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					                           QUARTERLYREPORT
                              (Translation from Russian language)




      Open Joint Stock Company "Far East Telecommunications
                            Company"

                               Code of the Issuer: 30166-F

                                 For 3rd Quarter 2010
                   Address: 57, Svetlanskaya Str., Vladivostok Russia 690091

 The information in this quarterly report is disclosed pursuant to applicable law of the
                           Russian Federation on securities



Deputy of CEO

Date : November 12, 2010                                    ____________ Alexandr V. Pototsky

                                                                           sign


Chief Accountant

Date : November 12, 2010                                      ____________ Elena V. Sidorova
                                                                          sign




Contact person: Sergey N. Sinenko
Position: Director of Equity Capital Department
Phone: +7(4232) 222-864
Fax: +7(4232) 222-864
E-mail: sns@dsv.ru
Homepage http://www.dsv.ru/en/ir/reports/quarterly_reports/




                                                                                                1
                                                                              Content
Content .................................................................................................................................................................... 2
   2.3. The Issuer liabilities ..................................................................................................................................... 9
   2.3.1. Accounts payable ...................................................................................................................................... 9
   The accounts payable breakdown ....................................................................................................................... 9
      2.3.2. The Issuer‟s credit history: .................................................................................................................. 10
      2.3.3. Issuer‟s liabilities arising from security furnished to third parties ...................................................... 10
   2.5. Risks in connection with the issued equity securities purchasing .............................................................. 11
      2.5.2. Country and regional risks .................................................................................................................. 12
      2.5.4. Legal risks ........................................................................................................................................... 15
      2.5.5. Risks in connection with issuer‟s business.......................................................................................... 15
      3.2.2. Issuer‟s basic business activity ............................................................................................................ 19
   3.2.3. Issuer‟s materials, commodities (raw materials) and suppliers ............................................................... 20
IV. Information about issuer‟s financial and business activities ........................................................................... 33
   4.1. Results of issuer‟s financial and business activities ................................................................................... 33
      4.1.1. Profit and losses .................................................................................................................................. 33
   4.1.2. Factors, which have influence to revenue from sale by issuer of goods, products, works, services and
   profit (loss) of issuer from basic business activity ............................................................................................ 33
   4.2. Issuer‟s liquidity, sufficiency of capital and current assets ........................................................................ 33
   4.3. Size and structure of issuer‟s capital and current assets ............................................................................. 34
   4.3.1. Size and structure of issuer‟s capital and current assets .......................................................................... 34
      4.3.2. Issuer‟s financial investments ............................................................................................................. 36
   4.3.3. Issuer‟s intangible assets ......................................................................................................................... 36
   4.4. Information about issuer‟s policy and expenses in R&D, regarding licenses and patents, new
   developments and researches ............................................................................................................................ 36
   4.5. Analysis of development trends in issuer‟s basic business activity ........................................................... 37
      4.5.1. Factors and conditions effecting issuer‟s business and its results: ...................................................... 38
      4.5.2. Competitors of the Issuer .................................................................................................................... 38
V. Detailed information about persons included in the Issuer‟s governance bodies, the Issuer‟s bodies for
control over its financial and operational activities, and brief information about the Issuer‟s staff members
(personnel) ............................................................................................................................................................ 40
   5.1. Information about structure and authority of the Issuer‟s corporate governance bodies ............................ 40
   5.2. Information about persons, included in the issuer‟s management bodies .................................................. 46
      5.2.1. Members of the Board of Directors ..................................................................................................... 46
      5.2.2. Issuer‟s Executive Committee:............................................................................................................ 57
      5.2.3. Membership of collegial executive body of the Issuer (Executive Committee) .................................. 58
   5.3. Information about reward, preferences and/or compensation of expenses to each the Issuer‟s corporate
   governance body ............................................................................................................................................... 65
   5.4. Information about structure and authority of issuer‟s bodies for control over issuer‟s financial and
   business activities .............................................................................................................................................. 68
   5.6. Information about size of reward, preferences and/or compensation of expenses to issuer‟s bodies for
   control over issuer‟s financial and business activities ....................................................................................... 75
   5.7. Information about number and summary on education and structure of issuer‟s staff members (personnel)
   and changes in their number ............................................................................................................................. 76
VI. Information about members (shareholders) of issuer and about transactions with interest entered into by
issuer ..................................................................................................................................................................... 77
   6.1. Information about total number of issuer‟s members (shareholders) ......................................................... 77
   6.2. Information about issuer‟s members (shareholders) holding at least 5 percent of its share (joint-stock)
   capital (co-op share fund) or at least 5 percent of its ordinary shares and information about members
   (shareholders) of such persons holding at least 20 percent of share (joint-stock) capital (co-op share fund) or at
   least 20 percent of their ordinary shares............................................................................................................ 77
   6.3. Information about share of State or municipality in issuer‟s share capital, special right (golden share) ... 77
   6.4. Information about restrictions for participation in issuer‟s share (joint-stock) capital (co-op share fund) 78
   6.5. Information about changes in structure and participation of issuer‟s shareholders (members) holding at
   least 5 percent of its share (joint-stock) capital (co-op share fund) or at least 5 percent of its ordinary shares 78




                                                                                                                                                                             2
6.6. Information on interested-party transactions effected by the Issuer ........................................................... 79
6.7. Information about accounts receivable....................................................................................................... 80
7.1. Issuer‟s annual accounting statements ....................................................................................................... 81
7.2. Quarterly accounting statement of the Issuer for the last finished reporting period ................................... 81
7.3. Accounting statements of the issuer for the last financial year .................................................................. 86
7.4. Data about accounting policy of the issuer ................................................................................................ 86
7.5. Information about export and share of export in total sales ..................................................................... 101
7.6. Information about value of issuer‟s real estate and material changes in issuer‟s assets since the latest fiscal
year ending date .............................................................................................................................................. 101
7.7. Information about issuer‟s participation in court proceedings if such participation may have material
effect on issuer‟s financial and business activity ............................................................................................ 101
8.1. Additional information on the Issuer........................................................................................................ 101
   8.1.1. Amount and structure of the Issuer‟s Equity Capital ........................................................................ 102
   8.1.2. Information about change of size of issuer‟s share (equity) capital .................................................. 102
   8.1.3. Information about establishment and use of provision fund and other issuer‟s funds....................... 102
   8.1.4. Information about the procedure for summoning and convening meeting (sitting) of issuer‟s supreme
   management body ....................................................................................................................................... 102
   8.1.5. Information about commercial entities in which issuer has at least 5 percent of equity (joint-stock)
   capital (co-op share fund) or at least 5 percent of ordinary shares .............................................................. 104
   8.1.6. Information about material deals entered into by issuer.................................................................... 107
   8.1.7. Information about issuer‟s credit ratings ........................................................................................... 108
8.2. Information about each category (type) of issuer‟s shares ....................................................................... 109
8.3. Сведения о предыдущих выпусках эмиссионных ценных бумаг эмитента, за исключением акций
эмитента ......................................................................................................................................................... 110
8.3. Information about previous issues of issuer‟s equity securities except for issuer‟s shares ...................... 110
   8.3.1. Information about issues where all securities are cancelled (redeemed) ........................................... 110
   8.3.2. Information about issued securities, which are traded ...................................................................... 113
   8.3.3. Information about issues where issuer‟s securities liabilities are not executed (default) .................. 118
8.4. Information about person(s) submitting guarantee for bonds issue.......................................................... 118
8.5. Terms and conditions for execution of liabilities for bonds issue ............................................................ 119
   8.5.1. Circumstances for securing of liabilities for bonds with mortgage coverage.................................... 119
8.6. Information about entities dealing with accounting of rights to issuer‟s equity securities ....................... 119
8.7. Information about legislation, regulated capital import and export, which can influence to dividends
payment, percents payments, and other payments to non residents: ............................................................... 120
8.8. Taxation of yield on the Issuer‟s issue securities that have been placed or are being placed................... 120
8.9. Information about dividends declared (attributed) and paid to issuer‟s shares for the last 5 fiscal years or
per each finished fiscal year, in case if the Issuer exists less than 5 years ...................................................... 121
8.10. Data on yield paid on bonds issues, for the last 5 finished fiscal years preceding date of quarter end, and
in case is the Issuer exists less than 5 years – for each finished fiscal year, preceding to end of reported
quarter: ............................................................................................................................................................ 123
8.10. Other information ................................................................................................................................... 131
8.11. Data on represented securities and the Issuer of represented securities, which ownership rights are
confirmed by depository receipts .................................................................................................................... 131




                                                                                                                                                                       3
                                               Introduction

Basis of the Issuer‟s liability to disclose information in form of Quarterly report:
The issuer performed registration of the Prospectus of Securities.

  State registration of the issue (additional issue) of the securities of the issuer was done by registration of
  Prospect of Securities, issue of securities was done by open subscription among persons, number of which
  were more than 500.

  The issuer is public corporation (open joint stock company), established during privatization of state and/or
  municipal enterprises (and it‟s branches), and in accordance with plan of privatization, approved by set
  terms and been Prospect of securities of the issuer at the date of its approve, the possibility of the issuer‟s
  shares alienation to more than 500 purchasers or not limited number of persons.

This quarterly report contains assessments and prognostications made by issuer‟s corporate
governance bodies regarding future events and/or actions, prospects of economic development
of issuer‟s basic business branch and issuer‟s performance results including issuer‟s plans,
probability of certain events and certain actions. Investors should not fully rely upon
assessments and prognostications thereof as actual issuer‟s performance results in future may
differ from those prognosticated due to many reasons. Purchase of the issuer‟s securities is
connected with risks described herein.




                                                                                                                   4
I. Brief information about persons included in the Issuer’s corporate
governance bodies, information about bank accounts, auditor, valuator and
financial advisor of the issuer and about any other persons signing the
quarterly report.

1.1. Persons of the issuer‟s corporate governance bodies
The Issuer’s Board of Directors

                              Surname/ Name/ Patronymic                                      Year of birth
Yurchenko Evgeny Valerievich (Chairman of the Board)                                            1965
Afanas‟ev Denis Nikholaevich                                                                    1978
Gurkin Vyacheslav Fedorovich                                                                     1944
Kritsky Nikholay Ivanovich                                                                       1957
Kobischanov Mikhail Yurievich                                                                    1963
Umnova Elena Vladimirovna                                                                        1954
Feoktistova Nataliya Vladimirovna                                                                1966
Shevchuk Alexander Viktorovich                                                                   1983
Lokotkov Alexey Alexeevich                                                                       1950
Statyin Vladimir Anatolievich                                                                    1959
Kulikov Denis Viktorovich                                                                        1975


The Issuer’s Sole Executive Body (Chief Executive Officer)

Surname/ Name/ Patronymic, Year of birth
Balatsenko Andrey Vladimirovich, 1965

The Issuer’s Ccollegial Executive Body (the Executive Committee):

                                           ФИО                                              Год рождения
Balatsenko Andrey Vladimirovich (Chairman of the Executive Committee)                            1965
Dobrovolsky Vitaly Ivanovich                                                                     1948
Pototsky Alexander Valerevich                                                                    1971
Sidorova Elena Vitalievna                                                                        1974
Simonova Elena Jakovlevna                                                                        1974
Shabanov Igor Timofeevich                                                                        1955
Sun Andrew Kibonovich                                                                            1978
Lyubushkin Ivan Alexandrovich                                                                    1976


1.2. The issuer’s bank accounts

Information about credit organization
Full name of the bank: Joint-stock commercial Savings Bank of the Russian Federation (open joint-stock
company) (Far-Eastern bank of Sberbank of Russia, Primorsky OSB No 8635)
Abbreviated name of the bank: Sberbank of Russia OJSC) (Far-Eastern bank of Sberbank of Russia,
Primorsky OSB No 8635)
Location: 22 Semenovskaya St., Vladivostok Russia 690050
Taxpayer‟s ID: 7707083893
Bank Identification Code (BIC): 040507601



                                                                                                             5
Issuer‟s account number: 40702810150020101065
Correspondent account of the bank: 30101810800000000601
Type of account: for transactions in Roubles of RF

Information about credit organization
Full name of the bank: Primorsky Branch of OJSC CB “Svyaz-Bank”‟
Abbreviated name of the bank: Primorsky Branch of OJSC CB “Svyaz-Bank”‟
Adress: 41, Svetlanskaya Str., Vladivostok Russia
Taxpayer‟s ID: 2540014227
Bank Identification Code (BIC): 040502870
Issuer‟s account number: 40702810400310010013
Correspondent account of the bank: 30101810500000000870
Type of account: for transactions in Roubles of RF


Information about credit organization
Full name of the bank: Branch of “GAZPROMBANK” Open Joint Stock Company in Vladivostok
Abbreviated name of the bank: Branch of “GAZPROMBANK” in Vladivostok
Adress: 5A, Uborevicha Str., Vladivostok
Taxpayer‟s ID: 7744001497
Bank Identification Code (BIC): 040502886
Issuer‟s account number: 40702810742000000021
Correspondent account of the bank: 30101810400000000886
Type of account: for transactions in Roubles of RF

1.3. Auditor(s) of the Issuer

Information on the Auditor, nominated to perform independent audit of accounting and financial statements of
the Issuer in compliance with signed agreement, as well as on the auditor (s), approved (nominated) for audit
of annual financial (accounting) statements of the Issuer by result of current or finished fiscal year:

Full auditor‟s name: Closed Joint Stock Company«KPMG»
Short auditor‟s name: CJSC "KPMG"
Address: 18/1 Olimpiysky prospect St., office 3035, Moscow Russia 129110
Auditor is not a resident of Russian Federation.
Telephone: +7 (495) 937-4477
Fax: +7 (495) 937-4499
E-mail: moscow@kpmg.ru
The said license: # 003330, issued by Order of Ministry of Finance of the RF of 17.01.2003 # 9, license
extended till 17.01.2013.
Data on license to audit:
Name of authority issued the licence: Ministry of Finance of RF
Number: Е 003330
Date of issue: January 17, 2003
Date of expiration: January 17, 2013
Data on auditor participation in auditors self regulated organizations.
Auditor is not a member of auditors self regulated organizations.
Data on auditor membership in collegiums, associations, or other professional associations (organizations):
The Issuer has no such information.
Fiscal years when auditor did independent audit of accounting and financial (accounting) statements of the
Issuer:

     Year
     2006
     2007
     2008
     2009




                                                                                                                6
Factors that may challenge independence of the Auditor, including information about material interests
connected Auditor (Auditor‟s employees) with the Issuer:
There are no factors which may influence to the Auditor independence, as well as no material interests,
connected Auditor (Auditor‟s employees) with the Issuer.
Auditor nomination:
Tender procedure for auditor nomination and basic tender‟s circumstances:
Main terms of tender:
• Tender committee shall approve the date of tender;
• Tender committee shall disclose information about time, place, form, tender subject, procedure
of documents preparation to participation in the tender, requirements for tender participants,
order of approving (nominating) auditor von the tender, order and terms of information about
winner disclosure not more than 30 days before the date of tender holding by invitation to tender
publishing (Appendix 1) at the corporate web-site of OJSC Far East Telecom.
• Tender committee shall publish form of application at the corporate web-site not less than 30
calendar days before the tender;
• During 10 calendar days since the date of tender invitation publishing the tender committee shall gather
applications to participation interested auditor organizations.
Procedure of candidature to auditor for approving by General meeting of shareholders (participant), including
corporate governance bodies making the decisions:
Holding of tender. Candidatures are approved by the Board of Directors of the Company by result of tender.
Information about work, made by auditor in term of special auditor tasks:
CJSC "KPMG" does not make work for OJSC Far East Telecom in term of special tasks
Determine of order of Auditor‟s remuneration, the factual amount of remuneration of auditor shall be indicated,
paid by the Issuer by the end of each last ended fiscal years, for which auditor made independent audit of the
issuer‟s accounting and financial statements:
Auditor‟s reward was not connected with results of made audit.
Delayed and out-dated payments for the Auditor‟s services: there are no delayed or out-dated payments for the
services rendered by the Auditor at the end of this quarterly period.

1.4. Assessor of the Issuer
  Name: Akop Gurgenovich Sarkisyan
  Assessor works on the basis labor agreement with legal entity

  telephone: +7 (495) 755-9700
  fax: +7 (495) 755-9701
  e-mail: hakop.sarkissian@ru.ey.com


  Data on legal entity to sign agreement with:
    Full company‟s; name: "Ernst and Young-Evaluation" Ltd
    Short company‟s‟ name: "Ernst and Young-Evaluation" Ltd
    Adress: 115035, Moscow, Sadovnicheskaya Naberezhnaya , 77, build.1


  Data about assessor participation in self regulated organizations of assessors:
    Assessor is not a member of self regulated assessors‟ organization

  Date about evaluation services, provided by the assessor:
  1 ordinary and 1 preferred shares of OJSC Far East Telecom evaluation as a part of control pocket of
  shares (for purpose of conversion shares for reorganization in form of merging to OJSC Rostelecom), as
  well as 1 ordinary and 1 preferred share of OJSC Far East Telecom as a part of minority pocket of shares
  (for purpose of shares buyback during reorganization).

  ФИО: Lafer Mariya L‟vovna
  Assessor works on the basis of labor agreement with legal entity
  telephone: +7 (495) 755-9700
  fax: +7 (495) 755-9701




                                                                                                                  7
  She has no email address.

  Data on legal entity to sign agreement with:
    Full company‟s; name: "Ernst and Young-Evaluation" Ltd
    Short company‟s‟ name: "Ernst and Young-Evaluation" Ltd
    Adress: 115035, Moscow, Sadovnicheskaya Naberezhnaya , 77, build.1



  Data about assessor participation in self regulated organizations of assessors:
    Assessor is not a member of self regulated assessors‟ organization

  Date about evaluation services, provided by the assessor:
  1 ordinary and 1 preferred shares of OJSC Far East Telecom evaluation as a part of control pocket of
  shares (for purpose of conversion shares for reorganization in form of merging to OJSC Rostelecom), as
  well as 1 ordinary and 1 preferred share of OJSC Far East Telecom as a part of minority pocket of shares
  (for purpose of shares buyback during reorganization).


