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PJSC RusHydro: Results of the Board of Directors Meeting on May 24, 2021

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PJSC RusHydro (HYDR)
25-May-2021 / 16:47 CET/CEST
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.

 

Results of the Board of Directors Meeting on May 24, 2021

 

PJSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces that the Company's Board of Directors held a meeting in absentia on May 24, 2021.

 

Resolutions passed on Items of the agenda:

 

Item 1: On Including Candidates into the Voter List for Election into the Company Management and Control Bodies.

Adopted Resolution:

No.

 Candidate's full name

 

Candidate's position

 

Maksim Sergeyevich Bystrov

Chairman of the Management Board, Association Nonprofit Partnership Council for Organizing an Efficient System of Trading at Wholesale and Retail Electricity and Capacity Market

Pavel Sergeyevich

Grachev

Chief Executive Officer, Public Joint-Stock Company Polyus

Alexey Vladimirovich Kozlov

Assistant to the Deputy Prime Minister of the Russian Federation Y.I.Borisov

Alexey Yurevich

Pavlov

Deputy Head of the Federal Agency for State Property Management

Vyacheslav Viktorovich Pivovarov

President, Limited Liability Company Altera Capital

Nikolay Dmitriyevich Rogalev

Rector, National Research University Moscow Power Engineering Institute (MPEI)

Dmitry Nikolaevich Snesar

Head of the Department-Senior Vice-President, VTB Bank (public joint stock company)

Pavel Nikolaevich Snikkars

Deputy Minister of Energy of the Russian Federation

Yuriy Petrovich

Trutnev

Deputy Prime Minister of the Russian Federation and Presidential Plenipotentiary Envoy to the Far Eastern Federal District

Natalia Olegovna Filippova

Deputy Director of Secretariat of Deputy Prime Minister of the Russian Federation and Presidential Plenipotentiary Envoy to the Far Eastern Federal District Y.P. Trutnev

Victor Viktorovich Khmarin

Chairman of the Management Board - General Director, Public Joint-Stock Company Federal Hydro-Generating Company - RusHydro

Aleksey Olegovich Chekunkov

Minister of the Russian Federation for the development of the Far East and Arctic

Nikolay Grigoryevich Shulginov

Minister of Energy of the Russian Federation

 

 

No

Candidate's full name

Candidate's position

1.

Nataliya Nikolayevna Annikova

Member of the Internal Audit Commission of Joint-Stock Company Zarubezhneft

2.

Alexey Vladimirovich Kulagin

Deputy Head of the Department, Ministry of Energy of the Russian Federation

3.

Jakub Hadzimuratovich Malsagov

Chief specialist-expert of the Department, Federal Agency for State Property Management

4.

Igor Nikolayevich Repin

Deputy Executive Director, Association of Professional Investors

5.

Ilya Nikolayevich Khazov

Head of the Division of the Department, Ministry of Finance of the Russian Federation

 

* in accordance with resolution of the Board of Directors of the Company dated April 05, 2021 (Minutes No. 324 dated April 06, 2021)

 

 

Item 2: On Preliminary Approval of the Company's Annual Report for 2020.

Adopted Resolution:

To preliminarily approve the RusHydro Annual Report for 2020 as per Schedule 1 to the Minutes and submit it for approval to the Annual General Meeting of Company Shareholders.

 

Item 3: On Preliminary Approval of the Company annual accounting (financial) statements as of 2020 year - end.

Adopted Resolution:

To preliminarily approve the Annual Accounting (Financial) Statements of the Company, for 2020, and recommend the Annual General Meeting of Company Shareholders to adopt the resolution as follows:

"To approve the Annual Accounting (Financial) Statements of the Company, for 2020, which is a part of the materials for the Meeting, posted on the RusHydro corporate website www.rushydro.ru.*"

 

* the expression "materials for the Meeting" shall mean information (materials) to be provided to persons entitled to participate in the annual General Meeting of Company Shareholders on the results of 2020, when preparing for the Meeting.

 

 

Item 4: On recommendations to the Annual General Meeting of Company Shareholders on matters related to the AGM agenda:

Adopted Resolution:

Recommend the Annual General Meeting of Company Shareholders to adopt the resolutions as follows:

 

 

 

* the expression "materials for the Meeting" shall mean information (materials) to be provided to persons entitled to participate in the annual General Meeting of Company Shareholders on the results of 2020, when preparing for the Meeting.

 

 

Item 5: On the Matters Related to Convening, Preparing and Holding the Annual General Meeting of Company Shareholders.

