At a Regular Meeting of RusHydro’s Board of Directors
JSC RusHydro announces that on February 29th, the Company's Board of Directors voted by proxy.
The Board of Directors approved termination of RusHydro's participation in JSC UEMC via voluntary liquidation and also instructed RusHydro's representatives in UEMC's Board of Directors to vote for the adoption of all the necessary decisions regarding the liquidation of UEMC. In particular, the Board of Directors of RusHydro instructed to agree on the composition of the liquidation committee, which includes representatives of all the shareholders of UEMC, including RusHydro.
RusHydro has held 20.67 percent of UEMC's authorized capital since the restructuring of JSC RAO UES of Russia - 01.07.2008.
JSC Ural Energy Management Company (UEMC) was established in 2002, by a decision adopted by RAO UES of Russia's Board of Directors. It was established to prepare the energy systems of JSC Tymenenergo and JSC Kurganenergo for restructuring and operating in market conditions. Since the restructuring of RAO UES of Russia, UEMC's further development strategy has not been outlined, and the Company does not have areas of activity that can generate profit. The Company carried out the tasks for which it was initially established; its shareholders do not receive a profit from their participation in UEMC; and its net assets have steadily declined in size over the last several years. All these factors make this block of shares non-liquid.
The Board of Directors decided to liquidate RusHydro's branch - the Irganayskaya HPP and to introduce corresponding amendments in RusHydro's Articles of Association.
At present, there are two branches of RusHydro operating in Dagestan: the Dagestan branch and the Irganayskaya HPP. A sole management center needs to be established to carry out a more system-wide and unified policy aimed at implementing hydro-power projects within the Republic and enhancing management efficiency and optimizing management expenses. Liquidation of the branch does not affect the functioning and reliability of the Irganayskaya HPP, the entire staff of the power plant will be transferred to the Dagestan branch.
The Board of Directors approved the Work Plan for H1 2012;
The Board of Directors approved a report on the progress of measures implemented in 2011 and approved in accordance with the Company's non-core assets register, as amended. In addition, the Board of Directors instructed the Company's Management Board to submit a 2012 work progress report for consideration by the Board of Directors, in accordance with the Company's non-core assets register, not later than February 28th, 2013.
Approval of the newly amended register is conditioned by the need to update data contained in the document.
The Board of Directors approved a contract between RusHydro and JSC SO UES, which is an interested party transaction.
According to this contract, RusHydro shall render services to SO UES related to reactive power control without power production by using power generating equipment at the Volzhskaya, Votkinskaya, Zhigulevskaya, Zelenchuksksaya, Kamskaya, Nizhegorodskaya, Ezminskaya and Gizeldonskaya HPPs, as well as at the Zagorskaya PSHPP. Also, the Board of Directors approved a pricing procedure for services under this contract.
In accordance with Russian Government Regulation No. 117, dated 03.03.2010, SO UES will be responsible for selecting power engineering facilities which render services to ensure system reliability, for concluding contracts with them and for coordinating the actions of the participants in the system services market.
In December 2011, RusHydro received notification from SO UES regarding 2012 selection activities, in the form of a proposals request. RusHydro agreed to participate in the selection process and submitted a proposal on rendering services on reactive power control in relation to hydro-power generating equipment. Following the results of all procedures, RusHydro was one of the winners and was included in the list of electric power engineering subjects that passed the selection process. This made it possible to conclude a contract for rendering services on reactive power control without the production of electricity between RusHydro and SO UES.
The Board of Directors approved the reports on the execution of RusHydro's key performance indicators (KPIs) for Q4 2011 and FY 2011.
All KPIs have been fulfilled.
The Board of Directors approved a report on the fulfillment of RusHydro's 2011 development priorities.
RusHydro's development priorities are the main tools for implementing the Company's strategic plan during the course of the year and for determining the list of key tasks in each direction of corporate activity that are considered to be the highest priority ones during the current year.
2011 development priorities, approved by the Company's Board of Directors on February 24th, 2011, included tasks aimed at ensuring the reliability and safety of operating hydro-power facilities, as well as implementation of the Company's investment projects, M&A projects and the innovative development program. Furthermore, among these priorities are: enhancing energy efficiency, developing engineering, creating research-design and water resource utilization systems, expanding RES utilization, developing international construction and engineering activities and upgrading the legislative base.
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