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“SOUTHERN TELECOMMUNICATIONS COMPANY” PJSC. Agenda of the Annual General Shareholders’ Meeting of “UTK” PJSC 30.06.2004. “SOUTHERN TELECOMMUNICATIONS COMPANY” PJSC. - PowerPoint PPT Presentation
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ANNUAL REPORTANNUAL REPORT130.06.2004
“SOUTHERN TELECOMMUNICATIONS COMPANY” PJSC “SOUTHERN TELECOMMUNICATIONS COMPANY” PJSC
AgendaAgenda
of the Annual General Shareholders’ Meeting of “UTK” PJSC of the Annual General Shareholders’ Meeting of “UTK” PJSC 30.06.2004 30.06.2004
AgendaAgenda
of the Annual General Shareholders’ Meeting of “UTK” PJSC of the Annual General Shareholders’ Meeting of “UTK” PJSC 30.06.2004 30.06.2004
1. Approval of the annual report, annual financial accounts including profit and loss statement (profit and loss accounts), distribution of profits and losses of the Company according to the results of the reporting financial year (2003).
2. Determination of 2003 dividend size, form and time of payment under each category and type of shares
3. Election of the members to the Company’s Board of Directors
4. Election of the members to the Company’s Auditing Commission
5. Appointment of the Company’s Auditor for the year 2004
6. Determination of the rates of deductions for calculation of the annual remuneration to be paid to the members of the Board of Directors
7. Introduction of amendments and additions to the Company’s Charter
8. Introduction of amendments and additions to the Company’s Provisions on the Board of Directors
9. Introduction of amendments and additions into the Company’s Provisions on the Management Board
10. Introduction of amendments and additions to the Company’s Provisions on the Auditing Commission
ANNUAL REPORTANNUAL REPORT230.06.2004
Approval of the annual report, annual Approval of the annual report, annual financial accounts including profit and financial accounts including profit and loss statement (profit and loss loss statement (profit and loss accounts), distribution of profits and accounts), distribution of profits and losses of the Company according to losses of the Company according to the results of the reporting financial the results of the reporting financial year (2003)year (2003)..
Approval of the annual report, annual Approval of the annual report, annual financial accounts including profit and financial accounts including profit and loss statement (profit and loss loss statement (profit and loss accounts), distribution of profits and accounts), distribution of profits and losses of the Company according to losses of the Company according to the results of the reporting financial the results of the reporting financial year (2003)year (2003)..
Speaker – I.F. Ignatenko, General Director of “UTK” PJSC
“SOUTHERN TELECOMMUNICATIONS COMPANY” PJSC“SOUTHERN TELECOMMUNICATIONS COMPANY” PJSC
ANNUAL REPORTANNUAL REPORT330.06.2004
General information about “UTK” PJSC General information about “UTK” PJSC
The Company’s structureThe Company’s structure
Significant corporate events of the yearSignificant corporate events of the year
Positioning in the marketPositioning in the market
Performance resultsPerformance results
Financial resultsFinancial results
Auditor’s OpinionAuditor’s Opinion
Report of the Auditing Commission Report of the Auditing Commission
Development prospectsDevelopment prospects
STRUCTURE OF THE REPORTSTRUCTURE OF THE REPORT
ANNUAL REPORTANNUAL REPORT430.06.2004
http:http:\\\\www.stcompany.ruwww.stcompany.ruE-mail: [email protected]: [email protected]. +7(8612) 53-20-56Tel. +7(8612) 53-20-56
RegisteredRegistered
by the Act of the Krasnodar City Registration by the Act of the Krasnodar City Registration ChamberChamber №494 №494 seriesseries А А
Head officeHead office::6666, Karasunskaya Street, Krasnodar , Karasunskaya Street, Krasnodar
GENERAL INFORMATION ABOUT THE COMPANYGENERAL INFORMATION ABOUT THE COMPANY
Full registered name, date of the Full registered name, date of the registrationregistration
ANNUAL REPORTANNUAL REPORT530.06.2004
GENERAL INFORMATION ABOUT THE COMPANYGENERAL INFORMATION ABOUT THE COMPANY
Size - 1 bln 297 mln 779 ths 384,66 rubles
Par value - 0,33 ruble
Common registered non-documentary shares
2 960 512 964
Preferred registered non-documentary shares
972 151 838
Authorized capitalAuthorized capital
ANNUAL REPORTANNUAL REPORT630.06.2004
17,09 16,13
88,7 82,91 83,87
11,30%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2001 2002 2003
Legal persons
Individuals
GENERAL INFORMATION ABOUT THE COMPANYGENERAL INFORMATION ABOUT THE COMPANY
Ownership structureOwnership structure
ANNUAL REPORTANNUAL REPORT730.06.2004
Other20.66%
J.P. Morgan Chase Bank 4.65%
"Branswick UBS Warburg Nominees" CJSC5.61%
"ABN AMRO Bank А.О." CJSC7.12%
"ING Bank (Euroasia) " CJSC6.54%
"DKK" CJSC15.44%
"Investitsionnaya kompaniya svyazi" OJSC (“Svyazinvest” OJSC) 38.16%
LINDSELL ENTERPRISES LIMITED – holder1.82%
GENERAL INFORMATION ABOUT THE COMPANYGENERAL INFORMATION ABOUT THE COMPANY
Capital structureCapital structure
ANNUAL REPORTANNUAL REPORT830.06.2004
13322
13195191
9056117 85
323258
368484
372480
352367
803
1415
524691
0
1500
"Ura
lsvy
azin
form
"O
JSC
"Vol
gaT
elec
om"
OJS
C
"Cen
tral
Tel
ecom
" O
JSC
"Sib
irT
elec
om"
OJS
C
"UT
K"
PJS
C
"Nor
th-W
este
rnte
leco
m"
OJS
C
"Dal
svya
z" O
JSC
as at 31.10.2002as at 01.01.2003as at 01.01.2004
GENERAL INFORMATION ABOUT THE COMPANYGENERAL INFORMATION ABOUT THE COMPANY
Market capitalization of inter-regional entitiesMarket capitalization of inter-regional entities, , USD mlnUSD mln
ANNUAL REPORTANNUAL REPORT930.06.2004
GENERAL INFORMATION ABOUT THE COMPANYGENERAL INFORMATION ABOUT THE COMPANY
Dynamics of UTK share prices and market indices in 2003Dynamics of UTK share prices and market indices in 2003
4
5
6
7
8
9
10
11
Shar
e pr
ice,
US
cent
s
Average common share (CS) price Average preferred share (PS) price
min PS 5.1 cents (05.01.03)
max PS 8.83 cents (20.10.01.03)
min CS 6.93 cents (27.01.03)
max CS 10.3 cents (20.10.03)
Source: RTS databaseTrading volume Amount, mln$
CS 286 5.43
PS 130 2.63
Total 416 8.06
ANNUAL REPORTANNUAL REPORT1030.06.2004
GENERAL INFORMATION ABOUT THE COMPANYGENERAL INFORMATION ABOUT THE COMPANY
ADR capitalization of “UTK” PJSC in ADR capitalization of “UTK” PJSC in 2003, 2003, USD mlnUSD mln
+65.3%
6,9 7,1 7,4 7,8 7,78,5 8,9
10,09,5
10,8
4,74,3
0
2
4
6
8
10
12Ja
n.03
Feb.