5.1. On the Convening of the Annual General Meeting of Company Shareholders.

Adopted Resolution:

To set the deadline for accepting voting ballots to be June 30, 2021.

the Company's Annual Report for 2020, and a report by the Internal Audit Commission of the Company based on the results of review thereof;

the Annual Accounting (Financial) Statements for 2020, including an Auditor's Report and a report by the Internal Audit Commission of the Company, based on the results of review thereof;

rationalization of the proposed net profit distribution and assessment of its compliance with the dividend policy adopted at the Company, including to the dividend payment and the Company's auxiliaries, with explanations and economic rationalization of the need to allocate a certain part of the net profit to the auxiliaries;

information on shareholder's agreements concluded during the year prior to the date of the Meeting;

report on interested party transactions concluded by the Company in 2020, and a report by the Internal Audit Commission of the Company as to the reliability of the data contained in the above report;

recommendations (stance) of the Board of Directors of the Company concerning an agenda for the Annual General Meeting of Company Shareholders as well as minority opinions of the Board Members as to each agenda item;

information on proposals as to putting items to the agenda of the Annual General Meeting of Shareholders, including information on the persons having proposed each of the items included in the Meeting Agenda;

abstracts of minutes of the Audit Committee under the Board of Directors of the Company, Investment Committee under the Board of Directors of the Company, and HR and Remuneration (Nominations) Committee under the Board of Directors of the Company, concerning the corresponding items considered by the Meeting;

details of candidates to the Board of Directors of the Company, including information on persons the having nominated these candidates, as well as information as per Clause 8 of Schedule 3 to the Regulation on the Information Policy of RusHydro;

details of candidates to the Internal Audit Commission of the Company, including information on the persons having nominated these candidates;

information as to the presence or absence of written consents of the candidates nominated for election into the Board of Directors and the Internal Audit Commission, for being elected into a corresponding body of the Company;

details of the candidacy of the Company Auditor, including information as per Sub-Clause 2 of Clause 3, Schedule 3 to the Regulation on the Information Policy of RusHydro;

information on the corporate activities that have the dividend rights of the shareholders impaired and (or) their shares diluted, details of the judicial orders having established the episodes of the shareholders' use of ways, other than dividends and disposal value, to generate income at the Company's expense;

internal auditing report;

draft resolutions of the Meeting, as to the agenda items.

 

5.2. On Recognizing Candidates to the Company Board of Directors as Independent.

Adopted Resolution:

 

*Approved by resolution of the Supervisory Board of Moscow Exchange on March 3, 2021 (Minutes No. 20)

 

Schedule 2 to the Minutes

Having assessed the compliance of P. S. Grachev, a member of the Board of Directors of the Company, as an independent candidate to the Board of Directors of the Company to be elected at the Annual General Meeting of Shareholders in 2021, with the criteria for determining the independency of the Board of Directors members, as envisaged by Appendix 4 to the Listing Rules, the HR and Remunerations (Nominations) Committee (Minutes No. _111 dated May 21, 2021) established that P. S. Grachev is not a party related to:

Based on the results of the assessment, the criteria of P. S. Grachev's relatedness to the Company's substantial counterparty - PJSC FGC UES*, were revealed due to the Company's contractual relations in the field of technological connection of the Company's generating facilities to PJSC FGC UES power grids and due to the contractual relations in the field of electric capacity sales by the Company. Therewith, the amount of liabilities under contracts between the Company and PJSC FGC UES exceeds 2% of revenues according to the consolidated financial statements of each party, prepared under IFRS for the preceding fiscal year.

The HR and Remunerations (Nominations) Committee under the Board of Directors of the Company established that the existing relatedness to the substantial counterparty is of nominal nature, and recommended the Board of Directors of the Company to recognize P. S. Grachev as an Independent Director. The above relatedness cannot affect P. S. Grachev's ability to form unbiased and independent opinions as to the agenda items considered by the Board of Directors and act for the benefit of the Company and its shareholders due to the reasons as follows:

Considering the above, P. S. Grachev has no opportunity to influence any terms of the technological connection contracts between the Company and PJSC FGC UES.

The Company and PJSC FGC UES, in accordance with Sub-Clause 4 of Clause 4 of WECM Rules, have entered into agreements for the supply of capacity at free prices based on results of competitive capacity takeoff (hereinafter, "CCT Agreements"), where the Company acts as a capacity supplier.

Prices under the CCT agreements are determined in the course of / on the basis of competitive procedures (competitive selection) conducted in accordance with WECM Rules and Joining Contract provisions.

