Main page / Appendices / Key Corporate Governance Principles

Key Corporate Governance Principles

The corporate governance system of the Company is regulated according to the rules and procedures stipulated by the Charter and internal documents of the Company. Key principles of corporate governance model includes the following directions:

  1. Observation of Shareholder Rights

    The Company has an internal document stipulating key procedures for GSM arrangement and convention – the Regulations on the Procedure for GSM Arrangement and Convention at IDGCInterregional Distributive Grid Company of Urals (approved by AGSMAnnual General Shareholder Meeting, protocol #7 dd. 27.06.2014). According to item 1 art. 52 of the Joint-Stock Companies’ Act and item 11.5 art. 11 of the Charter shareholders are notified on a GSM in no less than 30 days prior to the event despite of the agenda issues (unless the legislation does not stipulate a larger term). Items 11.5 and 11.7 of the Charter stipulate that shareholders have a possibility to get familiarized with information (materials) subject to dissemination during the GSM arrangement via e-means, including internet. According to item 5.3. of the Regulations on the Procedure for GSM Arrangement and Convention, shareholders have a possibility to participate in debates over the Company’s activities. To ensure an equal and fair possibility for shareholders to participate in the Company’s profit the Company has an internal document stipulating the Company’s dividend policy – the Regulations on the Dividend Policy (approved by the BoDBoard of Directors, protocol #73 dd. 03.09.2010).

  2. Board of Directors

    The Company has the Board of Directors. The BoDBoard of Directors competence is stipulated in art. 15.1. of the Charter. The Regulations on the Procedure for BoDBoard of Directors Arrangement and Convention at IDGCInterregional Distributive Grid Company of Urals stipulate the procedures for BoDBoard of Directors arrangement and convention providing BoDBoard of Directors members an opportunity to prepare properly for sеssions. There are 5 Committees of the Board of Directors in the Company: the Audit Committee, the Personnel and Remunerations Committee, the Strategy and Development Committee, the Reliability Committee and the Technological Connection Committee. Each of the Committees is regulated by its own regulations on the Committee.

  3. Corporate Secretary

    The Company has a corporate secretary who is responsible to the Board of Directors that decides on his/her election or termination of authorities. The Company has an internal document stipulating rights and liabilities of the corporate secretary – the Regulations on the Corporate Secretary (approved by the Board of Directors, protocol #29 dd. 02.10.2007).

  4. Information Disclosure

    The Company has an internal document stipulating information policy of the Company – the Regulations on the Information Policy of IDGCInterregional Distributive Grid Company of Urals (approved by the Board of Directors, protocol #130 dd. 28.08.2013). The Company has created a special web-page on the official web-site containing information for shareholders and investors (FAQ, regularly updated IR calendar, IR releases as well as other useful information for shareholders and investors) – Investor Relations. Since the Company has foreign investors, it discloses important information on the Company’s operations both in Russian and English. The Company also discloses information on its SACSubsidiary and associated companys. The Company also discloses annual and interim consolidated financial statements prepared under International Financial Reporting Standards (IFRSInternational Financial Reporting Standards).

  5. Internal Control and Risk Management System

    To evolve the internal control and risk management system the Board of Directors has approved the following internal documents that stipulate principles of functioning, processes and procedures of the risk management and internal control system:

    The Company has a policy stipulating measures aimed at the shaping of elements of corporate culture, organization structure, rules and procedures fighting against corruption – the Antucorruption Policy of Rosseti and its SACSubsidiary and associated companys (approved by the Board of Directors, protocol #159 dd. 29.12.2014). Detailed description of corporate governance model of the Company is stipulated in internal documents posted in Founding and Internal Documents Section of the official web-site of the Company. During the reported period the Company has not contracted special companies to evaluate the observation of corporate governance principles stipulated by the Russian Corporate Governance Code. On the whole, the Company observes the MICEXMoscow Interbank Currency Exchange listing rules, except a number of factors disclosed below:

    • fragmentary non-observance of requirements regarding several functions of BoDBoard of Directors Committees set forth by the Listing rules;
    • fragmentary non-observance of requirements regarding activities of the corporate secretary;
    • fragmentary non-observance of requirements regarding activities of the unit responsible for internal audit;
    • lack of information on terms for disclosure of the date when the list of persons entitled to participate in the GSM is prepared in the Charter/internal documents.

    IDGCInterregional Distributive Grid Company of Urals strives to follow the requirements of the Russian Corporate Governance Code (recommended for use by the Russian Central Bank, letter #06-52/2463 dd. 10.04.2014) and principles of corporate governance acknowledged by best international practices. The Company intends to bring its corporate governance in line with the Code (to comply with the Listing Rules) during next reported periods by introducing alterations and amendments into the Charter and other internal documents regulating various activities of the Company.

Up