Annual general meeting of shareholders of Siberia Airlines, JSC


At the meeting the following questions were discussed:

    »  Approval of the annual report of the company;
    »  Approval of the annual financial report, including reports on profits and losses (profit and loss statements) of the company for 2006;
    »  Approval of distribution of profits and losses of the company for 2006;
    »  About the size, terms and the form of payment of dividends for 2006;
    »  Definition of numerical structure of board of directors;
    »  Election of members for the company’s board of directors;
    »  Election of members for the company’s audit commission;
    »  Approval of the company’s auditor;
    »  Modification in the charter of a society.

As was noted in the annual report, 2006 was characterized by some revival of development in the air transportation sector in Russia: The increase in passenger turnover was 9.5 % (in 2005 — 3.4 %) with an 8.3 % increase in the volume of passenger traffic (in 2005 — 3.9 %), and also increased competition in regional markets. Therefore during the last few years Siberian Airlines exceeded the rates of growth, both of the sector, and of many competitors, and on a pure gain in volume of passenger traffic is the leader in the sector — the increase came to 690,000 passengers. By volume of traffic on internal lines in Russia the airline has kept its lead position. With an increase of 8.1 % in the internal volume of tratraffic in all sectors of civil air transportation in Russia, the airline achieved an increase of traffic on domestic lines of 10.4 %.

Despite the multi-faceted competitive environment, in last few years Siberia Airlines has shown skill in being able to effectively compete in the market, using its basic advantages in attracting customers:

    »  Extensive network of air routes, flexible system of tariffs (including via the Internet), convenient connections and a high level of service;
    »  Additional services provided during the sale of tickets;
    »  Adoption of new aviation technology of foreign manufacture.

The primary goals of commercial activity of airline company in 2006 were:

    »  Increased efficiency in the use of the aircraft fleet, management of loading, increase in the profitability of flights;
    »  Increase in frequency of flights, strengthening of positions in the existing markets;
    »  Expansion of the air route network, development of the new markets.

In 2006 Siberia Airlines continued to increase production and financial parameters:

    »  Transportation of passengers has grown by 16.4 % and has reached 4.9 million passengers;
    »  The passenger turnover has increased by 14.2 % and has totaled 12.5 billion passenger km.;
    »  The revenues of the airline have increased by 27.1 % and have reached 24.969 billion rubles.

In 2006 Siberian Airlines has achieved positive financial results — a net profit of 61.0 million rubles, compared to the 1,101.1 million rubles in losses the previous year.

For the current accounting period Siberia Airlines has paid in the form of taxes the sum of 2.052 billion rubles which comes to more than 8 % of the general revenues. Tax payments of Siberia Airlines is the equivalent of paying 68,000 semi-annual pensions to pensioners of the Novosibirsk area.

Results of the commercial activity of Siberian Airlines in 2006 allow us to draw the conclusion that the chosen strategy of development of the airline was optimum. The basic competitive advantage of Siberian Airlines in long-term prospective, is effectively implemented strategy of growth, based on the further growth of production and financial parameters, strengthening the positions of airline in the market of air transportation, increase of fiscal efficiency of all economic activities, labour productivity and growth in profitability, increase in the aircraft fleet of technologies of foreign manufacture and development of new brand of S7 Airlines.

Shareholders had voted to accept statement of the annual report, financial balance sheet, the account of profits and losses of the company for 2006. For 2006 the decision to pay on all common shares of Siberian Airlines a dividend of 60 rubles per chare was accepted.

The auditor for Siberian Airlines for 2007 was approved — the audit agency “Lyudi Dela”, JSC. On the ninth question of the summons of assembly the motion was not approved.

At the meeting of shareholders a new structure of board of directors of airline was approved. Nine people were selected: Artemev S.I. — the deputy the head of Territorial management of Federal agency on management of federal property in the Novosibirsk area, Vindermut A.A. — member of board of directors of Siberia Tekhnik, LLC., Gribkov A.V. — member of board of directors of IK Eurofinanci, JSC., Koshkin A.A. — the general director of Sibmost, JSC., Kuznetsov I.B. — the general director of Firma Factor LTD, JSC., Lomovtseva T.I. — director of legal support of S7 Group of Companies, JSC., Tolmachyov J.V. — the main specialist-expert of Federal agency on management of federal property, Filyov V.F. — the general director of Siberian Airlines, JSC., Filyova N.V. — the general director of S7 Group of Companies, JSC. Also the audit committee of the company was selected.

The same day the board of directors selected Chairman of the Advisory Committee who once again is Koshkin Albert Aleksandrovich who has the scientific degree of Dr.Sci.Tech.