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Dividend Payment Procedure of JSC IDGC Holding

04.07.2012
Dear Shareholders:

The Annual General Meeting of Shareholders of JSC IDGC Holding held on June 30, 2012, decided that dividends on preference and ordinary shares based on performance results in 2011 shall not be paid and that dividends on the Company’s preference shares shall be paid out of undistributed profits of prior years in the amount of 0.07 ruble per share. Dividends are paid out of the issuer’s funds.

In accordance with paragraph 8.5 of the Articles of Association of JSC IDGC Holding, the dividend payment period may not exceed sixty (60) days from the date of the decision to pay dividends.

If the last day of any dividend payment period falls on a nonbusiness day, then the immediately following business day shall be deemed to be the last day of such period. Therefore, the last day for dividend payment is August 29, 2012.

In accordance with the Regulations for Dividend Policy of JSC IDGC Holding, dividends shall be paid in cash. In accordance with Article 196 of the Civil Code of the Russian Federation, any accrued but unpaid dividends shall be stored for a period of 3 years. This period shall begin on the expiration date of the dividend payment period, i.e. August 29, 2012. No interest shall be charged on unclaimed dividends.

Dividends shall be deemed to be paid if the relevant amounts have been paid from JSC IDGC Holding’s account to the bank account (postal address) contained in the shareholder register maintenance system.

Please note that registered persons’ questionnaires may contain any inaccurate or outdated details of shareholders and dividend payment methods. JSC IDGC Holding shall not be liable for any failure to perform its dividend payment obligations if the shareholder register fails to contain any registered person’s accurate and complete details necessary to pay (transfer) dividends to such person.

In accordance with paragraph 7.2 of the Regulations for Keeping the Register of Holders of Registered Securities approved by Resolution of the Federal Commission for the Securities Market of the Russian Federation No. 27 of October 2, 1997, if any registered person’s particulars are changed, the shareholder shall be obligated to furnish the registrar again with a fully completed registered person questionnaire and update in a timely manner the banking details used for dividend payment.

Please note that depositary clients also have the obligation to update in a timely manner their identity document data and the banking details used for dividend payment.

For the avoidance of any dividends’ failing to be paid, you are kindly requested to alter your registered person questionnaire in a timely manner and update the banking details used for dividend payment.

In accordance with Article 43 of the Tax Code of the Russian Federation, any received dividends are considered to be an income and shall be subject to tax at a rate of 9% applicable to the income received by Russian corporate and individual tax residents. Accrued dividends are paid to shareholders, less tax.
Shareholders that are individuals may receive 2NDFL individual income tax certificates stating the income amount and the withheld tax amount from the Department for Business and Tax Accounting of JSC IDGC Holding after January 1, 2013.

Nonresidents eligible, under tax treaties (conventions), for any tax relief should make available supporting documents to JSC IDGC Holding before August 15, 2012. In the absence of documents bearing out tax relief, shareholders will pay 15% tax.

The documents bearing out shareholders’ eligibility for tax relief with respect to the dividends and accompanied by a covering letter should be made available to the Department for Business and Tax Accounting of JSC IDGC Holding within the shortest time possible, but not later than August 15, 2012.

In the event that any documents in support of nonresident shareholders’ income being taxed at a reduced rate fail to be produced within the above-mentioned period or in full, such income will be taxed at a rate of 15% as provided for in the Russian tax laws. In this case, any overwithheld tax will be refunded in accordance with the procedure set forth in paragraph 2 of Article 312 and Article 323 of the Tax Code of the Russian Federation.

If you have any questions regarding nonresident taxation, please contact Ms. Tatiana Fedorova at +7 (495) 995-53-33 (ext. 58-06).

Requirements applicable to documents in support of tax relief:

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