Considering the above, P. S. Grachev has no opportunity to influence any terms of CCT agreements between the Company and PJSC FGC UES.

Throughout his period of being a member of the Board of Directors, P. S. Grachev has been involved actively in activities of the Board of Directors of the Company - he has been participating in the absolute majority of meetings held by the Board of Directors and Committees under the Board of Directors of the Company (including those of the Board of Directors, Audit Committee, HR and Remunerations (Nominations) Committee, Strategy Committee, and Far East Power Industry Development Committee, as held since the early 2020).

P. S. Grachev's track record with the Company Board of Directors and Committees under the Company Board of Directors in 2016 to 2021, as well as his active stands in the discussions at in-person meetings, have been demonstrating his ability to provide independent, unbiased and fair judgments, since the P. S. Grachev's stands as to agenda items of meetings of the Board of Directors and the Committees are based on his professional expertise and experience, being rational and independent, and the nature of resolutions adopted by P. S. Grachev previously and at present allow coming to a conclusion that the occurrence of his nominal relatedness to a material counterparty of the Company will affect neither independence of P. S. Grachev, nor his ability to act for the benefit of the Company and all shareholders thereof.

In 2020, P. S. Grachev signed a Declaration of a Member of the Board of Directors of the Company Recognized as Independent, in the form recommended by Moscow Exchange.

 

* P. S. Grachev is a member of the Board of Directors of PJSC FGC UES.

 

Schedule 3 to the Minutes

Having assessed the compliance of M. S. Bystrov, a member of the Board of Directors of the Company, as an independent candidate to the Board of Directors of the Company to be elected at the Annual General Meeting of Shareholders in 2021, with the criteria for determining the independency of the Board of Directors members, as envisaged by Appendix 4 to the Listing Rules, the HR and Remunerations (Nominations) Committee (Minutes No. 111 dated May 21, 2021) established that M. S. Bystrov is not a party related to:

According to the assessment results, for M. S. Bystrov, criteria were revealed of being related to:

The HR and Remunerations (Nominations) Committee under the Board of Directors of the Company established that the existing relation to the Company, its substantial counterparties and its substantial shareholder, is of nominal nature, and recommended the Board of Directors of the Company to recognize M. S. Bystrov as an Independent Director.

M. S. Bystrov's relatedness to the Company substantial counterparties: ATS JSC, SO UES JSC, CFR JSC, Market Council TC ANO, Karachaevo-Cherkesskenergo JSC, Kabbalkenergo JSC, STC UPS Protivoavariynoe Upravlenie JSC, PJSC FGC UES, EENS JSC and with the Company substantial shareholder is of nominal nature and cannot affect his ability to form unbiased and independent opinions as to the agenda items considered by the Board of Directors and act for the benefit of the Company and all shareholders thereof, due to the reasons as follows:

Commercial relations between the Company and CFR JSC are based on the principle of non-discriminatory access to the services providable by the wholesale market commercial infrastructure organizations (Article 20 of the Russian Federal Law on the Electric Power Industry). The amount of payment for the CFR JSC service package, the same for all counterparties, is and shall be as approved by the NP Market Council Association Supervisory Board;

The Company is a participant in the wholesale market for electricity and power and a party to the Joining Contract. The Company concludes contracts in accordance with WECM Rules and WECM Regulations. Joining Contract terms and conditions are binding on the parties when they participate in relations on the wholesale electricity and capacity market (WECM).

The Company and PJSC FGC UES, in accordance with Sub-Clause 4 of Clause 4 of WECM Rules, have entered into agreements for the supply of capacity at free prices based on results of competitive capacity takeoff (hereinafter, "CCT Agreements"), where the Company acts as a capacity supplier.

Prices under the CCT agreements are determined in the course of / on the basis of competitive procedures (competitive selection) conducted in accordance with WECM Rules and Joining Contract provisions;

Since the price under the said contract corresponds to the prices based on the results of capacity competitive auction (competitive transactions) and this practice is exercised by the Company under all non-regulated capacity purchase and sale contracts with other counterparties not related to M. S. Bystrov, the latter as a member of the Board of Directors has no possibilities to influence the price parameters of the above contract.

Selecting such counterparties was stipulated by unbiased factors such as a unique status of the counterparties at a particular market, and peculiarity of the electricity and capacity market structure; part of the contractual terms and conditions are governable by the Russian Government acts. Therefore, concluding such contracts has no relation to M. S. Bystrov's being Member of the Board of Directors of the Company.