03
Mar
. 03
Apr
.03
May
.03
Jun.
03
Jul.0
3
Aug
.03
Sep.
03
Oct
.03
Nov
.03
Dec
.03
ANNUAL REPORTANNUAL REPORT1130.06.2004
5,6
5,2
5
5,2
5,4
5,6
5,8
• Corporate Governance Corporate Governance ScoreScore
12 February 2003 11 November 2003
• Long-term corporate local Long-term corporate local and foreign currency credit and foreign currency credit rating rating
27 December 2001 02 April 2003
В -
ССС+
On August 6, 2003 Standard & Poor's assigned its "ruBBB" On August 6, 2003 Standard & Poor's assigned its "ruBBB" Russia national scale rating to PJSC "Southern Russia national scale rating to PJSC "Southern Telecommunications Company" ("UTK" PJSC). At the Telecommunications Company" ("UTK" PJSC). At the same time, Standard & Poor's assigned its "ruBBB" rating same time, Standard & Poor's assigned its "ruBBB" rating to "UTK" PJSC Russian ruble (RUR) 1.5 billion senior to "UTK" PJSC Russian ruble (RUR) 1.5 billion senior unsecured bond issue due 2006unsecured bond issue due 2006
GENERAL INFORMATION ABOUT THE COMPANYGENERAL INFORMATION ABOUT THE COMPANY
Rating Agency “Standard & Poor’s”Rating Agency “Standard & Poor’s”
ANNUAL REPORTANNUAL REPORT1230.06.2004
• LocationLocation
Building 1, 77, Sadovnicheskaya nab., Moscow, Building 1, 77, Sadovnicheskaya nab., Moscow, RussiaRussia
««Ernst and Young VneshauditErnst and Young Vneshaudit»» CJSC CJSC
• LicenseLicense
License No. Е003246 for auditing, in particular for License No. Е003246 for auditing, in particular for general and bank auditing and for auditing of general and bank auditing and for auditing of insurance companies, foundations and exchanges, insurance companies, foundations and exchanges, was granted for five years and approved by Order was granted for five years and approved by Order No. 9 of the RF Ministry of Finance dated January No. 9 of the RF Ministry of Finance dated January 17, 2003 (valid till 17.01.2008).17, 2003 (valid till 17.01.2008).
GENERAL INFORMATION ABOUT THE COMPANYGENERAL INFORMATION ABOUT THE COMPANY
The Company’s AuditorThe Company’s Auditor
ANNUAL REPORTANNUAL REPORT1330.06.2004
GENERAL INFORMATION ABOUT THE COMPANYGENERAL INFORMATION ABOUT THE COMPANY
• LocationLocation
15a, Kalanchevskaya Str., Moscow, 107078, 15a, Kalanchevskaya Str., Moscow, 107078, RussiaRussia..Tel.Tel.//faxfax: (095) 933-42-21.: (095) 933-42-21.E-mailE-mail: [email protected]: [email protected]
««Registrator-svyazRegistrator-svyaz»» CJSC CJSC
• LicenseLicense
Number: 10-000-1-00258.Number: 10-000-1-00258.
Date of issue: 1.10.2002 Date of issue: 1.10.2002
Period of validity: unlimited.Period of validity: unlimited.Licensing body:Licensing body: Federal Commission for Federal Commission for Securities Market of Russia.Securities Market of Russia.
RegistrarRegistrar
ANNUAL REPORTANNUAL REPORT1430.06.2004
Elected on 25.06.2003
Corporate Governance CommitteeCorporate Governance Committee
Budget and Investment Planning Budget and Investment Planning CommitteeCommittee
Nominations and Compensation CommitteeNominations and Compensation Committee
Audit CommitteeAudit Committee
40 meetings were held184 issues were considered and approved
THE COMPANY’S STRUCTURETHE COMPANY’S STRUCTURE
Board of Directors Board of Directors
ANNUAL REPORTANNUAL REPORT1530.06.2004
THE COMPANY’S STRUCTURETHE COMPANY’S STRUCTURE
Management Board Management Board
Elected on 25.06.2003
12 meetings were held140 issues were considered and approved
FFinancial and economic operations of the Companyinancial and economic operations of the Company
CCapital constructionapital construction
DDevelopment of the Company’s investment program and budget for their evelopment of the Company’s investment program and budget for their submission to the Board of Directors for approvalsubmission to the Board of Directors for approval
Determination of the priority development trendsDetermination of the priority development trends
Approval of the internal documents regulating the Company’s operationsApproval of the internal documents regulating the Company’s operations
Supervising accounts receivable and drawing up actions on their reductionSupervising accounts receivable and drawing up actions on their reduction
SSocial and economic developmentocial and economic development
ANNUAL REPORTANNUAL REPORT1630.06.2004
THE COMPANY’S STRUCTURETHE COMPANY’S STRUCTURE
Auditing Commission Auditing Commission
Elected on 25.06.2003The terms of reference of the Auditing Commission cover: The terms of reference of the Auditing Commission cover:
checking the reliability of the data contained in the accounts and other financial checking the reliability of the data contained in the accounts and other financial documents of the Company; documents of the Company;
revealing any facts of violation of the procedure for book-keeping and revealing any facts of violation of the procedure for book-keeping and submission of financial reports, established by the legal acts of the Russian submission of financial reports, established by the legal acts of the Russian Federation; Federation;
checking the observance of the legal standards in tax calculation and paymentchecking the observance of the legal standards in tax calculation and payment ;;
revealing any facts of violation of the legal acts of the Russian Federation, in revealing any facts of violation of the legal acts of the Russian Federation, in compliance with which the Company performs its financial and economic compliance with which the Company performs its financial and economic operationsoperations;;
evaluating the economic advisability of financial and economic operations of evaluating the economic advisability of financial and economic operations of the Company.the Company.
ANNUAL REPORTANNUAL REPORT1730.06.2004
General Director
Board of Directors
General Shareholders’ Meeting
Management Board
General Management
Branches
( 10 branches of major business)
Branches
( 3 branches of secondary business)
THE COMPANY’S STRUCTURETHE COMPANY’S STRUCTURE
Organizational structureOrganizational structure
ANNUAL REPORTANNUAL REPORT1830.06.2004
Gen
eral
man
agem
ent
Technological Commercial
Financial
Economic
Construction
Corporate Governance
Legal
Security
Personnel management
Administrative
Accounting
Internal AuditInformation
THE COMPANY’S STRUCTURETHE COMPANY’S STRUCTURE
Main functional blocks of the General Management Main functional blocks of the General Management organizational structureorganizational structure
ANNUAL REPORTANNUAL REPORT1930.06.2004
Optimization of the number of structural divisions in the Optimization of the number of structural divisions in the Company’s branches – according to management Company’s branches – according to management standardsstandards
Establishment of effective vertical and horizontal Establishment of effective vertical and horizontal relations between structural divisions – according to relations between structural divisions – according to business management doctrinebusiness management doctrine
Optimization of the staff number in structural divisions – Optimization of the staff number in structural divisions – in conformity with scientifically proved labor standardsin conformity with scientifically proved labor standards
Improvement of systems, forms and methods of Improvement of systems, forms and methods of managementmanagement
THE COMPANY’S STRUCTURETHE COMPANY’S STRUCTURE
The basic directions of optimization of the The basic directions of optimization of the Company’s organizational structure are the Company’s organizational structure are the following:following:
ANNUAL REPORTANNUAL REPORT2030.06.2004
Extraordinary General Shareholders’ Meeting was held onExtraordinary General Shareholders’ Meeting was held on 21.01.2003. 21.01.2003.Venue: 44, Krasnaya Street, Krasnodar, Krasnodar kraiVenue: 44, Krasnaya Street, Krasnodar, Krasnodar krai
Annual General Shareholders’ Meeting was held onAnnual General Shareholders’ Meeting was held on 25.06.2003. 25.06.2003.Venue:Venue:::“Health-care center “Orbita” CJSC, Olginka, Tuapse district, Krasnodar krai.“Health-care center “Orbita” CJSC, Olginka, Tuapse district, Krasnodar krai.
