DJ PJSC RusHydro: Results of the Board of Directors Meeting on June 21, 2019
PJSC RusHydro (HYDR)
PJSC RusHydro: Results of the Board of Directors Meeting on June 21, 2019
25-Jun-2019 / 08:45 CET/CEST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
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announcement.
Results of the Board of Directors Meeting on June 21, 2019
PJSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces that
the Company's Board of Directors held a meeting in absentia on June 21,
2019.
Resolutions passed on Items of the agenda:
Item 1. On approval of amendments to the Decision on the additional issue of
the Company's securities.
The resolution adopted:
To approve amendments to the Decision on the additional issue of RusHydro
shares (ordinary shares) (Schedule 1 hereto).
Item 2. On approval of amendments to the Company's Securities Prospectus.
The resolution adopted:
To approve amendments to the RusHydro Securities Prospectus (for ordinary
shares) (Schedule 2 hereto).
Item 3. On approval of the report on the interim results of the fulfillment
of the Company's Business Plan for 2019 considering the actual results for
Q1 2019 (including the report on the fulfillment of the Investment Program,
inter alia, the Comprehensive Modernization Program of Generating
Facilities, for Q1 2019).
The resolution adopted:
To approve the report on the interim results of execution of the Business
Plan for 2019 considering the actual results for Q1 2019 (including the
report on the fulfillment of the Investment Program, inter alia, the Complex
Modernization Program for Generating Facilities, for Q1 2019) (Schedule 3
hereto).
Item 4. On approval of the report on the fulfillment of the Annual Complex
Procurement Program of the Company for Q1 2019.
The resolution adopted:
To approve the report on execution of RusHydro's Annual Complex Procurement
Program for Q1 2019 (Schedule 4 hereto).
Item 5. On election of members of Committees under the Company's Board of
Directors.
5.1. On election of members to the HR and Remuneration (Nominations)
Committee under the Company's Board of Directors.
The resolution adopted:
1) To terminate ahead of time the powers of Sergey Nikolayevich Ivanov, a
member of the HR and Remuneration (Nominations) Committee under the
Company's Board of Directors.
2) To elect Pavel Sergeyevich Grachev, a member of the Board of Directors,
to the HR and Remuneration (Nominations) Committee under the Company's
Board of Directors.
5.2. On election of members to the Audit Committee under the Company's Board
of Directors.
The resolution adopted:
1) To terminate ahead of time the powers of Sergey Nikolayevich Ivanov, a
member of the Audit Committee under the Company's Board of Directors.
2) To elect Pavel Sergeyevich Grachev, a member of the Board of Directors,
to the Audit Committee under the Company's Board of Directors.
3) To elect Pavel Sergeyevich Grachev the Chairman of the Audit Committee
under the Company's Board of Directors.
Item 6. On approval of the reports on the performance results of the
Committees under the RusHydro Board of Directors for the corporate year
2018-2019.
The resolution adopted: To postpone the matter to a later date.
Item 7. On consideration of the Company's Management Board Performance
Report for 2018.
The resolution adopted:
To take into consideration the Company's Management Board Performance Report
for 2018 (Schedule 5 hereto).
Item 8. On approval of the Company's internal documents:
8.1. On amending the Unified Regulation on Procurement of Products for the
Needs of RusHydro Group: on extending the practice of using factoring in
performing contracts for supply of goods (performance of work, provision of
services).
The resolution adopted:
1. To amend clause 5.3.9 of the Unified Regulation on Procurement of
Products for the Needs of RusHydro Group approved by Decision of the
RusHydro Board of Directors (Minutes No. 277 dated October 4, 2018) to read
as follows:
"5.3.9. A procurement notice and/or procurement documentation may provide
for the use of assignment of claim (factoring) in performing product
delivery contracts concluded by the Customer with small and medium business
entities based on the results of procurements held in the form of a
competitive tender in accordance with the provisions of the civil laws of
the Russian Federation."
2. To instruct the Chairman of the Management Board and General Director of
the Company N. G. Shulginov:
2.1. To notify controlled organizations that have acceded to the Unified
Regulation on Procurement of Products for the Needs of RusHydro Group about
the amendments introduced thereto within 10 business days after this
resolution is adopted.
2.2. To publish information about the execution of Directives of the
Government of the Russian Federation No. 4111p-p13 dated May 8, 2019, along
with the electronic copies of the supporting documents on the
Interdepartmental State Property Management Portal by July 10, 2019.
Item 9. On the consideration of matters of significance to the Company:
9.1. On the creation of a Centralized Service Center performing accounting
and tax accounting functions and generation of reports in RusHydro Group.
The resolution adopted:
To approve establishing of a Centralized Service Center performing
accounting and tax accounting functions and generation of reports in
RusHydro Group based at HydroEngineering Siberia JSC.
9.2. On the consideration of the report on the progress of the Action Plan
(the list of measures) for the implementation of occupational standards in
the Company's operations.
