Minutes of 25.04.2018 №269

MINUTES NO. 269
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 24, 2018, 11:00 a.m.

(Moscow time)

Minutes date:

April 25, 2018

Form of the meeting:

joint attendance

Place of the vote count:

7 Malaya Dmitrovka St., Moscow

Number of elected members of the Board of Directors:

13 persons

Members of the Board of Directors

who participated in voting:

M. S. Bystrov

P. S. Grachev

S. N. Ivanov

V. M. Kravchenko

V. V. Pivovarov

N. D. Rogalev

Yu. P. Trutnev

A. O. Chekunkov

S. V. Shishin

N. G. Shulginov

The meeting of the RusHydro Board of Directors was personally attended by Chairman of the Board of Directors Yu. P. Trutnev and the following members of the Board of Directors: M. S. Bystrov, P. S. Grachev, S. N. Ivanov, V. V. Pivovarov, A. O. Chekunkov, N. G. Shulginov.

The following members of the Board of Directors of RusHydro submitted their opinion in writing: V. M. Kravchenko, N. D. Rogalev, S. V. Shishin.

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

Attending nonmembers: B. B. Bogush, A. V. Kazachenkov, S. A. Kirov, D. I. Rizhinashvili.

Corporate Secretary of RusHydro N. G. Kovaleva.


The speaker on all agenda items is member of the Management Board, First Deputy General Director S. A. Kirov.

Y. P. Trutnev, Chairman of the Board of Directors of the Company, opened the meeting in presentia.


AGENDA OF THE MEETING:


1. Fulfillment of the Business Plan of the Company for 2017 (including reports on the implementation of the Investment Program (including the Program for Comprehensive Upgrading of Generating Facilities) and the Annual Comprehensive Procurement Program for 2017).

2. Consideration of the report on the implementation of the consolidated Business Plan (including the consolidated Investment Program) of RusHydro Group for 2017.

3. Approval of the report on the achievement of the Company's (the Management Board members') key performance indicators.


DISCUSSION OF ITEMS AND VOTING RESULTS:


Item 1: Fulfillment of the Company Business Plan for 2017 (including reports on the implementation of the Investment Program (including the Program for Comprehensive Upgrading of Generating Facilities) and the Annual Comprehensive Procurement Program for 2017).


Heard: Member of the Management Board, Deputy General Director S. A. Kirov


Draft resolution put to vote:

To approve the Report on the Fulfillment of the Business Plan for 2017 (including reports on the implementation of the Investment Program (including the Program for Comprehensive Upgrading of Generating Facilities) and the Annual Comprehensive Procurement Program for 2017) (Appendix No. 1 to the Minutes).


Voting results:

For: 10 (M. S. Bystrov, P. S. Grachev, S. N. Ivanov, V. M. Kravchenko, V. V. Pivovarov, N. D. Rogalev, A. O. Chekunkov, S. V. Shishin, N. G. Shulginov, Yu. P. Trutnev)

Against: 0

Abstained: 0


According to Clause 15.3 of Article 15 of the Articles of Association of RusHydro, the resolution on this matter shall be adopted by a simple majority vote of the members of the Board of Directors who take part in the meeting.


Resolution adopted.


Item 2: Consideration of the Report on the Implementation of the Consolidated Business Plan (including the consolidated Investment Program) of RusHydro Group for 2017.


Heard: Member of the Management Board, Deputy General Director S. A. Kirov


Draft resolution put to vote:

To consider the Report on the Implementation of the Consolidated Business Plan (including the consolidated Investment Program and the action plan for the optimization of costs based on the results of an external independent cost audit at RusHydro, including its subsidiaries) of RusHydro Group for 2017 (Appendix No. 2 to the Minutes).


Voting results:

For: 10 (M. S. Bystrov, P. S. Grachev, S. N. Ivanov, V. M. Kravchenko, V. V. Pivovarov, N. D. Rogalev, A. O. Chekunkov, S. V. Shishin, N. G. Shulginov, Yu. P. Trutnev)

Against: 0

Abstained: 0


According to Clause 15.3 of Article 15 of the Articles of Association of RusHydro, the resolution on this matter shall be adopted by a simple majority vote of the members of the Board of Directors who take part in the meeting.


Resolution adopted.


Item 3: Approval of the Report on the Achievement of the Company's (Management Board Members') Key Performance Indicators.


Heard: Member of the Management Board, Deputy General Director S. A. Kirov

Speakers: M. S. Bystrov, V. V. Pivovarov, N. G. Shulginov, P. S. Grachev, Yu. P. Trutnev.