SIGNIFICANT CORPORATE EVENTS OF THE YEARSIGNIFICANT CORPORATE EVENTS OF THE YEAR
General Shareholders’ MeetingsGeneral Shareholders’ Meetings
ANNUAL REPORTANNUAL REPORT2130.06.2004
SIGNIFICANT CORPORATE EVENTS OF THE YEARSIGNIFICANT CORPORATE EVENTS OF THE YEAR
Corporate reorganizationCorporate reorganization
Rearrangement of organizational structure
and human resources management
Creation of communication networks’
management system
Change of information technologies
Development of business opportunitiesIncrease of efficiency of
accounting and economic subdivisions
Reorganization of logistical support
Corporate actions of general character
ANNUAL REPORTANNUAL REPORT2230.06.2004
Description Measure unit
Fact 2002
Plan 2003 Growth rate,%
Increase in number of basic telephones sets 165 775 244 596 147,5
Average number of lines Ths lines 3 211,1 3 409,8 106,2
Revenue from sales RUR mln 10 532 13 269,6 125,9
Revenues from new services RUR mln 305,6 434,5 142,2
Income per 1 line RUR 3 279,8 3 891,6 118,6
Income per 1 employee RUR 247 572 322 124,6 130,1
Number of lines per employee Lines/employee
75,5 82,8 109,7
Average number of employees on pay-roll people 42 541 41 194 96,8
Average wages RUR 5 099,6 6 532,3 128,1
Capex volume RUR mln 3 571 ,6 8 308, 2 232,6
Number capacity to be put into service Ths lines 374,3 513,3 137,1
SIGNIFICANT CORPORATE EVENTS OF THE YEARSIGNIFICANT CORPORATE EVENTS OF THE YEAR
Approval of 2003 BudgetApproval of 2003 Budget
ANNUAL REPORTANNUAL REPORT2330.06.2004
Russian Economic Forum in London, 3.04.2003
International Congress "Trust and Security in the Information Society", 21-22.04.2003, Moscow
International Investment Forums «South of Russia-2003», 6-9.04.2003, Madrid and 26-29.09.2003, Berlin
SIGNIFICANT CORPORATE EVENTS OF THE YEARSIGNIFICANT CORPORATE EVENTS OF THE YEAR
Participation in exhibitions and Participation in exhibitions and congresses, meetings with investorscongresses, meetings with investors
ANNUAL REPORTANNUAL REPORT2430.06.2004
SIGNIFICANT CORPORATE EVENTS OF THE YEARSIGNIFICANT CORPORATE EVENTS OF THE YEAR
International Exhibition “Svyaz-Expocomm,2003International Exhibition “Svyaz-Expocomm,2003», », May,May, 2003, 2003, MoscowMoscow
InternationalInternational Investment Forum Investment Forum ««Days of the Krasnodar krai in GermanyDays of the Krasnodar krai in Germany», », MayMay 2003, 2003, HannoverHannover
International Exhibition of telecommunications, new infocommunication International Exhibition of telecommunications, new infocommunication technologies and their applicationstechnologies and their applications « «Infocommunications of Russia XXI centuryInfocommunications of Russia XXI century»,», SeptemberSeptember,, Russia Russia
World ExhibitionWorld Exhibition « «TelecomTelecom-2003», -2003», OctoberOctober, , SwitzerlandSwitzerland, , GenevaGeneva
Participation in exhibitions and Participation in exhibitions and congresses, meetings with investorscongresses, meetings with investors
ANNUAL REPORTANNUAL REPORT2530.06.2004
SIGNIFICANT CORPORATE EVENTS OF THE YEARSIGNIFICANT CORPORATE EVENTS OF THE YEAR
On April 18, 2004 a meeting of "UTK" PJSC Management and top managers of On April 18, 2004 a meeting of "UTK" PJSC Management and top managers of the fund ‘’Templeton Russia Fund’’ headed by Mr. Mark Mobius, the Company’s the fund ‘’Templeton Russia Fund’’ headed by Mr. Mark Mobius, the Company’s shareholder, was held in Krasnodar.shareholder, was held in Krasnodar.
On On 15 15 SeptemberSeptember 2003 2003 a conference with analysts and investors devoted to a conference with analysts and investors devoted to placement of UTK series 01 bond issue to have been performed on 18.09.2003 was placement of UTK series 01 bond issue to have been performed on 18.09.2003 was held in Moscow. The Company presented its plans of business development up to held in Moscow. The Company presented its plans of business development up to 2006 at the conference.2006 at the conference.
Participation in exhibitions and Participation in exhibitions and congresses, meetings with investorscongresses, meetings with investors
ANNUAL REPORTANNUAL REPORT2630.06.2004
SIGNIFICANT CORPORATE EVENTS OF THE YEARSIGNIFICANT CORPORATE EVENTS OF THE YEAR
Actions on investor relations and Actions on investor relations and development of the development of the secondary market of sharessecondary market of shares
Program on investor relations and development of Program on investor relations and development of the secondary market of shares in 2003the secondary market of shares in 2003 was was approved by the Board of Directors on 25 April 2003.approved by the Board of Directors on 25 April 2003.
AimsAims:: to ensure fair market value and to form the to ensure fair market value and to form the Company’s liquid securities market, to make the Company’s liquid securities market, to make the Company more recognizable by the participants of Company more recognizable by the participants of the investment communitythe investment community
ANNUAL REPORTANNUAL REPORT2730.06.2004
SIGNIFICANT CORPORATE EVENTS OF THE YEARSIGNIFICANT CORPORATE EVENTS OF THE YEAR
Customer serviceCustomer service
Integrated system of sales of telecom services and advertising in the telecommunications market of the Southern federal district
Set up of Unified Accounting and Service Centers
Main tasks:To meet the requirements of various categories of customers for the range of telecommunications services available.
