Protecting Investors Righs and Interests Protecting Investors Righs and Interests

Improving Investment Climate in RussiaImproving Investment Climate in Russia

Investor Protection AssociationIPA

IPAIPA – 10 years of protecting investors – 10 years of protecting investors rights and interests in Russiarights and interests in Russia

EstablishedIn 2000, Moscow. Founding members: NAUFOR, domestic institutional investors, industrial enterprises

IPA members25 major international and domestic investment funds working in Russia. Total A.U.M. exceed $20bn.

The main purposeTo unite efforts of investors to protect their rights and improve corporate governance in Russia

Reports to

The Council of the Association

IPA Board of Directors

Chairman of the IPA BoD: Alexander Branis, Prosperity CM

Vice Chairman: Aivaras Abromavicius, Partner, East Capital

Member/participant of:

Moscow International Financial Center, Project Group “Corporate law and governance, taxation of financial operations”

Expert groups of the FFMS and the Ministry for Economic Development, the National Council for Corporate Governance

Cooperation with ISS (an MSCI Brand)

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IPA – improvement of legislation and corporate governance practice in Russia

A united vote of investors with regard to reforming corporate and financial markets legislation; - interacting with state authorities in respect of improvement of the legislation;

Uniting efforts of investors for implementing higher standards and ensuring compliance with best corporate governance practice in Russian companies in order to protect rights of investors

- representing interests (i.a. within the framework of a consolidated position) of shareholders at general shareholders meetings, Boards of Directors and committees, efficient interaction with majority shareholders and many other activities;

Alerting the public about violations and problems in terms of protection of investors and shareholders rights

- active work with Russian and international mass media, information exchange between the IPA members;

Facilitation in coflicts resolution, including support in court hearings; - representing interests of shareholders/investors in conflict situations on behalf of a separate investor, as well as on behalf of

the general investment community represented in the IPA.

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IPAIPA – a source of important up-to-date – a source of important up-to-date informationinformation

Active participation in corporate governance in Russia at the level of the Association’s Board of Directors and Committee for corporate conflicts

Online interaction with IPA independent directors and conference calls for IPA members

Voting recommendations to GSM on the essential issues (restructuring/major transactions/interested-party transactions)

Corporate news, forums, comments, announcements and various information on the IPA website

Hotline on dividends related issues: please contact us in case of any queries regarding dividends: corporate regulations, size and delinquent disbursement

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“Top 100” database

– Assess/manage your investment risks with the IPA: track record and rankings by degree of their investment risk on 100 major companies

Draft laws and regulatory acts on the IPA website

– Be proactive, participate in shaping the market environment, discuss online proposed amendments to the legislation

Corporate governance alerts from IPA experts

– Get updates on the most important issues of concern for minority shareholders

IPA activitiesIPA activities:: supporting IPA members in a supporting IPA members in a wide range of issueswide range of issues

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• IPA supports its members interested in active approach to investment management in Russia in all issues regarding corporate governance and protection of investors rights and their investments

• IPA has resources and capabilities for comprehensive coverage of respective issues and adequate support to investors / shareholders

This may be of especial interest to international funds with no subsidiaries or full-scale

operating representative offices in Russia.

IPA supports interests of investors at the level of General Shareholders Meetings of Russian issuers

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IPA supports investors in exercising their rights and securing their legitimate interests at General Shareholders’ Meetings:

• monitoring of corporate events (dates of AGSM/EGSM, record dates), ensuring that shareholders duly receive all the required information pursuant to the existing legislation;

• professional advice on proposed decisions / related documents - giving voting recommendations to shareholders;

• voting at a GSM according to the instructions of an investor / assistance with custodies regarding excerising shareholders rights;

• consolidation of minority shareholders’ votes on the most important issues, e.g., on proposed M&A, large and/оr affiliated transactions, amendments to the Corporate Charter affecting rights of shareholders etc.

• public speeches and interaction with the mass media on behalf of the Association on all issues affecting rights and interests of shareholders.

IPA supports interests of investors on the Board of Directors / BoD Committees within the framework of the program “Independent director”

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• Consolidation of minority shareholders votes for election of independent directors - For over 10 years the Association has run independent directors to Boards of Directors of Russian

companies * Candidacy of an IPA independent director is approved of by the IPA Board of Directors after

ppresentation by IPA members; the IPA independent director is not in any way affiliated either with the management, or ith majority shareholders and acts solely in interests of all shareholders, being compliant with international independency standards.

