Internal Audit Commission

The Internal Audit Commission verifies the accuracy of our financial reporting under Russian law, generally supervises our financial activity and performs certain internal control functions. Our current Internal Audit Commission was elected on June 27, 2011, and is comprised of five members. Pursuant to our charter, the Audit Commission is elected by the annual general shareholders’ meeting (or, as applicable, an extraordinary general shareholders’ meeting) for a term expiring on the date of the next annual shareholders’ meeting. Any shareholder or any other person nominated by a shareholder may be a member of the Internal Audit Commission provided that a member of the Internal Audit Commission may not simultaneously be the President, a member of the Board of Directors, a member of the Management Board or a member of the liquidation commission (elected in case of our liquidation). The Internal Audit Commission elects its Chairman and Secretary.

The Internal Audit Commission reviews our financial and business operations and, in particular: audits our financial and business documents; reviews the legal impact of agreements executed on our behalf, transactions and settlements with counterparties; analyses the accounting statements and statistical records for compliance with applicable regulations; checks whether payments to suppliers of goods and services, payments to the budget, calculation and payments of dividends and redemption of other obligations are made accurately and in due course; audits our balance sheets and our profit and loss statements and performs other functions related to financial issues. In the performance of its duties, the Internal Audit Commission has the right to request, and officers of our governing bodies must provide, documents on our financial and business operation, including confidential documents.