To ensure a sufficiently high level of service for key customers
The efficient promotion of services to the telecommunications market of the SFD taking into account the Company’s service, regional and client segment priorities
ANNUAL REPORTANNUAL REPORT2830.06.2004
SIGNIFICANT CORPORATE EVENTS OF THE YEARSIGNIFICANT CORPORATE EVENTS OF THE YEAR
Personnel managementPersonnel management
The main concept of the personnel management system used by The main concept of the personnel management system used by the Company is to increase business efficiency of the company by the Company is to increase business efficiency of the company by raising the effectiveness of its human resourcesraising the effectiveness of its human resources
90%
80%
91,4%
81%
Provision with specialistshaving higher education
Provision with specialistshaving secondary special
education
2002
2003
70.92%
81.6%Average over
“Svyazinvest” OJSC
ANNUAL REPORTANNUAL REPORT2930.06.2004
SIGNIFICANT CORPORATE EVENTS OF THE YEARSIGNIFICANT CORPORATE EVENTS OF THE YEAR
Improvement of quality management systemImprovement of quality management system
Improvement of quality control system in Improvement of quality control system in accordance with ISO 9000 standards makes it accordance with ISO 9000 standards makes it possible to ensure reliable and stable operation possible to ensure reliable and stable operation of the Company as well as to achieve the set of the Company as well as to achieve the set goal which is to provide goal which is to provide Southern regions of Southern regions of Russia with full range of integrated telecom Russia with full range of integrated telecom services of high quality services of high quality
ANNUAL REPORTANNUAL REPORT3030.06.2004
POSITIONING IN THE MARKETPOSITIONING IN THE MARKET
23,428,4
15,9
46,5%
51,4%
45%
20
25
30
35
40
45
50
55
2001 2002 2003
0
10
20
30
40
50
60
Telecommunications market, RUR bln
Market share of "UTK" PJSC, %
Telecommunications market of the Southern Telecommunications market of the Southern federal district federal district
GoalGoal: : to increase UTK market share toto increase UTK market share to 51% 51%
ANNUAL REPORTANNUAL REPORT3130.06.2004
POSITIONING IN THE MARKETPOSITIONING IN THE MARKET
Telecommunications market of the Southern Telecommunications market of the Southern federal districtfederal district
19,8%
19,1% 30,7%
26,0% 5,2%
4,9% 10,8%
7,4% 41,7%
34,5%
0% 20% 40% 60% 80% 100%
2002
2003
Local telephony
Long-distance fixed-line telephony
New services (VAS)
Other services
Cellular communication
ANNUAL REPORTANNUAL REPORT3230.06.2004
POSITIONING IN THE MARKETPOSITIONING IN THE MARKET
Priority development trendsPriority development trendsPriority development trendsPriority development trends
Counteraction to competitors in the market of long-distance telephony.Counteraction to competitors in the market of long-distance telephony. Sale promotion of services of long-distance fixed-line telephonySale promotion of services of long-distance fixed-line telephony..Development of public switched telephone network PSTN paying special attention to Development of public switched telephone network PSTN paying special attention to business sector (high profitability, good prospects of broadening the range of business sector (high profitability, good prospects of broadening the range of provided services)provided services)..Introduction of universal service cards for payment of telecommunications servicesIntroduction of universal service cards for payment of telecommunications services ..Provision of package services.Provision of package services. Introduction of time-based billing system SPUS.Introduction of time-based billing system SPUS.
Traditional telecommunications servicesTraditional telecommunications services
Introducing new technologies and services corresponding to the tendencies of market Introducing new technologies and services corresponding to the tendencies of market development and meeting the customers’ real requirements (Call-centers, intelligent development and meeting the customers’ real requirements (Call-centers, intelligent services, cable TVservices, cable TV) ) Making value-added services more competitive including in the spheres of customer Making value-added services more competitive including in the spheres of customer serviceservice..Developing integrated data networks (multi-service networks) in the Southern Federal Developing integrated data networks (multi-service networks) in the Southern Federal DistrictDistrict..Introduction of universal service cards to pay for telecommunications services providedIntroduction of universal service cards to pay for telecommunications services provided ..Popularization of the pre-paid cardsPopularization of the pre-paid cards..Technical realization of intra-regional roaming of servicesTechnical realization of intra-regional roaming of services..Providing services “in packageProviding services “in package””..
New value-added servicesNew value-added services
ANNUAL REPORTANNUAL REPORT3330.06.2004
POSITIONING IN THE MARKETPOSITIONING IN THE MARKET
Priority development trendsPriority development trendsPriority development trendsPriority development trends
Tariff policyTariff policyto even out tariffs in the framework of the inter-regional company, to minimize to even out tariffs in the framework of the inter-regional company, to minimize tariff differences in the consolidated company taking into account regional tariff differences in the consolidated company taking into account regional peculiarities;peculiarities;
to introduce step-by-step unified tariff system for all categories of customersto introduce step-by-step unified tariff system for all categories of customers;;
to reduce cross-subsidiesto reduce cross-subsidies;;
to bring regulated tariffs to the level of economically justified costs on the basis to bring regulated tariffs to the level of economically justified costs on the basis of separate cost accounting and standard level of profit, their further of separate cost accounting and standard level of profit, their further rebalancing according to “price cap” method (limit pricing);rebalancing according to “price cap” method (limit pricing);
to include investment component in tariff structureto include investment component in tariff structure;;
to develop tariffs on value-added services on the basis of new technologies, using to develop tariffs on value-added services on the basis of new technologies, using the experience of domestic and foreign operatorsthe experience of domestic and foreign operators; ;
to elaborate various tariff plans for package servicesto elaborate various tariff plans for package services;;
to use flexible system of discounts with regard to customer demand, growth of to use flexible system of discounts with regard to customer demand, growth of volume of provided services and earnings increasevolume of provided services and earnings increase..