** IPA candidates obtain positive recommendations by the ISS and international rating agencies.

• Basic tasks of an independent director include:- Control and monitoring of corporate decisions affecting interests and rights of minority shareholders - Increase of the company’s transparency for minority shareholders- Facilitating implementation and compliance with the best corporate governance practices in the company- Taking part in drafting and implementation of the development strategy of the company

• Representation of investors interests in BoDs committees / BoDs coordination councils - the IPA directly participates in establishment and operation of advisory bodies at Boards of Directors in case

essential corporate decisions are to be taken, which could affect interests of all shareholders (positive experience: restructuring of OJSC «RAO UES of Russia», establishing united OJSC «Rostelecom»)

Representation of interests of IPA members/investors in conflicts

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IPA supports its members in securing their rights and legitimate interests in conflict situations:

• Extrajudicial dispute resolution

• Organisation of coordinated PR-actions on behalf of the Association

• GR / support in interaction with regulating authorities

• Expert support in drafting lawsuits and administrative appeals, representation of interests in the process of court trial / administrative proceedings

IPA is an umbrella for IPA is an umbrella for coordinatedcoordinated actions of actions of investors in corporate actions and disputesinvestors in corporate actions and disputes

Representing interests of portfolio investors in the process of restructurings:- Establishment of the united OJSC «Rostelecom»/merger of the regional telecom companies;- Merger of OGK-2/OGK-6, establishment of the largest generating company in Russia (among OGK);- Merger of Uralkaly / Silvinit

Participation in corporate conflicts- Infringement on rights of shareholders in connection with appraisal of shares of OJSC «Silvinit» for purposes of merger with OJSC «Uralkaly»;- Violation of minority shareholders rights in OJSC «GMK Norilsky Nickel»;- Violation of rights of minority shareholders in OSAO «Ingosstrakh».

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The latest notorious corporate events in which the Association was engaged

Participation of IPA members in management and policy-making process of the IPA

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Active IPA members can delegate their representatives to IPA management bodies:

• The Council of the Association (IPA members) annualy elects members of the IPA Board of Directors (the Board of Directors is comprised of 12 members)

• Any member of the Association could take part in operation of the Committee for corporate conflicts at the IPA BoDs

IPA BoDs and its Committees:• Shape position of the Association, including public position, on the most

important and essential issues in respect of protection of investors rights and interests, i.a. in conflict situations, in law-making process, in case of violation of shareholders rights, etc.;

• Approve of candidates to the BoDs of Russian companies; • Adopt the IPA’s budget and management reports; • Determine the candidacy of the IPA executive director; • Take other key corporate decisions.

The main advantages of membership The main advantages of membership in the IPAin the IPA

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•Joined efforts of the IPA members in respect of protection of their rights and legitimate interests

•Annual expenses of a member on active corporate governance within the standard service package are USD 10,000

•Possibility of maintaining confidentiality at investor’s discretion in most cases in the process of corporate governance / PR actions etc. IPA employees represent interests of the IPA and its members in general without disclosing specific investor(s)

•Pursuant to the law on insider information, corporate legislation, as well as corporate governance standards IPA employees / ID are not regarded as affiliated persons of investment funds, since all active corporate governance processes in the IPA are duly regulated

•To become an IPA member and take part in its activities a representative office in Russia is not required

Join your efforts with other Join your efforts with other investorsinvestors

This will allow you: To influence corporate decisions and improve corporate practices in joint

stock companies

To manage your corporate governance related investment risks connected

To ensure protection of your shareholder rights

To weather corporate reorganizations and preserve control over your assets

To contribute to improvement of the legislation and regulatory framework

To be efficient in corporate dispute and conflict resolution

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How to find usHow to find us::Denis Kulikov IPA, Executive directorTel: +7 (495) 510 5306Email: kulikov@corp-gov.ru

Alexander ShevchukIPA, Deputy DirectorTel: +7 (495) 510 5306Email: shevchuk@corp-gov.ru

IPA Members: Deutsche Bank AG, Dart Management, East Capital

Asset Management, Equinox, Hermitage Capital Management, NCH Advisors, Prosperity Capital Management, Renaissance Brokers, SUN Capital Partners, Templeton Asset Management, Vostok Nafta Investment Ltd., Alfa Bank, Aton, VFP, MC UralSib, Industrial Investors, KIT Finance, , Leader , United Heavy Machinery, Philip Morris marketing and Sales, Kazimir Partners, PPF BETA  Ltd.,  IC RUSS-INVEST, EOS Russia, Fleming Family & Partners.

Our address:IPA Executive office127473, Moscow, 1st Schemilovskii per., 17, office 11

Membership and general enquiries:Tel: +7 (495) 510 5306Email: inf@corp-gov.ru

IPA hot-line:Seek advice or report abuse of your shareholder rightsTel: +7 (495) 510 5306Email: shevchuk@corp-gov.ru

Our website:www.corp-gov.ru (Rus)www.corp-gov.org (Eng)

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