> About TATNEFT – Articles of Association of OAO TATNEFT

Articles of Association of OAO TATNEFT Print version

TATNEFT Holding Company - Open Joint Stock Company, named after V.D. Shashin (hereinafter referred to as «The COMPANY») has been established pursuant to the Decree of the President of the Republic of Tatarstan «On transformation of State-Owned Enterprises, Organizations and Associations into Joint Stock Companies» issued on September 26, 1992, No. УП-466, and the Law of the Republic of Tatarstan «On transformation of state-owned and communal property in the Republic of Tatarstan (on withdrawal from state ownership and privatization)».

Article 1. Trade name and location of the company

1.1. Trade name of the Company shall be:

In the Russian language - Открытое Акционерное Общество «Татнефть» имени В.Д.Шашина;
an abbreviated name - OАО «Татнефть» им. В. Д. Шашина;
In the Tatar language – «Татнефть» В.Д.Шашин исемендэге Ачык Акционерлык жэмгыяте;
an abbreviated name - «Татнефть» В.Д.Шашин исемендэге АЖ;
In Latin lettering - OAO TATNEFT (JSC).

1.2. The Company's location (address of the Company's executive office domicile):

Russian Federation, Republic of Tatarstan, Almetyevsk, Lenin Street, 75.
Mailing address: 423450, Russian Federation, Republic of Tatarstan, Almetyevsk, Lenin Street, 75.

1.3. Date of the Company establishment and term of its activity: the Company was established in January 1994 for an indefinite period.

Article 2. Legal status of the company

2.1. The Company shall be a legal person. The Company shall have legal title of ownership for separate property and shall be liable for its obligations within these assets, shall have an independent balance, shall on its own behalf acquire and exercise property and personal non-property rights and bear responsibilities, shall act as a plaintiff and as a defendant before the court.

2.2. The Company shall have a seal bearing its full trade name and location in the Russian and Tatar languages, a duly registered trade mark (i.e. its logo and other visual identification marks), bank accounts in roubles and foreign currency. Official notice bodies of the Company shall be newspapers «Neftyanik Tatarstana» and «Hazine» (further referred to as Official Bodies of the Company).

2.3. The Company's participants (shareholders) are physical and legal persons possessing the Company's shares.

2.4. The Company shall bear its liabilities within the limits of its assets. Shareholders shall not be liable for the obligations of the Company and they shall undertake risks of losses as a result of the Company's activity within the limits of their shares value.

The Company shall not be liable for the asset obligations of its shareholders.

The Company shall be entitled to give any holding participant mandatory instructions, and it shall bear joint responsibility with the holding participant for any transactions made by the participant in pursuance of such instructions.

2.5. The Company is a successor of PO Tatneft, Bugulma Mechanical Plant, Menzelinsk Exploratory Drilling Board, Bavly Drilling Board.

2.6. Legal status of the Company shall be specified in accordance with the Civil Code of the Russian Federation and Federal Law «On Joint Stock Companies» in view of the special provisions of the legal acts of the Republic of Tatarstan regarding privatisation.

2.7. The Company has established its representations in:

Baghdad, the Republic of Iraq.
Moscow, the Russian Federation.
Kiev, Ukraine.

The Company has established its branch in the Great Socialist People’s Libyan Arab Jamahiriya.

Article 3. Objectives and types of the company's activities

3.1. The Company's main objective shall be gaining profit. The areas of the Company's business activity shall be determined by the Company independently. The business activity shall be carried out through property-owning complexes (enterprises), by establishing of branches, representations, as well as establishing of economic societies and partnerships or participation in them.