ANNUAL REPORTANNUAL REPORT3430.06.2004
11075,1
3571,51762,2
0
12000
2001 2002 2003
PERFORMANCE RESULTSPERFORMANCE RESULTS
Investment policyInvestment policy
Capital expenditures, RUR mln
310.1%
202.7%
8244,9
18703078,4
0
12000
2001 2002 2003
Fixed assets put into operation, RUR mln
267.8%
164.6%
ANNUAL REPORTANNUAL REPORT3530.06.2004
32
35,3
29,70 26,0
31,7
27 22
17,4
25,6
19
15,6
18,7
0% 20% 40% 60% 80% 100%
2001
2002
2003
Extension New construction
Reconstruction Technical reequipment
PERFORMANCE RESULTSPERFORMANCE RESULTS
Investment policyInvestment policy
Capex breakdownCapex breakdown
ANNUAL REPORTANNUAL REPORT3630.06.2004
PERFORMANCE RESULTSPERFORMANCE RESULTS
Investment policyInvestment policy
Allocation of capital expendituresAllocation of capital expenditures
74
77,8
69,4 8,3
2,6
12 4
4
5,6
10
15,6
16,6
0% 20% 40% 60% 80% 100%
2001
2002
2003
Local telephony
Long-distance telephony
Value-added services
Other
ANNUAL REPORTANNUAL REPORT3730.06.2004
0%
50%
100%
2001 2002 2003
Own funds Borrowed funds
PERFORMANCE RESULTSPERFORMANCE RESULTS
Investment policyInvestment policy
Sources of financingSources of financing, %, %
75%
48%
12,5%
25%
52%
87,5%
ANNUAL REPORTANNUAL REPORT3830.06.2004
PERFORMANCE RESULTSPERFORMANCE RESULTS
Investment policyInvestment policy
Borrowed funds breakdownBorrowed funds breakdown, %, %
0%
50%
100%
2001 2002 2003
Bank credits Bonded loans
Credits from vendors Leasing
Other borrowed funds
43%
25%
33%
78%
50%14%
10%
22% 15%
10%
ANNUAL REPORTANNUAL REPORT3930.06.2004
PERFORMANCE RESULTSPERFORMANCE RESULTS
Investment policyInvestment policy
436,835,7
60,5
95,7
196,2313,7
0
600
2001 2002 2003
ruralTN
urbanTN
Number capacity put into operationNumber capacity put into operation,, ths lines ths lines
374.2
532.5
231.9
142.3%
161.4%
ANNUAL REPORTANNUAL REPORT4030.06.2004
PERFORMANCE RESULTSPERFORMANCE RESULTS
2742,05
1459,3 1629,25
0
3000
2001 2002 2003
Increase in the length of long-distance (intra-zonal) Increase in the length of long-distance (intra-zonal) telephone channelstelephone channels , , ths channel/kmths channel/km
168.3%
111.6%
Fiber-optic lines put into serviceFiber-optic lines put into service,, km km
197.1%
102.7%
Indicators of network developmentIndicators of network development
1354,3668,9 686,95
0
1500
2001 2002 2003
ANNUAL REPORTANNUAL REPORT4130.06.2004
PERFORMANCE RESULTSPERFORMANCE RESULTS
Indicators of network developmentIndicators of network development
SDH equipment manufactured by SDH equipment manufactured by Siemens, Alcatel, Lucent Siemens, Alcatel, Lucent TechnologesTechnologes, , Huawei are Huawei are deployed in the intra-zonal deployed in the intra-zonal transportation networktransportation network
STM-1/4/16/64STM-1/4/16/64
STM-1/4/16/64STM-1/4/16/64
STM-1/4/16/64STM-1/4/16/64
ANNUAL REPORTANNUAL REPORT4230.06.2004
PERFORMANCE RESULTSPERFORMANCE RESULTS
Indicators of network developmentIndicators of network development
Increase in the number of basic telephonesIncrease in the number of basic telephones,, ths sets ths sets
165.8
296.8
153.1
178.9%
108.4%
3,5 3,8 3,63,3
0
5
at 01.01.2003 at 01.01.2004
Installed capacity, mln lines
Equipped capacity, mln lines
21537,5 36,1
81,8
115,5 129,70
300
2001 2002 2003
rural TNurban TN
ANNUAL REPORTANNUAL REPORT4330.06.2004
92,393,3
91,3
94,1 94,195,8
95,1%93,9%93,4%
86889092949698
100
2001 2002 2003
80%
85%
90%
95%
100%
rural TN
urban TN
urban andrural TNs
PERFORMANCE RESULTSPERFORMANCE RESULTS
Indicators of network developmentIndicators of network development
7,321,9
11,4
56,345,239,3
31,6%
48,4%
38,7%
0
20
40
60
80
100
2001 2002 2003
0%
10%
20%
30%
40%
50%
60%Digitization rateDigitization rate,%,%
Equipped capacity factorEquipped capacity factor,%,%
ANNUAL REPORTANNUAL REPORT4430.06.2004
PERFORMANCE RESULTSPERFORMANCE RESULTS
Main economic indexesMain economic indexes
8218,4 10531,913506,6
0
14000
2001 2002 2003
Revenue from sale of goods, works, servicesRevenue from sale of goods, works, services,, RUR mln RUR mln
128.24%
128.15%
7899,2 10042,413222,7
0
14000
2001 2002 2003
Revenue from telecommunications servicesRevenue from telecommunications services,, RUR mln RUR mln
131.7%
127.1%
ANNUAL REPORTANNUAL REPORT4530.06.2004
PERFORMANCE RESULTSPERFORMANCE RESULTS
Main economic indexesMain economic indexes
Dynamics of revenue structure from telecommunications services, %Dynamics of revenue structure from telecommunications services, %
4297,5
5270,6
6668
2601,8
3694,8
5250,8 546
751,8
771,4
756,9
305,6
248,1
0% 50% 100%
2001
2002
2003
DLD and ILD telephony
Urban and rural TNs
Value-added services
Other telecommunications services
50.4% 4.1%39.8%
52.5% 3.1%36.8%
54.4% 3.0%33.0%
ANNUAL REPORTANNUAL REPORT4630.06.2004
PERFORMANCE RESULTSPERFORMANCE RESULTS
Main economic indexesMain economic indexes
Revenues from value-added services (VAS)Revenues from value-added services (VAS),, RUR mln RUR mln
546,1
305,6248,1
4,1%
3,1%3,0%
0
200
400
600
800
1000
2001 2002 2003
0,0
1,0
2,0
3,0
4,0
5,0
Revenues from VAS, RURmln
Share in tariff revenues,%178.7%123.2%
0
50
100
150
200
250
300
350
Inte
rnet IP
VP
N
ISD
N
TV IN
0
500
1000
1500
2000
2500 2002, RUR mln
2003, RUR mln
Growth rate, %
Dynamics of revenues from value-added servicesDynamics of revenues from value-added services
ANNUAL REPORTANNUAL REPORT4730.06.2004
PERFORMANCE RESULTSPERFORMANCE RESULTS
Main economic indexesMain economic indexes
6058 8022,810452,9
0
14000
2001 2002 2003
CostsCosts , , RUR mln RUR mln
130.29%
132.43%
0% 100%
2001
2002
2003
Wages and salariesUnified income taxDepreciation chargesMaterialsPayments to RostelecomElectricity chargesTaxesOtherSecurityInsuranceTrainingAdvertising costs
Dynamics of costs structureDynamics of costs structure, %, %33.8% 10.3%10.5% 9.3% 14.3%
32.8% 8.8%10.9% 9.9% 14.25%
31.4% 10.5%11.4% 11.3% 13.7%
ANNUAL REPORTANNUAL REPORT4830.06.2004
PERFORMANCE RESULTSPERFORMANCE RESULTS
Main economic indexesMain economic indexes
2,233,15
2,14
27,2%23,3%
20,3%
0
1
2
3
4
5
2001 2002 2003
0%
EBITDA, RUR bln
EBITDA margin,%
EBITDA EBITDA in comparable conditionsin comparable conditions,, RUR bln RUR bln
0,770,76
0,74
0,7
2001 2002 2003
Cost price of one ruble of revenueCost price of one ruble of revenue,, RUR RUR
ANNUAL REPORTANNUAL REPORT4930.06.2004
PERFORMANCE RESULTSPERFORMANCE RESULTS
Main economic indexesMain economic indexes
45828
4254140992
329,3
179,3
247,6
36000
46000
2001 2002 2003
0
50
100
150
200
250
300
350 Staff number, people
Revenue per oneemployee, RUR ths
32,71%38,10%
28,10% 27,90%
