Annual General Meetings of Participants/Shareholders in limited liability companies and joint stock companies under the Russian legislation.

Under the Russian legislation, limited liability companies and joint stock companies are to hold Annual General Meetings of Participants/Shareholders.

LIMITED LIABILITY COMPANY (OOO)

Timelines: The Annual General Meeting of Participants is held not before 1 March and not later than 30 April (unless the OOO's Articles of Association stipulate a more specific deadline).

Agenda: An OOO's annual performance figures for the previous financial year (the annual report and the annual balance sheet) are to be approved at the Meeting. Other issues included in the terms of reference may also be settled at the Meeting. Please remember that, effective 1 January 2012, the annual report of an OOO must contain an OOO net asset section.

Procedure for preparing for, convening and holding the General Meeting of Participants:
• The Meeting may not approve annual reports and balance sheets in the absence of a relevant opinion from the OOO's Internal Auditing Committee/Internal Auditor (if establishment thereof is provided for by the Articles of Association or is mandatory by virtue of law).
• The Meeting is convened by an executive body or the Board of Directors/Supervisory Board (if one is formed and its terms of reference cover issues relating to holding the General Meeting of Participants). Participants are to be given at least 30 days’ notice of the Meeting (unless the Articles of Association prescribe another timing).
• Other specifics of preparing for, convening and holding the Meeting are determined by law, the Articles of Association, internal regulations, and decisions of the OOO's General Meeting of Participants.
JOINT STOCK COMPANY (AO)

Timelines: The Annual General Meeting of Shareholders is held not before 1 March and not later than 30 April (unless the AO's Articles of Association stipulate a more specific deadline).
Agenda: The Meeting is to decide on the following: 1) approving annual reports and accounts; 2) distributing the OA's profits and losses on the basis of the financial year figures; 3) electing the AO's Board of Directors/Supervisory Board; 4) electing the AO's Internal Auditing Committee/Internal Auditor; 4) approving the AO's auditor; 5) other issues covered by the terms of reference of the General Meeting of Shareholders.
Procedure for preparing for, convening and holding the General Meeting of Shareholders:
• The accuracy of the data contained in the AO's annual report and accounts must be confirmed by the Internal Auditing Committee/Internal Auditor of the OA.
• The AO's annual report is to be pre-approved by the AO's Board of Directors/Supervisory Board or its sole executive body (if there is no Board of Directors/Supervisory Board) at least 30 days before the Meeting.
• The Meeting is to be convened by the AO's Board of Directors/Supervisory Board or (if there is no Board of Directors/Supervisory Board) another body whose terms of reference, in accordance with the Articles of Association, cover issues related to holding the Meeting. The notice of holding the Meeting must be communicated, in accordance with general practice, at least 20 days before the date thereof.
• Other specifics of preparing for, convening and holding the Meeting are determined by law, the Regulations on additional requirements on preparing for, convening and holding the General Meeting of Shareholders, the Articles of Association, internal regulations, and decisions of the AO's General Meeting of Shareholders.
CONSEQUENCES OF BREACH OF THE LEGISLATION ON CONVENING THE ANNUAL GENERAL MEETING OF PARTICIPANTS/SHAREHOLDERS
Joint Stock Company

If no Annual General Meeting of Shareholders has been held within the established period, the powers and authorities of the AO's Board of Directors/Supervisory Board, other than those relating to preparing for, convening and holding the Annual General Meeting, are terminated.

Limited Liability Company/Joint Stock Company
• The court may recognise decisions of the General Meeting of Participants/Shareholders made in breach of the law and the company's Articles of Association as invalid on the basis of an application from a relevant participant/shareholder in the company who did not participate in the General Meeting or voted against the decision under dispute (clause 1, article 43 of the Federal Law "On Limited Liability Companies"; clause 7, article 49 of the Federal Law "On Joint Stock Companies").
• The administrative liability for breaching the law on preparing for, convening and holding General Meetings of Participants/Shareholders (article 15.23.1 of the Code of Administrative Offences of the Russian Federation) is as follows:
o an administrative fine of 2,000 - 4,000 roubles for individuals ;
o an administrative fine of 20,000 - 30,000 roubles or disqualification for one year for officers;
an administrative fine of 500,000-700,000 roubles for legal entities.