3.2. Major activities of the Company shall be as follows:

search and exploration, drilling and development of oil and gas fields and bitumen fields, as well as deposits of conventional resources, fresh and mineral subsurface waters, construction of any type of wells, including water wells;
production of oil, gas, bitumen, fresh and mineral waters, other mineral resources, their transportation by various transportation means, their processing and sale;
construction of industrial facilities and social facilities, design works, civil engineering works, start-up and repair works for all types of equipment and engineering communications;
manufacturing of certain machinery, equipment and materials, repair of drilling and oil production equipment;
research works and design works;
consumer goods manufacturing and sales;
trade and commercial activity (including broker and dealer operations), including external economic activity in compliance with the Law in force;
design, construction and operation of local, trunk and international communication lines;
rendering services in the fields of various communication types and data transmissions;
topographic and geophysical and cartographic works, geological and ecological research and ecological protection measures;
manufacturing, sale and check-test of metrological equipment;
non-destructive testing;
training of specialists, special servicing of the facilities accountable to the State Mine Technical Inspection (Gosgortechnadzor) Bodies;
training and attestation of personnel including those accountable to the State Mine Technical Inspection Bodies;
transportation services, maintenance of public roads, bridge facilities, departmental roads, approach roads and industrial sites;
operation and maintenance of river craft and other fleet, water intake and hydraulic facilities;
consulting, leasing, marketing, intermediary and other services including services in the area of external economic activity and financial operations;
growing, stocking, processing, storage and commercial usage of forest and agricultural products, used materials and production wastes;
consumer goods and manufactured goods retail and wholesale operations;
organization of and participation in exhibitions, trade exhibitions, contests, tenders, auctions including hard currency and investment ones; as well as in fairs, conferences, seminars including international ones;
securities operations and issue;
acting as an issuer, investor, financial mediator at the stock market;
advertising, information, consulting, publishing and juridical activities;
export and import of consumer goods and industrial products including components, spare parts and parts to technical equipment; results of research and experimental design developments such as licences and know-how;
barter deals (transactions) with domestic and foreign legal and physical persons inside the country and abroad;
design, construction, manufacturing maintenance and operation of a)oil and gas industrial facilities; b)complex oil treatment units; c)gas industrial facilities; d)lifting mechanisms and safety devices to them; e)boiler plants, steam and hot-water boilers, heat generating units, auxiliary equipment for boiler plants; f)oil and gas equipment and drilling equipment, spare parts to it, tools, mechanical devices for labour-consuming processes; g)high-pressure vessels, oil equipment; h)oil pipelines, gas pipelines, water pipelines, hot water and steam pipelines; i)power lines;
installation, maintenance and operation of electrical equipment, including explosion-proof equipment;
design of trunk pipelines;
repair and maintenance of railway, water, automobile transport means and special vehicles;
construction, reconstruction, repair and maintenance of motor roads and road constructions;
operation of pumps and compressors;
work-over;
mining works for the development of non-metallic mineral resources, mine surveying, geodesic and geological research;
installation, repair and operation of automatic equipment and instrumentation, communication and information-logical equipment, fire-fighting and fire-detecting equipment, alarm system;
operation of refining facilities;
operation and maintenance of petrol stations, oil products supply and sales operations;
technical safety expertise of industrial facilities (units), equipment and operations in oil and gas industry, boiler inspection facilities, lifting mechanisms, gas pipelines and industrial pipelines;
security of restricted information being of state and commercial secret, arrangement and performance of defensive activities concerning preparedness for mobilisation, civil defence, emergency situation in accordance with legislative and legal acts of the Russian Federation and the Republic of Tatarstan;
working out and implementation of advanced technologies, performance of pilot works;
maintenance of municipal housing;
polygraphic activity;
operation of equipment for air separation products;
grain storage and treatment;
sanatorium and health resort, as well as health improvement activity;
medical activity;
pharmaceutical activity;
pre-school and primary school education;
activities for providing sports and health improvements services;
activities for mineral and natural potable water production and bottling;
products certification and testing activities;
laboratory testing;
carrying out of other types of industrial, technical, scientific, commercial and other activities, which are not prohibited by the legislation.

3.3. All types of activities to be licensed under the law in force shall be only carried out on the basis of relevant licenses.

Article 4. Authorized capital. Securities

4.1. The Authorized capital of the Company consists of the nominal value of the Company's shares acquired by the shareholders, and constitutes 2,326,199,200.00 roubles.

4.2. The Authorized Capital of the Company is divided into uncertified registered shares of two types having equal nominal value of 1.00 (one) rouble each:

a) preferred stock in the amount of 147,508,500 (one hundred forty seven million five hundred eight thousand and five hundred) shares. The total issue of shares (per nominal value) is 147,508,500 (one hundred and forty seven million five hundred and eight thousand and five hundred) roubles;

b) ordinary stock in the amount of 2,178,690,700 (two billion one hundred seventy eight million six hundred ninety thousand and seven hundred) shares. The total issue of shares (per nominal value) is 2,178,690,700 (two billion one hundred seventy eight million six hundred ninety thousand and seven hundred) roubles. In accordance with the law in force the Republic of Tatarstan exercises a special right («Golden share») with respect to the Company. The legal status of the special right («Golden share») is determined by the current legislation of the Russian Federation and the Republic of Tatarstan.

4.3. The share of preference stocks in the total volume of the Authorized capital of the Company shall not exceed twenty five (25) percent.

4.4. The Shareholders of the Company shall have preferential rights to acquire additional shares and issued securities, converted into shares in case of placement of the latter through open subscription in number proportional to the shares of this category (type) they possess. In case the payment is made by nonmonetary assets the Company reserves the right to call for independent assessment of property contribution by an internationally acknowledged auditor.

4.5. The Company shall not be liable to buy out the shares possessed by the shareholders, except for the cases stipulated by the law in force. The Company can acquire the shares for further alienation or redemption.

Article 5. Rights and obligations of the shareholders

5.1. The shareholder's title shall be limited by the Company's shares acquired by him. The shareholder of the Company shall not be entitled for any assets of the Company except for the event of liquidation.

5.2. Any shareholder shall be entitled:

to be present at the meetings in person or through his authorized representative with the transfer of his voting rights;
within 30 calendar days period after the end of each fiscal year shareholders (a shareholder) who own no less than 2% of the Company' s voting shares in the aggregate shall have the right to enter their proposals into an agenda of the General Meeting and to offer candidates to the Board of Directors and Auditing Committee of the Company the number of whom should not exceed the composition number for such body stipulated in the Articles;
the shareholders being owners of the voting shares of the Company shall have the right to request redemption by the Company of all or part of their shares in cases envisaged by the law in force;
to participate personally or through a relevant authorized representative in administrating of the Company's activity in compliance with the Articles;
to obtain information about the activities of the Company from the management bodies of the Company, to familiarize themselves with the founding documents and other documents stipulated by the Articles, to obtain confirmation about inclusion of such shareholder into the Register of the Shareholders;
to join together with other shareholders of the Company living or working in the same area in order to work out a decision on the agenda of the General Meeting, including offering and nominating of a representative to the General Meeting with appropriate transfer to him of their votes. In this case an agreement on voting shall be made up the procedure and form of which to be approved by the Board of Directors. Signatures of the agreement participants to be executed in presence of the trustees shall be considered a legal basis for transfer of their votes, and they shall not require any notarisation. The will of the representative shall be confirmed by all the votes at the General Meeting;
other rights of the shareholders, as well as the procedure of execution of their rights shall be defined by the law in force and the legal acts of the Russian Federation and the Republic of Tatarstan.