1.5. Information about issuer’s advisor
Advisor was not invited in the reported quarter.

1.6. Information about other persons, signed quarterly report
No other persons signed quarterly report.


II. Finance and Economics Highlights of the Issuer
2.1. Finance and economics highlights of the Issuer business

  Financial and economic               2009, 9       2010, 9
        highlights                     months        months

The Issuer‟s net assets,              9 389 373        10 719
Roubles                                                   095
Loans to Equities and Reserves              91.31        98.83
ratio, %
Short term liabilities to                   53.93        35.57
Equities and Reserves Ratio, %
Covering loan repayments, %                 49.79        51.81
Share of overdue debts, %                     1.1         0.18
Account receivable turnover,                 6.12          1.7
раз
Dividend share in net profit, %               25            25
Labor productivity ratio,                 965.58        365.23
Roubles per people
Amortization to revenues                    10.69           30
ration, %


2.2. Issuer’s market capitalization

Market capitalization is calculated by multiplying number of shares of the respective category (type) by price
of one share of that category (type), disclosed by stock exchange at the securities market and determined in




                                                                                                                 8
compliance with Order of market price calculation of the issued securities and investment funds, admitted to
the trading though trade institutor, approved by the Decree Federal Commission for the Securities Market of
Russia as of December 24, 2003 No 03-52/nc.

        As of RTS data
                                  3rd quarter
                                     2010
  Market capitalization, RUR     10 098 849
                                 600

Trade institutor whose information was used for the Issuer‟s market capitalization calculation, as well as other
additional information about securities public trading:
The Issuer‟s market capitalization was calculated in compliance with data and methodic of RTS Stock
exchange, the information was download from RTS web-site: www.rts.ru



2.3. The Issuer liabilities

2.3.1. Accounts payable

  The accounts payable breakdown

Accounts payable breakdown for 6 months of 2010.
                                                                                        Thousands Roubles
                                                                 Under 1 year                Over 1 year
                                                                    783 104                          0
Accounts payable to suppliers and contractors

Including overdue                                                   18 014                           x
                                                                    115 042                          0
Accounts payable to company‟s staff

Including overdue                                                      0                             x

Accounts payable to budget and state non-budget                     467 201                          0
funds
Including overdue                                                      0                             x
Credits,                                                              622                       4 055 755
Including overdue                                                      0                             x
Loans                                                              1 276 961                    2 236 036
Including overdue                                                      0                             x
Including bond loans                                                628 864                     2 236 036
Including overdue bond loans                                           0                             x
Other accounts payable, Roubles                                     452 945                          0

Including overdue                                                     806                            x
TOTAL                                                              3 095 875                    6 291 791
Including overdue                                                   18 820                           x

     There is no overdue accounts payable.


     Creditors who have not less than 10 percents of total sum of accounts payable: there are no such



                                                                                                                   9
creditors

          2.3.2. The Issuer’s credit history:

                                                                                 Credit/loan         Principal and/or
                           Name of               Principal                         period /              interest
       Liability         creditor/loan            amount          Curren-        repayment           payment delay,
                            holder               (rubles)           cy          period under          delay period,
                                                                                  contract                 days
Bonds loan             Bonds loan                1,288,063,700      RUR       07.06.2006/30.05.2 none
                                                                              012
Bands                  Bonds                     1,500,000 000      RUR       21.07.2009/17.07.2 none
                                                                              012
Bill                   OJSC "MDM                        608,022     RUR       05.10.2010/24.12.2 none
                       Bank"                                                  010
Bill                   Bank VTB OJSC                    201,706     RUR       18.10.2010/17.12.2 none
                                                                              010
Not renewable          OJSC KB                   1,500,000,000      RUR       29.12.2009/24.12.2 none
credit line            «Svyaz-Bank»                                           012
Bill                   OJSC                              90,360     RUR       19.10.2010/22.11.2 none
                       "TransCreditBank"                                      010
Not renewable          OJSC KB                   1,500,000,000      RUR       24.12.2009/31.10.2 none
credit line            «Svyaz-Bank»                                           013
renewable credit       OJSC KB                     280 956 237      RUR       13.02.2009/04.03.2 none
line                   “Svyaz-Bank”                                           013
renewable credit       OJSC KB                   1 110 401 000      RUR       05.08.2010/05.08.2 none
line                   “Svyaz-Bank”                                           012
renewable credit       Dalnevostochnyi             500,000,000      RUR       04.08.2010/04.08.2 none
line                   bank OJSC                                              012
renewable credit       Bank VTB OJSC                98 475 233      RUR       28.07.2010/27.08.2 none
line                                                                          010



2.3.3. Issuer’s liabilities arising from security furnished to third parties

                                        9 months
                                          2010
Total issuer‟s liabilities in               163 060
securities granted, Roubles
Total liabilities of third parties                  0
on which issuer granted
security to third parties
including in form of pledge or
suretyship,
thousand Roubles

Issuer‟s liabilities to furnish security to any third party including in form of pledge or surety ship in the last fiscal
year ended and the last reported period ended being at least 5 percent of issuer‟s assets balance-sheet value in the
last fiscal year ended: none.




                                                                                                                      10
2.3.4. Issuer’s other liabilities

There are no liabilities which are not reflected in the Issuer‟s balance-sheet.

2.4. Issue objectives and fields to spend funds received as a result of placing of equity
securities
No securities were issued in the reported quarter.

2.5. Risks in connection with the issued equity securities purchasing

2.5.1. Industry sector risks

Impact of possible worsening of situation in issuer‟s sector to its business and execution of liabilities in
connection with securities.

Impact of possible worsening of situation in issuer‟s sector to its business and execution of liabilities in
connection with securities.

          For a few recent years there has been a stable trend of telecommunication market growth rates
exceeding GRP of the Russian Far East regions. Analysis of trends and prospects for development of Russian
telecommunications market sees great opportunities for telecommunications development in the Far Eastern
Russia.
          Key risk of OJSC Far East Telecom is that market growth rate is conditioned by mobile
telecommunications development which trend will keep for the coming 2 years at least. OJSC Far East
Telecom is a mobile telecommunications provider in Kamchatka and Magadan Oblasts while the basic
potential for that service is still in Primorsky Krai, Khabarovsk Krai and Sakhalin Oblast.
Regarding execution of liabilities in connection with shares, that risk may lead to decrease of dividends
payable to shareholders on Company‟s shares. Worsening of the regional situation does not have impact on
payment of accrued dividends.
          Worsening condition of Company in the sector may be caused by reasons of general nature, namely:
- possible decrease of consumer demand on telecommunications services due to worsening financial
and economic wealth of people in the Russian Far East;
- possible production drop in Russian economy and worsening financial standing of business entities in Far
East;
- possible worsening of budget execution of the Russian Federation and Far East which will contribute to
decrease of financing budget-funded organizations and growth of their debts for telecommunications
services;
- possible changes of current regulations. Besides, company‟s situation in the market is complicated due to
the following factors:
- dependency on OJSC Rostelecom, OJSC MTT and other long-distance telephone operators in setting the
ratio for payment for long-distance national and international traffic;
- dependency on Ministry for antitrust policy of Russia when setting regulated tariffs.
Worsening situation in the sector may lead to decreasing efficiency and profitability of Company and as a
result to decreasing dividends to Company‟s shareholders. For payment of dividends already accrued that risk
has no impact.

The most significant, as opined by issuer, possible changes in the sector (separately in the domestic and foreign
markets) and suggested actions by issuer are as follows.

         Changes in the foreign market are not prognosticated by issuer as issuer does not provide services for
export. In the domestic market the following changes are prognosticated:
- growing demand for new telecommunications services including growth of Internet traffic:
- growing share of mobile telecommunications in total telecommunications services.
         Issuer actively develops the following kinds of telecommunications:



                                                                                                               11
- Broadcast TV, BTV,
- Video-on-Demand, VoD,
- Network Personal Video Recorder, NPVR,
- Using TV screen for Internet services, attributable to PC, e.g., T-Internet, T-mail, T-commerce, and for
computer games via certain computers in network while image is sent to TV screen.
         In case of unfavorable development of the regional situation OJSC Far East Telecom plans:
- to optimize structure of production costs,
- cut company‟s expenses including possible review of investments program,
- change work with subscribers to maximize company‟s salles and decrease payment delays from subscribers.

Risks connected with possible change of prices to raw materials, services used by issuer in its business
(separately in domestic and foreign markets) and their impact on issuer‟s business and execution of liabilities on
securities.
         Issuer does not buy raw materials. Possible growth of prices on materials, products and services used
by issuer in its business may have negative impact on issuer‟s financial indicators as it will lead to growth of
expenses and as a result to decrease of Company‟s profit. Also, decrease of dividends on issuer‟s shares is
possible. Execution of liabilities on accrued dividends is not effected by that risk, as profit for previous years
was actually received.

Risks connected with possible change of prices on products and/or services of issuer separately in domestic and
foreign markets) and their impact on issuer‟s business and execution of liabilities on securities.
          Risks connected with possible change of prices on OJSC Far East Telecom‟s services have material
effect for the Issuer. Tariffs on issuer‟s regulated services are set by Federal Service for Tariffs of Russia and
there always is a risk of setting tariffs below cost-price of services or below the required profitability level.
That does not allow Company to maximize possible profit and dividends to shareholders. Execution of
liabilities on accrued dividends is not effected by that risk.
          Risks connected with possible change of prices on OJSC Far East Telecom‟s services are appearing
when working with associated operators and commercial customers. To prevent loss of customers in possibly
changing terms and conditions including financial conditions for cooperation, Company worked out and
introduced in 2004 the system for servicing VIP and corporate customers.
          There are no risks connected with change of prices in foreign markets as issuer does not provide
services for export.


2.5.2. Country and regional risks

Risks connected with political and economic situation in the country (-ies) where issuer is registered as taxpayer
and/or exercises its basic business subject that basic business of issuer in such country/region makes up 10 and
over percent of income in the last fiscal period ended.
         Issuer provides services in Russia and in seven regions only – Primorsky Krai, Khabarovsk Krai,
Sakhalin, Amur, Kamchatka, Magadan Oblasts and Jewish Autonomous Oblast. Thus, issuer is exposed to
any political and economic risks common to Russia in general and the said regions in particular.

Suggested actions of issuer in case of negative impact of changing situation in the country (-ies) on its business:
         In case of negative impact of changing situation in the country and region on Company‟s business,
issuer suggests to do all actions aimed at minimizing the effect of the said changes on its business, including:
         – production costs cut, reduction of staff, sequester of investment plans.
         In case of unfavorable regional situation development OJSC Far East Telecom plans:
- to optimize production costs structure,
- reduce company‟s costs including possible sequester and review of investments program in the regions
where negative trends are seen for the benefit of more actively developing regions,
- change work with subscribers to maximize company‟s income and decrease payment delays from
subscribers.

Risks connected with possible military conflicts, emergency situation and strikes in country (-ies) and region
where issuer is registered as taxpayer and/or is doing basic business:



                                                                                                                12
          In case of possible military conflicts, emergency situations and strikes issuer will most probably be
subordinate to security and military agencies as it is providing vital and state important function –
telecommunications. This guarantees that activities will continue in any conditions on the limit of
engineering capacity. There are risks of putting issuer‟s fixed assets out of commission and attempts to take
over its telecommunication points.

Risks connected with geographical specifics of country (-ies) and region where issuer is registered as taxpayer
and/or exercises its basic business including increased probability of acts of God, possible transport traffic
termination due to remoteness or hard accessibility, etc.
         Currently, surface area of Far Eastern Federal District (the most distant from the economic center of
Russia) is 36% of country‟s area. There are 6.5 million of people living there which is 4.6% of the total
population of the RF. Far Eastern economic district includes Republic of Sakha (Yakutia), Primorsky and
Khabarovsk Krais, Amur, Kamchatka, Magadan and Sakhalin Oblasts, Jewish Autonomous Oblast, Koryak
and Chukot Autonomous Districts.

         Far East historically was mainly developing on the basis of geostrategical and resource priorities.
Non-economic elements are present in its structure on the level which is higher than average Russian, like
protection of frontiers, populating areas, placing defense objects, construction of strategic roads and other
communications. The strategic role of Far East for the RF is determined by possibility to take part in
economic life of Asia-Pacific region.
         Far East possesses great resource potential being one of the manufacturers of diamonds, fisheries,
mineral wealth, timber, soybeans. 60% of Russia‟s fish and seafood is caught in Far Eastern seas. This is
currently one of the key factors for restraining regional raw materials non-intensive economy.
         Unevenly spread resources are also a factor effecting the development of Far East‟s economy. Only
insignificant part of Far East is suitable for permanent residence in spite of large area. Natural and mineral
wealth of the region is located mainly in unfavorable physical and geographical areas. Therefore, its
development is possible using temporary settlements which slows down the development of social
infrastructure. All this is accompanied by increased costs and slow capital turnover. Besides the above
specifics, the region lacks half of own (economically available) power sources and food which makes power
and food more expensive than average Russian level. Complex natural conditions predetermine the need for
special telecommunications technologies to built telecommunication networks, radio relay lines and satellite
systems.
         In pre-reform period, mining and transport sectors were the most stable, although internal
development potential was decreasing: in mining, due to depletion of the most effective resources, in transport
– due to rapidly growing fuel and power prices. Military-industrial and engineering sector‟s enterprises were
exercising strategic defense functions receiving raw materials, parts and inventories from Western Russia and
shipping finished products back there. In regulated prices conditions it did not have impact on their economic
standing. But with liberalization of prices the economic situation has changed dramatically.
         Currently, remoteness from basic industrial centers and therefore increased transport costs on goods
delivery, deficiency of fuel and food, unfavorable physical and geographical conditions extra costs on
production and manpower predetermine low competitiveness of Far East‟s production.
         From the budget point of view, Far Eastern regions are receiving the largest subsidies in the RF.
Also, wealth level is characterized by high prices on basic products and low level of income. Population level
was maintained in Soviet years by high migration while now migration does not contribute to population
growth as death rate is exceeding birth rate (2 last years saw 1.5% decrease).
         Currently, foreign economic specialization is a typical trend in regional economic development.
However export is based mainly on raw materials export and has positive impact for limited number of
manufacturers and individuals. It does not have impact on secondary sector oriented at the domestic market.
         Despite the existing difficulties, strategic role of Far East remains as such for Russia. Currently it is
reasoned by rapid development of Asia-Pacific region‟s economy which is rather close from Far East.
         For realization of social and economic potential of the region, it is required to obtain governmental
support to attract permanent population and provide available resources for the economy.
         In March 2002, the Russian Government approved Program for economic and social development of
Far East and Baikal area till 2010. The program set the following objectives:
-        creation of economic conditions for stable development of Far East and Baikal area considering
geostrategic interests and Russia‟s security;
-        infrastructure construction and establishment of favorable investments climate for development of
priority sectors of Far East‟s and Baikal‟s economy and stimulation of programs and projects of international



                                                                                                               13
and near-border cooperation;
-        development of social sphere, achievement of required social standards compliant with specifics of
Far East and Baikal.
         Basic volume of investments provided for by the federal purposed program will be used for
construction of fuel/power and transport infrastructure. Successful implementation of program should ensure
doubled gross regional product by 2010 compared to 2002, creation of 600 thousand new jobs. Finally all that
should lead to financial self-sufficiency of the region.
Expected results of program‟s implementation:
-        decrease of Far East‟s underrun (by key macroeconomic indicators) from average Russian level;
-        growth of financial self-sufficiency of the region and people‟s living standards;
-        decrease of social strain in the region.
         In 2007, the Russian Government approved Program for economic and social development of Far
East and Baikal area till 2013. Total of 566 billion rubles will be spent on that program. In particular, that
money will be spent on reconstruction of 22 regional airports, 13 seaports, construction of modern ferry line
between Sakhalin and the mainland, 6.5 thousand km of roads. In absolute figures, it is planned to spend 7
times more on social programs compared to previous years. The Government expects that by 2013 GRP of Far
East and Baikal will have 2.6 times growth while investments in fixed assets – 3.5 times.
          In January 2007 President Putin announced Russia‟s readiness to act as organizing country for
APEC in 2012 and host summit of heads of states and governments united in Forum. That implies
modernization of airports, construction of new roads, hotels and even a seaquarium. All those efforts are
aimed at drastic economic growth and development of social sphere in Siberia and Russian Far East.
         Key risks of OJSC Far East Telecom connected with the region are in further outflow of people in
some areas. Some regions where issuer is doing its business are exposed to increased risk of acts of God like
earthquakes, volcanic explosions, tsunami (Kamchatka, Kuril islands, Sakhalin) which may have negative
impact on issuer‟s fixed assets.
         Due to low density of population and lack of transport infrastructure in some regions, there are risks
of traffic termination with some settlements. Meantime, significance of telecommunications is dramatically
increasing due to the same. To improve telecommunications reliability with those hard to access settlements,
issuer is introducing a number of radio relay and satellite communications projects instead of wire
technologies.
         Credit market has seen interest rate growth since August 2007 due to bank liquidity crisis.
In short-term prospect, it is possible to borrow funds at higher interest rates compared to those for
available borrowings. In a more distant prospect, Company will be able to both re-distribute its
credit portfolio and compensate growth of interest rates by increasing tariffs. Hedging of risks is not
exercised by issuer.
         Issuer‟s basic liabilities are in rubles, therefore the factor of possible fluctuations of foreign
currency exchange rates is not material for Company. For existing structure of accounts payable
even same direction of fluctuation of foreign currency exchange rates will cause insignificant
change of that amount. Meantime, USD and EUR rates are inversed. Opposite directions of foreign
currency exchange rates are mitigating exchange rate fluctuations. Currently, Company is
concluding contracts in rubles only. Therefore, dependency of issuer, its financial standing and
liquidity on foreign currencies exchange rates is weak. It is impossible to insure from total risks
(drops and crises). But even in case of critical change of exchange rates Company can, to minimize
the share of its foreign currency liabilities, by shifting to suppliers contracting in Russian rubles.
         In case of inflation growth, the probability that issuer will default in executing liabilities on
securities is rather small. Meantime, during inflation the real value of debts and interest is
depreciating which is favorable for issuer. Meantime, the real value of accounts receivable and
payable is depreciating which effects the real profitability of issuer‟s business in the same direction.
In case of inflation issuer may increase tariffs on its services to compensate extra costs. For a
number of services, 100% prepayment is possible. Critical levels of inflation are considered those
paralyzing the economy, i.e., over 100% per annum.
         From the beginning of September 2008 world financial crisis has influenced to Russian
bank system as well as foreign system. There was growth of interest rates, including floating interest
rates for given credits. Most of banks stopped crediting because of liquidity lack. Corporate
financing is becoming more difficult under existing circumstances.




