15.09.2014
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Results of the Board of Directors on September 12, 2014

JSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces that the Company's Board of Directors held a meeting in absentia on September 12, 2014.


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The Board of Directors approved the report on interim results of 2014 business-plan execution for the 1st half of 2014 (including report on implementation of investment program, including reports on fulfillment of comprehensive modernization program and procurement plan).


Electricity generation and output by RusHydro’s power plants in the 1st half of 2014 totaled 99.1% and 99.6% of the planned volumes for the quarter respectively. A slight undershoot was a result of unfavorable hydrological conditions and regimes allowed by the Federal Water Resources Agency.


In the 1st half of 2014, increase in total installed capacity amounted to 20.5 MW as a result of completion of technical upgrade and reconstruction works at the Volzhskaya HPP (10.5 MW) and the cascade of Verkhnevolzhskie HPPs (10 MW).


Financing of the investment program for the 1st half of 2014 amounted to RUB 29.91 bn or 106% of funding plan for the 1st half of 2014 and 31% of the annual plan. Actual financing of technical rehabilitation and modernization projects in the 1st half of 2014 totaled RUB 11.84 bn or 107% of the plan for the 1st half of 2014 and 29% of the annual plan.


Due to optimization of procurement procedures the procurement program for the 6 months of 2014 has been implemented with 8.6% economy against prevailing market prices.


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The Board of Directors approved the report on execution of RusHydro’s KPI’s for the 2nd quarter of 2014.


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The Board of Directors has approved the new edition of Provision on insider’s information.


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The Board of Directors resolved to amend the procurement policy of RusHydro to comply with the Russian Government Decree of 14.07.2014 on changes in procurement policies in regards to preference for Russian producers of petrochemical products.


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The Board of Directors has approved a number of contracts and supplementary agreements between RusHydro and Hydropoject Institute, qualified as interested party transactions, and determined the prices of these transactions:

  • contract for development of single monitoring program of conditions of the Zagorskaya PSPP and Zagorskaya PSPP-2 hydro engineering facilities for the period of restoration works at the Zagorskaya PSPP-2;
  • addendum No. 10 to the agreement for transfer of connection of 500 kW of the Zagorskaya PSPP from the existing 500 kW outdoor switchgear to the combined 500 kW switchgear of the Zagorskaya PSPP and Zagorskaya PSPP No.2;
  • contract for geotechnical and hydrological surveys at the Zagorskaya PSPP;
  • agreement, including the addendum No.1, for geodetic monitoring of deformation of hydropower facilities on the site of Bureyskaya hydropower complex;
  • contract including supplement agreement No.1 for geotechnical and hydrological surveys in gear race and tailrace of the Bureyskaya HPP;
  • contract including supplement agreement No.1 and No.2 for turn-key project of complex retooling of the hydropower unit No. 9 of the Saratovskaya HPP.
The Board of Directors approved the contractor agreements between JSC RusHydro and JSC Lenhydroproject, qualified as interested party transactions, and determined the price of these transactions:
  • for development of design documentation for reconstruction of the start-up complex of the Irganayskaya HPP launched at the operational level mark of 547.00 m;
  • for actualization of Irganayskaya HPP project with installed capacity of 400 MW.

The Board of Directors also approved the agreement for development of the additional operations schedule of the Sayano-Shushenskoe reservoir with the maximum water level of 536.5 m of the provisional regulations for the utilization of water resources of reservoirs of the Sayano-Shushenskiy hydropower complex located on the Yenisei river, between JSC RusHydro and JSC Lenhydroproject, qualified as interested party transaction, and determined the price of this agreement.

The Board of Directors approved the addendum No.1 to the agreement between RusHydro and NP Hydropower of Russia for development of the updated list of corporate standards for 2014-2015, qualified as interested party transaction, and determined that the price of this agreement and the number of standards remain unchanged.


The Board of Directors approved a contract between RusHydro and Vnesheconombank for depositary services in regards to RusHydro’s securities, qualified as interested party transaction, and determined the price of contract.


The Board of Directors approved bilateral power purchase agreements between RusHydro and INTER RAO in regards to output of the Bureyskaya and Zeyskaya HPPs, located in non-price zone, qualified as interested party transactions, and determined the prices of these agreements. The electricity produced by hydropower plants in excess of balance will be supplied under these agreements. Total volume of electricity supplied under the agreements will not exceed 2,400,000 MW.


The Board of Directors approved the agreement between RusHydro and Moscow Power Engineering Institute for professional training of RusHydro’s employees, qualified as interested party transaction.


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The Board of Directors approved the interim report on implementation of innovative development program of RusHydro for 2014-2016 in the 1st half of 2014. Overall financing of the program during the period totaled RUB 781.2 mn.

The following results have been achieved:

  1. Optimization of hydropower plants regime accounting for long-term climate change in the region of reservoirs.
  2. Development of new methods of diagnostics of main hydrotechnical equipment conditions.
  3. Optimization of environmentally-friendly lubricants utilization in hydroturbines.

Total financing of development of educational programs amounted to RUB 59 mn.

As Chairman of Global Sustainability Electricity Partnership (GSEP) RusHydro arranged round table discussions on sustainable development of hydropower in Irkutsk and Moscow.


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The Board of Directors took a note on execution of the Board’s commission of May 23, 2014, and moved the deadlines for execution of a number of commissions regarding improvement of procurement policy of RusHydro and its approval by the Ministry of economic development and Ministry of energy of Russia to December 31, 2014.


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The Board of Directors commissioned Evgeny Dod, Chairman of the Management Board-General Director of RusHydro, to:

  1. 1. Submit for the Board’s consideration by November 20, 2014, the long-term development program of RusHydro in compliance with recommendations for the long-term development programs of the state-owned companies, which provide for the update of the program on the annual basis.
  2. Develop and approve by November 20, 2014, the Standard for the auditor’s review of the program implementation that will regulate the procedure for this review, prepared in accordance with the standard for the auditor’s review of the program implementation developed by the Ministry of economic development of Russia.
  3. Amend, if necessary, by November 20, 2014, the effective Regulations on Remuneration to the sole executive body of the Company in regards to dependence of remuneration of the Company's sole executive body on execution of the planned performance indicators of the Company determined by the program.


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The Board of Directors commissioned Evgeny Dod, Chairman of the Management Board-General Director of RusHydro, to:

  1. By October 31, 2014 — analyze the applied financial flows management system of JSC RusHydro, its subsidiaries and affiliates.
  2. By November 5, 2014 — send the results of the analysis to the Ministry of Finance of the Russian Federation.
  3. By March 30, 2015 — develop and approve the structure of the unified treasury of the Company, its subsidiaries and affiliates.
  4. By May 31, 2015 — develop and approve the internal documents of the Group, regulating the treasury and the system of financial flow management in compliance with the effective legislation.
  5. By June 30, 2015 – start work of the treasury in accordance with p. 3 and 4.

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The Board of Directors commissioned Evgeny Dod, Chairman of the Management Board-General Director of RusHydro, to complete the following by December 1, 2014:

  1. Carry out comparative analysis of the corporate management standards applied in the Company and the key provisions of the Corporate Management Code that includes study of risks connected with the possible implementation of the new provisions of the Code in the activities of the Company.
  2. Develop a draft plan of activities ("Roadmap") for implementation of key provisions of the Code in the Company and send it to the Ministry of energy of Russia and to the Federal Agency for State Property Management
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