0%
50%
2002 2003
Growth rate ofbusiness efficiency,%
Growth rate ofrevenue,%
Growth rates of revenues and business efficiencyGrowth rates of revenues and business efficiency, %, %
Business efficiencyBusiness efficiency
ANNUAL REPORTANNUAL REPORT5030.06.2004
PERFORMANCE RESULTSPERFORMANCE RESULTS
Main economic indexesMain economic indexes
3948,50
3279,80
2681,10
2000
3000
4000
2001 2002 2003
Revenue per one line, RUR
83,40
75,50
66,90
65
85
2001 2002 2003
Number of lines per one employee,lines/employee
Business efficiencyBusiness efficiency
539,10489,90413,40
0
200
400
600
2001 2002 2003
DLD/ILD traffic per one line, minutes
ANNUAL REPORTANNUAL REPORT5130.06.2004
3127
3866
30562498
123,6%
121,4%
126,4%
122,3%
0
6000
2002 2003
Tariff revenue per one line, RUR
Costs per one line, RUR
Revenue growth rate, %
Costs growth rate,%
PERFORMANCE RESULTSPERFORMANCE RESULTS
Main economic indexesMain economic indexes
Business efficiencyBusiness efficiency
ANNUAL REPORTANNUAL REPORT5230.06.2004
FINANCIAL RESULTSFINANCIAL RESULTS
26,2
4,8
11,20 15,701,902,40
0
35
2001 2002 2003
Non-current assets Current assets
Structure and history of balance sheet accountsStructure and history of balance sheet accounts,, RUR bln RUR bln
18,118,1
3131AssetsAssets
13,31,6 3,8
5,2
9,111,8
12,5
2,5 2,50
35
2001 2002 2003Borrowed funds Accounts payable Own funds
+12.2
+0.7
LiabilitiesLiabilities
+12.9+71.3%+5.0
+38%13,113,1
18,118,1
3131
13,113,1
ANNUAL REPORTANNUAL REPORT5330.06.2004
FINANCIAL RESULTSFINANCIAL RESULTS
Structure and history of balance sheet accountsStructure and history of balance sheet accounts,, RUR bln RUR bln
15,7026,202,40
4,80
2002 2003
Current assets
Non-current assets
0 5 10 15 20 25 30
2002
2003
Fixed assets Other non-current assets Intangible assets
0 1 2 3 4 5 6
2002
2003
InventoriesAccounts receivable (due in more than 12 months)
Accounts receivable (due in less than 12 months) Cash and cash equivalents
Short-term financial investments
13% 87%
16%
84%
Non-current assetsNon-current assets Current assetsCurrent assets
AssetsAssets
+12.918,118,1
3131
+71.3%
79,8%
89,6%
30,4%62,4%
46,7%44,1%
ANNUAL REPORTANNUAL REPORT5430.06.2004
0 2 4 6 8 10 12 14
2002
2003
Credits and loans
Bonds
Leasing, commercial credit
Bills of credit
11,8
12,5
2,50
13,30
3,80
5,20
2002 2003
Own fundsAccounts payableBorrowed funds
FINANCIAL RESULTSFINANCIAL RESULTS
Structure and history of balance sheet accountsStructure and history of balance sheet accounts,, RUR bln RUR bln
0 5 10 15 20
2002
2003
Long-term Short-term
BorrowingsBorrowings
LiabilitiesLiabilities
1818..11
3131
+0.7
+12.2
BorrowingsBorrowings
59,7%
53,5%
65%
21%
40,4%
16,6%
43% 14%
ANNUAL REPORTANNUAL REPORT5530.06.2004
FINANCIAL RESULTSFINANCIAL RESULTS
Net assets of the Company Net assets of the Company
As at 01.01.2003
As at
01.01.2004
1. Net assets (RUR ths) 12 017 083 12 766 438
2. Authorized capital (RUR ths) 1 297 779 1 297 779
3. Reserve fund (RUR ths) 63 200 64 889
4. Net assets/authorized capital ratio (ROE) (line.1/line.2) (%)
925,9 983,7
5. . Net assets/sum of authorized capital and reserve fund ratio (line.1/(line.2+line.3) (%)
882,9 936,9
+ RUR 749.4 mln
ANNUAL REPORTANNUAL REPORT5630.06.2004
FINANCIAL RESULTSFINANCIAL RESULTS
Dynamics of profitDynamics of profit,, RUR mln RUR mln
30542509
21601665
2274
1460 1389,61247,3
-500
500
1500
2500
3500
4500
2001 2002 2003
sales incomePre-tax profitPre-tax profit in comparable conditions
10801562
978 871,1781,9
-500
500
1500
2500
3500
4500
2001 2002 2003
Net profit Net profit in comparable conditions
ANNUAL REPORTANNUAL REPORT5730.06.2004
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
200320022001
Increase of share capital
Covering the losses of thereporting year
Creating a special stockfund of employees
Dividend payment
Creating reserves
Retained earnings balance
67.8%
32.2%
RUR 1080 mln
Reporting period
FINANCIAL RESULTSFINANCIAL RESULTS
Main directions of retained earnings distribution Main directions of retained earnings distribution
ANNUAL REPORTANNUAL REPORT5830.06.2004
0,0812
0,18908
0,0812
0,11114
0,18908
0,1607
0
0,2
2001 2002 2003
Ordinary sharesPreference shares
FINANCIAL RESULTSFINANCIAL RESULTS
Dividend payment, RURDividend payment, RUR
ANNUAL REPORTANNUAL REPORT5930.06.2004
AUDITOR’S OPINIONAUDITOR’S OPINION
AUDITOR’S OPINIONAUDITOR’S OPINIONon 2003 Financial accounts of “UTK” PJSC on 2003 Financial accounts of “UTK” PJSC
by “ERNST AND YOUNG VNESHAUDIT” CJSCby “ERNST AND YOUNG VNESHAUDIT” CJSC
In our opinion, in 2003 the bookkeeping procedure related to preparing the Financial accounts of "Southern
Telecommunications Company" PJSC complied with the requirements of Federal Law “On Accounting” No. 129-FZ of November 21, 1996, and the above accounts prepared in compliance with the said Law reliably represent in all material aspects the financial standing of "Southern Telecommunications Company" PJSC as of December 31, 2003 and its business results for the period from January 1, 2003 till December 31, 2003 inclusive.
ANNUAL REPORTANNUAL REPORT6030.06.2004
REPORT OF THE AUDITING COMMISSIONREPORT OF THE AUDITING COMMISSION
In the opinion of the members of the Auditing Commission In the opinion of the members of the Auditing Commission based on the results of the audit of the Company’s business based on the results of the audit of the Company’s business operations in 2003 and its 2003 financial accounts, financial operations in 2003 and its 2003 financial accounts, financial accounts of “Southern Telecommunications Company” accounts of “Southern Telecommunications Company”
PJSC are prepared PJSC are prepared in the way to present, in all in the way to present, in all material respects, the assets and liabilities of material respects, the assets and liabilities of "Southern Telecommunications Company" PJSC "Southern Telecommunications Company" PJSC as of 31 December 2003 and its financial results as of 31 December 2003 and its financial results for the year 2003for the year 2003 in compliance with the Federal Law in compliance with the Federal Law “On Accounting” No. 129-FZ of November 21, 1996 and the “On Accounting” No. 129-FZ of November 21, 1996 and the normative documents of the Ministry of Finance of the normative documents of the Ministry of Finance of the Russian Federation (Orders № 34n of 29.07.98 (amended Russian Federation (Orders № 34n of 29.07.98 (amended and restated), № 43n of 06.07.99, № 67n of 22.07.2003).and restated), № 43n of 06.07.99, № 67n of 22.07.2003).