                                                                                                            14
2.5.3. Financial risks

          In 2009 situation at the bank sector of RF became more stable. As a result of it Central bank of RF
carried out a policy of interest rate decreasing to make credits more available for real sector of economy.
To the end of 4th quarter 2009 interest rate for credits decreased significantly; it helped to the
Company to refinance credit debt, which was attracted at higher rates and to decrease interest expenses on
credit portfolio. Interest rates have been decreased from 13% to 8.75% together with inflation rate slow down
during a year.
          Most liabilities of the Issuer to 99.98% are nominated in Roubles, so factor of possible currency rate
fluctuation is not a significant risk for the Company. Unilateral changing of currency rates will result to
unimportant changing of debt because of such structure of debt. At the same time movement of US Dollar
rate and Euro is inverse. Inverse movement of currencies grades courses fluctuation.
          Currently, Company is concluding contracts in rubles only. Therefore, dependency of issuer, its
financial standing and liquidity on foreign currencies exchange rates is weak. It is impossible to insure from
total risks (drops and crises). But even in case of critical change of exchange rates Company can, to minimize
the share of its foreign currency liabilities, by shifting to suppliers contracting in Russian rubles.
In case of inflation growth, the probability that issuer will default in executing liabilities on securities
is rather small. Meantime, during inflation the real value of debts and interest is depreciating which is
favorable for issuer. Meantime, the real value of accounts receivable and payable is depreciating which
affects the real profitability of issuer‟s business in the same direction. In case of inflation issuer may increase
tariffs on its services to compensate extra costs. For a number of services, 100% prepayment is possible.
Critical levels of inflation are considered those paralyzing the economy, i.e., over 100% per annum.

2.5.4. Legal risks

         OJSC Far East Telecom‟s main business is telecommunications service, the issuer does not export
goods, works or services. Therefore, legal risks in connection with issuer‟s business are described for
domestic market only. In general, risks related to issuer‟s business are typical for most business entities
working in the Russian Federation and may be considered as country‟s general risks.
         Risks connected with changes in foreign currency regulations: Risks connected with possible change of
foreign currency regulations are currently considered as minimal by issuer.
         Risks connected with change of tax regulations: Risks connected with change of tax regulations are
considered by issuer as general country‟s risk.
         Risks connected with change of customs control rules and duties: As most of equipment for
telecommunication services is imported or made of imported components any change of customs control rules
and duties may bring certain risks for issuer.
         Risks connected with change of regulations on licensing issuer‟s basic business activity or licensing
rights to use objects which are limited (including mineral wealth): Risks connected with possible change of
licensing regulations are currently considered by issuer as minimal.
         Risks connected with change of court practice on matters related to issuer‟s business (including
licensing matters) which may have negative impact on its performance results and results of current court
proceedings where issuer is involved: Change of court practice on matters related to issuer‟s business is
unable to have material effect on its business results and results of current proceedings between issuer and
third parties.

2.5.5. Risks in connection with issuer’s business

         Risks connected with current court proceedings where issuer is involved: Current proceedings except
for those specified in clause 7.7 have no practical impact on issuer‟s basic business as the number of claims
against issuer under current proceedings is insignificant.
         Risks connected with inability to prolong issuer‟s license on any kind of business activity or use of
objects which are limited (including mineral wealth): All available issuer‟s licenses have sufficient validity
period. Risks of future rejections to prolong existing licenses are minimal.
         Risks connected with possible issuer‟s liability for third parties‟ debts including issuer‟s subsidiaries:
Issuer‟s liability for debts of subsidiaries and affiliates may begin only as provided for by law, namely if issuer
leads any subsidiary to loss or bankruptcy by giving instructions provided for by law mandatory for following
by such subsidiary. Issuer shall undertake to prevent arising of the said situation as loss or bankruptcy of any
subsidiary or affiliated company directly contradicts issuer‟s business objective – receipt of profit.




                                                                                                                 15
                          III. Detailed Information about the Issuer

3.1. History of the Issuer’s incorporation and development
3.1.1. Information about issuer’s corporate name
The Issuer‟s full name: Open Joint Stock Company "Far East Telecommunications Company"
The Issuer‟s short corporate names: OJSC Far East Telecom.

Firm name of the Issuer (name for commerce organization) was registered as trade mark or service mark.
Information on registration of the Issuer‟s corporate name as a trademark or a service mark: corporate
name of the Company makes part of the combined trademark, certificate No: The Issuer‟s full name: Open Joint
Stock Company "Far East Telecommunications Company" /Открытое акционерное общество
"Дальневосточная компания электросвязи" The Issuer‟s short corporate names: OJSC Far East Telecom
/ОАО "Дальсвязь"
On July 26, 2004 Federal service for intellectual property, patents and trademarks registered «Дальсвязь»
trademark in state register of trademarks and service signs of the RF. OJSC Far East Telecom was issued
trademark (service sign) certificate No 272407

All previous names of the Issuer used during the Issuer‟s existence:

Full corporate name: Open joint stock company “Electrical svyaz” of Primorsky region
Short corporate name: АООТ "Electrical svyaz of Primorsky region"
Date of name granting: 05.12.1994
Reason of name granting: Decision about registration No 1088 as of 05.12.1994

Full corporate name: Open Joint Stock Company “Electrical svyaz” of Primorsky region
Short corporate name: OJSC "Electrical svyaz of Primorsky region”
Date of name granting: 06.20.1996
Reason of name granting: Decision of General Shareholders Meeting as of 05.29.1996., Minutes No 3 as of
05.29.1996

Full corporate name: Open Joint Stock Company "Far East Telecommunications Company"
Short corporate name: OJSC “Far East Telecom”
Date of name granting: 10.30.2001
Reason of name granting:
Decision of General Shareholders Meeting as of 10.30.2001г., Minutes No 9 as of 11.05.2001

3.1.2. Information about issuer’s state registration

Data about initial state registration:
Date of issuer‟s state registration: 05.12.1994
Legal entity‟s state registration code: No. 5464
State registration authority: Department for registration and assistance to business activities of financial
department of Vladivostok city council
Certificate of making a record in Uniform state register of legal entities about a legal entity registered before July
1, 2002.
Main state registration number of legal entity: 1022501276159
Date of registration (date of making record): 06.09.2002
Authority making record to Uniform state register of legal entities: Inspection of the Russian Federation Ministry
for taxes and duties of Vladivostok city Leninsky district.

3.1.3. Issuer’s establishment and development

The Issuer‟s life period from the date of its State registration, as well as date till the Issuer will exist:
Fifteen years and four months. The issuer was established for unlimited period.
Short description of creation and development of the Issuer, other information, important for making the
decision about the issuer‟s securities purchasing:




                                                                                                                   16
The issuer‟s purpose: The main purpose of the Issuer‟s business is deriving of profit, provision of customers
with high quality telecommunications services.
Issuer‟s mission: Formation and satisfaction the customers‟ needs in the telecommunication services at the
Far East Region territory, and integration into the global information community of the XXI-st century.

Issuer‟s mission: Creating and fully meeting customers‟ needs for modern telecommunication services in Far
Eastern federal district.

Issuer‟s basic tasks:
• Full scope of telecommunications services;
• Creating the image of a reliable operator – the leader providing high quality telecommunication
services available for all kinds of users;
• Improvement of servicing customers and interactions with them;
• Comprehensive development of services utilizing the most present technologies;
• Creating conditions where each staff member‟s abilities can be realized most fully for company‟s
benefit;
• Growth of company‟s revenues and capitalization, creating favorable conditions for investments.

In 1991, state enterprise for telecommunications and informatics Rossvyazinform was established in
Primorsky Krai on the basis of Department for telecommunications.

In 1994, after privatization SE Rossvyazinform was transformed into open type JSC Electric
telecommunications company of Primorsky Krai.

In compliance with the decision of General meeting of shareholders of 31.12.2001, OJSC ELETEC of
Primorsky Krai was renamed OJSC Far East Telecommunications Company (OJSC Far East Telecom). In
June 2008 in compliance with the decision of General meeting of shareholders short name of company in
English language was change from OJSC Far East Telecom to OJSC Far East Telecom.
Currently OJSC Far East Telecom is a provider of the full telecommunications services range in the
competitive market of FEFD providing most of modern services using its network. Company‟s telephone
network is tightly connected with Rostelecom‟s infrastructure and is the regional part of Russian general use
network enabling other operators get connected to it.

Present business of OJSC Far East Telecom is characterized by the following data:
• Number of automatic telephone switches (urban + rural) – 1,122
• Installed net capacity (urban + rural) –1,593,209
• Used capacity of ATS – 1,372,776
• Number of PSTN phones – 1,346,006 including SIP-telephony 4,435
• Number of payphones – 2,860
• Number of telephones per 100 residents – 25
• Number of users for broadband Internet access and switched Internet access – 449,006
         Number of IPTV subscribers – 107,601
         Number of GSM net service subscribers – 73,959

3.1.4. Contact information

Location: 57 Svetlanskaya St., Vladivostok Russia 690091
Location of Executive Committee:
57 Svetlanskaya St., Vladivostok Russia 690091
Address for correspondence:
57 Svetlanskaya St., Vladivostok Russia 690091
Telephone: +7(4232) 222-864
Fax: +7(4232) 222-864
E-mail: sns@dsv.ru; ir@dsv.ru
Internet web-site for investors and shareholders:
• In Russian language: http://www.dsv.ru/ru/center_investor/
• In English language: http://www.dsv.ru/en/ir/
Issuer‟s division working with investors and shareholders




                                                                                                                17
Equities Capital Ddepartment
Location: 57 Svetlanskaya St., Vladivostok Russia 690091
Phone/fax: (4232) 222-864
  E-mail: sns@dsv.ru; ir@dsv.ru

3.1.5. Taxpayer’s ID (TIN)

The Issuer‟s Taxpayer Identification Number (TIN): 2540014227

3.1.6. Issuer’s branches and representative offices

Name: Primorsky branch
Location: 37 Prospekt Krasnogo Znameni St., Vladivostok, the Russian Federation 690950
Established: 10.30.2001
Head: Shabanov Igor Timopheevich
P/A validity: 01.31.2011

Name: Khabarovsk branch
Location: 58 Karla Marksa St., Khabarovsk, the Russian Federation 680000
Head: Torgashin Eugeny Victorovich
Established: 10.30.2001

P/A valid till: 01.31.2011

Name: Amur branch
Location: 159 Gorkogo St., Blagoveshchensk, Amur Oblast, the Russian Federation 675011
Head: Beleichev Aleksandr Vladimirovich
Established: 10.30.2001
P/A valid till: 01.31.2011

Name: Magadan branch
Location: 2A Prospekt Lenina St., Magadan, Magadan Oblast, the Russian Federation 685000
Head: Vlasov Srgey Vladimirovich
Established: 10.30.2001
P/A valid till: 01.31 2011

Name: Kamchatka branch
Location: 56 Leninskaya St., Petropavlovsk-Kamchatsky, Kamchatka Oblast, the Russian Federation 683000
Head: Khitrova Elena Yurievna
Established: 10.30.2001
P/A valid till: 01.31.2011

Name: Sakhalin branch
Location: 220 Lenina St., Yuzhno-Sakhalinsk, Sakhalin Oblast, the Russian Federation 693000
Head: Kalyuzhny Viktor Afanasievich
Established: 10.30.2001
P/A valid till: 01.31.2011

Name: Representative of OJSC Far East Telecom in Moscow
Location: 9 Sechenosvky Pereulok St., Moscow, the Russian Federation 119034
Head: Mukhacheva Mariya Andreevna
Established: 10.30.2001
P/A valid till: 01.31.2011

3.2. Core business

3.2.1. Industry classification of the Issuer
Codes of industry classification of the Issuer‟s main activities pursuant to All-Russia Classifier of




                                                                                                        18
Economic Activities (ARCEA):

             Code of activity in
              accordance with
                  ARCEA
                   64.20.11
                   64.20.12
                   64.20.22
                    64.20.3




3.2.2. Issuer’s basic business activity

Services accounting for at least 10 percent of issuer‟s revenue are: intrazone telecommunication services



        Name of result             2009, 9        2010, 9
                                   month.         month.
Revenue from sale of goods         1 660 174      1 602 883
(works/services),
thousands Roubles
Share in total revenue of the            16.7          15.3
issuer, %

     Revenue change of the issuer from the core business to 10 and more percents comparing with reporting period of
     the previous year and the reasons of the changes: none


     Services accounting for at least 10 percent of issuer‟s revenue are: local communication services


        Name of result              2009, 9       2010, 9
                                     month        month
Revenue from sale of goods         3 838 820      4 042 597
(works/services),
thousands Roubles
Share in total revenue of the            38.6          38.7
issuer, %

Revenue change of the issuer from the core business to 10 and more percents comparing with reporting period of the
previous year and the reasons of the changes: none

The issuer‟s core business does not have seasonal nature.

Structure of the Issuer’s expenses

Operational expenses of the Issuer

                                 Name of result                                      3rd Quarter
                                                                                        2010




                                                                                                                     19
Supply, %                                                                                5.3
Bought goods, half made goods, %                                                           0
Work and services of industrial nature, made by third parties, %                         7.1
Fuel, %                                                                                  1.1
Power (including electric), %                                                            3.5
Salary, %                                                                               31.4
Interest expenses per credits, %                                                           0
Rent, %                                                                                  1.5
Social welfare, %                                                                        7.2
Amortization, %                                                                         13.7
Taxes, %                                                                                 0.1
Other expenses                                                                          29.1
Services of telecom operators                                                           15.6
OJSC “Rostelecom” services                                                               3.5
Utilities                                                                                0.1
                                                                                           5
                                                                                         4.9
Total costs, %                                                                          100
Reference: Revenues, %                                                                  136


  New types of services of the Issuer, status of design of such services:

  There are no new types of services.

  Standards (rules) of accounting reporting prearrange:

  Accounting reporting is preparing with Russian Accounting standards and IFRS in compliance with Accounting
  policy for 2010.

3.2.3. Issuer’s materials, commodities (raw materials) and suppliers

  For the reported quarter:



     Suppliers of material used by the Issuer in common business activity and whose volume is more
than 10% in all purchases of the issuer:

     Full company name: CJSC "Envizhin Group"
     Adress: 53 stitch 5 Dubininskaya str., Moscow 117335
     Share in all the issuer purchase, %: 34

     Full company name: "Inline Telecom Solyushins" Ltd
     Adress: 72 Oktyabrskaya str., Moscow 127521
     Share in all the issuer purchase, %: 27

     Full company name: "Tekhnoline DV" Ltd
     Adress: 6 Lazo str., Vladivostok 690003
     Share in all the issuer purchase, %: 10

3.2.4. Markets for issuer’s products (works, services)




                                                                                                          20
Basic services market is the area of 7 regions of the Russian Far East: Primorsky Krai, Khabarovsk
Krai, Sakhalin Oblast, Amur Oblast, Kamchatka Oblast, Magadan Oblast and Jewish Autonomous Oblast.
End-users accounting for at least 10 percent of total revenue from sale of goods (works/services):
none.

Possible factors which may have negative impact on sale of issuer‟s goods (works/services) and possible isuer‟s
actions to mitigate the said impact.
Factors which may have negative impact on sale of goods:
• drop of demand on telecommunications services provided by issuer;
• worsening legal, political and economic situation in the country and issuer‟s region;
• intensification of investments in alternative telecommunications providers in issuer‟s region;
• worsening quality of services compared to that of competitors;
• equipment wear and tear;
• aggressive marketing strategy of competitors aimed at attraction of the most income-bringing customers.
Issuer‟s actions to mitigate the impact of those factors:
Issuer implements investments program providing for replacement of old equipment with new digital
equipment to increase the quality of services provided and introduce new services. Also, issuer developed
marketing strategy governing work with VIP customers aimed at active attraction of corporate users.

3.2.5. Information about issuer’s licenses:

1. License: 54110
Date of issue: 12.09.2007
Expiry: 12.09.2012
Issuing authority: Federal service for supervision in mass communications, telecommunications and
protection of cultural heritage
Kinds of activities: data transfer services except for telecommunication services related to voice information
transfer
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

2. License: 54107
Date of issue: 12.09.2007
Expiry: 04.10.2012
Issuing authority: Federal service for supervision in mass communications, telecommunications and
protection of cultural heritage
Kinds of activities: Data transfer services for voice information transfer
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

3. License: 23896
Date of issue: 4.10.2002
Expiry: 4.10.2012
Issuing authority: Ministry of the Russian Federation for telecommunications and informatization
Kinds of activities: mobile radio communication services in 900 MHz range (possibility to provide services in
1,800 MHz range in Petropavlovsk-Kamchatsky area)
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

4. License: 54111
Date of issue: 12.09.2007
Expiry: 12.09.2012
Issuing authority: Federal service for supervision in mass communications, telecommunications and
protection of cultural heritage
Kinds of activities: telecommunication services for wired radio broadcasting
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

5. License: 54104
Date of issue: 4.10.2007




                                                                                                                 21
Expiry: 4.10.2012
Issuing authority: Federal service for supervision in mass communications, telecommunications and
protection of cultural heritage
Kinds of activities: local telephone communication services via payphones
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

6. License: 54105
Date of issue: 4.10.2007
Expiry: 4.10.2012
Issuing authority: Federal service for supervision in mass communications, telecommunications and
protection of cultural heritage
Kinds of activities: local telephone communication services using public access devices
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

7. License: 23897
Date of issue: 4.10.2002
Expiry: 4.10.2012
Issuing authority: Ministry of the Russian Federation for telecommunications and informatization
Kinds of activities: mobile radio communication services in 900 MHz range
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

8. License: 53309
Date of issue: 4.10.2007
Expiry: 4.10.2012
Issuing authority: Federal service for supervision in mass communications, telecommunications and
protection of cultural heritage
Kinds of activities: mobile radio communication services
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

9. License: 23890
Date of issue: 4.10.2002
Expiry: 4.10.2012
Issuing authority: Ministry of the Russian Federation for telecommunications and informatization
Kinds of activities: local and intrazone telephone communication services
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

10. License: 54109
Date of issue: 4.10.2007
Expiry: 4.10.2012
Issuing authority: Federal service for supervision in mass communications, telecommunications and
protection of cultural heritage
Kinds of activities: telegraph services
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

11. License: 54108
Date of issue: 4.10.2007
Expiry: 4.10.2012
Issuing authority: Federal service for supervision in mass communications, telecommunications and
protection of cultural heritage
Kinds of activities: communication link services
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

12. License: 54106
Date of issue: 4.10.2007
Expiry: 4.10.2012
Issuing authority: Federal service for supervision in mass communications, telecommunications and
protection of cultural heritage
Kinds of activities: telematic communication services
Issuer‟s prognostication regarding prolongation: License prolongation is probable.