5.3. Any holder of ordinary stock acquired on general terms shall be entitled to alienate his stock without consent of other shareholders.

5.4. Rights of the preference stock holders:

Preference stock holders shall be entitled to obtain an annual fixed dividend comprising 100% (one hundred percent) of nominal cost of the preference stock, if otherwise is not decided by the General Meeting of the shareholders. The total amount paid as dividend for each preference share shall be determined by the General Meeting of the shareholders. If the amount paid out by the Company against each ordinary share for the given year exceeds the amount to be paid out against each preference share, the amount to be paid against the latter cannot be less than the amount of the dividend paid out against ordinary shares.
Dividends shall be annually paid out to the holders of the preference stock after the annual meeting and additionally as of the date of the dividends payment against the ordinary stock in case the amount to be paid against the preference shares should be increased in accordance with this article.
Holders of the preference stock shall have no right to vote at the shareholders' meetings except for the cases when the adoption of changes or amendments to the Articles implies re-organisation or liquidation of the Company, changing of the amount of fixed dividends for the preference stock or issue of the preference stock the holders of which shall enjoy more extensive rights than the ones set up by the Articles with regard to the preference stock holders. In such cases relevant resolution shall have to be approved by no less than three fourth of the votes of the shareholders possessing voting shares, which take part in the General Meeting, except the votes of the shareholders possessing preference shares, the rights on which are limited; and three fourth of the votes of all shareholders possessing preference shares, the rights on which are limited.

5.5. The Company shall not have any right to pay out dividends against the ordinary stock before paying out dividends against the preference stock.

5.6. Each ordinary share shall give the shareholder, its owner, equal volume of rights when making decisions on relevant issues at the shareholders' meeting, it shall also entitle the shareholder to obtain his dividends; and in the event of the Company liquidation it shall entitle the holder to obtain his share of assets. Each ordinary share shall entitle its holder to one (1) vote at the shareholders' meeting in accordance with the law in force.

5.7. In the event of the Company liquidation the assets remaining after the satisfaction of the clients' claims shall be used for paying out in the following priority:

Firstly, payment against the shares to be bought out in accordance with Article 75 of the Federal Law «On Joint Stock Companies»;
Secondly, coverage for dividends due but not have been paid against the preference shares;
Thirdly, allocation of the property of the liquidated Company among the shareholders possessing ordinary and preference shares.

5.8. The shareholder must:

abide by the requirements of the Articles and other in-house Company's documents;
fulfil his commitments to the Company in good time and in proper volumes;
not disclose any confidential information pertaining to the Company's activity, as defined by the Company's regulations, otherwise a guilty person shall bear responsibility in accordance with the law in force;
pay up the shares following the procedure, volume and methods set up by the law in force and the Articles, as well as relevant resolutions on securities issue;
refrain from any activity, which could be harmful for the Company;
inform the Registrar and/or nominee holder of the Company about all changes in his requisite elements. The Company shall not be held responsible for any delay in paying out dividends due to this reason.

5.9. Calculation and payment of the dividends shall be performed in the order set up by the law in force and the Articles. The dividends shall be paid in a monetary form or in securities. The General Meeting of the shareholders shall make a decision regarding the payment of annual dividends, dividend rate and form of their payment in accordance with the recommendation of the Board of Directors.

Annual dividends shall be paid out to the shareholders and nominee shareholders registered on the date of making up a list of persons entitled to participate in the annual General Meeting of the shareholders within the period up to December 31 of a given year. The Company may open a personal account for each shareholder (nominee holder) with «Zenit» Bank or «Devon-Credit» Bank with further obligatory notification of each shareholder to ensure timely payment out of such dividends.

5.10. There shall be no dividends accrued for the share, which has not been paid up in full.

5.11. A person, who is planning independently or jointly with his affiliated persons to sell more than 5 (five) percent of the stocks of the Company's Authorized capital, which are owned by him and his affiliated persons, shall notify the Company 30 (thirty) days prior to the date of such sale.

5.12. A person, who has acquired independently or jointly with his affiliated person (persons) 30 percent and more of the placed ordinary stocks of the Company, as well as every 5 percent of the placed ordinary stocks over 30 percent of the placed ordinary stocks of the Company, shall within 30 days from the date of such acquirement offer to the shareholders of the Company to sell him their ordinary stocks of the Company and issue securities, convertible to the ordinary stocks, at the market price to be not less than their weighted average price six (6) months prior to the date of such acquirement.

Article 6. Property and funds of the company

6.1. Property of the Company shall comprise floating and fixed assets including the Company's funds, as well as other assets the cost of which is shown in its own balance.

6.2. Following the procedures set up by the Articles the property of the Company may be divided into the property complexes (enterprises) based on technological, territorial or other principles.

6.3. Balance and net profit of the Company shall be fixed in compliance with the procedure stipulated by the law in force. The Company's net profit shall remain at the disposal of the Company and shall be independently allocated by the latter.

