Remuneration and compensation

Payment of Remuneration to members of the Board of Directors

In accordance with para. 2 of Article 64 of the Federal Law "On Joint Stock Companies" the resolution on payment of remuneration to members of the Board of Directors may be taken by the General Meeting of Shareholders only or by approval of a regulation governing the procedure for the payment of such remuneration, or by a decision to pay remuneration at the General Meeting of Shareholders of the Company.

From 25.06.2015 the Company has the Regulation on the payment of remuneration and compensation to members of the Board of Directors of IDGC of Centre in a new edition, approved by the Annual General Meeting of Shareholders on 25.06.2015 (Minutes dated 26.06.2015 # 01/15).

Until 25.06.2015 it was the Regulation on the payment of remuneration and compensation to members of the Board of Directors of IDGC of Centre, approved by the Annual General Meeting of Shareholders on 31.05.2008 (Minutes dated 03.06.2008 # 01).

Criteria for remuneration to members of the Board of Directors

From 25.06.2015
Until 25.06.2015

Type of remuneration

Criteria and conditions of calculation

1. For participation in the Company’s Board of Directors

Calculation under the formula:

S (1) = Rbase ×100/130 (n / m),

Rbase – the base part of remuneration, proceeding from revenue under RAS for fiscal year;

n – quantity of sessions of the Board of Directors, in which each member of the Board of Directors participated in the period between AGM;

m – total quantity of sessions of the Board of Directors in the period between AGM

Rbase depends on the size of revenue under RAS for fiscal year:

- over 200 bln RUB = 1 000 000 RUB

- over 30 bln RUB = 900 000 RUB

- over 10 bln RUB = 800 000 RUB

- over 1 bln RUB = 700 000 RUB

- over 600 mln RUB = 600 000 RUB

- below 600 mln RUB = 500 000 RUB

Allowances:

+ 30 % - Chairperson of the Board of Directors

+ 20 % - Chairperson of a Committee of the Board of Directors

+ 10 % - Members of a Committee of the Board of Directors

Condition:

Total amount of remuneration may not exceed Rbase

2. For increase in the market capitalization of the Company

0,0175 % of gain in the market capitalization of the Company, calculated for the period from the election of members of the Board of Directors until the election of new members of the Board of Directors

Condition:

may not exceed 5% of net profit under RAS received in the fiscal year

Type of remuneration

Criteria and conditions of calculation

1. For participation in meetings of the Board of Directors

5 minimum monthly tariff rates at correspondence meetings

10 the minimum monthly tariff rates at in-person meetings

+ 50% - Chairperson of the Board of Directors

2. Additional remuneration (paid if the member of the Board of Directors participated in more than 50% of held meetings (from his or her election to the date of termination of powers):

2.1. For net profit according to the annual financial statements approved by the AGM

Calculated on the basis of:

- net profit for the year according to annual accounting statements, approved by AGM;

- number of members of the Board of Directors in accordance with the Articles of Association of the Company;

- number of meetings held in the year in which a member of the Board of Directors participated

Chairperson of the Board of Directors is paid remuneration by a factor of 1.5

It may not exceed the salary of General Director determined by the Board of Directors:

- more than 5 times for Member of the Board of Directors;

- more than 7 times for Chairperson of the Board of Directors

2.2. For increase in the market capitalization of the Company during the work at the Board of Directors

0,0175 % of gain in the market capitalization of the Company, calculated for the period from the election of members of the Board of Directors until the election of new members of the Board of Directors of the Company

Average monthly volume of transactions in ordinary shares of the Company on the stock exchange shall not be less than 1.5 mln RUB for a term of office of members of the Board of Directors remunerated

It may not exceed the salary of General Director determined by the Board of Director more than 5 times

Amount of remuneration paid

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