                                                                                                    22
13. License: 54072
Date of issue: 04.10.2007
Expiry: 04.10.2012
Issuing authority: Federal service for supervision in mass communications, telecommunications and
protection of cultural heritage
Kinds of activities: communication link services (in Jewish Autonomous Oblast)
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

14. License: 39217
Date of issue: 21.12.2005
Expiry: 22.12.2010
Issuing authority: Federal service for supervision in telecommunications
Kinds of activities: communication services for broadcasting (Sakhalin Oblast)
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

15. License: 43246
Date of issue: 28.07.2006
Expiry: 21.06.2011
Issuing authority: Federal service for supervision in telecommunications
Kinds of activities: communication services for broadcasting (Sakhalin Oblast)
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

16. License: 39218
Date of issue: 21.12.2005
Expiry: 22.12.2010
Issuing authority: Federal service for supervision in telecommunications
Kinds of activities: communication services for broadcasting (Magadan Oblast)
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

17. License: 44448
Date of issue: 21.09.2006
Expiry: 21.06.2011
Issuing authority: Federal service for supervision in telecommunications
Kinds of activities: communication services for broadcasting (Magadan Oblast)
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

18. License: 45183
Date of issue: 24.10.2006
Expiry: 24.10.2011
Issuing authority: Federal service for supervision in telecommunications
Kind of activities: communication services for cable broadcasting
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

19. License: 43245
Date of issue: 28.07.2006
Expiry: 21.06.2011
Issuing authority: Federal service for supervision in telecommunications
Kinds of activities: communication services for broadcasting (Primorsky Krai)
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

20. License: 44192
Date of issue: 21.09.2006
Expiry: 21.09.2011
Issuing authority: Federal service for supervision in telecommunications
Kinds of activities: data transfer services except for telecommunication services related to voice information
transfer
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

21. License: 45182
Date of issue: 24.10.2006




                                                                                                                 23
Expiry: 21.06.2011
Issuing authority: Federal service for supervision in telecommunications
Kinds of activities: communication services for broadcasting (Khabarovsk Krai)
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

22. License: 45181
Date of issue: 24.10.2006
Expiry: 21.06.2011
Issuing authority: Federal service for supervision in telecommunications
Kinds of activities: communication services for broadcasting (Jewish Autonomous Oblast)
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

23. License: 53099
Date of issue: 18.09.2007
Expiry: 27.08.2011
Issuing authority: Federal service for supervision in telecommunications
Kinds of activities: communication services for broadcasting (Magadan Oblast)
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

24. License: 53100
Date of issue: 18.09.2007
Expiry: 27.08.2011
Issuing authority: Federal service for supervision in mass communications, telecommunications and
protection of cultural heritage
Kinds of activities: communication services for broadcasting (Sakhalin Oblast)
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

25. License: 50670
Date of issue: 21.05.2007
Expiry: 21.06.2011
Issuing authority: Federal service for supervision in mass communications, telecommunications and
protection of cultural heritage
Kinds of activities: communication services for broadcasting (Primorsky Krai)
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

26. License: 55965
Date of issue: 26.12.2007
Expiry: 27.06.2011
Issuing authority: Federal service for supervision in mass communications, telecommunications and
protection of cultural heritage
Kinds of activities: communication services for broadcasting (Khabarovsk Krai)
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

27. License: 55966
Date of issue: 26.12.2007
Expiry: 27.06.2011
Issuing authority: Federal service for supervision in mass communications, telecommunications and
protection of cultural heritage
Kinds of activities: communication services for broadcasting (Kamchatka Krai)
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

28. License: 63021
Date of issue: 29.09.2008
Expiry: до 29.09.2013
Issuing authority: Federal service for supervision in mass communications, telecommunications and
protection of cultural heritage
Kinds of activities: communication services for broadcasting (Magadan Oblast}
Issuer‟s prognostication regarding prolongation: License prolongation is probable.

29. License: 64419




                                                                                                    24
Date of issue: 11.28.2008
Expiry: 11.28.2011
Issuing authority: Federal service for supervision in telecommunications and mass communication
Kinds of activities: Granting of a telecommunication service for an on-air broadcasting (Sakhalin region)

Issuer‟s prognostication regarding prolongation: License prolongation is probable.


3.2.6. Issuer’s joint activities

Issuer does not do any joint activities with other entities.

3.2.7. Additional requirement to the Issuer whose main business is telecommunications services
Data on basic licenses is represented in clause 3.2.5 of this report.

1) License No 23897 (series F 023531) of 04.10.2002, Expiry 04.10.2012.
Kind of activities: mobile radio communication services in 900 MHz range.
- License holder is authorized to provide public mobile communication network services using GSM
standard equipment in 900 MHz range (Mobile Network-900) in Magadan Oblast.
- Mobile networks should be part of unified mobile network of the Russian Federation Mobile
Network-900.
- Installed capacity and coverage of area should be as on December 31 at least:
2005 – 2000 numbers, coverage – 5 %
2012 – 4000 numbers, coverage – 10 %
Area coverage may be checked within license utilization.
- Each subscriber of Mobile Network-900 unified network regardless from his registration and place
of purchase of subscriber‟s equipment should be able to use established Mobile Network-900.
- Mobile Network-900 should provide connection of incoming and outcoming calls between Mobile
Network-900 subscribers and public network subscribers of the RF.
- Numbers should be compliant with public communications network numbering plan and that of
GSM international numbering.
- Network should be designed and built so that failures in Mobile Network-900 during peak loads
does not exceed 5%.
- Existing ETSI standards and respective Russian regulations and rules should be complied with.
- Beginning of communication services providing via communications object is allowed subject to
available permit for use of the said communications object issued by state authority for communications and
IT supervision in the RF;

2) License № 23896 (series А 023530) of 04.10.2002, Expiry 04.10.2012.
Kind of activities: mobile radio communication services in 900 MHz range.
- License holder is authorized to provide public mobile communication network services using GSM
standard equipment in 900 MHz range (Mobile Network-900) in Kamchatka Oblast.
- License holder may provide mobile radio telephone communication services via two-band (dual
range) GSM -900/1800 standard network with installation of necessary equipment working in frequency
nominal 1800 and 900 MHz in Petropavlovsk-Kamchatsky area.
- Mobile networks should be part of unified mobile network of the Russian Federation Mobile
Network-900.
- Installed capacity and coverage of area should be as on December 31 at least:
2005 – 3000 numbers, coverage – 5 %
2012 – 8000 numbers, coverage – 20 %
Area coverage may be checked within license utilization.
- Each subscriber of Mobile Network-900 unified network regardless from his registration and place
of purchase of subscriber‟s equipment should be able to use established Mobile Network-900.
- Mobile Network-900 should provide connection of incoming and outcoming calls between Mobile
Network-900 subscribers and public network subscribers of the RF.
- Numbers should be compliant with public communications network numbering plan and that of
GSM international numbering.
- Network should be designed and built so that failures in Mobile Network-900 during peak loads
does not exceed 5%.




                                                                                                            25
- Existing ETSI standards and respective Russian regulations and rules should be complied with.
- Beginning of communication services providing via communications object is allowed subject to
available permit for use of the said communications object issued by state authority for communications and
IT supervision in the RF;
Liabilities coverage by the Issuer:
1). License No 23897 – capacity of 20,000 numbers , coverage - 5%
2). License No 23896 - capacity 40,000 numbers, coverage 7%
Factors that may negatively affect discharge of the Issuer‟s obligations imposed by the licenses: Resolutions
by state authorities in connection with redistribution of frequencies. Probability is hard to prognosticate. As
opined by issuer, probability is low.

b) Communication networks
Initial intrazone communication network of OJSC Far East Telecom utilizes cable (fiber-optic and
symmetric) air and radio relay communication lines. Analogue (K-60P) and digital plesiochronous and
synchronous hierarchy(PDH and SDH) transmission systems are used (IKM-120U, IKM-480, SMA-4, SMT-
1D, radio relay stations Ericsson , Alkatel 19479LX , etc.).
Urban and rural interstation communication networks utilize cable (fiber-optic and symmetric) air
and radio relay communication lines.
On urban interstation communication networks, SDH rings are built and equipment IKM-30, IKM-
15, Transport, OTG-32, OGM-30, OLT-21 etc. is used.
Rural communication networks utilize air lines in some settlements of Far Eastern regions.
Subscriber access networks utilize cable and air communication lines and wireless radio access
equipment. In intrazone communication network, ducts/links hired from OJSC Rostelecom are partly used
under unlimited period contracts.

3.3. The Issuer’s Prospective Business Plans

Short description of the issuer‟s plans of future business development:
- Active marketing of Internet services at the telecommunications market of Far East federal District
(videoconference
communications, corporate net of communications (including VPN), and intellectual
communications services;
- Marketing and active development of interactive multimedia services at the base of broadband Internet;
- Company revenue increasing due to new telecommunications services development;
- Outsourcing services at the base of Call-centers and informational divisions of branches.
One of priority for development also is development of fixed line communications services including local and
Intrazone communications for all types of users with different types of payments for services and keeping
dominant position at the telecommunications market of Far East.
The main competitive strength of OJSC Far East Telecom is high-capacity developed infrastructure, provided
to the company the direct access to the end subscriber. With this strength OJSC Far East Telecom poses a
problem to increase client amount and maximization revenues from one client due to new
telecommunications services.

OJSC Far East Telecom‟s Objectives for 2010:
Basic objectives – generation of revenue and costs reduction.
Keeping Company‟s market share in FEFD telecommunications market (including mobile and long
distance/international communications) at 28%
• Revenue (under Russian Accounting Standards) in 2010 – 14,563 million Roubles;
To achieve those objectives, the following tasks shall be fulfilled:
• Faster growth of broadband access services (subscriber growth by 2010: at least 498.5 thousands
subscribers; ARPU of broadband subscribers in 2010: at least 0.75 thousand Roubles).
• Keeping fixed line subscribers base by 2010: 1,360 thousand subscribers)
• Development of IP TV service and taking 32% of IP TV market share in 2010.
• Development of Voice over IP service and taking 41% of Voice over IP market in 2010.
In general, OJSC Far East Telecom plans to keep and achieve market positions by development of value
added services:
• Interactive IPTV and VoD.
• Development of broadband services.
• Development of networks on the basis of wireless broadband access.
• Introduction of „Voice over IP service.




                                                                                                              26
Diversified extra services packs to keep fixed lines subscribers


3.4. Issuer‟s participation in industrial, banking and financial groups, holdings, unions and
associations
Company: OJSC Svyazinvest
Issuer‟s position and functions in company: Subsidiary
Participation since: 1995.
Basic functions of OJSC Far East Telecom
         receipt of profit from business activities including dividends on company‟s shares;
         development and use of telecommunications networks and equipment;
         improvement of affordability of services for all subscribers;
         introduction of new telecommunication services including information services;
         participation in public use communication networks coordination as set forth by federal executive
         authority for state policy and management in telecommunications and IT;
         calling for funds from Russian and foreign investors, implementation of commercial projects in
          telecommunications.


         3.5. Issuer’s subsidiaries and dependent companies

Full name: Limited liability company Magalaskom
Short name: Magalaskom Co., Ltd.
Location: 2a Lenina St., Magadan 685000
TIN: 4909003447
OGRN: 1024900973206
Subsidiary: No
Dependent company: Yes
Reasons to admit company issuer‟s subsidiary or dependent company: owns over 20% of share capital
Issuer‟s share in entity‟s authorized capital: 50 %
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none
Basic kind of business: lease for international communication links
Significance of entity for issuer‟s business: long-term financial investments.
Entity‟s Board of Directors members:
Board of Directors is not provided for.

Person executing functions of sole executive body (Chief Executive Officer):

                               Name                                   Year of      Person‟s    Person‟s share
                                                                       birth     share in the      in total
                                                                                Issuer‟s share   amount of
                                                                                  capital, %      ordinary
                                                                                                 shares , %
Torgashin Evgeny Viktorovich                                           1975                  0                0


Members of entity‟s collegial executive body:
Collegial executive body is not provided for.


Full name: Limited liability company Kamalaskom
Short name: Kamalaskom Co., Ltd.
Location: 56 Lenina St., Petropavlovsk-Kamchatsky 683000
TUN: 4101028271
OGRN: 1034100643543
Subsidiary: No
Dependent company: Yes
Reasons to admit company issuer‟s subsidiary or dependent company: owns over 20% of authorized capital



                                                                                                             27
Issuer‟s share in entity‟s authorized capital: 50 %
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none
Basic kind of activities: lease for international communication links
Significance of entity for issuer‟s business: long-term financial investments.
Entity‟s Board of Directors members:
Board of Directors is not provided for.

     Person executing functions of sole executive body (Chief Executive Officer):

                               Name                                      Year of       Person‟s    Person‟s share
                                                                          birth      share in the      in total
                                                                                    Issuer‟s share   amount of
                                                                                      capital, %      ordinary
                                                                                                     shares , %
Shabanov Igor Timofeevich                                                 1955                  0              0


Members of entity‟s collegial executive body:
Collegial executive body is not provided for.
27
Full name: Limited liability company Interdaltelecom
Short name: Interdaltelecom Co., Ltd.
Location: Verhneportovaya 2 buil. A, Vladivostok Russia 690600
TIN: 2540004765
OGRN: 1022502267765
Subsidiary: No
Dependent company: Yes
Reasons to admit company issuer‟s subsidiary or dependent company: owns over 20% of authorized capital
Issuer‟s share in entity‟s authorized capital: 100%
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none
Basic kind of activities: local telephone services
Significance of entity for issuer‟s business: long-term financial investments.
Entity‟s Board of Directors members:

                               Name                                      Year of       Person‟s    Person‟s share
                                                                          birth      share in the      in total
                                                                                    Issuer‟s share   amount of
                                                                                      capital, %      ordinary
                                                                                                     shares , %
Bogatsky Pavel Dmitrievich                                                1972                  0              0
Pototsky Aleksandr Valerievich                                            1971                  0              0
Vondrachek Olga Vladimirovna                                              1975                  0              0


     Person executing functions of sole executive body (Chief Executive Officer):

                               Name                                      Year of       Person‟s    Person‟s share
                                                                          birth      share in the      in total
                                                                                    Issuer‟s share   amount of
                                                                                      capital, %      ordinary
                                                                                                     shares , %
Skrylnikov Aleksei Mikhailovich                                           1976                  0              0


Members of entity‟s collegial executive body:
Collegial executive body is not provided for.




                                                                                                              28
Full name: Closed joint-stock company Tranksikom
Short name: CJSC Truknsikom
Location: 2 Per. Febrichny St., Khabarovsk 680020
TIN: information is not available
OGRN: 1042700213929
Subsidiary: No
Dependent company: Yes
Reasons to admit company issuer‟s subsidiary or dependent company: owns over 20% of authorized capital
Issuer‟s share in entity‟s authorized capital: 25 %
Share of entity‟s ordinary shares belonging to issuer: 25 %
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none
Basic kind of activities: trunk communications
   Significance of entity for issuer‟s business: company provides services which issuer does not

Entity‟s Board of Directors members:
Board of Directors is not provided for.

    Person executing functions of sole executive body (Chief Executive Officer):

                               Name                                   Year of         Person‟s    Person‟s share
                                                                       birth        share in the      in total
                                                                                   Issuer‟s share   amount of
                                                                                     capital, %      ordinary
                                                                                                    shares , %
Bogoyavlensky Alexey Gennadievich                                      1971                    0              0



Members of entity‟s collegial executive body:
Collegial executive body is not provided for.
Full name: Limited liability company Wireless information technologies
Short name: WIT Co., Ltd.
Location: 220 Lenina St., Yuzhno-Sakhalinsk 693000
TIN: 7708134325
OGRN: 1027700235870
Subsidiary: Yes
Dependent company: No
Reasons to admit company issuer‟s subsidiary or dependent company: owns over 50% of authorized capital
Issuer‟s share in entity‟s authorized capital: 100 %
Share of entity‟s ordinary shares belonging to issuer: none
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none
Basic kind of activities: mobile telecommunication services
Significance of entity for issuer‟s business: long-term financial investments

Entity‟s Board of Directors members:

                               Name                                   Year of         Person‟s    Person‟s share
                                                                       birth        share in the      in total
                                                                                   Issuer‟s share   amount of
                                                                                     capital, %      ordinary
                                                                                                    shares , %
Nichiporenko Alexey Nikholaevich                                       1966                    0              0
Savchenko Viktor Dmitrievich                                           1960                    0              0
Golubitsky Bogdan Ivanovich                                            1979                    0              0
Temchenko Dmitry Viktorovich                                           1976                    0              0




                                                                                                             29
Koloskova Nataliya Viktorovna                                          1958                    0                 0


    Person executing functions of sole executive body (Chief Executive Officer):

                              Name                                    Year of         Person‟s    Person‟s share
                                                                       birth        share in the      in total
                                                                                   Issuer‟s share   amount of
                                                                                     capital, %      ordinary
                                                                                                    shares , %
Popov Eugeny Yurievich                                                 1966                    0                 0


Members of entity‟s collegial executive body:
Collegial executive body is not provided for.



