.3.1: On amending the Regulations on the HR and Remunerations (Nominations) Committee under the Board of Directors, approved by the decision of the Board of Directors of PJSC RusHydro (Minutes No. 239 of June 23, 2016).


Resolution:

To amend item 6.8. of the Regulations on the HR and Remunerations (Nominations) Committee under the Board of Directors of PJSC RusHydro approved by the decision of the Board of Directors (Minutes No. 239 of June 26, 2016) to read as follows:

“6.8. The Committee's members shall be elected for a term before holding of the General Meeting of the Company's Shareholders at which a new composition of the Company's Board of Directors is elected. In the event that all members of the Committee are elected to the new Board of Directors, the composition of the Committee shall be valid until the election of a new Committee. The powers of the Committee and any member of the Committee may be terminated ahead of schedule by resolution of the Company’s Board of Directors.”


Results of voting:

‘In favour’ – 12 (A.D. Avetisyan, M.S. Bystrov P. S. Grachyov, S.N. Ivanov, V.M. Kravchenko, V.V. Pivovarov, N. R. Podguzov, N. D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov).

Against — 0

Abstained — 0


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 4.4.: On approval of the report on the results of activity of the Committee for the Far-Est energy development issues under PJSC RusHydro Board of Directors for 2016-2017 corporate year.


Resolution:

To approve the report on the results of activity of the Committee for the Far-Est energy development issues under PJSC RusHydro Board of Directors for 2016-2017 corporate year (Annex 14 to the Minutes).


Results of voting:

‘In favour’ – 12 (A.D. Avetisyan, M.S. Bystrov P. S. Grachyov, S.N. Ivanov, V.M. Kravchenko, V.V. Pivovarov, N. R. Podguzov, N. D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov).

Against — 0

Abstained — 0


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 4.5.: On approval of the report on the results of activity of the Strategy Committee under the Board of Directors of PJSC RusHydro for 2016-2017 corporate year.


Resolution:

To approve the report on the results of activity of the Strategy Committee under the Board of Directors of PJSC RusHydro for 2016-2017 corporate year (Appendix No. 15 to the Minutes).


Results of voting:

‘In favour’ – 12 (A.D. Avetisyan, M.S. Bystrov P. S. Grachyov, S.N. Ivanov, V.M. Kravchenko, V.V. Pivovarov, N. R. Podguzov, N. D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov).

Against — 0

Abstained — 0


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 4.6: On approval of the report on the results of activity of the Investment Committee under the Board of Directors of PJSC RusHydro for 2016-2017 corporate year.


Resolution:

To approve the report on the results of activity of the Investment Committee under the Board of Directors of PJSC RusHydro for 2016-2017 corporate year (Appendix No. 16 to the Minutes).


Results of voting:

‘In favour’ – 12 (A.D. Avetisyan, M.S. Bystrov P. S. Grachyov, S.N. Ivanov, V.M. Kravchenko, V.V. Pivovarov, N. R. Podguzov, N. D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov).

Against — 0

Abstained — 0


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 5: On approval of the report on the functioning of the corporate system of internal control and risk management of the Company.


Resolution:

To approve the report on the functioning of the corporate internal control and risk management system of the Company (Appendix No. 17 to the Minutes).


Results of voting:

‘In favour’ – 11 (A.D. Avetisyan, M.S. Bystrov, P.S. Grachyov, S.N. Ivanov, V.V. Pivovarov, N.D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov)

Against — 0

‘Abstained’ — 1 (V.M. Kravchenko).


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 6: On consideration of the report on the progress of the implementation of the set of measures (list of measures) for the introduction of professional standards in the activities of the Company.


Resolution:

To approve the report on the implementation of the set of measures (list of measures) for the implementation of professional standards in the activities of the Company for the fourth quarter of 2016 and the first quarter of 2017 (Appendix No. 18 to the Minutes).


Results of voting:

‘In favour’ – 12 (A.D. Avetisyan, M.S. Bystrov P. S. Grachyov, S.N. Ivanov, V.M. Kravchenko, V.V. Pivovarov, N. R. Podguzov, N. D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov).

Against — 0

Abstained — 0


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 7: On approval of the report on implementation of the Innovation Development Program of PJSC RusHydro for 2016-2015 with an outlook for 2025 for 2016.


Resolution:

1. To approve the report on implementation of the Innovation Development Program of PJSC RusHydro for 2016-2020 with an outlook until 2025 for 2016 (Appendix No. 19 to the Minutes).