6.4. Property management shall be performed in strict compliance with the major objective of the Company.

6.5. The Company shall be entitled to establish an Employee Share Ownership Fund to be formed from the net profit. Annual deductions to the extent of 5% of the net profit are envisaged. The fund assets shall only be used for purchasing of the Company's shares with further distribution among its employees.

6.6. The Company shall establish a Reserve fund at no less than 5% of the Authorised capital. Compulsory annual deductions at the rate of no less than 5% of the net profit are envisaged to reach the stated value. The Reserve fund is designated to cover the Company's losses, to pay off bonds and to buy out the Company's shares in case no other assets are available.

6.7. The Company is entitled to establish other funds and to prescribe the procedure of their usage by relevant decision of the Board of Directors.

6.8. Loan obligations of the Company (including bonds), if otherwise is not provided by the Management Board, shall provide for their early redemption by the Company in case of any change in the shareholding structure of the Company, so that the share of a single shareholder of the Company (jointly with his affiliated persons) shall exceed 50 (fifty) percent of the Authorized capital of the Company.

Article 7. Meeting of the shareholders

7.1. The General Meeting of the shareholders shall be a superior management body of the Company. The Company shall hold the General Meeting of the shareholders once every year no earlier than 2 (two) months and no later than 6 (six) months after the end of a given fiscal year. Besides regular annual meetings extraordinary meetings of the shareholders can be called. The extraordinary meetings can be called by the Board of Directors on their own initiative, as well as at the written request of the Auditing Commission, Company's auditor or the shareholders who possess at least ten (10) percent of the Company's voting shares as of the date of submission of such request.

The request shall include the issues to be put on the agenda of the meeting; the resolution on calling or refusal to call the meeting shall be adopted by the Board of Directors within 5 (five) days and the meeting shall be held within the time period of no more than 40 (forty) days after the date of receiving such request, unless other period of time is envisaged by the Federal Law «On Joint Stock Companies».

Notice about calling the meeting and its agenda shall be published no later than 20 (twenty) days prior to the date of the meeting, and notice about calling the General Meeting of the shareholders, the agenda of which has the issue of the Company reorganization shall be published no later than 30 (thirty) days prior to the date of the meeting in the «Official Body of the Company».

In case envisaged in paragraph 2 of Article 53 of the Federal Law «On Joint Stock Companies» the notice about calling an extraordinary General Meeting of the shareholders shall be made no later than 50 days prior to the date of the meeting.

The notice about calling a General Meeting of the shareholders shall comprise the following:

full trade name of the Company and its location;
form of holding the General Meeting of the shareholders (a meeting or absent(ee) voting);
date, place, time of holding the General Meeting of the shareholders, mailing address, at which filled out voting papers can be sent;
date of making up a list of persons entitled to participate in the General Meeting;
agenda of the General Meeting of the shareholders;
the order of familiarization with the information (materials) to be submitted when getting prepared for the General Meeting of the shareholders, and the address, at which this information can be found;

The agenda shall not be changed after publishing of the notice of the meeting.

7.2. Except the cases envisaged by the law in force and the Articles quorum for holding the meeting of the shareholders shall be ensured either by personal presence or through authorized representatives of the shareholders possessing over 50% of the placed voting shares of the Company. In case the quorum is absent a new date of the meeting of the shareholders shall be appointed provided the shareholders or their authorized representatives possessing no less than 30% (thirty percent) of the placed voting shares have been registered for participation in the meeting. A notice about calling of a new meeting shall be published at least 20 (twenty) days prior to its date.

Any shareholder can personally attend the meeting or be represented by his proxy holders. Any proxy holder shall have a proxy granted by the shareholder in accordance with the procedure set up by the law in force and the Articles.

The shareholder shall not have to present his stock to participate in the meeting. Any shareholder may insist on inclusion of his special opinion into the minutes of the meeting. The minutes shall be drawn by the Secretary of the meeting who is at the same time the Secretary of the Board of Directors. When formulating the meeting's resolutions it is necessary to point out the majority that has adopted the resolution, as well as special opinions. The authenticity of the minutes shall be certified by signatures of the Chairman and the Secretary of the meeting. Minutes of the meetings, voting bulletins and proxies (copies of proxies) shall be kept in the Company's filling department, and copies of the minutes shall be kept with the Secretary of the Board of Directors. At the request of a shareholder the latter shall obtain copies of the minutes of the meeting certified by the Secretary with all annexes, as well as copies of special opinions.

The meeting of the shareholders shall be opened by the Chairman of the Company's Board of Directors or by a person authorized by the Board of Directors. Any shareholder or his authorized representative present at the meeting can be elected to act as the Chairman of the meeting. The meeting shall be presided by its Chairman in accordance with the procedures worked out by the meeting. Preparation for the work of the meeting is performed by the body, which initiated to call the meeting.