Full name: Closed joint-stock company AKOS
Short name: CJSC AKOS
Location: 38a Prospekt 100 let Vladivostoku, Vladivostok the RF 690048
INN: 2540001972
OGRN: 1022502272792
Subsidiary: Yes
Dependent company: No
Reasons to admit company issuer‟s subsidiary or dependent company: owns over 50% of authorized capital
Issuer‟s share in entity‟s authorized capital: 94.45 %
Share of entity‟s ordinary shares belonging to issuer: 94.45 %
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none
Basic kind of activities: local telephone services
Significance of entity for issuer‟s business: long-term financial investments

  Entity‟s Board of Directors members:


                              Name                                    Year of         Person‟s    Person‟s share
                                                                       birth        share in the      in total
                                                                                   Issuer‟s share   amount of
                                                                                     capital, %      ordinary
                                                                                                    shares , %
Provotorov Alexander Yurievich (Chairman)                              1974                    0                 0
Batmanov Mikhail Vladimirovich                                         1978                    0                 0
German Nadezhda Eugenievna                                             1964                    0                 0
Feoktistova Natalia Vladimirovna                                       1966                    0                 0
Nichiporenko Alexey Nikholaevich                                       1966                    0                 0
Chernikova Tamara Alexeevna                                            1959                    0                 0
Skrylnikov Alexey Mikhailovich                                         1976              0.0032          0.0042

Members of entity‟s collegial executive body (Executive Committee):

              Name                     Year of birth             Person‟s                       Person‟s share
                                                               share in the                         in total
                                                              Issuer‟s share                      amount of
                                                                capital, %                         ordinary
                                                                                                  shares , %
Temchenko Dmitry Viktorovich               1976                                     0                                0




                                                                                                             30
Members of entity‟s collegial executive body (Executive Committee):

                               Name                                       Year of        Person‟s          Person‟s share
                                                                           birth       share in the            in total
                                                                                      Issuer‟s share         amount of
                                                                                        capital, %            ordinary
                                                                                                             shares , %
Temchenko Dmitry Viktorovich                                               1976                        0                    0
Skrylnikov Alexey Mikhailovich                                             1976                        0                    0
Bobkov Vladislav Valerievich                                               1976                        0                    0
Danilakina Elena Nikholaevna                                               1981                        0                    0
Burlaka Elena Alexandrovna                                                 1971                        0                    0


Full name: Open joint-stock company Sakhatelecom
Short name: OJSC Sakhatelecom
Location: 22 Kurashova St., Yakutsk 677000
TIN: 1435143422
OGRN: 1031402074550
Subsidiary: Yes
Dependent company: No
Reasons to admit company issuer‟s subsidiary or dependent company: owns over 50% of authorized capital
Issuer‟s share in entity‟s authorized capital: 100 %
Share of entity‟s ordinary shares belonging to issuer: 100 %
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none
Basic kind of activities: local telephone services
Significance of entity for issuer‟s business: long-term financial investments

Entity‟s Board of Directors members:

                               Name                                       Year of      Person‟s    Person‟s share
                                                                           birth     share in the      in total
                                                                                    Issuer‟s share   amount of
                                                                                      capital, %      ordinary
                                                                                                     shares , %
Balatsenko Andrey Vladimirovich (Chairman of the Board)                    1965            0.0013          0.00053
Skrylnikov Aleksey Mikhailovich                                            1976                 0                 0
Davidova Alena Aleksandrovna                                               1974                 0                 0
Lavrova Olga Yurievna                                                      1969                 0                 0
Lyubushkin Ivan Aleksandrovich                                             1976                 0                 0
Voloshin Konstantin Gennadievich                                           1974                 0                 0
Andrianov Roman Vladimirovich                                              1975           0.00037          0.00038
Krivoshapkin Albert Ivanovich                                              1977                 0                 0
Batmanov Mikhail Vladimirovich                                             1978                 0                 0
Ponomarev Il‟ya Vladimirovich                                              1970                 0                 0

Person executing functions of sole executive body (Chief Executive Officer):

               Name                    Year of              Person‟s                         Person‟s share
                                        birth             share in the                           in total
                                                         Issuer‟s share                        amount of
                                                           capital, %                           ordinary
                                                                                               shares , %




                                                                                                                31
Voloshin Konstantin Gennadievich          1974                  0                                   0

Members of entity‟s collegial executive body (Executive Committee):

              Name                   Year of birth               Person‟s                      Person‟s share
                                                               share in the                        in total
                                                              Issuer‟s share                     amount of
                                                                capital, %                        ordinary
                                                                                                 shares , %
Voloshin Konstantin                       1974                         0                                0
Gennadievich
Gotovtseva Sargilana Ivanovna             1977                         0                                0
Akishev Aleksey Sergeevich                1977                         0                                0
Kan Savely Konstantinovich                1957                         0                                0
Svetlolobov Oleg Nilovich                 1962                         0                                0
Lee Sergey Trofimivoch                    1957                         0                                0
Likhandi Igor Vladimirovich               1960                         0                                0
Bogdanova Svetlana Evgenievna             1962                         0                                0
Tulaganov Ruslan Kuchkarovich             1974                         0                                0
Grishaev Nikolay Viktorovich              1976                         0                                0
Sukueva Olga Semyonovna                   1977                         0                                0


3.6. Breakdown and value of the Issuer’s fixed assets, information about plans to purchase,
renewal and loss of fixed assets about all facts of the Issuer’s fixed assets encumbrance

  3.6.1. Fixed assets

  At the end of reporting period

                Fixed assets                 Primary (reconstructive) value,    Sum of accrual amortization, RUR.
                                                         RUR.
Land                                                                   9 417                                        0
Buildings                                                           1 418 152                                -426 741
Constructions and transmission hardware                          5 984 226                                  -2 097 884
Machine and equipment                                           11 377 115                                  -6 800 651
Transport                                                            233 368                                 -124 150
Computing and office equipment                                       939 614                                 -752 552
House fond                                                            33 881                                     -889
Other                                                              435 183                                 -196 283
Total:                                                          20 431 256                              -10 399 151




                                                                                                                  32
           IV. Information about issuer’s financial and business activities
4.1. Results of issuer’s financial and business activities

4.1.1. Profit and losses
         Name of result              2009, 9       2010, 9
                                     months        months
Revenues, RUR.                       9 941 660 10 443 270
Gross profit, RUR                    2 589 297     2 753 060
Net profit (non distributed profit   1 626 951     2 172 812
(uncovered loss), RUR
Return on Equity capital, %               18.6             21.1
Return on assets, %                        9.4             10.7
Net profitability coefficient, %          16.4             20.8
Products (sales) profitability, %           26             26.4
Uncovered loss as on                      0.57             0.51
reporting date, thousand
Roubles, RUR
Uncovered loss as on                           0             0
reporting date and total
balance ratio, RUR

  Economics analysis of return and losses of the issuer:

  The main factors have influenced to revenue growth are growth of services, new services marketing as well as
  tariffs increase.



4.1.2. Factors, which have influence to revenue from sale by issuer of goods, products, works,
services and profit (loss) of issuer from basic business activity

        Inflation: inflation growth rate has material effect on issuer‟s revenue as growth of
tariffs depends on inflation level in particular.
        Foreign currency exchange rates: foreign currencies exchange rates are not
effecting issuer‟s revenue and profit received as all issuer‟s service tariffs are set in
national currency and issuer has no liabilities in foreign currency. Exchange rate
fluctuations have no effect on issuer.
        State authorities: About 45% of revenue is generated from services regulated by
Federal service for tariffs of Russia, Federal service for supervision in telecommunications.
Thus, resolutions of regulators have direct effect on issuer‟s revenue.
        Other economic, financial, political and other factors: Effect rate - 30%.


4.2. Issuer’s liquidity, sufficiency of capital and current assets

                                     9 months,     9 months,
                                       2009          2010
Working capital, thousand            -5 864 204    -6 849 583
Roubles



                                                                                                                 33
Permanent asset index               1.62         1.59
Current liquidity ratio             0.57         0.91
Fast liquidity ratio                0.41         0.69
Equity ratio                        0.52          0.5

   Economic analysis of liquidity and solvency:
Working capital is the share of equity capital for financing current assets. Negative value of
working capital is explained by current liabilities exceeding issuer‟s current assets. One of the
sources to cover fixed assets and noncurrent assets is short-term accounts payable.
Permanent asset index is the share of issuer‟s noncurrent assets in equity sources.
Current liquidity factor shows the degree of covering current liabilities with current assets. Current
assets exceeding short-term financial liabilities provides for reserve to pay long-term accounts
payable and compensate losses which may be incurred by company in placement and liquidation of
all current assets except for cash. The more is that reserve, the more is creditors concern that debts
will be paid back.
Fast liquidity factor shows availability of the most liquid assets and may be considered an indicator
of potential reserve of issuer‟s funds. Common value of that factor is deemed satisfactory if exceeds
0.7-1. This factor change was effected by growing short-term accounts payable.
Equity ratio is the sustainability of company's financial standing describing the level of financial
independence.
Equity ratio is ratio of equity to total assets.
In the course of realization of liquidity increase measures, issuer is facing the following tasks:
- search of optimal ratio of assets and liabilities structure from profitability and risk point of view
accounting for liquidity limits;
- modeling company‟s liquidity position in mid-term;
- improvement of borrowings structure;
- sale of non-core assets

4.3. Size and structure of issuer’s capital and current assets

4.3.1. Size and structure of issuer’s capital and current assets

                               9 months,
                                 2010
Authorized capital,            2 535 006
thousands roubles
Total value of the Issuer‟s     -844 510
shares, bought back by the
Issuer for the further
sale/resale, thousands
Roubles
Issuer‟s shares bought back            0
by the issuer for future
resale/assignment,
percentage of issued shares
(authorized capital)
Reserve capital established      126 751
from profit allocations,
thousand Roubles
Additional capital, thousand     567 717
Roubles



                                                                                                    34
Social welfare fund,                8 288 389
thousand Roubles
Net profit, thousand               10 673 353
Roubles

Structure and size of issuer‟s current assets in compliance with the Issuer‟s accounting
statements

                                   9 months,
                                     2010
Working capital
Inventory                           2 809 047
Raw materials and other values        634 027
Animals for farming                   595 100
Expenses in unfinished                         0
production
Products for sale                              0
Shipped goods                            879
Costs of future periods                     0
Other inventories and costs            38 048
VAT per purchased values                       0
Accounts payable (payments are         48 123
expected in more than 12
months after the reporting date)
Including per purchasers and             832
customers
Accounts payable (payments are                 0
expected during 12 months after
the reporting date)
Including per purchasers and        2 059 288
customers
Short term financial investments    1 246 201
Cash                                      242
Other current assets                   65 958


Issuer‟s policy for funding current assets:
Issuer funds current assets from own sources – revenue from main business. (Meantime,
borrowings are used for capital investments).
Factors which may cause changes in policy for funding current assets and assessment of their
probability:
-Sharp decrease or increase of interest rates on borrowings may have effect on the amount
of borrowed funds.
That factor‟s probability is low. (Also, it will not have effect on issuer‟s current business, as
issuer uses borrowings on capital investments only – investments activity).
    - Revenue decreasing. That factor‟s probability is low.
As opined by issuer‟s executives, the above changes in size and structure of capital have
positive impact.




                                                                                              35
4.3.2. Issuer‟s financial investments

Kind of securities: Common shares
Full corporate name of securities issuer: Open joint-stock company Sakhatelecom
Short corporate name of securities issuer: OJSC Sakhatelecom.
Location: 22 Kurashova St., Yakutsk city, Russia 677000

Information about issues of such category/type of securities owned by issuer:
 Date of state registration   State registration code of issue       State registration authority
         of issue
     March 10, 2004                      1-01-55018-Е              Federal Committee for Securities
                                                                   Market of the Russian Federation

Number of securities owned by issuer: 1,499,547
Total face value of securities owned by issuer (rubles): 1,499,547 Roubles
Total book value of financial investments: 3,664,097,851.8 Roubles
Information about reserves established for depreciation of securities:
Information about potential loss in connection with bankruptcy of issuer of securities of that kind,
category/type of person liable for securities:
There are no losses of financial investments value. There are no potential losses due to bankruptcy.
Information about other investments: there are no other investments


4.3.3. Issuer’s intangible assets

  At the end date of reporting period:

                    Name of intangible assets groups                               Initial        Depreciation
                                                                              (replacement)        accrued,
                                                                                   value,          thousand
                                                                                 thousand           Roubles
                                                                                Rooubles
Sole rights to software, databases                                                         173                   173
Sole right to trademarks                                                                   128                    57
Other                                                                                        4                     4

    The issuer represent information about it‟s intangible assets in accordance with Accounting policy 14/2000
    “Accounting of intangible assets”, approved by Order of Ministry of Finance of RF as of October 16, 2000.




4.4. Information about issuer’s policy and expenses in R&D, regarding licenses and
patents, new developments and researches

Information about receipt by issuer any legal protection of basic intellectual property objects:
Issuer has no patents and other objects of legal protection of intellectual property.
Currently, Far East Telecom trademark is licensed.
Basic directions and results of using intellectual property:
Basic use of intellectual property is utilization of trademark when providing all kinds of
services by issuer, protection of corporate name, and use for creating strong advertising



                                                                                                                 36
brand.
Risk factors in connection with possibility of basic patents / trademark licenses expiry: There
are no risks in connection thereof.


4.5. Analysis of development trends in issuer’s basic business activity

          Telecommunications sector is one of the most rapidly developing Russian economic sectors
which is supported by industry growth and increase of purchasing power of individuals. Development
of telecommunications and IT infrastructure is among the priorities of state policy and accounting for
creation of global information society is a necessary condition of further economic development,
employment growth and increase of cultural and education level.
          At present, communications market is represented by local operators and
national/international operators, while traditional operators account for less than half of sector‟s
revenue. Regional communication operators hold licenses for local telephone services, data transfer
and ISDN services, wireless subscriber access and mobile communications.
          State policy priorities in mid-term prospect of IT and telecommunications infrastructure,
communications market development, are as follows: providing access to any user to
telecommunications infrastructure and information sources, outrunning growth of infrastructure,
improvement of investment attractiveness of communications and IT sector, creating conditions for
faster development of new technologies, ensuring state interests and information security, creating
conditions for fair competition, support of national telecommunications equipment manufacturers.
          For implementation of those tasks it is provided as follows:
- to carry out effective technology policy aimed at modernization of existing and introduction of new
public communication systems and networks;
- faster development of modern high-quality communication services market (data transfer, e-mail,
Internet access and other telematic services);
- harmonization of radio frequency range use in compliance with international treaties of the
Russian Federation, conversion of radio frequencies, implementation of economic methods in
selling frequencies via tenders;
- improvement of state price/tariff regulation mechanism providing for equalizing tariffs with
reasonable economic costs level (including investments component), minimizing cross-subsidizing
of communication services, shift to state regulation of tariffs using marginal pricing method;
- gradual establishment of universal servicing system (providing to any user in the Russian
Federation access to public communication network at any times, providing basic communication
services with specified quality and for reasonable prices);
- providing indiscriminate access of operators to public use network and setting connection and
traffic tariffs, separate accounting of revenue and costs of operators by kinds of communication
services;
- introduction of transparent and public procedures for licenses issue and cancellation,
establishment of reasonably fair licensing requirements and conditions aimed at development of
telecommunications infrastructure;
- implementation of a range of measures aimed at development of competitive national production
of telecommunications equipment and software;
- creation and development of market of IT and knowledge as production factors, making public
information resources real sources of social and economic development, systemizing of state
information resources and transferring them into electronic form which suggests development of
electronic commerce and Russian Internet segment, providing access to Russian and international
resources for educational institutions;
- shift to digital TV broadcasting technology providing for simultaneous increase of programs.
          Development of telecommunications in Far Eastern federal district (except for Sakha
Republic and Chukot Autonomous Okrug) within the recent 5 years is going ahead of economic



                                                                                                   37
development, i.e., telecommunications sector revenue growth rates are significantly exceeding
production growth rates.
        One f the important spheres of sector‟s development is total improvement of tariff policy of
electric communication companies by equalizing communication services tariffs to economically
reasonable level, minimizing cross-subsidizing of communication services. In particular, under
communication services pricing reform it is suggested to increase local telephone tariffs.
  Investments policy of inter-regional companies a lot of capital investments are kept for expansion
  and modernization of public telephone networks and data transfer networks which is aimed at
  liquidation of queues for telephone installation and digital network increase.

4.5.1. Factors and conditions effecting issuer’s business and its results:

          01.01.2004 Federal Act of 07.07.2003 № 126-FZ “About telecommunications” It sets forth legal
basics of communications sector in Russia and defines sectoral status of state authorities and rights and
liabilities of persons participating in the said sector or using communication services.

Material events/factors which may have most negative effect on issuer‟s ability to show in future same or better
performance compared to the latest reported period:
         In future, basic negative effect should be expected from competitors. In 2008 it is expected to grow on
mobile communications, intrazone communications and connection and traffic markets.
         Probability of such events happening (arising factors): obtaining licenses by competing operators for
intrazone services and active development of mobile operators in all regions.

Material events/factors which may negative or positive influence on the issuer‟s business results:

         In 2008-2009 there was high speed development of new value added services, such as broadband
access to the Internet by technology of DSL, IPTV, VOD, Netvile and other multimedia services. Also it is
expected development of Voice over IP (IP telephony).
         Currently, most of issuer‟s revenue is received from local telephone services – 39%. Tariffs on these
services are set by government, therefore state policy in communication services pricing may have most
negative/positive effect on issuer‟s performance. Share of new services is 32% in total Company‟s revenue.

Material events/factors which may have most negative effect on issuer‟s ability to show in future same or better
performance compared to the latest reported period:
         In future, basic negative effect should be expected from competitors. Competition is expected to grow
on mobile communications, intrazone communications and connection and traffic markets.
         Probability of such events happening (arising factors): obtaining licenses by competing operators for
intrazone services and active development of mobile operators in all regions, federal operators going to
Broadband Internet market (RTK, TTK).

The main current and assumed competitors of the Issuer are in core businesses including foreign competitors
(abroad). Factors of the issuer‟s competitiveness including description of influence degree to competitiveness of
the Issuer‟s services and products are:
         Far East Telecom continues to keep leading position at the local and Intrazone fix line
communications.

4.5.2. Competitors of the Issuer

The main and supposed issuer‟s competitors are in basic kinds of activities including abroad. List of issuer‟s
competitive advantages and description of their impact on competitive advantages of products (works/services):
OJSC Far East Telecom is keeping the leading position in local and intrazone communications.

Key competitors in local communications:
       OJSC NTC (Primorsky Krai),




                                                                                                              38
         CJSC TK-Vostoktelecom (Khabarovsk Krai),
         Sakhalin Telecom Ltd (Sakhalin Oblast),
         Federal state enterprise Zabaikalskaya Railway (Amur Oblast).
Highest level of competition is observed in Primorsky Krai, Khabarovsk Krai and Amurskaya Oblast.

In 2009, intrazone operators appeared which cannot be regarded as important competitors, if it is not
considered in connection with end users (as last mile is not open), but they are already competitors in
operator business.

Key Intrazone communications competitors:
        OJSC NTK (Primorsky Krai),
         Sovintel Ltd (Khabarovsky Krai),
         SP “Sakhalin Telecom” Ltd (Sakhalinskaya Oblast).

Key Internet services competitors:
        OJSC NTC, CJSC Vostoktelecom, Vladivostok network Co., Ltd (Primorsky Krai),
        CJSC Redcom, Vostoktelecom Co., Ltd, Golden Telecom, CJSC Prestige Internet Enforta
        (Khabarovsk Krai),
        Interkamservice Co., Ltd, Intercom Co., Ltd, SK TV Co., Ltd (Kamchatka Oblast),
        Maglan Co., Ltd, Deltacom Co., Ltd (Magadan Oblast),
        Teledine Systems Co., Ltd (Amur Oblast)
        SP Sakhalin Telecom Co., Ltd (Sakhalin Oblast).

