MEGAFON Annual Report 2016

External Audit

MegaFon engages independent external auditors to audit its annual financial statements and review quarterly financial statements. The Audit Committee of the Board of Directors assesses prospective auditors and makes recommendations regarding their appointment to the General Meeting of Shareholders, including recommendations regarding the auditors’ fees. The selected independent auditors are then approved by the General Meeting of Shareholders.

The annual General Shareholders Meeting held on 30 June 2016 approved JSC KPMG, a firm with in-depth understanding of MegaFon’s business, as the Company’s external auditors.

The total fees paid to JSC KPMG for its audit services provided during 2016 amounted to RUB 56m, and RUB 34.6m were paid for nonaudit services.