The Kubanenergo corporate management system is an assembly of processes providing management and control of the activities of the Company. These processes include relations between shareholders, the Board of Directors and executive organs and is aimed at harmonising the interests of all those involved in corporate relations, including not only the shareholders and management bodies but also potential investors and a wide circle of other interested parties: consumers, employees, counteragents, creditors, partners and state and local associations.

Kubanenergo considers corporate management to be a means of improving the effectiveness of its activities, strengthening its reputation, growth in investment attractiveness and reducing expenditure of capital attracted.

Main principles of corporate management at Kubanenergo

Accountability. The General Shareholders Meeting examines the Company’s activities every year; the Board of Directors provides strategic management of the Company’s activity and controls the work of management; the executive organs — Management Board and General Director — manage ongoing activities by the Company and are accountable to the Board of Directors and the Company’s shareholders.

Fairness. The Company undertakes to protect the legal rights of the shareholders and treat all shareholders equally.

Transparency. The Company ensures timely disclosure of veracious information on all significant facts regarding its activities, including its financial standing, social and environmental indicators, operating results, property and management structure, as well as providing free access to this information to all interested parties.

Responsibility. The Company recognises the right of all interested parties as stipulated by legislation and aims to work with them for its development and financial stability.

Internal documents have been approved in order to systemise and ensure continuation in the practice of corporate management at Kubanenergo such as the Rules of Corporate Management, the Statement on insider information, the Statement on information policy, and the Statement on dividend policy^*. All these documents have been developed in accordance with leading corporate management standards, including the Russian Rules for Corporate Management, and are aimed at ensuring compliance with and protection of the rights and legal interests of shareholders, investors and other interested parties.

The appendices to the Annual Report include the following materials relating to the Company’s corporate management practices:

• review of internal documents and statements at Kubanenergo regulating the activities of its management and control bodies, as well as the functioning of key corporate management procedures;
• report for 2011 on the Company’s compliance with the Russian Rules for Corporate Management recommended by the Federal Commission for the Securities Market of Russia, in accordance with order№03-849/r of the Federal Commission for the Securities Market of 3 April 2003 On Methodical Recommendations on the Content and Form of Presenting Information on Compliance with the Code of Corporate Conduct in Annual Reports of Public Companies.

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   Internal documents mentioned here and other internal documents on corporate management at Kubanenergo can be found at www.kubanenergo.ru in About the company/Constituent and in house documents