Remuneration of members of the Board of Directors & the Management Board & Vice-presidents

The contractual salaries of the members of the Management Board and Vice-presidents of the Company consist of a fixed amount payable on a monthly basis, as well as quarterly and yearly performance bonuses. For the years ended December 31, 2011 and 2012, members of the Management Board and Vice-presidents were entitled to remuneration and compensation in an aggregate amount of approximately RUB  240 million and approximately RUB 372 million, respectively.

The Directors receive compensation for service as directors in accordance with the Regulation on the Board of Directors approved by the general shareholders meeting on June 14, 2012. According to this regulation, the Directors receive quarterly and annual compensation. Quarterly compensation for each Director is equal to RUB 1.5 million and can be decreased by 10% (in case of non-participation in up to 25% of meetings), 30% (in case of non-participation in more than 25% but fewer than 50% of meetings) and 100% (in case of non-participation in more than 50% of meetings). Annual compensation of all Directors is approved by the general shareholders meeting as a percentage of the Company’s OIBDA determined on the basis of IFRS accounts for the next reporting financial year, and in any case shall not exceed 0.13%. Annual compensation can be decreased by 50% if the Director participated in less than 50% of meetings. Also according to the Regulation, the Company shall reimburse the Directors’ expenses incurred in connection with their functions as directors. For the years ended December 31, 2011 and 2012, the Directors were entitled to remuneration and compensation in an aggregate amount of approximately RUB 192 million and approximately RUB 150 million, respectively.

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