Key mobile communications competitors:
    OJSC Mobile TeleSystems, OJSC Vympelcom-Communications, and CJSC «МоBICом Khabarovsk
(Megafon trademark) in Magadan and Kamchtsky Oblast,

    Potential competitors of OJSC Far East Telecom are companies providing similar range of services and
having network of branches in Far East or planning development of branches.

        OJSC Far East Telecom‟s market share (including mobile communications) by revenue at the end of
year:
        2008 – 27.5%
        2009 – 27.8%
        2010 (forecast) – 27.4%

Basic factors of competitive advantages:
         Own developed infrastructure: the largest communication grids and distributing networks in all
regions of company‟s business including district centers (high domination);
         Ability to effectively work with connected operators (high domination);
         Advantages of access to all categories of customers: effective contracts and billing information,
developed channels of bills delivery (average domination);
         Regional entity of company provides service to corporate customers in the whole territory of FEFD
including development of special offers and tariff plans (average domination);
         Stable image among customers that OJSC Far East Telecom‟s branches are sustainable and reliable
companies (low domination);
         Sustainable financial standing allowing for investments in development of new services;
         Skilled engineering and commercial staff allows to offer optimal price/quality services and ensure
high level of service when providing communications.

Opinions of issuer‟s management bodies regarding the information submitted are the same.




                                                                                                          39
 V. Detailed information about persons included in the Issuer’s governance
  bodies, the Issuer’s bodies for control over its financial and operational
     activities, and brief information about the Issuer’s staff members
                                  (personnel)
5.1. Information about structure and authority of the Issuer’s corporate governance bodies

Full description of the Issuer‟s governance bodies, its duties in compliance with Articles of Association
(incorporation documents) of the Issuer:

In compliance with the Issuer‟s Articles of Association:
General meeting of shareholders shall be the Issuer‟s supreme management body.
The Board of Directors shall be the Issuer‟s collegial management body exercising overall supervision of
Company‟s business.
Executive Committee shall be collective executive body implementing resolutions of General
meeting of shareholders and the Board of Directors.
CEO (General Director) shall be sole executive body exercising supervision of Company‟s everyday
business. CEO is appointed by the Board of Directors.

        Authority of General meeting of shareholders in compliance with the Issuer‟s Articles of Association:

        The following matters shall be the authority of General Meeting of shareholders and may not be
addressed for decision making to the Board of Directors, CEO or the Executive Committee of Company:
        1) making amendments and changes to these Articles of Association or approval of any new version
of Company‟s Articles of Association (except for cases provided for by the Federal Act On joint-stock
companies), decisions thereon shall be made by at least three-fourths of the votes of shareholders being
owners of Company‟s voting shares and attending Meeting;
        2) Company‟s restructuring, decision thereon shall be made by at least three-fourths of the votes of
shareholders being owners of Company‟s voting shares and attending Meeting;
        3) Company‟s winding up, appointment of winding up commission and approval of intermediate and
final winding up balance sheets, decision thereon shall be made by at least three-fourths of the votes of
shareholders being owners of Company‟s voting shares and attending Meeting;
        4) election of the Board of Directors members, made by cumulative voting;
        5) preterm dismissal from office of members of the Board of Directors, decision thereon shall be
made by a majority of votes of shareholders being owners of Company‟s voting shares and attending Meeting;
        6) determination of quantity, book value, rank/type of Company‟s authorized shares and rights vested
with those shares, decision thereon shall be made by at least three-fourths of the votes of shareholders being
owners of Company‟s voting shares and attending Meeting;
        7) increase of Company‟s Share Capital by increasing book value of shares, decision thereon shall be
made by a majority of votes of shareholders being owners of Company‟s voting shares and attending Meeting;
        8) increase of Company‟s Share Capital by placing additional ordinary shares under open
subscription if the number of additionally placed shares is over 25 percent of ordinary shares previously
placed by Company, decision thereon shall be made by at least three-fourths of the votes of shareholders
being owners of Company‟s voting shares and attending Meeting;
        9) increase of Company‟s Share Capital by placing additional shares under closed subscription,
decision thereon shall be made by at least three-fourths of the votes of shareholders being owners of
Company‟s voting shares and attending Meeting;
        10) decrease of Company‟s Share Capital by buy back of part of shares by Company for the purpose
of decreasing their total number and by redemption of shares purchased or bought back by Company,
decision thereon shall be made by a majority of votes of shareholders being owners of Company‟s voting
shares and attending Meeting;
        11) decrease of Company‟s Share Capital by decreasing book value of shares, decision thereon shall
be made by a majority of votes of shareholders being owners of Company‟s voting shares and attending
Meeting;




                                                                                                                40
         12) decrease of Company‟s Share Capital in cases if net assets value is less than Authorized share
capital in accordance to Audit results, decision thereon shall be made by a majority of votes of shareholders
being owners of Company‟s voting shares and attending Meeting, except cases when decreasing of share
capital is making by decision of the Board of Directors to the amount which is less of Company‟s net assets,
decision thereon shall be made by a majority of three fourth votes of shareholders being owners of
Company‟s voting shares and attending Meeting;
         13) electing members of Company‟s Inspection committee and their preterm dismissal from office,
decision thereon shall be made by a majority of votes of shareholders being owners of Company‟s voting
shares and attending Meeting;
         14) approval of Company‟s auditor, decision thereon shall be made by a majority of votes of
shareholders being owners of Company‟s voting shares and attending Meeting;
         15) Payment (declaring of) dividends based on the results of the first quarter, six months, nine
months of any fiscal year, decision thereon shall be made by a majority of votes of shareholders being owners
of Company‟s voting shares and attending Meeting;
         16) Approval of annual reports, annual Company‟s accounting statements including Company‟s
earnings and loss statements (reports) and distribution of earnings (including payment (declaring) of
dividends except for the earnings distributed as dividends based on the results of the first quarter, six months,
nine months of any fiscal year) and Company‟s losses based on the results of any fiscal year, decision thereon
shall be made by a majority of votes of shareholders being owners of Company‟s voting shares and attending
Meeting;
         17) setting forth the procedure for holding General Meeting of Company‟s shareholders, decision
thereon shall be made by a majority of votes of shareholders being owners of Company‟s voting shares and
attending Meeting;
         18) splitting-up and consolidation of shares, decision thereon shall be made by a majority of votes of
shareholders being owners of Company‟s voting shares and attending Meeting;
         19) decision on approval of transactions with interests, decision thereon shall be made in cases and
in compliance with the procedures provided for by Chapter XI of the Federal Act On joint-stock companies;
         20) decision on approval of large transactions related to purchase, alienation or possible alienation
by Company of any assets of the value over 50 percent of the balance sheet value of Company‟s assets as per
Company‟s accounting data as on the date of the latest accounting date except for transactions in the course
of Company‟s normal business activities, transactions related to offering Company‟s ordinary shares by
subscription (sale) and transactions related to offering equity securities convertible into Company‟s ordinary
shares, decision thereon shall be made by at least three-fourths of the votes of shareholders being owners of
Company‟s voting shares and attending Meeting;
         21) decision on participation in financial and industrial groups, associations and other unions of
commercial organizations, decision thereon shall be made by a majority of votes of shareholders being owners
of Company‟s voting shares and attending Meeting;
         22) approval of internal documents governing Company‟s bodies, decision thereon shall be made by
a majority of votes of shareholders being owners of Company‟s voting shares and attending Meeting;
         23) offering bonds by Company, convertible into shares and other equity securities convertible into
shares, if the said bonds (other equity securities) are placed by closed subscription or by open subscription
when in case of open subscription convertible bonds (other equity securities) may be converted into
Company‟s ordinary shares which are making up over 25 percent of previously offered ordinary shares,
decision thereon shall be made by at least three-fourths of the votes of shareholders being owners of
Company‟s voting shares and attending Meeting;
         24) decision on compensation by Company of the expenses on arrangement and holding of General
Meeting of Company‟s shareholders in case if in violation of the provisions of the current laws of the Russian
Federation the Board of Directors fails to decide on summoning an extraordinary Meeting and the said
Meeting was summoned by other persons. The said decision shall be made by a majority of votes of
shareholders – owners of Company‟s voting shares attending that Meeting;
         25) decision on assignment of powers of Company‟s sole executive body to a managing company or
a manager, and the said decision shall be made by a majority of votes of shareholders – owners of Company‟s
voting shares attending that Meeting;
         26) other matters provided for by the Federal Act On joint-stock companies and these Articles of
Association.

         General Meeting of shareholders shall be entitled to make decisions on the matters provide for by sub
clauses 2, 7, 8, 9, 11, 18 – 22, 25, clause 12.2 of these Articles of Association solely by the Board of Directors



                                                                                                               41
request. Meantime, other persons entitled in compliance with the current laws of the Russian Federation to
move offers in the agenda of any annual or extraordinary General Meeting of shareholders shall not be
entitled to demand that the Board of Directors shall bring the said matters in the agenda thereof.
          General Meeting of shareholders shall not be entitled to consider and decide on the matters which
are not related to its authority by the Federal Act On joint-stock companies.
          General Meeting of shareholders shall not be entitled to consider and decide on the matters which
are not included in the agenda and to change agenda.
          When General Meeting of shareholders is deciding on amendments and changes in these Articles of
Association restricting any rights of shareholders – owners of Company‟s preferred shares of a certain type,
the decision on the said amendments and changes shall be considered made if it was voted for by at least
three-fourths of the votes of shareholders – owners of Company‟s ordinary shares attending that meeting and
three-fourths of the votes of all shareholders owners of Company‟s preferred shares of a certain type.


Authority of the Board of Directors in compliance with the Issuer‟s Articles of Association:

         1) determining priority directions of Company‟s business including approval of Company‟s
annual budget, mid-term and long-term budgets, strategies and development programs, making
amendments in the said documents, study of the results of their implementation;
         2) preliminary approval of operations outside the framework set by Company‟s annual
budget;
         3) summoning annual and extraordinary General Meetings of shareholders except for cases
provided for by clause 8, Article 55 of the Federal Act On joint-stock companies;
         4) approval of the agenda of General Meeting of shareholders;
         5) defining the date of making the list of persons entitled to attend General Meeting of
shareholders and other matters related to the authority of Company‟s Board of Directors in
compliance with the provisions of Chapter VII of the Federal Act On joint-stock companies and in
connection with arrangements for and convening of General Meeting of shareholders;
         6) preliminary approval of Company‟s annual report;
         7) increase of Company‟s Share Capital by placing extra shares by Company limited to the
number of authorized shares set forth by these Articles of Association except for cases provided for
by subclauses 8, 9 of clause 12.2 of these Articles of Association;
         8) Company‟s issuing of bonds and of other equity securities in case when under terms and
conditions of placing of the said bonds and other equity securities they are not convertible into
Company‟s shares;
         9) making decision about determination of percentage (coupon) for bonds;
         10) making decision about prescheduled maturity of Company‟s issued bonds, decision
about its issuing is providing possibility of maturity;
         11) Company‟s issuing bonds convertible into shares and of other equity securities if the
said bonds (other equity securities) are placed by open subscription and meanwhile the convertible
securities (other equity securities) may be converted into Company‟s ordinary shares making up the
total of 25 percent and under of the issued ordinary shares;
         12) determination of price (monetary valuation) of assets, placing price and repurchase
price of equity securities in cases provided for by the Federal Act On Joint Stock Companies;
         13) approval of resolutions on issuing of securities, issue prospectus, reports on the results
of Company‟s securities purchase for the purpose of redemption, reports on redemption results,
reports on submission of requests by shareholders about redemption of shares owned by them;
         14) buy back of Company‟s placed shares, bonds and other securities;
         15) determination of issued by Company‟s bonds buy back price and the procedure of price
determination;
         16) approval of Company‟s registrar and terms and conditions of his labor contract and
deciding on cancellation of the said contract;
         17) recommendations on earnings distribution including the size of dividends on



                                                                                                         42
Company‟s shares, its payment procedures and Company‟s loss based on fiscal year‟s results;
         18) approval of internal document about dividends per Company‟s shares, including
amendments to it, and recognition documents as lost power;
         19) use of Company‟s reserve fund and other funds;
         20) approval of internal documents setting forth the procedures of internal control over
Company‟s financial and business activities;
         21) recommendations on the size of rewards and compensations paid to Company‟s
Inspection committee members, approval of the terms and conditions of the contract with
Company‟s auditor for providing auditor‟s services, including setting the payment amount for the
said services;
         22) approval of the Charter on Company‟s division exercising the functions of internal
control, preliminary approval of candidates for its head position and dismissal by Company‟s
initiative of the said person from office as well as considering other matters to be decided upon by
the Board of Directors in compliance with the Charter on the said division;
         23) preliminary approval of any transaction or a few interlinked transactions in connection
with purchase, alienation or possible alienation of assets by Company, both directly and indirectly,
the value of which is from 1 to 25 percent of the balance-sheet value of Company‟s assets as per its
accounting statements as on the latest accounting date.
         24) approval of any transaction in connection with purchase, alienation or possible
alienation of assets by Company, the value of which is from 25 to 50 percent of the balance-sheet
value of Company‟s assets as per its accounting statements as on the latest accounting date except
for transactions in the course of Company‟s normal business, transactions in connection with
placing of Company‟s ordinary shares by subscription (sale), transactions in connection with
placing of equity shares convertible into Company‟s ordinary shares;
         25) approval of any transactions with interest in cases provided for by Chapter XI of the
Federal Act On joint-stock companies;
         26) setting/changing functional units of organizational structure and basic functions of
divisions being functional parts of Company‟s organizational structure (except for the structures of
branches and representative offices);
         27) establishment of branches, opening of representative offices, their winding up, approval
of Charter thereof;
         28) preliminary approval of candidates for positions of heads of branches and
representative offices and dismissal of the said persons from office;
         29) appointment of the sole executive body (CEO), setting the period of his office and early
termination of his powers and labor contract concluded with him;
         30) electing/re-electing Company‟s Chairman of the Board of Directors and his deputy;
         31) establishment of collegial executive body (the Executive Committee): setting its powers,
appointment of the Executive Committee members, early termination of their powers;
         32) preliminary approval of combining functions by persons, who is CEO, members of
Executive committee, positions in governance in other organizations;
         33) approval of positions overlapping in managing bodies of other entities by the person
exercising the functions of Company‟s sole executive body, Company‟s Executive Committee
members;
         34) establishment of permanent or interim committees (to be engaged in certain matters) of
the Board of Directors, approval of the charter on them; including amendments to it‟s charters, and
recognition documents as lost power;
         35) appointment and dismissal from office of Company‟s Corporate Secretary, approval of
the charter on the Corporate Secretary and his office; including amendments and changing to the
mentioned documents, and recognition documents as lost power;
         36) approval of the terms and conditions of contracts (addendums) with CEO, the Executive
Committee members, heads of branches and representative offices, the head of Company‟s division exercising
internal control functions, Company‟s Corporate Secretary and considering the matters decisions thereon




                                                                                                       43
shall be made by the Board of Directors in compliance with the said contracts;
         37) making decisions on Company‟s participation in other commercial entities:
       - about creation of the organization by establishment,
       - about participation as a member,
       - termination of participation, except of cases when entity‟s business of liquidation,
       - change of the participation share size, the book value of participation share, owned by the
Company, except of cases when mentioned changes are results of decisions made by governance
body of such organization, whose participant is Company, or in case when mentioned changes are
made by order by Court;
       38) approval the Company‟s position regarding questions of competency of general participants
meetings of commercial entities, whose participant is the Company, regarding the questions, which causes the
termination of the Company‟s participation in such organizations, changing of the company‟s participation
share and book value of the Company‟s participation share, amount of shares changing or book value of
shares, owned by the Company;
        39) making decisions on Company‟s participation in non-commercial organizations except
for the cases provided for by subclause 21, clause 12.2 of these Articles of Association:
        - about creation of the organization by establishment,
        - by participation as a member,
        - termination of participation, except of cases when entity‟s business of liquidation,
        - making additional contributions (in-payments) in connection with Company‟s
participation in non-commercial organizations;
        40) making decisions on the matters related to the authority of General Meetings of
shareholders of any commercial entities the sole member of which is Company;
        41) approval of internal document(s) setting forth the rules and approaches to disclosure of
information about Company, the procedure for using the information about Company‟s business,
Company‟s securities and transactions with them which is not public; including amendments to the
documents, and recognition documents as lost power;
        42) approval of Code of corporate conduct of the Company, including amendments to it,
and recognition it as lost power;
        43) approval of risk management programs (procedures or other documents) of the
Company, and also consideration of any other meters, decisions regarding which shall be made by
the decision of the Board of Directors in accordance to the mentioned documents;
        44) preliminary approval of invitation outside specialist on the paid basis to the inspection
of the Company‟s business made by the Inspection commission; determination of procedure of
payment and other material circumstances of outside specialist participation, attracted on the paid
basis in the Inspection commission;
        45) preliminary approving of electing person who is responsible for organization and
supporting of risk management process in the Company, and termination him/her from appointed
position, approving of labor contract with risk manager (additional agreements) and consideration
of matters , decision about which shall be made by the Board of directors regarding to the
mentioned documents;
        46) approving of circumstances of insurance contracts regarding to obligations of the board
of directors, members of the executives committee and Chief executive officer of the Company, and
also persons which were or will be appointed to such positions in the corporate governance bodies
of the Company;
        47) approval of other Company‟s internal documents besides those provided for by clause
13.4 of these Articles of Association regulating the matters of the authority of Company‟s Board of
Directors except for the internal documents approval of which is related by Company‟s Articles of
Association to the authority of General Meeting of shareholders and Company‟s executive bodies;
        48) other matters provided for by the Federal Act On joint-stock companies and these
Articles of Association;




                                                                                                         44
      The matters related to the authority of Company‟s Board of Directors may not be delegated
to Company‟s collegial or sole executive body.

       Decisions on the matters specified by subclauses 7, 11, 24, clause 13.4, and also questions
about offering to General shareholders meeting to decrease decrease of Company‟s Share Capital in
cases if net assets value is less than Authorized share capital in accordance to Audit results, decision thereon
shall be made by all the members of Company‟s Board of Directors except for the votes of the leaving
members of Company‟s Board of Directors.
        Should the unanimity of Company‟s Board of Directors on the matter specified by
subclause 20, clause 13.4 of these Articles of Association fail to be reached, the said matter may be
brought to General Meeting of shareholders and the decision thereon shall be made by a majority of
votes of shareholders – owners of Company‟s voting shares attending that Meeting.
        In case, if unanimities was not reached by the members of the Board of Directors regarding
to the question mentioned in clause 24 subclause 13.4 of the Articles of Association, the mentioned
question can be represented in the mentioned period of time to the consideration of General
Shareholders Meeting. Decision regarding to this question shall be made by the majority of voters -
owners of voting shares of the issuer, taken participation in the general shareholders meeting.
        Decisions regarding to the matters, mentioned in clauses 25 and 13.4 of the Articles of
association shall be made by the majority of votes of the independent directors, not interested in the
deal.
        In case if the Board of directors members was         recognized as interested persons and (or) are not
independent directors, the deal shall be approved by the decision of the general shareholders meeting by the
majority of voters, which are not interested in the deal shareholders – owner of voting shares.
        Other matters besides those listed in clause 13.6 of these Articles of Association related to
the authority of the Board of Directors by the Federal Act On joint-stock companies and these
Articles of Association shall be made by a majority of votes of Company‟s Board of Directors
attending that Meeting.

