OREANDA-NEWS. July 08, 2010. Rostelecom (RTS and MICEX: RTKM, RTKMP, OTCQX: ROSYY) (hereafter, “the Company”) announced the results of its Annual General Shareholders Meeting (AGM).

At the AGM, shareholders voted to approve the following agenda items:

Item 1: 

Shareholders approved the Company’s annual financial statement, as well as the annual accounting reports drafted in accordance with Russian Accounting Standards (RAS), including the Company’s profit and loss statement for fiscal 2009.

The decision on this item was approved by 99.6 % of votes of the holders of the Company’s common (voting) shares that participated in the voting.

Item 2: 

Shareholders approved the allocation of profit based on the results of fiscal 2009 as follows:

–        RUR 3,571,195,000 or 70% of net profit to increase the Company’s equity;

–        RUR 1,530,388,000 or 30% of net profit to be allocated as dividends for 2009.

The annual dividends for 2009 were allocated as follows:

–        RUR 2.1005 per preferred share. The total amount of dividends to be paid out to holders of preferred shares will amount to 10% of 2009 RAS net profit;

–        RUR 1.4002 per common share. The total amount of dividends to be paid out to holders of common shares will amount to 20% of 2009 RAS net profit. 

Dividends will be paid out to shareholders, including the list of persons entitled to receive dividends in conformity with the shareholder register as of May 7, 2010, as follows:

–        by transfer to shareholders’ bank accounts (the Company bears expenses associated with the dividend payment, and shareholders bear expenses associated with dividend receipt);

–        by postal order (the Company bears expenses associated with the dividend payment, and shareholders bear expenses associated with dividend receipt);

–        by payment through the Company’s cash desks (only for Rostelecom employees). 

The decision on this item was approved by 99.9 % of votes of the holders of the Company’s common (voting) shares that participated in voting.

Item 3: 

Members of the new Board of Directors were elected. The majority of votes based on the results of cumulative voting went to the following candidates:

1. Anatoly Ballo, Management Board member, Deputy Chairman of Vnesheconombank;

2. Vladimir Bondarik, Deputy General Director of Svyazinvest;

3. Yury Kudimov, General Director of VEB Capital Ltd.

4. Alexey Lokotkov, Deputy General Director of Svyazinvest;

5. Konstantin Malofeev, Managing Partner of MarCap Advisors Limited;

6. Mikhail Poluboyarinov, Director of Infrastructure Department of Vnesheconombank;

7. Alexander Provotorov, First Deputy General Director of Svyazinvest;

8. Viktor Savchenko, Deputy General Director of Svyazinvest;

9. Anatoly Tikhonov, Management Board member, First Deputy Chairman of Vnesheconombank;

10. Yelena Umnova, Deputy General Director of Svyazinvest;

11. Evgeny Yurchenko, General Director of Svyazinvest. 

Item 4: 

Members of the Audit Committee were elected. Shareholders cast their votes in favor of the following candidates:

1. Mikhail Batmanov, Deputy Director of Corporate Governance and Legal Department of Svyazinvest;

2. Svetlana Bocharova, Head of Division of Accounting, Tax and Statistics Department of Svyazinvest;

3. Bogdan Golubitsky, Director of Economics and Finance Department of Svyazinvest;

4. Olga Koroleva, Chief Accountant of Svyazinvest;

5. Vyacheslav Ulupov, Director of Internal Control Service of Vnesheconombank; 

Item 5: 

KPMG was approved as the Company’s external auditor for fiscal 2009.

The decision on this item was approved by 99.8 % of votes of the holders of the Company’s common (voting) shares that participated in the voting. 

Item 6: 

Shareholders determined the number of the Company’s authorized common shares as 5,900,000,000 units with a nominal value of RUR 0.0025 each. It was also determined that the authorized common shares when placed will vest the owners thereof with the same rights as those provided by the Company’s common shares. In addition, shareholders approved Amendment No. 1 to be made to Rostelecom’s Charter.

The decision on this item was approved by 99.8 % of votes of the holders of the Company’s common (voting) shares that participated in the voting. 

Item 7: 

The Company’s shareholders passed a resolution to reorganize Rostelecom by merging with
CenterTelecom, Sibirtelecom, Far East Telecom, VolgaTelecom, North-West Telecom, Uralsvyazinform, Southern Telecommunications Company, as well as Company of Telecommunication and Information of the Republic of Dagestan (“the Merging Companies”).

All in all, shareholders representing 73.5% of the voting shares (common and preferred) took part in voting on the reorganization issue with 97.2 % of these shareholders voting in favor of the reorganization. 

In line with this item, shareholders approved the merger agreements between Rostelecom and the Merging Companies with the following share swap ratios for conversion of their shares into Rostelecom common shares: 

 

             Merging Companies

Number of common nominal certified shares of the merging companies to be converted into one common nominal certified share of Rostelecom

Number of preferred nominal certified shares of the merging companies to be converted into one common nominal certified share of Rostelecom

 

 CenterTelecom

3.867

4.920

 Sibirtelecom

46.537

59.374

 Far East Telecom

0.939

1.195

 VolgaTelecom

0.891

1.134

 North-West Telecom

4.102

5.220

 Uralsvyazinform

87.341

111.602

 Southern Telecommunications Company

19.378

24.648

 Dagsvyazinform

1.795

2.284

 

Item 8:  

Amendment No. 2 (of technical nature) to the Company’s Charter was approved. The decision on this item was approved by 99.6 % of votes of the holders of the Company’s common (voting) shares that participated in voting.

Item 9:  

Amendment No. 3 (changes concerning the calculation of the amount of dividend payments for holders of the Company’s preferred shares) to the Company’s Charter were not approved as 99.6% of the votes of holders of common shares (registered to participate in the AGM), but only 7.6% of the votes of all holders of preferred shares voted in favor, which is not sufficient for the decision to be passed.

tem 10:  

The new version of the Company’s Statute on the General Shareholders’ Meeting was approved. The decision on this item was approved by 99.6% of votes of the holders of the Company’s common (voting) shares that participated in the voting.

Item 11:  

The new version of the Company’s Statute on the Board of Directors was approved. The decision on this item was approved by 99.6% of votes of the holders of the Company’s common (voting) shares that participated in the voting.  

Item 12:

Shareholders also approved a Purchase and Sale Agreement on Securities between Rostelecom and Comstar-UTS and also a Securities Purchase and Sale Agreement between Rostelecom and MGTS Finance S.A. These transactions are subject to the condition that 25% plus one common share of Svyazinvest is to be acquired by Rostelecom, from the above-mentioned companies, for a total of RUR 26 bln.

All in all, 84.9 % of all holders of the Company’s common (voting) shares – which are not interested in this transaction – voted in favor. 

Item 13: 

The amount of remuneration was determined for members of the Company’s Board of Directors in accordance with the Statute on the Board of Directors. The decision on this item was approved by 99.5% of votes of the holders of the Company’s common (voting) shares that participated in the voting. 

At the Board of Directors’ meeting held after the AGM, Evgeny Yurchenko, General Director of Svyazinvest, was elected as Chairman of the Company’s Board of Directors.