ANNUAL REPORTANNUAL REPORT6130.06.2004
DEVELOPMENT PROSPECTSDEVELOPMENT PROSPECTS
Telecommunications developmentTelecommunications development
670680
594
336376390
75,4%
67,2%
58,2%
0
100
200
300
400
500
600
700
800
2004 2005 2006
0
10
20
30
40
50
60
70
80
Number capacity to be put into operation, ths linesIncrease in number of basic telephones, ths setsDigitization rate, %
ANNUAL REPORTANNUAL REPORT6230.06.2004
26,4
21,1
17
2,871,971,35
7,9%
11,9%10,9%
0
5
10
15
20
25
30
2004 2005 2006
0
2
4
6
8
10
12
14
Revenue, RUR bln
Net profit, RUR bln
Revenue share from value-added services, %
Economic Economic indexesindexes
DEVELOPMENT PROSPECTSDEVELOPMENT PROSPECTS
ANNUAL REPORTANNUAL REPORT6330.06.2004
DEVELOPMENT PROSPECTSDEVELOPMENT PROSPECTS
Priority trendsPriority trendsIntroduction of the procedure of obligatory feasibility study in order to Introduction of the procedure of obligatory feasibility study in order to determine the potential customers’ demanddetermine the potential customers’ demand
Formation of package services for VIP- and corporate clientsFormation of package services for VIP- and corporate clients
Bringing state-regulated tariffs on telecom services to economically Bringing state-regulated tariffs on telecom services to economically justified levels taking into account their investment componentjustified levels taking into account their investment component..
Making up and realization of the annual Program on measures to Making up and realization of the annual Program on measures to promote the Company’spromote the Company’s..
Improvement of the system of sales and customer service Improvement of the system of sales and customer service
Creation of universal payment system for telecom services using Creation of universal payment system for telecom services using unified service cardsunified service cards..
Development of integrated inter-regional multi-service and Development of integrated inter-regional multi-service and transportation networkstransportation networks..
Searching the ways to reduce losses from unprofitable servicesSearching the ways to reduce losses from unprofitable services
ANNUAL REPORTANNUAL REPORT6430.06.2004
DEVELOPMENT PROSPECTSDEVELOPMENT PROSPECTS
Strategic aims and goalsStrategic aims and goals Strengthening the Company’s leading position in the region in order to Strengthening the Company’s leading position in the region in order to achieve 51% of the total revenue of telecommunications sector of the achieve 51% of the total revenue of telecommunications sector of the Southern federal district by the year 2006Southern federal district by the year 2006
Ensuring annual growth of sales volume by 20% and increase of the Ensuring annual growth of sales volume by 20% and increase of the Company’s capitalization per lineCompany’s capitalization per line
Technical re-equipment and development of communication networks of Technical re-equipment and development of communication networks of
all levels, reaching digitization rate ofall levels, reaching digitization rate of 75% 75% by 2006 by 2006
Creating common information space and integrating in the global Creating common information space and integrating in the global
information communityinformation community
Realization of the integrated Program on the reorganization of the merged Realization of the integrated Program on the reorganization of the merged
operators in all directions by the year 2006 operators in all directions by the year 2006
Increasing operating profit per one lineIncreasing operating profit per one line
ANNUAL REPORTANNUAL REPORT6530.06.2004
Approval of the annual report, annual Approval of the annual report, annual financial accounts including profit and financial accounts including profit and loss statement (profit and loss loss statement (profit and loss accounts), distribution of profits and accounts), distribution of profits and losses of the Company according to losses of the Company according to the results of the reporting financial the results of the reporting financial year (2003)year (2003)..
Approval of the annual report, annual Approval of the annual report, annual financial accounts including profit and financial accounts including profit and loss statement (profit and loss loss statement (profit and loss accounts), distribution of profits and accounts), distribution of profits and losses of the Company according to losses of the Company according to the results of the reporting financial the results of the reporting financial year (2003)year (2003)..
Speaker – I.F. Ignatenko, General Director of “UTK” PJSC
“SOUTHERN TELECOMMUNICATIONS COMPANY” PJSC“SOUTHERN TELECOMMUNICATIONS COMPANY” PJSC
ANNUAL REPORTANNUAL REPORT6630.06.2004
Agenda item Agenda item №2№2Agenda item Agenda item №2№2
“SOUTHERN TELECOMMUNICATIONS COMPANY” PJSC“SOUTHERN TELECOMMUNICATIONS COMPANY” PJSC
Determination of 2003 dividend size, form and time of payment under each category and type of shares
Determination of 2003 dividend size, form and time of payment under each category and type of shares
Speaker – S.G. Fefilova, Deputy General Director of “UTK” PJSC
ANNUAL REPORTANNUAL REPORT6730.06.2004
32%
68%
2003 net profit 2003 net profit amounted to RURamounted to RUR 11,,080 080 millionmillion
RUR 108.0 mln
Ordinary shares
Preference shares
RUR 348.4 million were RUR 348.4 million were allocated to dividend allocated to dividend payment under all categories payment under all categories of sharesof shares
Determination of 2003 dividend size
ANNUAL REPORTANNUAL REPORT6830.06.2004
Determination of 2003 dividend size
Number of shares, units
Amount of dividend, RUR
ths
Dividend per one share,
RUR
Ordinary registered non-documentary shares
2 960 512 964 240 396 0.0812
Preference registered non-documentary shares
972 151 838 108 043 0.11114
ANNUAL REPORTANNUAL REPORT6930.06.2004
Determination of form and time of 2003 dividend payment under each category and type of shares
It is proposed to pay the following 2003 dividendIt is proposed to pay the following 2003 dividend::
1.1. preference share dividend amounting to 0.11114 (naught preference share dividend amounting to 0.11114 (naught point one one one one four) ruble per one share. point one one one one four) ruble per one share. Dividend should be paid in cash prior to August 29, Dividend should be paid in cash prior to August 29, 2004;2004;
2.2. ordinary share dividend amounting to 0.08120 (naught ordinary share dividend amounting to 0.08120 (naught point zero eight one two zero) ruble per one share. point zero eight one two zero) ruble per one share. Dividend should be paid in cash prior to December 15, Dividend should be paid in cash prior to December 15, 2004.2004.