7.3. The following issues shall be within the sole competence of the General Meeting of the shareholders pursuant to the law in force and the Articles:

introduction of revisions and amendments into the Articles or adoption of a new version of the Articles of the Association (including amendments to the Articles regarding increase of the Authorized capital transferred to the sole competence of the Company' s Board of Directors in case the Board of Directors fails to unanimously adopt the submitted amendments);
reorganisation of the Company;
liquidation of the Company, appointment of a Liquidation Commission and approval of intermediate and final liquidation balances;
determination of a composition number of the Board of Directors of the Company, election of its members and early termination of their powers;
definition of the number, nominal value, category (type) of declared shares and the rights represented by these shares;
increase of the Authorized capital of the Company by means of increase of the nominal value of shares or by allocation of additional shares, if relevant decision is not unanimously adopted by the Board of Directors, to the extent of the declared shares;
decrease of the Authorized Capital of the Company by means of decrease of the nominal value of shares, as well as by redemption of the shares acquired or bought-out by the Company;
election of members of the Auditing Committee of the Company and early termination of their powers;
approval of the Company's auditor;
approval of the Company's annual reports, accounting reports, including reports on profits and losses, as well as the distribution of profits (including dividend payment (announcement), except for the profits distributed as dividends by the results of the first quarter, half year, nine months of the fiscal year) and losses of the Company by the results of the fiscal year;
dividend payment (announcement) by the results of the first half year, nine months of the fiscal year;
acquisition of placed shares by the Company in cases envisaged by the Federal Law «On Joint Stock Companies»
determination of the procedure of holding the General Meeting of the shareholders;
making a decision about participation in holding companies, finance and industrial groups, associations and other amalgamations of commercial organizations;
approval of in-house documents regulating the activity of the Company's bodies;
splitting and consolidation of shares;
making a decision about approval of transactions in cases envisaged in Article 83 of the Federal Law «On Joint Stock Companies»;
making a decision about approval of big transactions in cases envisaged in Article 79 of the Federal Law «On Joint Stock Companies»;
making a decision on other issues stipulated by the law in force.

Resolutions on these issues shall be taken through bulletin voting in order set up by the law in force and the Articles.

Article 8. Board of directors

8.1. The Board of Directors shall perform general management of the Company's activity and take decision on all issues of its activity, except those, which are referred by the law in force to the sole competence of the General Meeting of the shareholders.

Members of the Board of Directors shall be elected for the period up to the next annual General Meeting of the shareholders and can be re-elected infinitely.

Early termination of the powers of the members of the Board of Directors shall be only done by a relevant decision of the General Meeting of the shareholders. In case the Board of Directors has not been elected within the time period set up by the law in force, the powers of the existing Board of Directors shall be ceased, except for the powers connected with the preparation, convention and holding of an annual General Meeting of the shareholders.

8.2. The Board of Directors shall consist of 15 persons. Only a natural person can be a member of the Board of Directors.

Members of the Board of Directors shall be elected and their powers shall be terminated by the General Meeting of the shareholders following the procedure set up by the law in force and the Articles.

8.3. The major task of the Board of Directors shall be to work out the Company's development policy aimed at increasing of the Company's profit and ensuring of its stable financial and economic status.

8.4. The Board of Directors shall have the following sole competence:

Determination of the first priority directions of the Company's activity;
Convention of an annual General Meeting and an extraordinary General Meeting of the shareholders, except those cases, stipulated in paragraph 8 of Article 55 of the Federal Law «On Joint Stock Companies»;
Approval of the agenda of the General Meeting of the shareholders;
Determination of the date of making up a list of persons, entitled to participate in the General Meeting of the shareholders, and other issues referred to the competence of the Board of Directors and connected with preparation and holding of the General Meeting of the shareholders;
Increase of the Authorized Capital of the Company by allocation of additional shares, within the limits of the quantity and the category (type) of the declared shares;
Allocation of bonds and other issued securities by the Company in cases stipulated by the Federal Law «On Joint Stock Companies»;
Determination of the value (pecuniary valuation) of the property, value of allocation and redemption of issued securities in cases stipulated by the Federal Law «On Joint Stock Companies»;
Acquisition of allocated by the Company shares, bonds and other securities in the cases stipulated by the Federal Law «On Joint Stock Companies»;
Formation of executive bodies of the Company and early termination of their powers;
Recommendations on the amount of fees and compensations to be paid to the members of the Auditing Committee of the Company and determination of the remuneration of the auditor;
Recommendations on the amount of dividends against shares and the procedure of their payment;
Use of the Reserve Fund and other funds of the Company;
Establishment of branches and representation offices of the Company;
Approval of transactions in cases stipulated in Chapter XI of the Federal Law «On Joint Stock Companies»;
Approval of a Registrar of the Company and terms and conditions of an agreement with him, as well as cancellation of the agreement;
Making a decision about introduction of amendments and supplements into the Articles of the Company based on the results of shares allocation by the Company, including the amendments, connected with the increase of the Authorized Capital of the Company by placing of additional stocks, and any decision being a basis for allocation of shares and issued securities, converted into shares and a registered report about the results of shares issue;
Determination of the procedure of submitting all accounts, reports, applications, calculation system of profit and loss, including regulations pertaining to depreciation of property;
Appointment and release of the Secretary of the Board of Directors and definition of his functional duties;
Approval of other in-house documents of the Company, apart from those provided in item 8.4 of the Articles, regulating the issues referred to the competence of the Board of Directors of the Company, except the in-house documents, approval of which is referred by the Articles of the Company to the competence of the General Meeting of the shareholders and executive bodies of the Company;
Forming of the committees of the Board of Directors and approval of the relevant regulations of the committees;
Adoption of the Code of Corporate Management and introduction of amendments into this Code;
Approval of the evaluation criteria of work of the members of the Board of Directors and of the members of the Management Board, as well as determination of their remuneration;
Approval of the estimated charges for the Board of Directors;
Other issues, which are not referred to the competence of the General Meeting of the shareholders and executive bodies of the Company.