        Authority of sole and collegial executive bodies in compliance with issuer‟s Articles of Association:

         14.4. The following matters of everyday supervision of Company‟s business shall be the authority of
Company‟s Executive Committee:
         1) development of offers on the basic directions of Company‟s business including draft annual
budgets, mid-term and long-term budgets, strategies and programs of Company‟s development, offers on
making amendments to the said documents;
         2) approval of internal control procedures;
         3) establishment of Company‟s staff and social policies;
         4) approval of the internal document regulating the general provisions for labor motivation and
considering entering into collective agreements and contracts and decision thereon;
         5) making materials and draft decisions on the matters to be considered by the Board of Directors
except for the matters provided for by subclauses 24, 26, 27, 28, 31, 33, clause 13.4 Article 13 of these Articles
of Association and the matters initiated in compliance with the laws of the Russian Federation and
Company‟s Articles of Association specifying exact time for their considering by the Board of Directors
making preliminary consideration of the said matters by Company‟s Executive Committee impossible;
         making materials to be considered by any committees of the Board of Directors;
         6) organizational and technical assistance of Company‟s bodies;
         7) setting forth the technical, financial and economic and tariff policies of Company and its
branches;
         8) setting forth the accounting policy, control over improvement of accounting and management
accounting methods and introduction of accounting in compliance with the international accounting
standards in Company and its branches;
         9) setting forth planning, budgeting and controlling methods in Company and its branches;
         10) setting forth the policy of safety ensuring in Company and its branches;
         11) setting forth the procedure for vesting any branch with assets and withdrawal of assets thereof;




                                                                                                                45
         12) setting forth the number of and appointment of the members of collegial executive bodies of
branches and early termination of their powers, approval of Charter on branch‟s collegial executive body;
         13) preliminary approval of candidates for the position of deputy heads, chief accountants of
branches and representative offices and dismissal of the said persons from office by Company‟s initiative;
         14) approval of the terms and conditions of contracts (addendums) with the members of collegial
executive bodies of branches and representative offices, deputy heads, chief accountants of branches and
representative offices and considering the matters decisions thereon shall be made by the Executive
Committee in compliance with the said contracts;
         15) approval of branches‟ quarterly budgets and making amendments thereto;
         16) analysis of working results of Company‟s divisions including separate ones and development of
instructions mandatory for execution on improvement of their work;
         17) approval of internal documents regulating the matters of Company Executive Committee‟s
authority except for the documents approved by General Meeting of shareholders and Company‟s Board of
Directors;
         18) approval/change of Company‟s corporate structure including approval of the functions of
structural divisions (except for the structure and functions of representative offices and structural divisions of
branches located outside the location addresses of branches).

        Collegial executive committee also has a right to make decisions regarding to other questions of
current activity management of the Issuer by order of the Board of Directors, the Board of Directors and
Chief executive Officer‟s proposals.

      Chief executive makes decision regarding the questions which are not in competency of
General shareholders meeting, the Board of Directors, Collegial executive committee.

       Company developed and implemented Corporate code of conduct approved by Board of
Directors, protocol # 24 of April 28, 2006.
        Full text of Code is available at:
                 www.dsv.ru/ru/about/korp_upravlenie/ – in Russian language;
                 http://www.dsv.ru/en/company/corporate_governance/corporate_governance_guidelines/ – in
                 English language.



5.2. Information about persons, included in the issuer’s management bodies

5.2.1. Members of the Board of Directors

Yurchenko Eugeny Valerievich
(Chairman of the Board of Directors)
Year of birth: 1965
Education: high
Person‟s Positions during Latest 5 Years:

        Period of time                         Name of employer                                 Title
    since              till
2005            2007            OJSC «Comstar – United TeleSystems»               deputy of chief executive
                                                                                  officer for regional
                                                                                  development
2007            2009            Central-Chernozemny Bank of Serbank of            manager of regional branch
                                Russia
2009            Present time    OJSC «Svyazinvest»                                chief executive officer
2009            Present time    OJSC «Volga Telecom»                              chairman of the board of




                                                                                                               46
                                                                                   directors
2009            Present time    OJSC «Sibirtelecom»                                chairman of the board of
                                                                                   directors
2004            2005            OJSC «Rostelecom»                                  member of the board of
                                                                                   directors
2003            2005            OJSC «RTKomm.ru»                                   member of the board of
                                                                                   directors
2003            2005            OJSC «RTK-Invest»                                  chairman of the board of
                                                                                   directors
2003            2005            NPF «Telecom-Soyuz»                                member of the fund board
2003            2005            OJSC «Interregional commercial Bank of             the board of directors‟
                                telecommunications development and                 member
                                information»
2009            Present time    OJSC «Far East Telecom»                            chairman of the board of
                                                                                   directors
2004            2005            OJSC «Central telegraph»                           the board of directors‟
                                                                                   member
2009            Present time    OJSC «Center Telecom»                              the board of directors‟
                                                                                   member
2004            2005            CJSC «Registrar-Svyaz»                             the board of directors‟
                                                                                   member
2009            Present time    OJSC «North-West Telecom»                          chairman of the board of
                                                                                   directors
2009            Present time    OJSC «South Telecommunications Company»            chairman of the board of
                                                                                   directors
2009            Present time    OJSC «Uralsvyazinform»                             chairman of the board of
                                                                                   directors
2009            Present time    OJSC «Rostelecom»                                  chairman of the board of
                                                                                   directors
2009            Present time    OJSC «Central telegraph»                           chairman of the board of
                                                                                   directors
2009            Present time    OJSC "MGTS"                                        the board of directors‟
                                                                                   member
2009            Present time    NPF "Telecom-Soyuz"                                Member of the funds‟ member
2009            Present time    Russian fund of telecommunications history         Member of executive
                                                                                   committee


Person‟s share in the Issuer‟s authorized capital/ordinary shares: 0.7306%

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: 0.04416%

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:




                                                                                                                47
The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.



Afanasiev Denis Nikholaevich
Year of birth: 1978
Education: high

Person‟s Position During Latest 5 Years:

       Period of time                          Name of employer                                 Title
    since            till
2004            2008            Federal agency of industries                       Adviser
2008            Present time    Ministry of telecommunications and mass            Head of division
                                communications of RF
2009            Present time    OJSC «Svyazinvest»                                 Member of inspection
                                                                                   commission
2009            Present time    OJSC «Dagsvyazinform»                              the board of directors‟
                                                                                   member
2009            Present time    OJSC «Svyazinvest»                                 the board of directors‟
                                                                                   member
2009            Present time    OJSC «South Telecommunications Company»            the board of directors‟
                                                                                   member
2009            Present time    OJSC «Far East Telecom»                            the board of directors‟
                                                                                   member
2010            Present time    OJSC "Central Telegfaph"                           the board of directors‟
                                                                                   member
2009            Present time    Ministry of telecommunications and mass            Minister adviser
                                communications of RF



Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

  Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and
  fees, securities market, and criminal liability (previous conviction having) for crime in sphere of economics,
  or against State Government:




                                                                                                                   48
     The person has not been brought to the mentioned types of accounts.

  Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
  procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

     Person did not work on the mentioned positions.

Gurkin Vyacheslav Fyodorovich

Year of birth: 1944
Education: higher
Person‟s Positions during Latest 5 Years:

       Period of time                          Name of employer                                  Title
    since            till
2005            Present time    CJSC Investments company Imbera                    President
2006            Present time    OJSC Far East Telecom                              the board of directors‟
                                                                                   member


Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.


Kritskiy Mikhail Ivanovich
Year of birth: 1957
Education: high
Person‟s Positions during Latest 5 Years:

        Period of time                         Name of employer                                  Title
    since             till




                                                                                                                49
2006            2008            Holding "Multinet holding group"                   Executive director
2008            2009            CJSC «Megafon International»                       Chief executive Officer‟s
                                                                                   Adviser
2009            Present time    OJSC «Svyazinvest»                                 заместитель генерального
                                                                                   директора
2009            Present time    OJSC «VolgaTelecom»                                the board of directors‟
                                                                                   member
2009            Present time    OJSC «South Telecommunications Company»            the board of directors‟
                                                                                   member
2009            Present time    OJSC «Far East Telecom»                            the board of directors‟
                                                                                   member
2010            Present time    OJSC "GIPROSVYAZ"                                  the board of directors‟
                                                                                   chairman


Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

Kobishchanov Mikhail Yurievich
Year of birth: 1963
Education: higher
Person‟s Positions during Latest 5 Years:

       Period of time                          Name of employer                                  Title
    since            till
2005            Present time    CJSC First corporation of national                 Adviser
                                development FNDS
2003            Present time    OJSC «Far East Telecom»                            the board of directors‟
                                                                                   member


Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized



                                                                                                                50
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

Umnova Elena Vladimirovna
Year of birth: 1954
Education: high
Person‟s Positions during Latest 5 Years:


        Period of time                         Name of employer                                  Title
    since              till
2007            2008            OJSC «Factory «Etalon»                             chief financial officer
2008            2009            Tambov branch of Central-Chernozemsk bank          deputy of manager
                                of Sberbank of Russia.
2009            Present time    OJSC «Svyazinvest»                                 deputy of chief executive
                                                                                   officer
2009            Present time    OJSC «Giprosvyaz»                                  the board of directors‟
                                                                                   member
2009            Present time    OJSC «Rostelecom»                                  the board of directors‟
                                                                                   member
2009            Present time    OJSC «Uralsvyazinform»                             the board of directors‟
                                                                                   member
2009            Present time    OJSC «CenterTelecom»                               the board of directors‟
                                                                                   member
2009            Present time    OJSC «North-West Telecom»                          the board of directors‟
                                                                                   member
2009            Present time    OJSC «South Telecommunications Company»            the board of directors‟
                                                                                   member
2009            Present time    OJSC «Far East Telecom»                            the board of directors‟
                                                                                   member
2005            2007            OJSC "Komstar-United TeleSystems"                  Head of business integration
                                                                                   and subsidiaries management




                                                                                                                51
                                                                                   division, deputy of corporate
                                                                                   governance director, director
                                                                                   for management of department
                                                                                   for regional development of
                                                                                   corporate center



Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

Feoktistova Natalia Vadimovna
Year of birth: 1966
Education: higher
Person‟s Positions during Latest 5 Years:

        Period of time                         Name of employer                                  Title
    since            till
2005            Present time    OJSC «Svyazinvest»                                 head of corporate management
                                                                                   and legal department
2005            2005            OJSC "Informational technologies”                  the board of directors‟
                                                                                   member
2007            Present time    OJSC "Hiprosvyaz"                                  the board of directors‟
                                                                                   member
2006            2008            OJSC Southern telecommunications company           member of inspection
                                                                                   committee
2008            Present time    OJSC "Sibirtelecom"                                member of inspection
                                                                                   committee
2005            2007            OJSC "Uralsvyazinform"                             member of inspection
                                                                                   committee
2009            Present time    OJSC "Volgatelecom"                                member of inspection
                                                                                   committee
2006            2008            CJSC "MobiTel"                                     Inspector




                                                                                                                52
2006            Present time    OJSC "Far East Telecom"                            member of inspection
                                                                                   committee


Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

Shevchuk Aleksandr Viktorovich
Year of birth: 1983
Education: higher
Person‟s Positions during Latest 5 Years:


        Period of time                         Name of employer                                  Title
    since            till
2001            Present time    Association for protection of investors‟ rights    assistant of independent
                                                                                   directors, chief specialist on
                                                                                   corporate secretaries, manager
                                                                                   of analytics project, deputy of
                                                                                   executive director.
2007            2008            OJSC “South Telecommunications Company”            the board of directors‟
                                                                                   member
2007            2008            OJSC "Center Telecom"                              the board of directors‟
                                                                                   member
2006            Present time    OJSC Far East Telecom                              the board of directors‟
                                                                                   member


Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.




                                                                                                                53
Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

  Lokotkov Alexey Alexeevich
  Year of birth: 1950
  Education: high
  Person‟s Positions during Latest 5 Years:

       Period of time                          Name of employer                                  Title
    since            till
2000           2006             OJSC "Center Telecom"                              First deputy of CEO
2007            2008            OJSC "Soyuztelefonstroy"                           First deputy of CEO
2009            Present time    OJSC "Svyazinvest"                                 Deputy of CEO
2010            Present time    OJSC "Informational technologies of                Member of the board of
                                telecommunications"                                directors
2010            Present time    OJSC "GIPROSVYAZ"                                  Deputy of the board of
                                                                                   directors chairman
2010            Present time    OJSC "Rostelecom"                                  Member of the board of
                                                                                   directors
2010            Present time    OJSC "central telecommunications company"          Member of the board of
                                                                                   directors
2010            Present time    OJSC "Far East Telecom "                           Member of the board of
                                                                                   directors
2010            Present time    OJSC "Sibirtelecom"                                Member of the board of
                                                                                   directors
2010            Present time    OJSC "South Telecom"                               зам.председателя совета
                                                                                   директоров
2010            Present time    OJSC "Health complex “ORBITA"                      Member of the board of
                                                                                   directors
2009            Present time    OJSC "Svyazinvest"                                 Member of executive
                                                                                   committee


Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.




                                                                                                                54
Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.



  Stat‟yin Vladimir Anatolievich
  Year of birth: 1959
  Education: high
  Person‟s Positions during Latest 5 Years:

       Period of time                          Name of employer                                  Title
    since            till
2000            Present time    "Union for protection interests of shareholders    CEO
                                of corporation and enterprises
2004            2006            OJSC "Sibirtelecom"                                Member of the board of
                                                                                   directors
2005            2009            OJSC "Uralsvyazinform"                             Member of the board of
                                                                                   directors
2005            2006            OJSC "Smolenskenergoremont"                        член ревизионной комиссии
2006            2007            "Energokomplex"                                    Member of the board of
                                                                                   directors
2006            2007            OJSC "Far East Telecom"                            Member of the board of
                                                                                   directors
2009            Present time    Academy for labor and social relations             доцент кафедры экономики и
                                                                                   менеджмента
2009            2010            OJSC "CenterTelecom"                               Member of the board of
                                                                                   directors
2009            Present time    "Ozersky Fish Hatchery "                           The board of directors
                                                                                   chairman
2009            2010            Rest House "Polet"                                 Member of the board of
                                                                                   directors
2010            Present time    OJSC "Sibirtelecom"                                Member of the board of
                                                                                   directors
2010            Present time    OJSC "Volgatelecom"                                Member of the board of
                                                                                   directors
2010            Present time    "Design and Sientific research institute           Member of the board of
                                “SantekhNIIProject ”                               directors
2010            Present time    OJSC "Far East Telecom"                            Member of the board of




                                                                                                                55
                                                                                   directors


Person‟s share in the Issuer‟s authorized capital/ordinary shares: 0.0002%

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: 0.00079%

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.


  Kulikov Denis Viktorovich
  Year of birth: 1975
  Education: high
  Person‟s Positions during Latest 5 Years:

        Period of time                         Name of employer                                  Title
    since              till
2005            2006            Association for investors right protection         Expert
2006            2008            Association for investors right protection         Deputy of executive director
2008            Present time    Association for investors right protection         Executive director
2003            Present time    OJSC “South Telecom”                               Member of the board of
                                                                                   directors
2010            Present time    OJSC "Far East Telecom"                            Member of the board of
                                                                                   directors
2010            Present time    OJSC "North-West Telecom"                          Member of the board of
                                                                                   directors
2005            2006            OJSC "Volgatelecom"                                Member of the board of
                                                                                   directors
2010            Present time    OJSC "Uralsvyazinform"                             Member of the board of
                                                                                   directors
2010            Present time    OJSC "CenterTelecom"                               Member of the board of
                                                                                   directors
2003            2006            OJSC "Pecherskaya GRES"                            Member of the board of
                                                                                   directors
2003            2006            OJSC "Cherepetskaya GRES"                          Member of the board of
                                                                                   directors
2004            2006            OJSC "Penzenskaya generative company "             Member of the board of




                                                                                                                  56
                                                                                   directors
2006            2008            OJSC "OGK-5"                                       Member of the board of
                                                                                   directors
2007            2008            OJSC "Interregional distributive net company       Member of the board of
                                of South"                                          directors
2007            Present time    OJSC "Second generative company of                 Member of the board of
                                wholesale market of electro energy "               directors
2007            Present time    OJSC "Moscow united energetic company "            Member of the board of
                                                                                   directors
2008            Present time    OJSC "Territory generative company -4"             Member of the board of
                                                                                   directors
2010            Present time    CJSC "baykalvestkom"                               Member of the board of
                                                                                   directors
2010            Present time    OJSC "Interregional distributive net company       Member of the board of
                                of Volga"                                          directors
2010            Present time    OJSC "Volgatelecom"                                Member of the board of
                                                                                   directors



Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

5.2.2. Issuer‟s Executive Committee:

Balatsenko Andrei Vladimirovich (chairman)
Year of birth: 1965
Education: higher
Person‟s Positions during Latest 5 Years:


        Period of time                         Name of employer                                  Title
    since              till




                                                                                                                57
2004            2005            OJSC Far East Telecom                              Head of Blagoveshchensk
                                                                                   telephone and telegraph
                                                                                   network of Amur branch
2005            2006            OJSC Far East Telecom                              deputy CEO – director of
                                                                                   Kamchatka branch
2006            2007            OJSC Far East Telecom                              deputy CEO – director of
                                                                                   Sakhalin branch
2007            2009            OJSC Far East Telecom                              deputy CEO – director of
                                                                                   Primorsky branch
2007            Present time    OJSC Far East Telecom                              Executive Committee member
2009            Present time    OJSC Far East Telecom                              Chief Executive Officer,
                                                                                   Chairman of Executive
                                                                                   Committe

Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has 0.00131% of the Issuer‟s
authorized capital and 0.00053% of total amount of ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

5.2.3. Membership of collegial executive body of the Issuer (Executive Committee)

Dobrovolsky Vitaly Ivanovich
Year of birth: 1948
Education: high
Person‟s Positions during Latest 5 Years:


       Period of time                          Name of employer                                  Title
    since            till
2002            Present time    OJSC Far East Telecom                              Deputy CEO – director for
                                                                                   security and security mode
2002            Present time    OJSC Far East Telecom                              Executive Committee member



Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has 0.0013% in the Issuer‟s authorized




                                                                                                                58
capital and 0.00053% in total amount of ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

  Pototsky Alexander Valerievich
  Year of birth: 1971
Education: high
Person‟s Positions during Latest 5 Years:


       Period of time                          Name of employer                                  Title
    since            till
2007            2008            OJSC Far East Telecom                              Deputy of branch director –
                                                                                   head of Vladivostok center of
                                                                                   Electrosvyaz of Primorsky
                                                                                   branch
2008            Present time    OJSC Far East Telecom                              Deputy of CEO – technical
                                                                                   director
2008            Present time    OJSC Far East Telecom                              Executive committee member
2008            Present time    OJSC "Svyazintech"                                 Member of the board of
                                                                                   directors
2008            Present time    CJSC "Rostelegraph"                                Member of the board of
                                                                                   directors
2008            Present time    "Interdaltelecom" LLC                              Member of the board of
                                                                                   directors



Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.