The resolution adopted:
To approve the report on the progress of the implementation of the Action
Plan (the list of measures) for the introduction of occupational standards
in the Company's operations in Q4 2018 and Q1 2019 (Schedule 6 hereto).
9.3. On the progress of priority projects for the construction of two
facilities in the Far East (CHPP in Sovetskaya Gavan, Sakhalin GRES-2 (stage
1)) as of March 31, 2019.
The resolution adopted:
To take note of information on the progress of the priority projects of
construction of two facilities in the Far East (CHPP in Sovetskaya Gavan,
Sakhalin GRES-2 (stage 1)) as of March 31, 2019 (Schedule 7 hereto).
9.4. On recognizing candidates to the Company's Board of Directors (a Member
of the Company's Board of Directors) as independent.
The resolution adopted:
In accordance with the recommendations of the HR and Remuneration
(Nominations) Committee under the Company's Board of Directors:
1. To take into account the information on the results of the evaluation of
conformance of A. O. Chekunkov, a candidate nominated for election to the
Company's Board of Directors at the annual General Meeting of Shareholders
in 2019, to the independence criteria stipulated in Schedule 4 to the MOEX
Listing Rules.
A. O. Chekunkov is not affiliated with the Company, a substantial
shareholder of the Company, or the Company's competitors.
Mr. Chekunkov has formal criteria of affiliation with:
- The state, as Mr. Chekunkov is General Director of the Far East and Baikal
Region Development Fund JSC, an organization controlled by the Russian
Federation.
- The Company's substantial counterparty, the Far East and Baikal Region
Development Fund JSC (FEDF), as the amount of liabilities between the
Company and the FEDF under a loan agreement exceeds 2% of the book value of
assets and 2% of revenue of the FEDF.
To note that the affiliation between A. O. Chekunkov and the state and a
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DJ PJSC RusHydro: Results of the Board of Directors -2-
substantial counterparty is formal in nature and does not affect Mr.
Chekunkov's ability to act on the Board of Directors for the benefit of the
Company and all its shareholders for the following reasons:
- In accordance with Order of the Government of the Russian Federation No.
607-r dated March 30, 2019, A. O. Chekunkov has been nominated by the
Russian Federation as an independent director; therefore, Mr. Chekunkov has
no obligation to vote according to the directives of the Government of the
Russian Federation (clause 16 of Regulation of the Government of the RF No.
738 dated December 3, 2004).
- The affiliation of A. O. Chekunkov with the state is formal in nature
because his labor relations with the Far East and Baikal Region Development
Fund JSC do not influence the objective and independent decisions made by
Mr. Chekunkov as the control of the Russian Federation over the Far East and
Baikal Region Development Fund JSC is indirect and is exercised via the
State Development Corporation VEB.RF, which is managed by management bodies
typical for a commercial institution.
- The affiliation of A. O. Chekunkov with RusHydro's substantial
counterparty is formal in nature due to the following:
On April 4, 2018, RusHydro (the Borrower) and the FEDF (the Lender)
concluded a financing (target loan) agreement for the purpose of
construction of offsite infrastructure facilities at Sakhalinskaya GRES-2
(the "Project"). The borrowed funds were allocated to RusHydro on a
repayable and paid basis; the loan agreement has been concluded for the
period until June 25, 2026, for a total amount of up to RUB 5 billion at 5%
per annum.
Provision of funds to the FEDF to finance RAO Energy Systems of the East JSC
for the implementation of the Project in accordance with Regulation of the
Government of the Russian Federation No. 1055 dated October 16, 2014, has
been preliminarily approved by the Government Subcommission for the
Implementation of Investment Projects in the Far East and in the Baikal
Region (Minutes No. 3 dated December 25, 2017), by the FEDF Board of
Directors (Minutes No. 57 dated December 29, 2017), and by the RusHydro
Board of Directors as an interested party transaction (Minutes No. 265 dated
February 6, 2018; A. O. Chekunkov did not vote on this item). As of December
31, 2018, the loan had been disbursed in full (RUB 5 billion), and the loan
funds had been allocated to finance the Project by way of their transfer in
the form of a loan to an organization controlled by the Company, RAO ES of
the East JSC.
- The track record of A. O. Chekunkov in the Company's Board of Directors
and the Company's Committees in 2016-2018 has proved his ability to make
independent, unbiased, and conscientious judgments as the opinion of Mr.
Chekunkov on the agenda items of meetings of the Board of Directors and
committees under the Board of Directors was based on his expertise and
experience and was autonomous and independent, and the decisions made by Mr.
Chekunkov previously allow one to draw the conclusion that his formal
connection with the state did not influence his decisions as Mr. Chekunkov
acted for the benefit of the Company and all its shareholders.
