Results of the Board of Directors on April 25, 2014
JSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces that the Company's Board of Directors held a meeting in absentia on April 25, 2014.
The Board of Directors approved the report on 2013 business-plan execution (including report on implementation of investment program, comprising report on implementation of generating facilities modernization program in 2013).
Electricity generation by RusHydro’s power plants in the 4th quarter and full year 2013 totaled 120.8% and 114.6% of the planned volumes respectively; output totaled 122% and 115.4% of the planned volumes respectively. The overshoot was a result of favorable hydrological conditions and regimes allowed by the Federal Water Resources Agency.
In 2013, increase in total installed capacity amounted to 64.62 MW as a result of completion of technical upgrade and reconstruction works at the Volzhskaya, Zhigulevskaya, Kamskaya, Novosibirskaya and Saratovskaya HPPs. Also on October 1, 2013, the Pavlodolskaya HPP with installed capacity of 2.62 MW became a part of the North Ossetian branch of RusHydro.
Financing of the investment program in 2013 including projects of comprehensive modernization program for 2012-2025 amounted to RUB 69.07 bn or 88% of funding plan. The deviation was due to prohibition of the Ministry of energy of Russia to use funds in the amount of RUB 50 bn, allocated to RusHydro as payment for the Company’s shares of additional issue, until the engineering companies review project documentation for four generating facilities in the Far East.
Actual financing of technical rehabilitation and modernization projects in 2013 totaled RUB 31.48 bn or 110% of the annual plan. The increase of financing was due to prescheduled delivery of the equipment and completion of reconstruction of hydro units at the several plants.
The Board of Directors determined the auditor’s remuneration for auditing the Company’s 2014 accounting statements under RAS in the amount of RUB 15 mn (including VAT in the amount of RUB 2,288 mn); and under IFRS (review of condensed interim consolidated financial statements under IFRS for six months, ended on June 30, 2014, audit of consolidated financial statements for 2014) in the amount of RUB 106,577 mn (including VAT in the amount of RUB 16,257 mn).
JSC PriceWaterhouse Coopers Audit has won a tender for these services.
The Board of Directors considered the guidelines on control rights over intellectual property to be applicable to the development of new or updating current internal documents regulating innovative activities of RusHydro. The Board of Directors commissioned the Company’s Management Board to submit for the Board’s review until December 1, 2014, the report on development and approval of the Company’s internal documents regulating innovative activities, and innovative development program of RusHydro and its subsidiaries for 2014-2017 with the outlook for 2023.
The Board of Directors approved the additional contribution of funds to share capital of “VolgaHydro” LLC, qualified as an interested party transaction, and determined the price (monetary value) of contributed funds in the amount of RUB 362,200,000.
These funds will be used to finance further implementation of project.
The Board of Directors of RusHydro approved construction of “VolgaHydro” LLC, a joint venture aimed at manufacturing hydroturbine equipment, established together with Voith Hydro. On June 19, 2013, the Company’s Board of Directors approved participation of RusHydro in the joint venture located in Russia.
The Board of Directors approved the contractor replacement in the agreement between RusHydro, Institute Hydroproject and Mosoblhydroproject, qualified as an interested party transaction.
According to the agreement Institute Hydroproject transfers to Mosoblhydroproject all rights and obligations under agreement for design of a number of facilities of the Zelenchugskaya HPP/PSPP. Replacement of design engineer is aimed at optimization of construction documentation development and establishment of a single general design engineer of the Zelenchugskaya HPP/PSPP.
The Board of Directors approved RusHydro’s agreement, qualified as interested-party transaction. In accordance of p. 188.8.131.52 of Regulations on disclosure of information the details of these transactions will be made available after their implementation in compliance with regulatory requirements of the Russian Federation.
The Board of Directors approved a number of agreements and addendums to the agreements between RusHydro and its subsidiary Lenhydroproject, qualified as interested party transactions.
These agreements are aimed at reliability and safety improvement of RusHydro’s hydropower plants, decrease of emergency risks and control of installation and construction works.
The Board of Directors commissioned RusHydro’s representatives in the General Meeting of shareholders of CJSC Yakutskaya TPP No.2 to approve the irrevocable guarantee letter of credit under agreement between Yakutskaya TPP No.2 and PACKAGED POWER, INC. for delivery of four gas turbines, qualified as a major transaction. RusHydro’s guarantee was a mandatory requirement for opening the letter of credit. The letter of credit in the amount of up to USD 56,100,000 has been provided by ING Bank (Eurasia) and is valid through June 30, 2015.
On March 28, 2014, the Board of Directors of RusHydro approved a guarantee agreement between RusHydro and ING Bank (Eurasia) in regards to the letter of credit in the amount of up to USD 56,100,000 secured by CJCS Yakutshaya TPP No.2 (construction manager, wholly-owned by RusHydro).
The first stage of the Yakutskaya TPP No.2 is one of the four fossil-fuel projects in the Far East of Russia, implemented by RusHydro and its subsidiary, RAO ES of East. The new plant will allow to replace the retired capacities of operating Yakutskaya TPP, create spare capacity and help to improve reliability of power supply in Sakha, Yakutia. The installed capacity of the 1st stage of the Yakutskaya TPP No.2 will amount to 193 MW, heat capacity – 469 GCal/h.
The Board of Directors approved the report on implementation of innovative development Program for 2011-2015 with the outlook for 2021 in 2013.
Total financing of RusHydro’s innovation development projects, including financing of R&D projects, amounted to RUB 3,644.4 mn.
In 2013, RusHydro held a number of events as an official chair of the Global Sustainable Electricity Partnership (GSEP). As a part of this partnership RusHydro participated in a hybrid wind-diesel project in Argentina in cooperation with Duke Energy (USA), Hydro Quebec (Canada), EDF (France) and other companies.
The information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of RusHydro. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might," the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially from these statements. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to RusHydro and its operations.