Shareholders’ Equity

CHARTER CAPITAL

MegaFon’s charter capital consists of 620,000,000 ordinary registered uncertified shares, each with a par value of RUB 0.1. The Company is authorised to issue 100,000,000,000 additional ordinary shares. MegaFon has no preferred shares. All issues of ordinary registered uncertified shares have been combined into one issue with the state number 1-03-00822-J. The Government does not hold any shares in the Company.

In connection with its IPO held in November 2012 (see below), MegaFon created a global depositary receipt (GDR) programme under which ordinary shares may be converted into an equal number of GDRs. Each GDR represents an interest in one ordinary share. Holders of GDRs have essentially the same rights as holders of ordinary shares in terms of participation in general shareholders meetings and receipt of dividends.

As at 31 December 2015, MegaFon’s major shareholders were USM Group, which jointly held 56.32% of the Company’s charter capital, and TeliaSonera Group ¹ , which held 25.17% of the Company’s charter capital.

The holdings of the major shareholders of MegaFon have not changed during the reporting year.

SHAREHOLDER STRUCTURE

MegaFon shareholder structure as at 31 December 2015

The structure above does not reflect the formal ownership structure because, for the sake of simplicity, it omits intermediate companies through which shares may be held.

Presence on the stock exchange and share price performance

In November 2012, MegaFon conducted an initial public offering (IPO) on the Moscow Exchange and London Stock Exchange. The offering price was US$ 20 per ordinary share / GDR. The total offering size was US$ 1.8 bn, including the exercise of an overallotment option. A total of 2,153,000 ordinary shares and 89,326,500 GDRs were sold in the offering. This implied a market capitalisation for MegaFon of US$ 11.2 bn on the listing date.

MegaFon’s GDRs are traded on the Main Market of the London Stock Exchange.

MegaFon’s ordinary shares are traded on the Moscow Exchange. They are included in the highest (Level I) Quotation List of the Moscow Exchange, which highlights the high standards of our corporate governance and consistently high liquidity of our shares. The Company’s ordinary shares were initially included in Quotation List C; on 19 August 2013, they were admitted to trading on Quotation List B; and since late April 2014, they traded on Quotation List A2.

MegaFon shareholder structure as at 31 December 2015

MegaFon shareholder structure as at 31 December 2015

1  The name of TeliaSonera Group was changed to TeliaCompany Group. This change is valid from 18 April 2016.