Annual Report 2013

Corporate Governance

  • The Code of Corporate Conduct and the new edition of the Corporate Governance Code were approved by the Company’s Board of Directors.
  • Held 31 meetings of the Board of Directors of the Company, 5 of them – in praesentia.
  • Activities of members of the Board of Directors were evaluated for the first time.

The Company strives to fully comply with the main principles, adhere to Russian and international standards and provide for uninterrupted development of corporate governance when building its effective governance system.

In 2013, IDGC of Centre held an Annual General Meeting of Shareholders. New members were elected to the Company’ Board of Directors, which provided equal representation of the interests of both majority and minority shareholders and of members of an independent investor association.

25%

of net profit to pay out dividends on common shares in 2013

The shareholders decided to allocate 25% of net profit to pay out dividends on common shares, and use the rest of the profit on the development of the Company.

CJSC KPMG was approved as the Company’s auditor for the second year, having audited the Company’s reports in accordance with both the Russian and international accounting standards.

CORPORATE GOVERNANCE RATING:

The elected audit commission consisted of 5 members who are not members of the Company’s management bodies or employees, the fact providing for the objective character and independency of the auditors’ judgment.

New members to the Board of Directors’ committees were elected in the reporting year. The Audit Committee and the Personnel and Remuneration Committee are comprised entirely of members of IDGC of Centre’s Board of Directors who represent both majority and minority shareholders.

In 2013, the Russian Institute of Directors confirmed the NRCG 7+ (National Corporate Governance Rating) rating of IDGC of Centre, that is, Developed Corporate Governance Practice. We have been maintaining the history of this rating since 2007.

CORPORATE GOVERNANCE CODE

The Company has a Corporate Governance Code, the new edition of which was approved by the Board of Directors in February 2013. The Code encompasses the standards and principles of corporate governance, reflects the policy applied to the activities of the management and regulatory bodies, interaction with shareholders, investors, subsidiaries and controlled companies. A separate section is devoted to the resolution of the conflict of interests and corporate conflicts.

For details on this document, please visit our
corporate website.

MAIN PRINCIPLES OF CORPORATE GOVERNANCE

We utilize the principles of fairness, transparency, accountability of the Company’s management bodies to the shareholders, in particular, accountability of the Company’s management to the Board of Directors and the General Meeting of Shareholders, controllability of financial and utility-related operations and observance of third-party interests.

THE COMPANY’S TRANSACTION APPROVAL POLICY

Major transactions and interested party transactions at IDGC of Centre are subject to the approval of the Company’s management bodies according the Joint-stock Companies Federal Act and the Charter of IDGC of Centre. However, the Board of Directors’ responsibilities as far as preliminary approval of transactions involving the Company’s assets is concerned, were extended to reduce the risk of improper disposal of the Company’s assets.

For details on transactions, please see Management and Regulatory Bodies
of the Annual Report.