2. To take note of the Company’s rating prepared on the basis of the independent assessment of the quality of the actualization of innovative development programs, the final assessment is 95.20%.

3. To direct the Chairman of the Management Board – Director General of the Company, N.G. Shulginov, to ensure that the Company’s Board of Directors submits proposals for improving the quality of preparation and implementation of the design and implementation of the RusHydro Group’s design and implementation for 2016-2020, with a prospect until 2025 before November 01, 2017.


Results of voting:

‘In favour’ – 11 (A.D. Avetisyan, M.S. Bystrov, P.S. Grachyov, S.N. Ivanov, V.V. Pivovarov, N.D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov)

Against — 0

‘Abstained’ — 1 (V.M. Kravchenko).


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 8: To approve the Report on disposal of non-core assets of the Company for Q1 of 2017.


Resolution:

To approve the report on disposal of non-core assets of the Company for Q1 of 2017 (Appendix No. 20 to the Minutes).


Results of voting:

‘In favour’ – 11 (A.D. Avetisyan, M.S. Bystrov, P.S. Grachyov, S.N. Ivanov, V.V. Pivovarov, N.D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov)

Against — 0

‘Abstained’ — 1 (V.M. Kravchenko).


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 9: On determining the amount of payment for the services of the Company's Auditor.


Resolution:

To determine that the cost of services of the Company’s Auditor for auditing the financial statements of PJSC RusHydro prepared in accordance with the Russian accounting standards, and auditing (review) of the consolidated financial statements of RusHydro Group prepared in accordance with the International Financial Reporting Standards for 2017, in the amount of 118,827,180 (One hundred and eighteen million eight hundred and twenty-seven thousand one hundred and eighty) roubles, including VAT - 18,126,180 (Eighteen million one hundred and twenty-six thousand one hundred and eighty) roubles 00 kopecks, including:

1. the audit of financial statements of PJSC RusHydro prepared in accordance with the Russian Accounting Standards in the amount of 19,658,800 (Nineteen million six hundred fifty-eight thousand eight hundred) roubles 00 kopeks, including VAT - 2,998,800 (Two million nine hundred and ninety-eight thousand eight hundred) roubles 00 kopecks;

2. the audit of the consolidated financial statements of RusHydro Group prepared in accordance with the International Financial Reporting Standards in the amount of 75,026,170 (seventy five million twenty-six thousand one hundred and seventy) roubles 00 kopeks, including VAT - 11,444,670 (eleven million four hundred and forty-four thousand six hundred and seventy) roubles 00 kopecks;

3. the review of the condensed consolidated interim financial information of RusHydro Group prepared in accordance with the International Accounting Standards (IAS) 34 - “Interim Financial Reporting” for six months ending on June 30, 2017, in the amount of 24,142,210 (twenty four million one hundred and forty-two thousand two hundred and ten) roubles 00 kopecks, including VAT - 3,682,710 (three million six hundred and eighty-two thousand seven hundred and ten) roubles 00 kopecks.


Results of voting:

‘In favour’ – 12 (A.D. Avetisyan, M.S. Bystrov P. S. Grachyov, S.N. Ivanov, V.M. Kravchenko, V.V. Pivovarov, N. R. Podguzov, N. D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov).

Against — 0

Abstained — 0

In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 10: On determination of the position of PJSC RusHydro (representatives of the Company) on the agenda items of the meetings of the subsidiaries' governing bodies:


Item 10.1: On determination of the position of PJSC RusHydro (representatives of the Company) on the agenda item of the General Meeting of Shareholders of JSC “CHPP in Sovetskaya Gavan”: On consent to a major transaction - the conclusion by JSC “CHPP in Sovetskaya Gavan” of the Supplementary Agreement to the General Contractor Agreement for the construction of a CHPP in Sovetskaya Gavan No. СГ ТЭЦ – 14/0027 of June 23, 2014.


Resolution:

To instruct the representatives of the Company at the General Meeting of Shareholders of JSC “CHPP in Sovetskaya Gavan” on the issue: On consent to a major transaction - the conclusion by JSC “CHPP in Sovetskaya Gavan” of the Supplementary Agreement to the General Contractor Agreement for the construction of a CHPP in Sovetskaya Gavan No. СГ ТЭЦ – 14/0027 of June 23, 2014 to vote “FOR” the adoption of the following resolution:

To give consent to the conclusion of the Supplementary Agreement (hereinafter - the Supplementary Agreement) by JSC “CHPP in Sovetskaya Gavan” to the General Contractor Agreement for the construction of a CHPP in Sovetskaya Gavan No. СГ ТЭЦ – 14/0027 of June 23, 2014 (hereinafter – the Agreement), being a major transaction, the value of which exceeds 50 percent of the book value of assets of JSC “CHPP in Sovetskaya Gavan”, on the following material terms:

Parties to the Supplementary Agreement:

Customer - JSC “CHPP in Sovetskaya Gavan”;

General Contractor - OJSC "GlobalElectroService".