M. S. Bystrov's relatedness to the Company, which appeared in June 2020, is of nominal nature and exerts no influence on his ability to form unbiased and independent opinions as to the agenda items considered by the Board of Directors and act for the benefit of the Company and all shareholders thereof, due to the reasons as follows:

The long period of M. S. Bystrov's work with the Board of Directors of the Company, HR and Remunerations (Nominations) Committee and Audit Committee under the Board of Directors is of advantage for the Company, since M. S. Bystrov has the necessary many years' professional experience in electric power industry, investments, economy and finance, and extensive knowledge of the Company business, which facilitate and enhance the performance of the Board of Directors of the Company and the Committees thereunder.

In addition to the aforementioned actual relatedness criteria, M. S. Bystrov was found to be potentially related to:

Guaranteed electricity supply companies purchase energy resources on the wholesale market and sell them to any offtaker who applies to them, concluding public contracts with those offtakers. Under such contracts, payment is made at the price and/or pursuant to the price determination procedure fixed as per the provisions, as in force on the payment date, of Federal Laws, other regulations, as well as acts adopted by the authorized bodies in the sphere of state regulation of tariffs;

In order to purchase electricity for its own needs, the Company may be required to connect its power receivers to power grids owned by grid distribution companies operating in the relevant territory, which connection is done on the basis of contractual relations whose price and conditions are regulated in accordance with the procedure established by the Government of the Russian Federation.

At the conclusion of such contracts the Company has no opportunity to select other counterparties or change material terms and conditions of the contracts against those prescribed by the respective regulatory legal procedure.

Conclusion of these contracts is conditioned by unbiased factors and arrangements of the WECM, the standard forms of contracts have been approved by the Supervisory Board of NP Market Council Association, and the scope, price and cost of the said contracts are determined by the Commercial Operator of the WECM in accordance with the acts of the Government of the Russian Federation and/or the Joining Contract provisions.

The Company is a WECM participant, a party to the Joining Contract, and concludes contracts/agreements in accordance with WECM Rules and the Joining Contract. Joining Contract terms and conditions shall be binding on the parties when they participate in the circulation of electric power and capacity in the wholesale electric power (capacity) market.

Prices (tariffs) under regulated contracts are determined by the federal executive body in charge of state regulation of tariffs.

Prices under competitive agreements are determined in the course of / on the basis of competitive procedures (competitive selection, capital project bidding) conducted in accordance with WECM Rules and the Joining Contract.

Due to specifics of building relations between companies on the WECM, the Company has no opportunity to influence the selection of potential counterparties.

In view of the above, M. S. Bystrov has no opportunity to influence any material terms of entering into the said contracts/agreements;

Whereas wholesale market regulations, as approved by the NP Market Council Association Supervisory Board (hereinafter, "WECM Regulations"), change regularly, for the purposes of maintaining high level of knowledge in the area of wholesale market procedures and obtaining information on the wholesale market actual and planned changes, the Company employees should be trained at the original source of changes, namely at Market Council TC ANO. Contracts for education and training between the Company and Market Council TC ANO are concluded on an arm's length basis;

 

*61.73% of the RusHydro ordinary shares are owned by the Russian Federation represented by the Federal Agency for State Property Management, and 12.95% of the RusHydro ordinary shares are owned by VTB Bank (PJSC) which is also controlled by the Russian Federation. The data are given subject to outstanding shares of the additional issue No. 1-01-55038-E-043D dated August 27, 2018.

** M. S. Bystrov is a member of the SO UES JSC Board of Directors, as well as the ATS JSC Management Board Chairman and Member of the Board of Directors, and the Management Board Chairman and Supervisory Board Member at NP Market Council Association. CFR JSC (through ATS JSC) and Market Council TC ANO are controlled entities of NP Market Council Association.

*** Karachaevo-Cherkesskenergo JSC and Kabbalkenergo JSC, FGC UES PJSC, EENS JSC are controlled entities of Rosseti PJSC, the Board of Directors whereof includes M. S. Bystrov.

**** STC UPS Protivoavariynoe Upravlenie JSC is a controlled entity of UES Research Center JSC, the Board of Directors whereof includes M. S. Bystrov.

***** By resolution of the NP Market Council Association Supervisory Board (previous name - NP ATS) dated November 30, 2007, since April 01, 2008, ATS JSC has been charged with performing functions of the wholesale market commercial operator regarded, under Article 33, Clause 1 of the Russian Federal Law on the Electric Power Industry, as a wholesale market commercial infrastructure organization.

