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Consortium of the Russian Institute of Directors and «Expert RA» rating agency reassessed the corporate governance practices of IDGC of Centre and confirmed the Company’s corporate governance rating at NRCG 7+ — «Developed Practice of Corporate Governance» on the scale of National Corporate Governance Rating. «Reassessment took place in connection with the updating procedure of the National Corporate Governance Rating «RID — Expert RA», in which a number of changes was made. They reflect the changes in the Russian corporate law and recent recommendations of leading international and Russian corporate governance practices.
Since the assignment of National Corporate Governance Rating (NRCG) in January 2011 IDGC of Centre has had a number of corporate events. Most notable was the annual general meeting of shareholders following the results of 2010. New members of the Board of Directors and the Audit Commission of the Company were elected, new editions of the Articles of Association and internal documents of IDGC of Centre were approved, the auditor of the Company was selected and the payment of dividends for 2010 was approved.
For the audit of financial statements for 2011 the auditor «RSM Top-Audit» LLC was elected, which took seventh place in the ranking of audit companies by «Expert RA» in 2010.
The Audit Commission included five people who are employees of the Company’s major shareholder — IDGC Holding. The absence of officials and employees of IDGC of Centre in the Audit Commission ensures objectivity and independence of this control body.
The corporate governance practice of IDGC of Centre in terms of shareholders’ rights is estimated high by experts. The company has established corporate governance institutions for the protection and proper record keeping of shareholders’ rights. Thus, the function to keep records of ownership of shares of the Company is performed by an independent registrar — Reestr-RN LLC, the powers of the Board of Directors of the Company were expanded in terms of decision-making on significant transactions, there are procedures and practices to ensure high independence of external auditors. In particular, the external auditor of the Company as for RAS and IFRS is selected on the basis of competitive selection. IDGC of Centre has adopted the practice of rotation of external auditors at least once every five years, the Corporate Governance Code was approved, which establishes the basic principles of corporate governance practices of IDGC of Centre.
The corporate governance practice of the Company in terms of management and control bodies is estimated as good. The presence of one independent director and representatives of minority shareholders in the Board of Directors can speak about the balance of the Board concerning the interests of all stakeholders. The structure of the Board of Directors has also established committees for preliminary consideration of the most important issues: the Committee for Audit, Personnel and Remuneration Committee, Reliability Committee, Strategy and Development Committee and Committee of technological connection to the power grid. IDGC of Centre has approved the document, which regulates the internal control over financial and economic activities and the Board annually evaluates the effectiveness of the internal control system of IDGC of Centre.
The corporate governance practice of the Company in terms of information disclosure of its activities is estimated high. The Company has undertaken a number of significant steps to ensure the transparency of its operations and continuity of the practice in the future. The company provides free access for stakeholders to the Company’s financial statements prepared under RAS and IFRS and discloses publicly detailed information about the members of governing bodies of the Company, the individual remuneration paid to each member of the Board of Directors of the Company.
According to Consortium «RID — Expert RA», IDGC of Centre has low risks of corporate governance, complies with the requirements of Russian legislation and follows most of the recommendations of the Russian Corporate Governance Code and some of the recommendations of the international best practice corporate governance.