3.1. Achievement of the annual KPIs of RusHydro's Management Board Members for 2017.


Draft resolution put to vote:

3.1.1. To deem the KPI "Reduction of operating expenses (costs), %" for 2017, calculated with due regard to factors that are beyond the control of the Company management, to have been achieved.

3.1.2. To approve the Report on the Achievement of the Company Management Board Members' Annual Key Performance Indicators for 2017 (Appendix No. 3 to the Minutes).


Voting results:

For: 8 (M. S. Bystrov, P. S. Grachev, S. N. Ivanov, V. V. Pivovarov, N. D. Rogalev, A. O. Chekunkov, S. V. Shishin, N. G. Shulginov, Yu. P. Trutnev)

Against: 0

Abstained: 2 (V. M. Kravchenko, N. G. Shulginov)


Resolution adopted.


3.2. Approval of amendments to the Methodology for the Calculation and Evaluation of the Annual KPIs of RusHydro's Management Board Members.

Draft resolution put to vote:

3.2.1. To approve amendments to the Methodology for the Calculation and Evaluation of the Annual KPIs of RusHydro's Management Board Members (Appendix No. 4 to the Minutes).

3.2.2. To establish that the amendments specified in Clause 3.2.1 hereof shall apply from January 1, 2018.


Voting results:

For: 10 (M. S. Bystrov, P. S. Grachev, S. N. Ivanov, V. M. Kravchenko, V. V. Pivovarov, N. D. Rogalev, A. O. Chekunkov, S. V. Shishin, N. G. Shulginov, Yu. P. Trutnev)

Against: 0

Abstained: 0


Resolution adopted.


3.3. Approval of the Target Values of the Annual KPIs of RusHydro's Management Board Members for 2018 and the Target KPI Values under Cycle Two of RusHydro's Long-Term Motivation Program for 2018–2020.


Draft resolution put to vote:

3.3.1. To approve:

3.3.1.1. Target Values of the Annual KPIs of the Company's Management Board Members for 2018 (KPI "Return on Equity (ROE), %," "Earnings before Interest, Tax, Depreciation, and Amortization (EBITDA), RUB million," "Labor productivity, RUB thousand/man-hours") (Appendix No. 5 to the Minutes).

3.3.1.2. Target KPI Values under Cycle Two of RusHydro's Long-Term Motivation Program for 2018–2020 (KPI "Free Cash Flow (FCF), RUB million") (Appendix No. 6 hereto).

3.3.2. Based on the results of an evaluation of RusHydro's financial and economic activity for the first half of 2018, to bring the matter of approval of the Target Values of the Annual KPIs of RusHydro's Management Board Members for 2018 to the Board of Directors for review no later than July 31, 2018, if adjustment is needed.


Voting results:

For: 10 (M. S. Bystrov, P. S. Grachev, S. N. Ivanov, V. M. Kravchenko, V. V. Pivovarov, N. D. Rogalev, A. O. Chekunkov, S. V. Shishin, N. G. Shulginov, Yu. P. Trutnev)

Against: 0

Abstained: 0


Resolution adopted.


3.4. Approval of adjusted target KPI values under Cycle One of RusHydro's Long-Term Motivation Program for 2017–2019.


Draft resolution put to vote:

3.4.1. To approve amendments to the Target Values of Performance Indicators under Cycle One of the Company's Long-Term Motivation Program for 2017–2019 (for the KPI "Free cash flows (FCF), RUB million") (Appendix No. 7 to the Minutes).


Voting results:

For: 10 (M. S. Bystrov, P. S. Grachev, S. N. Ivanov, V. M. Kravchenko, V. V. Pivovarov, N. D. Rogalev, A. O. Chekunkov, S. V. Shishin, N. G. Shulginov, Yu. P. Trutnev)

Against: 0

Abstained: 0


According to Clause 15.3 of Article 15 of the Articles of Association of RusHydro, the resolution on this matter shall be adopted by a simple majority vote of the members of the Board of Directors who take part in the meeting.


Resolution adopted.


Furthermore, during the discussion of the last agenda item, the Chairman of the Board of Directors Yu. P. Trutnev ordered the Company management to submit an analytical memo to him within a month on import substitution of production equipment used in the operating activity of RusHydro Group.



Chairman

of the Board of Directors
Yu.P. Trutnev


Corporate SecretaryN.G. Kovaleva
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