8.5. Board of Directors meetings shall be held as required and, as a rule, at least once a month. The first organizational meeting of the Board of Directors, at which the members of the Board of Directors elect the Chairman of the Board of Directors, shall take place on the day of holding of an annual General Meeting of the shareholders. One of the Board meetings (an annual meeting) shall be held not later than one (1) month prior to the annual meeting to consider the Company's annual report.

The meetings of the Board of Directors shall be called by its Chairman on his own initiative, at the request of the General Director, Management Board or any member of the Board of Directors, Auditing Committee or an Auditor.

8.6. A written notice about the Board of Directors meeting (except the first organizational meeting) shall be sent to each member of the Board following the procedure set up by the Board of Directors. Such notice shall include an agenda of the meeting. All necessary documents concerning the agenda shall be attached to the notice. If required, any Board of Directors meeting may be postponed with consent of all the Board members present.

8.7. The Board of Directors meeting shall be deemed competent if at least a half (1/2) of the Board members takes part in it.

All decisions of the Board of Directors are taken by simple majority of the votes of the members of the Board of Directors participating in the meeting, if otherwise not provided by the law in force and by the Articles of the Company. In case the votes break equal the Chairman's vote shall be decisive.

8.8. Issues proposed for consideration by the shareholders possessing at least 5% (five per cent) of the ordinary stock in the aggregate, members of the Board of Directors, Auditing Committee, the Auditor, as well as the General Director and the Management Board shall be included into the agenda without fail.

8.9. Minutes of all meetings of the Board of Directors shall be maintained following the procedure set up by the Board. The minutes of the Board of Directors meetings shall be accessible for any shareholder, Board of Directors member or his representative at the legal address of the Company. The presiding person of the meeting of the Board of Directors and the Secretary of the Board of Directors shall sign all the minutes.

8.10. Re-election of the Board of Directors shall be held, if:

the term of the powers of the Board of Directors has run out;
early termination of the powers of the Board of Directors has taken place;
less than one half (1/2) of the total number of the members of the Board of Directors, determined by the Articles of Association, is left.

8.11. If less than one half (1/2) of the total number of the members of the Board of Directors of the Company, determined by this Articles of Association, is left, an extraordinary General Meeting of the shareholders shall be called for election of a new Board of Directors.

8.12. Powers of a member of the Board of Directors are determined within the frame of the law in force and the Articles.

8.13. Resolutions of the Board of Directors may be taken by absentee voting (by poll).

8.14. The Board of Directors shall establish committees for the primary consideration of the most important issues, which refer to the competence of the Board of Directors.

Standing and interim (for the solution of certain issues) committees shall be established in the Company.

The committees shall work on the basis of the regulations approved by the Board of Directors. Personal staffs are formed by the Board of Directors.

Article 9. Executive bodies of the company

9.1. Current activity of the Company shall be managed by the General Director and the Management Board (a collective executive board of the Company). They shall report to the Board of Directors and the General Meeting of the shareholders. The General Director and the members of the Management Board shall perform their activity in compliance with the law in force and the Articles and the agreement concluded by each of them with the Company.

The General Director shall be a Chairman of the Management Board.

9.2. The General Director shall be appointed following the procedure set up by the law in force and the Articles for a period of five (5) years. Early recall of the General Director shall be made based on the grounds stipulated in the prevailing labour legislation. In this case the resolution of the Board of Directors of the Company shall be taken by majority of two third of the votes of the members of the Board of Directors; the votes of the retired members of the Board of Directors shall not be taken into consideration.

9.3. In accordance with the legislation of the Russian Federation the General Director is fully authorized to perform management tasks of the Company's activity.
The General Director is entitled to act without any proxy on behalf of the Company within the limits of his competence defined by the Articles and the prevailing legislation.

9.4. The following powers are within the competence of the General Director:

ensure realization of the resolutions of the General Meeting of the shareholders and the Board of Directors of the Company;
dispose of the property of the Company to the extent, stipulated in the Articles of Association and the law in force;
submit candidatures for members of the Management Board to the Board of Directors;
approve in-house documents of the Company, except in-house documents, approval of which is referred by the Articles of the Company to the competence of the General Meeting of the shareholders, the Board of Directors and the Management Board;
distribute the duties among the members of the Management Board;
arrange the work of the Management Board, preside at the meetings of the Management Board, ensure taking of minutes at the meetings of the Management Board;
sign all the documents, approved by the Management Board;
determine the organizational structure of the Company, approve a list of members of staff of the Company, branches and representation offices, approve official salaries;
approve duty regulations;
hire and dismiss employees, as well as nominate and dismiss his deputies, chief accountant, heads of subdivisions, branches and representation offices;
propose to the Board of Directors candidates for the First Deputies of the General Director;
conclude labour contracts with the employees of the Company;
determine the amount of remuneration and compensation for the members of the Management Board;
encourage the employees of the Company and impose penalties on them;
ensure establishment of favourable and safe conditions of labour for the employees of the Company;
ensure development, conclusion and realization of the collective agreement;
open settlement, currency and other accounts of the Company with banks; on behalf of the Company conclude agreements and close different transactions;
ensure fulfilment of obligations of the Company relative to the budget and counteragents on economic agreements;
take a decision about making claims and pretensions on behalf of the Company against natural and legal persons and satisfaction of any claims, made against the Company;
organize business accounting and reporting;
manage preparation and submission of a draft annual report to the Board of Directors;
jointly with the Management Board ensure preparation and holding of General Meetings of the shareholders;
control rational and economic use of material, labour and financial resources;
within its competence ensure law observance in the activity of the Company;
take a decision on issues concerning the competence of an affiliate's participant;
solve other problems of the current activity of the Company.

