FAQ

The Company prepares, convenes and conducts its AGM pursuant to the applicable laws of Russia, the Charter and the Regulations on General Shareholders’ Meeting of the Company.

The Company notifies its shareholders about the meeting no less than 30 (thirty) days prior to the AGM date by mailing them the following documents:

1. an AGM notification;
2. a ballot.

AGM notification is disseminated among shareholders by way of registered mail and/or by publishing a message in the Rossiyskaya Gazeta newspaper or any other federal all-Russian printed publication.

Under the Federal Law "On Joint Stock Companies", AGM shall be held within a period from 1 March to 30 June of the year, following the reporting year.

EGM takes place:

• Upon request of the Company’s Audit Commission;
• Upon request of the Company’s independent auditor;
• Upon request of any shareholder (or group of shareholders) owning in total at least 10 percent of the Company’s voting shares;
• Upon decision of the Board of Directors.

For further information regarding the regulations on conducting an EGM please refer to the Charter and the Regulations on General Shareholders’ Meeting of the Company.

In accordance with the Charter and the decisions of the Board of Directors, the AGM usually takes place in the Company’s Training Center “Bekasovo”, a subsidiary of Rostelecom, located at: Village of Bekasovo, Naro-Fominsky District, Moscow Region.

In compliance with the Federal Law "On Joint Stock Companies", a shareholder does not have the right to request the returning board to void the marked ballot and to give him or her a new one.

To receive the Company’s press releases, please forward your contact information by e-mail to rostelecom@rostelecom.ru or call +7(499) 973 9920 or +7(499) 973-9973 to reach the PR and IR Department.

The Company’s fiscal year coincides with the calendar year and ends on December 31.

The Company prepares financial reports in accordance with Russian Accounting Standards (RAS) and International Financial Reporting Standards (IFRS). The independent auditor reviews the Company's full year financial statements in accordance with both RAS and IFRS. For more information, please visit our Financial Reports section.

The Company's independent auditor is ZAO "KPMG" as approved at the AGM.

The Company prepares quarterly financial reports in accordance with RAS and half year IFRS financial statements.

The Company's RAS financial statements are published in the section Financial Reports (in Russian) and disclosed in press releases (both in Russian and English). Press releases are widely disseminated according to best practice standards.

The Company's IFRS financial statements are published in the section Financial Reports (in Russian and English) and disclosed in press releases (in Russian and English). Press releases are published in the sections Financial Reports and News, as well as widely disseminated according to best practice standards.

In addition, the Company management hosts full year and half year IFRS results conference calls.

In accordance with the Russian legislation, the Company prepares Quarterly Report of Securities Issuer and List of Affiliated Persons, which are available in the sections Отчеты по требованиям ФСФР (in Russian) and Form 6-K (in English).

A dividend is a portion of the Company's net profit annually paid out to shareholders in proportion to the number of shares they hold.

Dividends are determined based on the results for each fiscal year set out in Profit & Loss Statement prepared in accordance with RAS.

The Dividend policy is formalized in a separate internal document that can be found in the Dividends section.

For this information please visit the Dividends section.

The decision on dividend payments is made at the AGM pursuant to the procedure provided by the Federal Law "On Joint Stock Companies". The total amount of dividend approved at the AGM cannot exceed the amount recommended by the Board of Directors.

The right to draw dividends is granted to the shareholders on the register as of the record date (the date when the list of shareholders entitled to participate in AGM is determined).

A shareholder shall be on the list of persons entitled to receive dividends upon results of the fiscal year.
Dividends in the amount approved by AGM can be received as follows:

• by transfer to shareholders’ bank accounts (bank charges deducted);
• by postal order (postal costs deducted);
• by payment through the Company’s cashiers (for Rostelecom employees only).

Each shareholder specifies the means by which they wish to receive dividends in the Registered Holder Form submitted to the Registrar. To change the means by which you receive your dividends please contact the Registrar.

The Company's agent authorized to pay out dividends is OJSC Obyedinennaya Registratsionnaya Kompaniya (United Registration Company). The Company is only responsible for paying dividends to its employees.

In this case a shareholder should contact OJSC Obyedinennaya Registratsionnaya Kompaniya at (495) 775-25-68 to find out the reason why dividends have not been paid.
A typical reason for non-receipt of dividends is that shareholders forget to submit to the Registrar changes in personal information, such as:

• changes in permanent home address, if he or she receives dividends by postal order;
• changes in account details, if he or she receives dividends by bank wire transfer;
• if a shareholder, who was employed with the Company and received dividends through the Company’s cashiers, left his or her job;
• changes in passport details for any method of receiving dividends.

In order to be able to draw dividends, a shareholder shall introduce changes to the register. For this, he or she shall fill in a special Form of Registered Holder, certify it by a notary, and mail or hand it to the Registrar at the address: 15a Kalanchevskaya Street (4th floor), P.O. Box 162, Moscow 107078.