ANNUAL REPORTANNUAL REPORT7030.06.2004
Agenda item Agenda item №3№3Agenda item Agenda item №3№3
“SOUTHERN TELECOMMUNICATIONS COMPANY” PJSC“SOUTHERN TELECOMMUNICATIONS COMPANY” PJSC
Election of the members to the Company’s Board of Directors Election of the members to the Company’s Board of Directors
Speaker – I.F. Ignatenko, General Director of “UTK” PJSC
ANNUAL REPORTANNUAL REPORT7130.06.2004
№ Name Post held
1 Stanislav Petrosovich Avdiyants Executive Director – Director of the Department for Economic and Tariff Policy, “Svyazinvest” OJSC
2 Vadim Yevgenyevich Belov Deputy General Director, “Svyazinvest” OJSC
3 Mikhail Borisovich Vasilyev Head of the Representative Office of “NCH Advisors Inc.”
4 Igor Vilgelmovich Volkovyski Head of Administrative Department of the Board of the Presidential Plenipotentiary in the Southern Federal District
5 Vladimir Lukich Gorbachev 1st Vice-chairman of the the RF State Duma Committee for Energy, Transport and Communications
6 Denis Viktorovich Kulikov Expert, Investor Protection Association (non-commercial organization) , “Svyazinvest” OJSC
7 Alexander Leonidovich Merzlenko Vice-president, “Renaissance-Capital” Ltd.
8 Georgy Alekseevich Romsky Deputy General Director, “Svyazinvest” OJSC
9 Stanislav Nikolaevich Panchenko Deputy General Director, “Svyazinvest” OJSC
10 Irina Petrovna Ukhina Deputy Director, Department of Corporate Governance, “Svyazinvest” OJSC
11 Andrei Anatolyevich Tshepilov Chief specialist, Securities Department, “Svyazinvest” OJSC
Board of Directors Board of Directors of “Southern Telecommunications Company” PJSC of “Southern Telecommunications Company” PJSC
((elected at the General Shareholders’ Meeting held on elected at the General Shareholders’ Meeting held on 2525 June June 2003 2003, Minutes, Minutes №14) №14)
ANNUAL REPORTANNUAL REPORT7230.06.2004
№ Name Post held
1 Stanislav Petrosovich Avdiyants Executive Director – Director of the Department for Economic and Tariff Policy, “Svyazinvest” OJSC
2 Vadim Yevgenyevich Belov Deputy General Director, “Svyazinvest” OJSC
3 Mikhail Borisovich Vasilyev Head of the Representative Office of “NCH Advisors Inc.”
4 Igor Vilgelmovich Volkovyski Head of Administrative Department of the Board of the Presidential Plenipotentiary in the Southern Federal District
5 Vladimir Lukich Gorbachev 1st Vice-chairman of the the RF State Duma Committee for Energy, Transport and Communications
6 Vladimir Vladimirovich Dudchenko Head of Analytical Department, Representative Office of “NCH Advisors Inc.”
7 Dmitry Georgievich Yefimov Head of the Independent Directors Group, Investor Protection Association (non-commercial organization) , “Svyazinvest” OJSC
8 Ivan Fyodorovich Ignatenko General Director, "UTK" PJSC
9 Denis Viktorovich Kulikov Expert, Investor Protection Association (non-commercial organization) , “Svyazinvest” OJSC
10 Andrey Vladimirovich Morozov Legal expert, Representative Office of “NCH Advisors Inc.” in Moscow (consulting)
11 Stanislav Nikolaevich Panchenko Deputy General Director, “Svyazinvest” OJSC
12 Iliya Vladimirovich Ponomaryov Head of the section, Department of Economic Planning and Budget, “Svyazinvest” OJSC
13 Georgy Alekseevich Romsky Deputy General Director, “Svyazinvest” OJSC
14 Elena Vladimirovna Umnova Director, Finance Department, “Svyazinvest” OJSC
15 Irina Petrovna Ukhina Deputy Director, Department of Corporate Governance, “Svyazinvest” OJSC
16 Andrei Anatolyevich Tshepilov Chief specialist, Securities Department, “Svyazinvest” OJSC
Information about the candidates to the Board of Directors of “UTK” PJSC Information about the candidates to the Board of Directors of “UTK” PJSC
ANNUAL REPORTANNUAL REPORT7330.06.2004
Agenda item Agenda item №4№4Agenda item Agenda item №4№4
Election of the members to the Company’s Auditing Commission Election of the members to the Company’s Auditing Commission
Speaker – T.V. Rusinova, Chief Accountant of “UTK” PJSC
ANNUAL REPORTANNUAL REPORT7430.06.2004
Auditing Commission of “UTK” PJSC Auditing Commission of “UTK” PJSC ((elected at the Annual General Shareholders’ Meeting held onelected at the Annual General Shareholders’ Meeting held on
2525 June June 2003, 2003, MinutesMinutes №14) №14)
№ Name Post held
1 Natalia Vladimirovna Boyarskikh Chief accountant, “Kubanelectrosvyaz”, branch of "Southern Telecommunications Company" PJSC
2 Lyubov Aleksandrovna Greseva Senior specialist, Department for Internal Audit and Economic Analysis, “Svyazinvest” OJSC
3 Vladimir Vladimirovich Kozin Director, Department for Direct Investments and Property, “Svyazinvest”OJSC
4 Irina Viktorovna Prokofieva Director of the Department for Internal Audit and Economic Analysis, “Svyazinvest” OJSC
5 Kirill Viktorovich Frolov Chief specialist, Department for Internal Audit and Economic Analysis, “Svyazinvest” OJSC
ANNUAL REPORTANNUAL REPORT7530.06.2004
On 5 March On 5 March 20042004 UTK Board of Directors approved the UTK Board of Directors approved the resolution to nominate the following candidates to the resolution to nominate the following candidates to the
Company’s Auditing Commission (MinutesCompany’s Auditing Commission (Minutes №35) №35)
№ Name Post held
1 Lyubov Aleksandrovna Greseva Senior specialist, Department for Internal Audit and Economic Analysis, “Svyazinvest” OJSC
2 Lyubov Yurievna Podgornaya Head of the section for Internal Audit, "UTK" PJSC
3 Irina Viktorovna Prokofieva Director of the Department for Internal Audit and Economic Analysis, “Svyazinvest” OJSC
4 Natalia Valerievna Uzlova Deputy head of the business accounting section, “Svyazinvest” OJSC
5 Natalia Petrovna Utina Head of the section, Department for Economic Planning and Budget, “Svyazinvest” OJSC
ANNUAL REPORTANNUAL REPORT7630.06.2004
Agenda item Agenda item №5№5Agenda item Agenda item №5№5
Appointment of the Company’s Appointment of the Company’s auditor for the year 2004auditor for the year 2004 Appointment of the Company’s Appointment of the Company’s auditor for the year 2004auditor for the year 2004
Speaker – T.V. Rusinova, Chief Accountant of “UTK” PJSC
ANNUAL REPORTANNUAL REPORT7730.06.2004
Agenda item Agenda item №6№6Agenda item Agenda item №6№6
Determination of the rates of deductions Determination of the rates of deductions for calculation of the annual for calculation of the annual remuneration to be paid to the members remuneration to be paid to the members of the Board of Directorsof the Board of Directors
Determination of the rates of deductions Determination of the rates of deductions for calculation of the annual for calculation of the annual remuneration to be paid to the members remuneration to be paid to the members of the Board of Directorsof the Board of Directors
Speaker – S.G. Fefilova, Deputy General Director of “UTK” PJSC
ANNUAL REPORTANNUAL REPORT7830.06.2004
It is proposedIt is proposed to approve the following rates of to approve the following rates of deductions for calculation of the annual remuneration deductions for calculation of the annual remuneration to be paid to the members of the Board of Directors:to be paid to the members of the Board of Directors:
1.1. 00..17% 17% of the Company’s EBITDA for the of the Company’s EBITDA for the reporting year as per the Company’s IAS reporting year as per the Company’s IAS financial accountsfinancial accounts
2.2. 00..23% 23% of the Company’s net profit allocated of the Company’s net profit allocated to dividend payment according to the to dividend payment according to the financial results of the reporting yearfinancial results of the reporting year