9.5. The Management Board is a collective executive body of the Company; it shall act on the basis of the Articles of the Association and provisions for the Management Board. The Management Board shall ensure realization of the resolutions of the meetings of the shareholders and the Board of Directors.

9.6. Members of the Management Board are appointed (elected) by the Board of Directors of the Company upon submission by the General Director (Chairman of the Management Board) following the procedure stipulated by the Law in force and the Articles. Early recall of the members of the Management Board shall be made similarly to the procedure used for appointment.

9.7. The Management Board under the leadership of the General Director (Chairman of the Management Board) shall ensure solution of the following issues:

participation in working out of the program of the Company's activity, perspective and current plans of the Company' s activity, as well as in preparation of reports regarding realization of such plans;
participation of the Company in commercial and non-commercial organizations;
implementation of the Company's financial and investment program within the powers obtained from the Board of Directors;
attraction of additional allocations from its subsidiaries to finance its goal-oriented industrial, research, social and nature conservancy programs;
disposal of shares and other securities of the Company;
determination of the procedure for access to the information kept in the Register of the Company's shareholders;
submission of proposals about the procedure of profit-and-loss distribution to the Board of Directors;
determination of internal and external price policy of the Company;
mutual co-ordination of production programs (if necessary, with outside enterprises) and balance sheets of subsidiaries and dependent entities;
approval of in-house documents of the Company on the issues that refer to the competence of the Management Board, and other documents submitted by the General Director;
preparation and submission of annual operation plans of the Company, annual balance sheets, profit-and-loss accounts and other documents of accountability to the Board of Directors;
regular submission to the Board of Directors of the information about the financial status of the Company, realization of first priority programs, transactions and decisions that may considerably effect the status of the Company;
submission of the required information to the Auditing Committee and Auditor of the Company;
organizational and technical arrangements for the operation of the General Meeting of the shareholders, Board of Directors, Auditing Committee;
analysis as well as summing up the work of individual services and divisions and also improvement of their structural organization.

The Management Board can also solve other issues that do not fall within the competence of the General Meeting of the shareholders, Board of Directors and General Director of the Company.

9.8. The Meeting of the Management Board shall be called by the General Director of the Company, as required.

9.9. Managers and main specialists of the executive staff and structural subdivisions of the Company shall be appointed for their positions on the competitive basis. The list of positions and procedure of competitive selection are defined by the Provision, approved by the Board of Directors.

Article 10. Register of the shareholders

10.1. The Company authorizes a Registrar (Register holder) to file and keep the Register of its shareholders. The Register shall include information about every registered person, number and category (type) of shares, recorded on the name of every registered person and other information stipulated by the legal acts.

10.2. A person included into the shareholders' Register is obliged to timely inform the Company about changes in his personal information, otherwise the Company and the Register holder shall not be liable for any losses caused with this regard.

10.3. The Company shall not be released from the liability for filing and keeping the Register of its shareholders.

A shareholder upon his request shall be given an extract from the Register of the shareholders certifying his inclusion into the Register of the shareholders.

Article 11. Accounting and reporting in the company. Proxyship.

11.1. Balance sheet and profit and loss account of the Company shall be drawn up in roubles.

11.2. The Company's fiscal years shall correspond to the calendar ones.

11.3. Balance sheet, profit and loss account, as well as other financial documents for reporting shall be drawn up in compliance with the law in force.

11.4. Major part of the basic documentation shall be formed and kept at the location of the Company's executive body including:

Company's foundation documents, as well as normative documents regulating relations inside the Company with subsequent changes and amendments;
accounting documents required for internal audits in the Company, as well as for audits by appropriate governmental bodies in compliance with the law in force;
minutes of the shareholders', Board of Directors and Auditing Committee meetings;
list of the Board of Directors and Auditing Committee members, as well as Deputies and Assistants of the General Director;
other documents, stipulated in Article 89 of the Federal Law «On Joint Stock Companies». The above-mentioned documents shall be available for the shareholders and their authorized representatives at any time during the working day. Shareholders and their representatives shall have the right to make copies of the above documents except for those containing commercial secrets.

The above-mentioned documents shall be available for the shareholders and their authorised representatives at any time during the working day. Shareholders and their representatives shall have the right to make copies of the above documents except for those containing commercial secrets.

11.5. After each General Meeting of the shareholders the Company shall publish its annual report, annual accounting statement in the local Official Body (publisher) of the Company.

11.6. Powers of attorney granted on behalf of the Company shall be signed by the General Director or his Deputies. Powers of attorney granted for obtaining materials and supplies inventories from legal and physical persons shall be also signed by the Company's branch, structural subdivisions or representation offices managers.

Article 12. Auditing committee

12.1. The Auditing Committee shall be a control authority of the Company. It shall check financial and economic activity of the Company and shall be accountable to the Company's General Meeting of the shareholders.

