16.12.2011
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The Consortium of Russian Institute of Directors and Expert RA (Rating Agency) increased the corporate governance score of JSC RusHydro to 7+

The Consortium of Russian Institute of Directors and Expert RA Rating Agency increased the corporate governance score of JSC RusHydro from 7 to 7+ which stands for "Well-developed practice of corporate governance" according to the scale of National Corporate Governance Score.

 

The score 7+ is assigned to a company, which according to the consortium experts' opinion operates pursuant to the applicable Russian legislation in the area of corporate governance, with inherent initiatives to embrace the baseline recommendations from the Russian Code of Corporate Conduct, and some recommendations of the best international practice in this area. In addition, such a company is characterized by relatively low risks of shareholders' losses related to the quality of corporate governance.

 

As highlighted by the consortium, over the last 2 years JSC RusHydro's score was confirmed and then increased, "there were significant changes related to the improvement of the most important institutes in the practice of JSC RusHydro's corporate governance".

 

The company's corporate governance practice has been passed as good in the area of observing and protecting shareholder rights. JSC PricewaterhouseCoopers Audit a company with high business reputation is involved to audit financial (accounting) statements prepared in accordance with the IFRS. JSC RusHydro promotes practice and procedures ensuring high independence of external auditors including periodic rotation of auditors' partners in accordance with auditing standards. The Company assures solid registration of stock ownership rights by way of having the shareholder register kept and managed by an independent registrar. The new version of the corporate governance code passed in 2010 sets forth the procedure for corporate conflict settlements. Following the results of 2010 the Annual General Shareholders' Meeting made a decision to pay out dividend to the amount of 6.6 % of the company's net profit and approved the Articles of Association that now has the evident payout period reduced to 60 days from the moment of making a decision on dividend payout.

 

JSC RusHydro's corporate governance practice has been passed as good in terms of its management and oversight bodies. The make-up of independent directors and limited participation of executive directors in the Board of Directors ensure its harmony in terms of possibilities to execute efficient monitoring of management activities and to ensure proper adherence to the company's interests in whole and all its shareholders when decisions are made by this management body.

 

In 2010 JSC RusHydro reorganized its internal audit, internal supervision and risk management service. The Board of Directors approved a new version of the internal risk control and management policy. In addition, new risk management standards are being developed and implemented in accordance with international best practice.

 

The Board of Directors pays much attention to the matter of enhancing the management efficiency and motivation. The Board approved the Provision on arrangement and control of JSC RusHydro's personnel pool and passed the new version of the Provision on payment of compensation and benefits to the Management Board members of JSC RusHydro and on December 22, 2010 the Board of Directors approved the Employee Stock Option Plan for 2 years.

 

JSC RusHydro demonstrates a good level of disclosing financial and non-financial information about its activities that is posted on the company's website on a regular basis and in its annual and quarterly statements. Financial statements of JSC RusHydro are disclosed on-line in the form suitable to its shareholders, in addition the company publishes its half-years statements prepared in accordance with the IFRS. In 2011, the Board of Directors approved the amended Provision on information policy, and the Company improved its disclosure-of-information practices about remuneration criteria for the members of executive bodies and data on adherence to the Russian Code of Corporate Conducts in its annual report.

 

Importantly, the Company's effort to sustain corporate social responsibility practices and care for related party interests has been passed as high. JSC RusHydro actively implements corporate social responsibility projects for its key stakeholders. Enterprises of RusHydro Group are regularly audited in terms of their environmental management systems for compliance with the requirements of international standard ISO 14001:2004. In 2010 the Company prepared a social report taking into account the GRI guidelines.

 

The National Corporate Governance Score (NCGS) indicates the quality of a company's corporate governance and allows to compare the level of corporate governance and related risks across different businesses. This score is a tool for perfecting the corporate governance practices in a company and for improving its relationships with investors. NCG is based on 10 score classes. The highest one is number ten - "Advanced Corporate Governance Practice". If the governance quality indicators of a certain company are above average values of a corresponding class then its rating class is supplemented with "+" sign.

 

The Rating Agency Expert RA is Russia's largest rating agency and has over 360 effective contact ratings and has been engaged in developing ratings since 1997.

 

The Russian Institute of Directors (RID) is a leading expert and resource center in the area of corporate governance, has been established by Russia's largest companies in November of 2011. The RID is one of the key participant that developed the Russian Code of Corporate Conduct and a developer of the Professional standard of corporate directors as well as the national register and corporate governance rating.

 

First in 2008, the Consortium assigned the National Corporate Governance Rating "7" for JSC RusHydro.  In 2009 this rating was confirmed at the same level. 

 




 

The information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of RusHydro. One 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 and rapid technological and market changes in our industries, as well as many other risks specifically related to RusHydro and its operations.
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