Subject of the Supplementary Agreement:

Amendment of conditions previously approved by the extraordinary General Meeting of Shareholders of JSC ‘CHPP in Sovetskaya Gavan’: reduction of the price of the Agreement by 2,175,922,551 (Two billion one hundred seventy-five million nine hundred twenty-two thousand five hundred fifty-one) roubles 29 kopecks in connection with the exclusion from the Agreement of the General Contractor’s obligations to perform the Work for the specified amount.

The limit price of the Agreement taking into account the Supplementary Agreement:

11,001,727,448 (Eleven billion one million seven hundred twenty-seven thousand four hundred forty-eight) roubles 71 kopecks, including VAT (18%) – 1,678,229,610 (One billion six hundred seventy-eight million two hundred and twenty-nine thousand six hundred and ten) roubles 82 kopecks.

Term of the Supplementary Agreement:

The Supplementary Agreement shall enter into force upon its signature by the Parties and shall apply to the relations of the Parties from May 19, 2017.


Results of voting:

‘In favour’ – 10 (A.D. Avetisyan, M.S. Bystrov, P.S. Grachyov, S.N. Ivanov, V.V. Pivovarov, N.D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov)

Against — 0

‘Abstained’ – 2 (V.M. Kravchenko, A.N. Shishkin)


In accordance with Clause 15.6. of Article 15 of the Articles of Association of PJSC ‘RusHydro’ the resolution on this item shall be adopted by a simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 11: On recognition as independent of candidate to the Board of Directors (Member of the Board of Directors of the Company).


Item 11.1: On recognition as independent of candidate to the Board of Directors (Member of the Board of Directors of the Company) M.S. Bystrov.


Resolution:

In accordance with the recommendations of the HR and Remunerations (Nominations) Committee adopted on May 22, 2017 (Minutes No. 63):

To take note of the information on the compliance of the member of the Board of Directors and the candidate nominated to the Board of Directors of the Company for election at the annual General Meeting of Shareholders in 2017, Maksim Sergeyevich Bystrov, with the independence criteria stipulated in the Listing Rules of the PJSC Moscow Exchange.

There is no connection between M.S. Bystrov and the Company, a substantial shareholder of the Company, competitors of the Company, the state.

To note that the connection between M.S. Bystrov and substantial counterparts of the Company - JSC “ATS” and JSC “SO UES” is of a formal nature and does not affect the ability of M.S. Bystrov to act on the Board of Directors for the benefit of the Company due to the following reasons:

- JSC “ATS” provides the Company with services as the commercial operator of the wholesale electricity and power market by virtue of its monopoly status, vested by Article 33 of the Federal Law “On Electricity” No. 35-FZ of March 26, 2003 (hereinafter – the Law on Electricity), and the commercial relations between Company and JSC “ATS” are based on the principle of non-discriminatory access to the administrator of the trading system of the wholesale market (Art. 6, Art. 20 of the Federal Law on Electricity, Government Decree No. 861 of December 27, 2004) and the principle of state regulation of tariffs on services of the commercial operator of the wholesale electricity and capacity market (Article 23.1 of the Federal Law on Electricity);

- JSC “SO UES” provides the Company with services as the commercial operator of the wholesale electricity and power market by virtue of its monopoly status, vested by Chapter 4 of the Federal Law “On Electricity”, and the commercial relations between Company and JSC “SO UES” are based on the principle of non-discriminatory access to the administrator of the trading system of the wholesale market (Art. 6, Art. 20 of the Federal Law on Electricity, Government Decree No. 861 of December 27, 2004) and the principle of state regulation of tariffs on services of the commercial operator of the wholesale electricity and capacity market (Article 23.1 of the Federal Law on Electricity);

- activity practice of M.S. Bystrov in the Board of Directors of the Company demonstrates his ability to make independent, objective and conscientious judgements, since the position of M.S. Bystrov on the agenda items of meetings of the Board of Directors and Committees under the Board of Directors is based on his professionalism and experience, is discretionary and independent, and decisions taken by M.S. Bystrov make it possible to conclude that his formal connection with JSC “ATS”, JSC “SO UES” does not affect adoption thereof.