12.2. The Commission is elected in the number of nine persons. The Auditing Committee members cannot simultaneously be members of the Board of Directors of the Company; neither can they hold posts in the management bodies of the Company. The Commission members shall elect a Chairman to organize its efficient work. The Commission meetings shall be recorded in minutes of such meetings.

12.3. The Auditing Commission shall take decisions at the meetings by majority of its members' votes. The Auditing Committee members shall be responsible for diligent fulfilment of their duties; they shall have no independent powers and shall not influence the Company's activity in any way other then through resolutions of the Auditing Committee.

12.4. The following issues are referred to the competence of the Auditing Committee:

inspection of documents (total or spot check) on financial and economic activity of the Company based on annual results, as well as at any time upon the decision of the General Meeting of the shareholders, Board of Directors, on its own initiative or at the request of a shareholder(s), possessing in aggregate at least 10% (ten percent) of the voting shares of the Company;
check of realization of established estimates and norms;
check of timely and correct calculation and payment of dividends;
check of timely and correct payments into the budget;
check of the observance by the Company and its Management bodies of the legislative acts and instructions, as well as realization of the resolutions of the shareholders' meeting;
check of organization and authenticity of the records management, accounting, statistical recording and accountability;
check of the competence of the resolutions taken by the Board of Directors, Management Board or General Director within their competent authority stipulated in the Articles and their compliance with the prevailing law and resolutions, made at the shareholders' meeting;
analysis of the resolutions of the shareholders' meeting; introduction of proposals to change them if they do not comply with the documents having first priority legal force;
check of the cash and property status of the Company;
working out of the recommendations for the management bodies of the Company;
preparation of its opinion on the above-mentioned check, including the annual report of the Company;
check of the observance of the prevailing law when keeping the register of the Company by the special Registrar.

12.5. The Auditing Committee shall submit a Report on the Results of the Annual Audit in compliance with the rules and regulations of financial accounting and bookkeeping to the Board of Directors no later than forty (40) days before the annual meeting. For such purpose the Commission is entitled to do the following:

to request from the Company's officials all the documents required to fulfil its work;
to request personal explanation from the Company's officials on the issues the Commission is interested in;
demand the convention of a meeting of the Board of Directors and/or shareholders' Meeting in cases when the discovered breaches or other factors pose a threat to the Company's interests and require making an adequate decision on the issues referred to the competence of the given bodies;
attract to its work the specialists that have no established posts in the Company; demand from the executive body of the Company to pay all necessary expenses, connected with auditing and checks within the limit of the appropriate estimates.

12.6. Unscheduled audits shall be performed at the written demand of the shareholders who possess at least 10% (ten percent) of the Company's ordinary stock, at the resolution of the shareholders' meeting or the Board of Directors. In such case the auditing reports shall be submitted to the Board of Directors within one (1) month at the latest after completion of the audit.

Article 13. Liquidation and reorganization of the company

13.1. The Company can be liquidated in the following situations:

at the resolution of the General Meeting of the shareholders;
at the decision of the Court ruling in compliance with the law in force.

13.2. When the Company is liquidated (except for liquidation as a result of the Court decision) the General Meeting shall establish a Liquidation Commission and shall define the procedure and time for liquidation which can not be less than two months and more than three months after announcement of such liquidation.

13.3. The Liquidation Commission shall perform liquidation of the Company. Starting from the moment of its setting up the Liquidation Commission shall take over and perform all managerial functions in the Company. From this moment the Commission shall be the sole authorised representative of the Company with regard to all aspects of the Company's activity. After setting up the Commission shall take the following steps: it shall place the information about the Company liquidation, as well as the procedure and timing for submission of any claims of its creditors in the local official Company's publisher. The Commission shall provide for the first official publication not later than one (1) week after its setting up and repeat such publication not earlier than in fourteen (14) days and not later than in forty (40) days. The Liquidation Commission shall arrange for collection of receivables of the Company and investigation of claims of its creditors and shall notify the creditors about the Company's liquidation in a written form.

Upon completion of the time period for making claims by the creditors the Liquidation Commission shall make an intermediary liquidation balance sheet and submit it for approval of the Shareholders' Meeting after co-ordination with the body which has executed state registration of the Company.

If the Company does not have any liabilities to its creditors at the moment of taking a decision on the liquidation, its property shall be distributed among its shareholders in accordance with the Articles and the law in force.

13.4. If available financial resources of the Company are not sufficient to meet the claims of the creditors the Company's property shall be sold by the Liquidation Commission at the open auction following the procedure set up by the law in force. Upon completion of settlements with the creditors the remaining assets shall be distributed among the shareholders following the procedure set up by the law in force and the Articles.

13.5. If the Company's assets are not sufficient to meet all the commitments to the creditors, then the Company's assets shall be distributed among them following the priority outlined by the law in force.

Upon completion of all settlements with the creditors the Liquidation Commission shall draw up a liquidation balance sheet to be approved by the Shareholders' Meeting after co-ordination with the body, which has executed state registration of the Company.

13.6. The Company shall be deemed liquidated from the moment of entering an appropriate record into the Uniform State Register of Legal Persons.

13.7. Re-organization and liquidation conditions and procedure that are not covered by the Articles shall be regulated by the law in force.

Article 14. Counting board

14.1. The functions of the Counting Board shall be performed by the Registrar

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