 

Schedule 4 to the Minutes

Having assessed the compliance of V. V. Pivovarov, a member of the Board of Directors of the Company / candidate to the Board of Directors of the Company to be elected at the Annual General Meeting of Shareholders in 2021, with the criteria for determining the independency of the Board members, as envisaged by Appendix 4 to the Listing Rules, the HR and Remunerations (Nominations) Committee (Minutes No. 111 dated May 21, 2021) established that V. V. Pivovarov is not a party related to:

According to results of the assessment performed, a criterion of being related to the Company was revealed for V. V. Pivovarov, since V. V. Pivovarov has been holding a position with the Board of Directors of the Company as of April 28, 2020 over 7, but less than 12 years in the aggregate (7 full years).

The HR and Remunerations (Nominations) Committee under the Board of Directors of the Company established that the existing relation to the Company is of nominal nature, and recommended the Board of Directors of the Company to recognize V. V. Pivovarov as Independent Director.

V. V. Pivovarov's relatedness to the Company is of a nominal nature and cannot affect his ability to form unbiased and independent opinions as to the agenda items considered by the Board of Directors and act for the benefit of the Company and all shareholders thereof due to the reasons as follows:

V. V. Pivovarov has the sterling both business and personal reputation and also possesses skills, experience and vital professional expertise in the financial, managerial and economic areas, as needed for adopting independent resolutions falling within the scope of the Board of Directors of the Company and required for the effective exercise of his functions and allowing him, inter alia, to participate in the operation of a range of committees under the Board of Directors of the Company.

 

Schedule 5 to the Minutes

Having assessed the compliance of A. V. Shevchuk, a candidate to the Board of Directors of the Company to be elected at the Annual General Meeting of Shareholders in 2021, with the criteria for determining the independency of the Board members, as envisaged by Appendix 4 to the Listing Rules, the HR and Remunerations (Nominations) Committee (Minutes No. 111 dated May 21, 2021) established that A. V. Shevchuk is not a party related to:

According to the assessment results, for A. V. Shevchuk, criteria were revealed of being related to:

The HR and Remunerations (Nominations) Committee under the Board of Directors of the Company established that the existing relation to the Company is of nominal nature, and recommended the Board of Directors of the Company to recognize A. V. Shevchuk as Independent Director with consideration taken of the below.

A. V. Shevchuk's relatedness to a substantial shareholder of the Company and to a substantial counterparty of the Company is of a nominal nature and cannot affect his ability to form unbiased and independent opinions as to the agenda items considered by the Board of Directors and act for the benefit of the Company and all shareholders thereof due to the reasons as follows:

Since the price under the said contract corresponds to the prices based on the results of capacity competitive auction (competitive transactions) and this practice is exercised by the Company under all non-regulated capacity purchase and sale contracts with other counterparties not related to A. V. Shevchuk, the latter has no possibilities to influence the price parameters of the above contract.

 

 

*61.73% of the RusHydro ordinary shares are owned by the Russian Federation represented by the Federal Agency for State Property Management, and 12.95% of the RusHydro ordinary shares are owned by VTB Bank (PJSC) which is also controlled by the Russian Federation. The data are given subject to outstanding shares of the additional issue No. 1-01-55038-E-043D dated August 27, 2018.

**JSC EENS is a controlled entity of JSC MRSK Urala, the Board of Directors whereof includes A. V. Shevchuk

*** The group of shareholders holding in aggregate 2.3% of the Company's voting shares include Kopernik Global Investors, LLC; Heptagon Fund plc - Kopernik Global All-Cap Equity Fund; Kopernik Global All-Cap Fund; Kopernik Global All-Cap CIT; Kopernik Global All-Cap Master Fund, LP; Kopernik Global Long-Term Opportunities Fund, LP; Kopernik International Fund; Raytheon Technologies Corporation Master Retirement Trust; Interventure Equity Investments Limited/Spectrum; TIFF Keystone Fund Kopernik.

 

 

About RusHydro

RusHydro Group is the leading producer of renewable energy in Russia. It is Russia's largest generating company and is the third hydropower company in the world with over 400 generating facilities. The Group's total electricity generation capacity including Boguchanskaya HPP is 38.0 GW.

 

For more information:

Investor Relations Department

Tel. +7 (495) 122 0555 ext. 1304

ir@rushydro.ru

 

The information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of RusHydro. You 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, rapid technological and market change 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.:

107335

EQS News ID:

1200441


 

End of Announcement

EQS News Service

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