Guided by the provisions of the Listing Rules PJSC Moscow Exchange, approved by the decision of the Supervisory Board of PJSC Moscow Exchange and the Corporate Governance Code, in order to form the Audit Committee and the HR and Remunerations (Nominations) Committee under the Board of Directors entirely of independent directors, implementing the commitment of the Company in the formation of the Committees of the Board of Directors to follow the rules of the Corporate Governance Code, providing for the special role of independent directors in the managing the Committees and working as part of the Strategy and Investments Committee, as well as taking into restriction under paragraph 6.3.3. of the Corporate Governance Code for members of the Board of Directors to participate in more than three committees, to recognize Maksim Sergeyevich Bystrov as an independent director.


Results of voting:

‘In favour’ – 11 (A.D. Avetisyan, M.S. Bystrov, P.S. Grachyov, S.N. Ivanov, V.V. Pivovarov, N.D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov)

Against — 0

"Abstain" — 1 (M.S. Bystrov).


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.


Item 11.2: On recognition as independent of candidate to the Board of Directors (Member of the Board of Directors of the Company) S.N. Ivanov.


Resolution:

In accordance with the recommendations of the HR and Remunerations (Nominations) Committee adopted on May 22, 2017 (Minutes No. 63):

To take note of the information on the compliance of the member of the Board of Directors and the candidate nominated to the Board of Directors of the Company for election at the annual General Meeting of Shareholders in 2017, Sergey Nikolayevich Ivanov, with the independence criteria stipulated in the Listing Rules of the PJSC Moscow Exchange.

There is no connection between S.N. Ivanov and the Company, a substantial shareholder of the Company, substantial counterparts of the Company, competitors of the Company.

S.N. Ivanov is connected with the state, since S.N. Ivanov is the General Director of RT-Capital LLC, which is controlled by the Rostec State Corporation, which in turn is controlled by the Russian Federation.

To note that the connection between S.N. Ivanov and the state is of a formal nature and does not affect the ability of S.N. Ivanov to act on the Board of Directors for the benefit of the Company due to the following reasons:

- in accordance with the Order of the Government of the Russian Federation No. 513-p of March 22, 2017, S.N. Ivanov was nominated by the Russian Federation as an independent director, in this regard, S.N. Ivanov has no the obligation to vote on the directives of the Government of the Russian Federation (paragraph 16 of the Decree of the Government of the Russian Federation No. 738 of December 03, 2014);

- the control of the Russian Federation over RT-Capital LLC is indirect and is carried out through the Rostec State Corporation, whose management is exercised through the management bodies common for the commercial organization, which neutralizes the state’s ability to influence the adoption by S.N. Ivanov of objective and independent decisions.

- activity practice of S.N. Ivanov in the Board of Directors of the Company demonstrates his ability to make independent, objective and conscientious judgements, since the position of M.S. Bystrov on the agenda items of meetings of the Board of Directors and Committees under the Board of Directors is based on his professionalism and experience, is discretionary and independent, and decisions taken by S.N. Ivanov make it possible to conclude that his formal connection with the state does not affect adoption thereof.

Guided by the provisions of the Listing Rules PJSC Moscow Exchange, approved by the decision of the Supervisory Board of PJSC Moscow Exchange and the Corporate Governance Code, in order to form the Audit Committee and the HR and Remunerations (Nominations) Committee under the Board of Directors entirely of independent directors, implementing the commitment of the Company in the formation of the Committees of the Board of Directors to follow the rules of the Corporate Governance Code, providing for the special role of independent directors in the managing the Committees and working as part of the Strategy and Investments Committee, as well as taking into restriction under paragraph 6.3.3. of the Corporate Governance Code for members of the Board of Directors to participate in more than three committees, to recognize Sergey Nikolayevich Ivanov as an independent director.


Results of voting:

‘In favour’ – 12 (A.D. Avetisyan, M.S. Bystrov P. S. Grachyov, S.N. Ivanov, V.M. Kravchenko, V.V. Pivovarov, N. R. Podguzov, N. D. Rogalyov, Yu.P. Trutnev, A.O. Chekunkov, S.V. Shishin, A.N. Shishkin, N.G. Shulginov).

Against — 0

Abstained — 0


In accordance with Clause 15.3. of Article 15 of the Articles of Association of PJSC RusHydro, the resolution on this item shall be adopted by simple majority of votes of the members of the Board of Directors attending the meeting.


The resolution has been adopted.

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