2. For the purpose of increasing the transparency of RusHydro, building its
positive business reputation, strengthening the positive current expert
evaluation of the corporate governance system, increasing the share of
independent directors in the Board of Directors,* and ensuring the
conformance of RusHydro to the recommendations of the Code of Corporate
Governance and the Company's internal documents, it is suggested that the
candidate to the RusHydro Board of Directors Aleksey Olegovich Chekunkov be
recognized as an independent director.
Mr. Chekunkov has an excellent business and personal reputation, the
knowledge, skills, and experience necessary to make decisions that fall
within the competence of the Board of Directors and required for the
effective performance of his functions, thus allowing him, among other
things, to participate in work of various Committees under the RusHydro
Board of Directors. Since 2015, Mr. Chekunkov has been a member of the
Committee for Far East Energy Development under the Board of Directors of
the Company. In 2016-2018, he was a member of the Company's Board of
Directors and of the Reliability, Energy Efficiency, and Innovations
Committee and the Investment Committee under the Company's Board of
Directors. The long service of A. O. Chekunkov in the Company's Board of
Directors and the Committee for Far East Energy Development is his advantage
as Mr. Chekunkov has the necessary longstanding experience in the field of
electrical power and investments and extensive knowledge of the Company's
business, which can contribute to the effective work of the Board of
Directors and the Committees of the Company.
During the meetings of the Committees and the Board of Directors, Mr.
Chekunkov was always active in discussing the agenda items and always
expressed an objective and well-considered opinion in voting that was
independent from the opinion of the Company management; he is responsible
and proactive. When participating in the work of the Board of Directors and
its Committees, Mr. Chekunkov made a significant contribution to the
Company's implementation of the most important matters related to various
areas of the Company's business, including priority projects for the
construction of facilities in the Far East, investment projects, and the
RusHydro innovation development program.
Furthermore, Mr. Chekunkov chaired the Far East and Baikal Region
Development Fund for a long time. He has 18 years of experience working in
the sector of direct investments. He has held senior positions in the
Russian Direct Investment Fund (RDIF), A-1 (Alfa-Group consortium), Delta
Private Equity (US-Russian Investment Fund), and Investment Group Alrosa
OJSC. He is also a member of the Supervisory Board at JSC Alrosa (PJSC). Mr.
Chekunkov took part in building the main mechanisms and approaches that
served as the basis for the state system of the management of Far East
development and was one of the ideologists and creators of the Voskhod
investment system for attracting capital to investment projects in the Far
East.
The work experience described above, a deep knowledge of the specifics of
the Company's work, an understanding of business processes, possession of
the necessary professional competences in the financial, administrative, and
economic areas, and use of the best corporate governance practice in his
work make the experience of Mr. Chekunkov significant for the Company.
3. Based on clause 2 of section 2.18 of Annex 2 and based on Annex 4 to the
MOEX Listing Rules, to recognize Aleksey Olegovich Chekunkov as an
independent director.
* According to the recommendations following the external independent audit
of performance of the Board of Directors conducted in 2018 by
PricewaterhouseCoopers Consulting Services LLC, it is necessary to increase
the share of independent directors in the Board of Directors (to elect an
additional independent director with global expertise in (hydro-)power
engineering).
9.5. On the consideration of the Electrical Power Development Program to
ensure advanced economic growth in the Far Eastern Federal Okrug.
The resolution adopted:
To take into account the Electrical Power Development Program to ensure
advanced economic growth in the Far Eastern Federal Okrug (Schedule 8
hereto).
9.6. Confidential.
The resolution adopted: Confidential.
About RusHydro
RusHydro Group is one of Russia's largest generating companies. RusHydro is
the leading producer of renewable energy in Russia with over 400 generating
facilities in Russia and abroad. The company also manages a number of R&D,
engineering and electricity retail companies. Group's thermal assets are
operated by subsidiary - RAO Energy System of East in the Far East of
Russia. Total electricity generation capacity of the Group is 39.4 GW, heat
capacity - 18.5 thousand GCal/h.
Russian Federation owns 60.56% in RusHydro, the rest is held by other
institutional and individual shareholders (over 360,000). The company's
stock is traded on Moscow Exchange (MOEX), and included in MSCI EM - MSCI
Russia indexes. Company's GDRs in the IOB section of LSE, ADRs - in OTCQX.
For more information:
Investor Relations Department
Tel. +7 (800) 333 8000 ext. 1607, 1319, 1304
ir@rushydro.ru
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The information in this press release may contain projections or other
forward-looking statements regarding future events or the future financial
performance of PJSC "RusHydro" ("RusHydro"). One can identify
forward-looking statements by terms such as "expect", "believe",
"anticipate", "plan", "aim", "target", "forecast", "project", "should",
"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 and political
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.
ISIN: US7821834048, RU000A0JPKH7
Category Code: MSCM
TIDM: HYDR
LEI Code: 2534005TJN9DX4YWVT97
OAM Categories: 2.2. Inside information
Sequence No.: 11211
EQS News ID: 830187
End of Announcement EQS News Service
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June 25, 2019 02:45 ET (06:45 GMT)
