JSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces that the Company's Board of Directors held a meeting in absentia on June 20, 2014. *** The Board of Directors approved the report on interim results of 2014 business-plan execution for the 1st quarter of 2014 (including report on implementation of investment program for the 1st quarter of 2014). Electricity generation and output by RusHydro’s power plants in the 1st quarter of 2014 totaled 111.3% and 112.2% of the planned volumes for the quarter respectively. The overshoot was a result of favorable hydrological conditions and regimes allowed by the Federal Water Resources Agency. In the 1st quarter of 2014, increase in total installed capacity amounted to 10 MW as a result of completion of technical upgrade and reconstruction works at the cascade of Verkhnevolzhskie HPPs. Financing of the investment program in the 1st quarter of 2014 amounted to RUB 11.31 bn or 103% of funding plan for the 1st quarter of 2014 and 12% of the annual plan. Actual financing of technical rehabilitation and modernization projects in the 1st quarter of 2014 totaled RUB 4.61 bn or 105% of the plan for the 1st quarter of 2014 and 11% of the annual plan of RUB 41.26 bn. *** The Board of Directors commissioned Evgeny Dod, Chairman of the Management Board of RusHydro, to develop and submit for the Board’s review by December 31, 2014:
1. Key Performance Indicators of RusHydro for 2015. 2. The list and methodology of calculation of RusHydro’s KPIs in compliance with the requirements to KPI’s of the state companies developed by the Federal Agency for State Property Management (Rosimushchestvo). *** The Board of Directors resolved to cut sales, general and administrative expenses (SG&A) in 2014 by 15% of their actual amount for 2013, including execution of the social partnership agreements, as well as through executive staff optimization, improvement of compensation scheme, and also through decreasing number and costs of works implemented by contracting parties. The Board of Directors commissioned Evgeny Dod, Chairman of the Management Board of RusHydro, to develop and approve the base for lowering SG&A and methodology of assessment of execution of these decisions by August 1, 2014. *** The Board of Directors approved the amended insurance protection program of RusHydro for 2014. The amendments are aimed to execute the government’s commission to provide the employees of the state companies with vouchers to health resorts of the Republic of Crimea. To finance the program the expenses for voluntary medical insurance of the Company in 2014 should be increased by 5% of the planned amount. *** The Board of Directors approved the Insurance Regulations of RusHydro. The Board of Directors approved the voluntary medical insurance agreement (including the addendums) between RusHydro and Alliance Insurance Company, qualified as interested party transaction, and determined the price of the agreement in the amount of RUB 64,833,925.50 (VAT free). The insurance regulations and agreement were updated in compliance with changes in the Russian insurance legislation. *** The Board of Directors commissioned RusHydro’s representatives at the AGM of CJSC TPP in Sovetskaya Gavan’ to approve the general contractor agreement for construction of heat and power plant in Sovetskaya Gavan’ city in the Far East of Russia, based on the results of an open tender, qualified as major transaction. The Board of Directors commissioned RusHydro’s representatives at the AGM of CJSC TPP in Sovetskaya Gavan’ to approve the following interrelated transactions, qualified as major transactions:
1. Sale-purchase agreement between RAO ES of East (seller) and CJSC TPP in Sovetskaya Gavan’ (buyer) of project documentation for implementation of the investment project for construction of heat and power plant in Sovetskaya Gavan’ city in Khabarovsk region. 2. Novation agreement. According to the agreement RAO ES of East assigns the rights (requirements) under contract for planning and surveying works at the project to CJSC TPP in Sovetskaya Gavan’. *** The Board of Directors approved the paid service contract between RusHydro and the Russian Union of Industrialists and Entrepreneurs (RSPP), qualified as interested party transaction, and determined the price limit of the agreement in the amount of RUB 220,000 (including VAT). The agreement provides for preparing the expert report on results of review of corporate sustainability report of RusHydro Group. *** The Board of Directors commissioned RusHydro’s representatives in the governing bodies of the Company’s subsidiaries and associates to vote for increase of share capital of the following companies and approved the acquisition of these stakes:
Company | Number of shares | Type of shares | Par value per share, RUB | Price of placement per share, RUB | JSC Leningradskaya PSPP | 900,000,000 | Ordinary | 1 | 1 | JSC Nizhne-Bureyskaya HPP | 23,781,700,000 | Ordinary | 1 | 1 | JSC Sulak Hydrocascade | 1,393,100,000 | Ordinary | 1 | 1 | JSC Zagorskaya PSPP-2 | 9,000,000,000 | Ordinary | 1 | 1 | JSC Hydroinvest | 15,104,267,985 | Ordinary | 1 | 1 | JSC ESC RusHydro | 14,221,368 | Ordinary | 1 | 1 | JSC SHPP of Dagestan | 27,581 | Ordinary | 1,000 | 1,000 | JSC Zaramagskiye HPPs | 7,083,260 | Ordinary | 1 | 1 | JSC Ust-Srednekanskaya HPP | 11,000,000,000 | Ordinary | 1 | 1 |
The shares are placed through a private subscription. RusHydro pays for these stakes through bank transfer of funds and/or setting off monetary claims to these companies. RusHudro’s share in the share capital of the abovementioned companies remains unchanged.
The Board of Directors approved the additional contribution of funds to increase share capital of the following companies:
§ Small HPPs of Stavropolye and Karachaevo-Cherkessia LLC in the amount of up to RUB 1,684,720,000; § Fiagdonskaya Small HPP LLC in the amount of up to RUB 17,017,115.49.
RusHudro’s share in in the share capital of the abovementioned companies remains unchanged.
*** The Board of Directors approved the agreement on compensation payments due to termination or change of water usage conditions, qualified as transactions related to gratuitous transfer of property by RusHydro. *** The Board of Directors approved an agreement between RusHydro and JSC Institute Lenhydroproject, qualified as interested party transaction, and determined the price of the agreement. The subject of the agreement is development of detailed documentation for comprehensive reconstruction of the Votkinskaya HPP. The Board of Directors approved a contractor agreement between RusHydro and JSC Hydroproject and an Addendum No.9 to this agreement, qualified as interested party transaction, and determined the price of the agreement. The subject of the agreement is project works for 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. *** The Board of Directors approved the electricity sale in 2014 under free bilateral sale-purchase agreements in the 2nd pricing zone of the wholesale electricity and capacity market according to the list of guarantee suppliers. *** The Board of Directors took note of the information on the status of implementation of four priority projects in the Far East of Russia: Blagoveschenskaya TPP (2nd stage), Yakutskaya TPP No.2 (1st stage), TPP in Sovetskaya Gavan’, and Sakhalinskaya TPP No. 2 (1st stage). *** The Board of Directors approved the reports of the Board’s Committees for the period from July 15, 2013 to May 31, 2014. *** The Board of Directors moved the deadline for execution of the Board of Directors’ commissions. The date for submitting the concept for restructuring of the scientific and technical complex of RusHydro for the Board’s review has been moved, as it should be studied together with Innovative development program of RusHydro for 2014-2018, which is currently being updated. *** The Board of Directors approved the report of the Company’s Management Board activity for 2013.
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