You can find information on procedure of submitting the Registered Holder Form to the Registrar, as well as on its operation in the section Registrar services and in the question How do I submit changes to the register?.

Most likely, the problem is that the data (for instance bank account, TIN) you have submitted is either out of date or incomplete. If your shares are in nominal holding, the reason may be a delay in processing (or late or incomplete processing) of your information to the depository bank by the nominee. To clarify the situation, please contact the Registrar or your nominee.

In accordance with the Russian Tax Code, the Company withholds tax on income received in the form of dividends. Therefore, you will receive your dividends net of tax.

Calculation and payment of income tax on dividends are made in compliance with the Tax Code of the Russian Federation enacted on January 1, 2002.
The Tax Code of the Russian Federation stipulates the following withholding tax rates with regard to the income received in the form of dividends:

• For resident legal entities — 9% (Clause 2, Article 275, and paragraph 1, Clause 3, Article 284 of the Russian Tax Code);
• For non-resident legal entities — 15% (Clause 3, Article 275, and paragraph 2, Clause 3, Article 284 of the Russian Tax Code);
• For resident individuals — 9% (Clause 4, Article 224, and paragraph 1, Clause 3, Article 284 of the Russian Tax Code);
• For non-resident individuals — 15% (Clause 3, Article 275, and Clause 3, Article 224 of the Russian Tax Code).

• There is no tax benefit for resident individuals provided by the Tax Code of the Russian Federation.
• Reduced tax rate may be applied to non-resident individuals, if a tax treaty was concluded between the shareholder’s home country and the Russian Federation.
• Tax benefit for legal entities (both resident and non-resident) are taken into account upon submission of supporting documents. Appropriate documents must be presented to the Company’s Registrar no later than the date of AGM.

The Company’s Registrar remits dividends to the nominee in line with data, contained in the shareholders' register as of the record date. Thereafter, the nominee independently remits funds to the shareholders, who have transferred their shares into nominee holding.

Upon new formalization of inheritance title (see the question How can I receive the title to shares I have inherited) an heir shall be entitled to dividends, unpaid to a testator. The dividends shall be paid to the heir as soon as reasonably possible after amendments are made to the shareholders' register.

Rostelecom  ADRs are quoted on the Pink Sheets, London Stock Exchange, Frankfurt Stock Exchange and other stock exchanges.

Information on the share capital structure is available in the section Our Shareholders

Since December 30, 2002 the Company’s depositary bank in the US is JPMorgan Chase Bank. More detailed information on the depositary can be found in the section Depositary services

Information on the Company's current market capitalization is available in the section Share Capital & Stock Market.

All Company-related financial information can be found in the section Financial Reports.

Rights and obligations of the Company’s holders of ordinary and preferred shares are set forth in articles 9 and 10 of the Charter.
The basic differences between ordinary and preferred shares are as follows:

• Holders of ordinary shares are entitled to participate in the AGM and vote on all issues put on the AGM agenda. They are also entitled to draw dividends, if they are declared and payable in the manner, set out in the Charter;
• The holders of preferred shares are not entitled to vote at the AGM, except in cases dictated by law and the Charter. At the same time, holders of preferred shares are entitled to receive an annual fixed dividend, except in cases set out in the Charter.

An American Depositary Receipt (ADR) is a certificate that certifies title of its holder to ordinary shares of a foreign issuer, deposited in a US depositary bank. Rostelecom ADRs, each equivalent to 6 ordinary shares, were issued by JPMorgan Chase Bank. The rights and obligations of ADR holders are stipulated in the Depositary Agreement, concluded between the Company, the depositary bank and ADR owners.

In accordance with article 32 of the Federal Law No.208-FZ "On Joint Stock Companies" dated December 26, 1995, holders of preferred shares of a company are not entitled to vote at AGM, unless the company's reorganization or dissolution is discussed.

Further, holders of preferred shares have the right to vote on issues concerning alterations and amendments to the company’s charter that limit their rights. An example may be an issue to determine or increase the amount of dividend payable.

Also, holders of preferred shares get the right to vote on all issues at AGMs following any AGM during which it was determined not to pay dividends on preferred shares or not to pay them in full. Once the full amount of dividends on preferred shares is paid out, holders of preferred shares lose their right to vote.

The Company's ordinary shares are traded on:

• MICEX (level I)

The Company’ preferred shares are traded on:

• MICEX (level I)

The Company's shares are included in the following indices:

• RTS index;
• RTS Telecommunication index (RTStl);
• MICEX index;
• MICEX TLC index (MICEX Telecommunication Index);
• MICEX MC index (MICEX Mid Cap Index); 
• AK&M composite index;
• AK&M Telecommunication index;
• AK&M ADR index;
• NYSE Composite;
• NYSE TMT Index (Media and Telecommunication)
• MSCI Index (Emerging Markets — Russia).

