OREANDA-NEWS. July 01, 2010. Southern Telecommunications Company (UTK) [(RTS: KUBN, KUBNP; МICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the largest fixed-line telecommunications operator in the territory of the Southern and North-Caucasian federal districts of Russia, announces that the annual general shareholders meeting of UTK was held in the company’s headquarters in the city of Krasnodar.

The company’s shareholders passed a resolution on the reorganization of the Company in the form of a merger with Rostelecom.  The annual general shareholders meeting of UTK is another important step on the road to the merger of the Svyazinvest Group of companies.

This meeting is one of the AGMs scheduled to be held in June 2010 for regional telecommunications operators and Rostelecom, at which the major issue on the agenda is the merger between RTOs and Rostelecom.

Once the reorganization of the Svyazinvest Group of companies is wrapped up, instead of eight operators which provide basic telecom services to households, state agencies and corporate clients only within the limits of their license coverage, a single universal telecom operator will be formed that will be capable of providing the full range of advanced telecommunications services on a nationwide scale.  This range includes traditional services – local, DLD and ILD telephony – and value-added services, with a focus on datacom, wireless communication and broadband Internet access.

All in all, 79.94% of those holding voting shares (common and preferred shares) took part in the reorganization issue. Also, 98.61% of the total number of shareholders voted for the merger.

On other issues up for discussion on the agenda, resolutions were passed by shareholders having a total of more than 83% of the voting (common) shares.

The annual general shareholders meeting approved the annual financial statement, the annual accounting reports, including the income statement (profit and loss statement) of the Company, the allocation of profit (including the dividend payout) and the Company’s losses on the results of the 2009 reporting year.  According to the relevant resolution, UTK will allocate RUR 461,400,593, including:

- RUR 0.18985 per one class A preferred share;

- RUR 0.09351 per one common share;

- RUR 1,384,257,383.30 to increase the company’s shareholder capital.

The new lineup of the Company’s Board of Directors was elected, including the following members:

1. Denis N. Afanasyev;

2. Mikhail V. Batmanov;

3. Valentina F. Veremyaniva;

4. Mikhail I. Kritsky;

5. Alexander E. Krupnov;

6. Denis V. Kulikov;

7. Mikhail A. Leshchenko;

8. Alexey A. Lokotkov;

9. Elena V. Umnova;

10. Alexander V. Shevchuk;

11. Evgeny V. Yurchenko.

The 5-member Audit Committee was elected with the following members:

1. Yulia A. Klyus;

2. Olga G. Koroleva;

3. Denis A. Obmoin;

4. Alla S. Ultiina;

5. Dmitry A. Shorokhov.

The shareholders meeting approved the new version of the Company Charter and the Statute on the Board of Directors of UTK.

KPMG was approved as the Company’s external auditor for 2010.

In addition, the deduction standards (percentages) were approved for calculating annual remuneration of members of the Board of Directors of UTK, which were elected at the annual general shareholders meeting.  These deductions amount to 0.26% of the Company’s EBITDA based on 2010 IFRS accounting report data and 0.78% of the Company’s net profit which is to be allocated for dividend payout in full-year 2010.

The shareholders meeting also adopted a decision on paying out bonuses to members of the Board of Directors of UTK for strong financial performance in 2009, setting the size and procedure for the bonuses.

All materials related to the annual general shareholders meeting of UTK held on June 16, 2010 can be viewed on the Company’s corporate website in the section entitled “Investors and shareholders” (in Russian).

Evgeny Yurchenko was elected as chairman of the Board of Directors and Alexey Lokotkov as deputy chairman at the end of the first meeting of the Board of Directors.