The Company’s ordinary and preferred shares are traded on major Russian stock exchanges, including the Russian Trading System (RTS) and the Moscow Interbank Currency Exchange (MICEX).

Since the Company’s shares are highly liquid securities, anyone may buy or sell Rostelecom's shares through investment companies or banks, licensed to provide brokerage services to individuals.

A list of licensed companies can be found on the website of the Federal Financial Markets Service(in Russian).

For information on other investment companies please refer to local sources.

Full name: OJSC Obyedinennaya Registratsionnaya Kompaniya (United Registration Company).
Short name: OJSC ORK
Postal address: P.O. Box 162, 15a Kalanchevskaya Street (4th floor), Moscow 107078
Location: "Krasnie Vorota" metro station, at the intersection of Orlikov Pereulok and Kalanchevskaya Street.
Phone (general enquiry): +7 (495) 933 4221
Phone (dividends): +7 (495) 775 2568
E-mail: ork@ork-reestr.ru

For more information please visit www.ork-reestr.ru.

Please refer to the Rules for keeping register of shareholders, introduced by OJSC ORK (in Russian), or contact the registrar at +7 (495) 933 4221.

In accordance with the Rules for keeping register of shareholders, you must complete the Registered Holder Form and submit it to the Registrar.

The Registered Holder Form shall be fully completed, certified by a notary, and mailed or handed to the Registrar at the following address: 15a Kalanchevskaya Street (4th floor), P.O. Box 162, Moscow 107078. If the Form is submitted by an authorized representative, he or she must present an original or a copy of the power of attorney.

If you have changed your passport, you should attach to the Form a certificate from the police (for Russian citizens only), which includes your previous and present passport details, or any other official documentation confirming the change.

To change your name in the register, please attach to the Form a copy of the relevant marriage certificate or change of name deed, signed by a notary.

If you personally hand these documents to the Registrar, they do not need to be certified.
No additional documents are required to certify the change of your permanent home/correspondence address, method of dividend payment, or your bank details.

When submitting the Form to the Registrar, there is fee of RUR 35.40 that must be paid by wire transfer from your bank. You may find the relevant instructions here (in Russian).

Additionally, you should send the bank receipt or a copy of the bank receipt along with the Form, as a proof of your payment.

If you have any questions regarding the Form please contact the Registrar at +7 (495) 933 4221 for general enquiries and at +7 (495) 775 2568 for dividend related matters.

Please note that shareholders of record are required to inform the registrar of changes in his or her personal details, as ruled by Federal Law No. 120-FZ "On Joint Stock Companies" dated August 7, 2001. If a shareholder has not instructed the registrar of a change, the registrar takes no responsibility for any possible losses.

To inherit securities an heir should request a transfer of securities from the registrar either personally, or through a notary. If the heir acts without a notary, he or she must provide passport details of the deceased, attach the death certificate, sign the request, and submit it to the Registrar.

After receiving the transfer of securities from the registrar, the heir should contact a local notary or legal authority at the last place of residence of the deceased to obtain the certificate of the right to inheritance.

After receiving the certificate, the heir should complete the Registered Holder Form (separate Forms if two or more heirs) and attach to it an original or notarized copy of the certificate of inheritance right. The Form must be certified by a notary and mailed or personally handed to the Registrar.

After submitting changes to the register, the heir is fully entitled to dispose of securities (sell them, gift them etc.) and to draw dividends.

If the inherited securities cannot be divided among heirs by percentage without resulting in fractional shares, the notary should define in the certificate a number of securities to be inherited.

In the case when the division of an inheritance is defined only by percentage of total holdings and the total number of securities cannot be divided without resulting in fractional shares, the Registrar will transfer the closest whole number of securities to each heir, with the remaining shares registered as common property.

If the documents are submitted to the Registrar by an authorized representative, he or she must present documentation proving power of attorney.

In accordance with article 28 of the Civil Code of Russia, only a parent or legal guardians can transact securities on behalf of minors under 14 who own them.

Without legal consent from the entity governing guardianship or trusteeship, a guardian has no right to make securities transactions on behalf of a minor (article 37 clause 2 of the Civil Code of Russia).

Minors from ages 14 to 18 are entitled to make transactions on their own upon consent from their legal representatives, which include parents or guardians.

A transaction made by a minor is also valid when written consent is given by a parent or guardian (article 27 of the Civil Code of Russia). Additionally, a consent form from the entity governing guardianship or trusteeship must be provided.

Please note:

• the Registered Holder Form must be signed to by a parent or legal guardian, if the juvenile is under 14, and certified by a notary;
• a consent to the transaction from the guardianship or trusteeship body must be attached to the Form, which is signed by the minor from 14 to 18 and certified by a notary.