                                                                                                                59
Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

Sidorova Elena Vitalievna
Year of birth: 1974
Education: high
Person‟s Positions during Latest 5 Years:

       Period of time                          Name of employer                                  Title
    since            till
2006            Present time    OJSC Far East Telecom                              Chief Accountant
2005            2008            CJSC "Integrator.Ru"                               Member of the Board of
                                                                                   Directors
2006            Present time    OJSC Far East Telecom                              Member of Executive
                                                                                   Committee



Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

Simonova Elena Yakovlevna




                                                                                                                60
Year of birth: 1974
Education: high
Person‟s Positions during Latest 5 Years:

        Period of time                         Name of employer                                  Title
    since              till
2006            2007            OJSC Far East Telecom                              Deputy for HR of director of
                                                                                   Primorsky Krai branch of
                                                                                   OJSC Far East Telecom
2007            Present time    OJSC Far East Telecom                              Deputy CEO – HR
                                                                                   Management Director
2008            Present time    OJSC Far East Telecom                              Member of executive
                                                                                   committee



Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

  Lyubushkin Ivan Alexandrovich
  Year of birth: 1976
  Education: high

Person‟s Positions during Latest 5 Years:

        Period of time                         Name of employer                                  Title
    since              till
2003            2006            OJSC “Far East Telecom”                            Director of Economics Policy
                                                                                   Department
2006            2010            OJSC “Far East Telecom”                            Director for Economics
2010            Present time    OJSC “Far East Telecom”                            Deputy of Chief executive
                                                                                   Officer – Director for
                                                                                   Economics and Finance
2010            Present time    OJSC “Far East Telecom”                            Member of the Board of




                                                                                                                61
                                                                                   Directors
2010            Present time    OJSC “Far East Telecom”                            Member of Executive
                                                                                   Committee



Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

Shabanov Igor Timofeevich
Year of birth: 1955
Education: high
Person‟s Positions during Latest 5 Years:


        Period of time                         Name of employer                                  Title
    since              till
2005            2006            OJSC Far East Telecom                              Deputy of director of
                                                                                   Kamchtsky branch for
                                                                                   business development
2006            2009            OJSC Far East Telecom                              Deputy of CEO - director of
                                                                                   Kamchtsky branch
2009            Present time    OJSC Far East Telecom                              Deputy of CEO - director of
                                                                                   Primorsky branch
2009            Present time    OJSC Far East Telecom                              Member of executive
                                                                                   committee



Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.




                                                                                                                 62
Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

Balatsenko Andrei Vladimirovich (chairman)
Year of birth: 1965
Education: higher
Person‟s Positions during Latest 5 Years:


       Period of time                          Name of employer                                  Title
    since            till
2004            2005            OJSC Far East Telecom                              Head of Blagoveshchensk
                                                                                   telephone and telegraph
                                                                                   network of Amur branch
2005            2006            OJSC Far East Telecom                              deputy CEO – director of
                                                                                   Kamchatka branch
2006            2007            OJSC Far East Telecom                              deputy CEO – director of
                                                                                   Sakhalin branch
2007            2009            OJSC Far East Telecom                              deputy CEO – director of
                                                                                   Primorsky branch
2007            Present time    OJSC Far East Telecom                              Executive Committee member
2009            Present time    OJSC Far East Telecom                              Chief Executive Officer,
                                                                                   Chairman of Executive
                                                                                   Committee

Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has 0.0013% in the Issuer‟s authorized
capital and 0.00053% in total amount of ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against




                                                                                                                63
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

  Sun Andrey Kibonovich
  Year of birth: 1978

  Education: high

Person‟s Positions during Latest 5 Years:

       Period of time                          Name of employer                                  Title
    since            till
2001            2005            OJSC Far East Telecom – Sakhalinsky Branch         Head of Devision
2005            2009            OJSC Far East Telecom – Sakhalinsky Branch         Deputy of Branch Director –
                                                                                   Director for Business
                                                                                   Development
2009            present time    OJSC Far East Telecom                              Deputy of Chief Executive
                                                                                   Officer - Director for Business
                                                                                   Development
2005            2010            BIT Ltd                                            Member of the board of
                                                                                   directors
2010            Present time    OJSC “Sakhatelecom”                                Member of the board of
                                                                                   directors


Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.




                                                                                                                 64
5.3. Information about reward, preferences and/or compensation of expenses to each the Issuer’s
corporate governance body
  Data on remuneration for each governance body (excluding person, executing duties of sole executive body of
  the Issuer governance). All types of rewards including salaries, bonuses, commissions, benefits, and (or)
  preferences, compensations of expenses, as well as other property grants for the last finished fiscal year shall
  be indicated below:

  The Board of Directors:

All kinds of rewards, Roubles                                                                                        63 411 268
Including:
Salaries, Roubles                                                                                                            0
Bonuses, Roubles                                                                                                             0
Commission, Roubles                                                                                                          0
Benefits, Roubles                                                                                                            0
Preferences and/or compensation of expenses, Roubles                                                                         0
Other property grants, Roubles                                                                                         260 733
Other, Roubles                                                                                                                0
Total, Roubles                                                                                                       63 672 001

        Information about existing agreements regarding such payments in current fiscal year:
        Company shall bear the expenses in connection with the activities of the Board of Directors including
compensation to members of the Board of Directors of all confirmed expenses in connection with the
execution of their duties by them.
        Any member of the Board of Directors executing his functions on commercial basis shall be paid
award for execution of his duties.

          Award of any member of the Board of Directors shall consist of quarterly and annual parts.
         Quarterly rewards of any member of the Board of Directors shall be 300,000 Roubles.
         The Board of Directors Chairman shall receive award with 1.5 factor.
         Quarterly rewards of any member of the Board of Directors shall be decreased by:
         10% - in case of he (she) attended 25% and less meetings of the Board of Directors;
         30% - in case of he (she) attended more than 25% meetings, but less than 50% (inclusively) meetings
of the Board of Directors.
         100% - in case of his (her) attendance of less than half all the meetings of the Board of Directors
held.
         If within a quarter the personal structure of the Board of Directors changed and/or terms and
conditions of exercising the Board of Directors member‟s functions (commercial/non-commercial basis),
award shall be paid proportionally to the time during which any Board of Directors member was executing
his functions on commercial basis.
         Annual reward for all the Board of Directors members is determined as sum of rewards in
compliance with norms (percentage):
         from Company‟s EBITDA as per International Financial Reporting Standards (IFRS)
         from Company‟s net profit spent on payment of dividends as per results of reported year.
     Annual rewards of one member of the Board of directors is determined as amount which is calculated in
     accordance to paragraph 1 – 3 of the present clause, divided to the amount of persons elected to the
     Board of Directors.
         If in the period since the moment of election of the Board of directors by general shareholders
     meeting till next general shareholders meeting there was re-election of the board of directors or
     circumstances of the board of directors duties execution (paid/unpaid basis) the reward shall be paid
     proportionally to the actually worked time on the paid basis.
         Annual reward of any the Board of Directors member shall be reduced by 50% in case of his
attendance at less than half of Board of Directors sittings held during his office.




                                                                                                                65
         Norms (percentage) for annual reward payment is established by decision of general shareholders
meeting, and applies for determining of reward size of persons, executing duties of the members of the Board
of directors till the next general shareholders meeting.
         Annual reward to the Board of Directors shall be paid not later than 3 month after the end of term of
working of the Board of directors.
         Additional reward of 60,000 Roubles to the quarter reward shall be paid the board of directors
members who is the members of the Board of directors committees (in each committee), but one member of
the board of directors can not be member in more than 2 committees.
         Chairman of the board of directors‟ reward shall be paid with 1.25 factor.
         The members of the board of directors have a right to participate in option programs of the
Company.

        In accordance to general shareholders meeting‟s decision as of June 11, 2008 norm to annual
reward of the board of directors is set forth:
              EBITDA in accordance to IFRS for 2007 – 0.39%;
              Net profit for dividends payment for 2007 – 0.78%.

         If within a quarter the personal structure of the Board of Directors changed and/or terms and
conditions of exercising the Board of Directors member‟s functions (commercial/non-commercial basis),
award shall be paid proportionally to the time during which any Board of Directors member was executing
his functions on commercial basis.
         Annual award for all the Board of Directors members shall be set as payment as per standards
(percent):
                 of Company‟s EBITDA as per accounting statements in compliance with International
                 Financial Reporting Standards for the reported year;
                 of Company‟s net profit in the reported year sent to payment of dividends.
         Annual award of any member of the Board of Directors shall be determined as the amount calculated
in compliance with paragraphs 1 – 3 of this clause divided in the number of persons elected into the Board of
Directors.
         If within a period since electing of the Board of Directors by General Meeting of shareholders till the
next General Meeting of shareholders the personal structure of the Board of Directors changed and/or terms
and conditions of exercising the Board of Directors member‟s functions (commercial/non-commercial basis),
award shall be paid proportionally to the time during which any Board of Directors member was executing
his functions on commercial basis.
         Annual award of any Board of Directors member determined in compliance with the fourth and firth
paragraphs shall be 50% deducted in case of his attendance of less than half the meetings of the Board of
Directors held during his term of office.

         Standards (percent) of allocations to calculate annual award shall be set by decision of General
Meeting of shareholders and shall be applied to define award of persons exercising the functions of the Board
of Directors members till the next General Meeting of shareholders.

         Annual award to any member of the Board of Directors shall be paid not later than within 3 months
since the termination of office of that Board of Directors.

         Quarterly award for the Board of Directors member shall be set as payment in respect to the Board of
Directors member functions execution in amount of 126,000 Roubles (or 42,000 thousands per month).
         Chairman of the board of directors‟ reward shall be paid with 1.25 factor.
         Quarterly rewards of any member of the Board of Directors shall be decreased by:
         10% - in case of he (she) attended 25% and less meetings of the Board of Directors;
         30% - in case of he (she) attended more than 25% meetings, but less than 50% (inclusively) meetings
of the Board of Directors.
         100% - in case of his (her) attendance of less than half all the meetings of the Board of Directors
held.
         If within a quarter the personal structure of the Board of Directors changed and/or terms and
conditions of exercising the Board of Directors member‟s functions (commercial/non-commercial basis),




                                                                                                             66
award shall be paid proportionally to the time during which any Board of Directors member was executing
his functions on commercial basis.

      The Board of Directors members shall be entitled to participate option programs realized by
Company.

        10 June 2009 General Shareholders Meeting approved the following basis for calculation annual
reward of the Issuer‟s Board of Directors
              EBITDA calculated in accordance with IFRS for 2009 – 0.39%;
              Net profit of the Group payable to dividends for 2009 – 0.78%.


        Remuneration for governance body by results of the last financial year, which was determined
    (approved) by authorized corporate governance body of the issuer, but have not been paid by the end of
    reported period:

    There were no mentioned factors during the reported period.

  Executive Committee‟s rewards:

All kinds of rewards, Roubles                                                                                   3 735 586
Including:
Rewards, Roubles                                                                                                       0
Bonuses, Roubles                                                                                                       0
Commission, Roubles                                                                                                    0
Benefits, Roubles                                                                                                      0
Preferences and/or compensation of expenses, Roubles                                                                   0
Other property grants, Roubles                                                                                         0
Other, Roubles                                                                                                          0
Total, Roubles                                                                                                  3 735 586

     Data on agreements in respect to such payments in the current year:
      In accordance to “Charter about Executives Committee reward” the procedure of determining of the
executive Committee reward as follows:
  Executive Committee reward consists from constant and quarterly bonus. Constant part is determined by
labor contract with Executive committee member (additional agreement to labor contract), which
circumstances shall be approved by the Board of Directors of the issuer. Quarterly bonus is paid in
compliance with “Charter about Executives Committee reward”.
     Quarterly bonus work in Executive Committee shall be determined by decision of the Board of Directors
of the issuer and shall not be higher than 175,000 Roubles per quarter per each member of executive
Committee, and 210,000 Roubles per Chairman of the executive Committee including payments provided by
regional regulation (maximum amount of bonus per quarter), in case if such payments are provided by
current law.
     Quarterly reward of the Executive Committee shall be determined by the Board of Directors taking in
account achievement of target results:
•        on achievement of Company‟s basic economic budget indicators upon quarterly results – not more
than 60% of amount indicated in clause 2.2.;
•        on results of execution of previously made resolutions by Company‟s General meeting of
shareholders and Board of Directors to be implemented in the quarter ended – not more than 40% of amount
indicated in clause 2.2.
     Timeliness of preparation and representation of documents for consideration of the Board of Directors,
compliance of documents and decision projects to requirement of current legislation, Articles of Association,
internal documents of the issuer, as well as established standards shall be took to account by the Board of
Directors during approval of quality of prepared documents for consideration of the Board of Directors.
         Bonuses for the reported quarter shall be determined by the Board of Directors equally for all



                                                                                                          67
members of the Executive Committee and paid with taking to account circumstances provided by clause 3.4.
of the Charter. Chairman of the Executive Committee reward shall be paid with 1.2 factor.
       In case of re-electing of the Executive Committee in the reported quarter size of quarterly bonus of
reward shall be paid proportionally to actually worked time by each member of executive committee
(Chairman) in this quarter (in calendar days).

    Remuneration for governance body by results of the last financial year, which was determined (approved)
    by authorized corporate governance body of the issuer, but have not been paid by the end of reported
    period:

    There were no mentioned factors during the reported period.

5.4. Information about structure and authority of issuer’s bodies for control over issuer’s
financial and business activities

   Structure of the Issuer‟s internal control and supervisory bodies:
         To control over the issuer‟s financial and business activities, Inspection Committee is established,
Department of internal control is a special structural division exercising internal control, and an independent
auditor is regularly invited.
         Inspection Committee is an independent Company‟s body elected at annual General meeting of
shareholders till the next annual General meeting of shareholders, consisting of 5 persons.
Office of any members or that of all Inspection Committee may be early terminated by resolution of General
meeting of shareholders.
         In case of early termination of Inspection Committee‟s office, authority of new Inspection Committee
shall be effective till the nearest annual General meeting of shareholders.
         In case if the number of Inspection Committee‟s elected members is less than half of quantity
amount of members of Inspection Commission determined by the Articles of Association the Inspection
Commission shall be considered as organized.
         Duties of members and whole Inspection Commission may be finished before the appointed time by
decision of the General shareholders meeting.
         Board of Directors shall summon an extraordinary General meeting of shareholders to elect new
Inspection Committee. Remaining members of Inspection Committee shall exercise their functions till
election of the new Inspection Committee at the said extraordinary General meeting of shareholders.
         In case if the number of Inspection Committee‟s elected members is less than half of quantity
   amount of members of Inspection Commission determined by the Articles of Association the Chairman of
   Inspection Commission have to inform the Board of Directors about it during 5 days since mentioned event
   appeared. The Board of Directors has to convoke extraordinary shareholders meeting for new Inspection
   Commission election.

Inspection Committee‟s authority shall be as under:
         checking reliability of data contained in reports and other financial documents of Company;
         detecting facts of violations of accounting and financial statements submission procedures set forth
         by the Russian Federation regulations;
         checking for compliance with regulations when calculating and paying taxes;
         detecting facts of violations of the Russian Federation regulations under which Company is doing its
         business;
         assessment of economic feasibility of Company‟s financial and business operations.
         Inspection of Company‟s financial and business activities by Inspection Committee shall be done
         upon annual results of Company‟s business.
         Inspection of Company‟s financial and business activities shall be exercised at any time:
         by initiative of Company‟s Inspection Committee;
         by decision of Company‟s General meeting of shareholders;
         by decision of Company‟s Board of Directors;
         by request of Company‟s shareholder(s) jointly holding at least 10 percent of Company‟s voting
         shares on any matters of authority of General meeting of shareholders as on the date of submitting
         the said request.




                                                                                                            68
   By request of Inspection Committee any persons holding office in Company‟s management bodies shall
submit documents regarding Company‟s financial and business activities.

  A Special-purpose division, independent from all executive bodies - Internal Audit Department, was created
by the Issuer, for supporting the issuer with internal control over all operational transactions. Activity of
Internal Audit Department is under control of the Board of Directors.

  All duties of this special-purpose division, order its activity, order of employees hiring and approval to the
  positions, requirements for employees shall be determined by internal documents approved by the Board of
  Directors.

  The Issuer annually invites independent auditor for audit and confirmation of accuracy of financial
  statements of the issuer.

  Auditor audits financial and business activity of the issuer in compliance with legislation of Russian
  federation and on the basis of signed with it agreement.

  Auditor of the Issuer shall be approved by the General shareholders meeting. Agreement with auditor,
  including cost of audit service shall be approved by the Board of Directors.

  Audit shall be made at any time by request of shareholders, who is owner more than 10 and more percent
  in authorized capital of the Issuer.
  Shareholders who are initiators of the audit shall send to the Board of Directors the written requirement,
  which shall describe the reason of requirement, name of shareholders, amount and type of owned shares,
  shareholders signatures, or signatures of their deputed persons. In case if requirement was signed by
  shareholder‟s deputed person the requirement shall be contain power of attorney.

  Internal Audit division is created by the Issuer.

Term of Internal Audit Division activity and its key employees:
Internal Audit Department has been working for Company since September 4, 2003.

Key employees of internal audit service:
Key employees cannot be specified as internal audit service work depends on professionalism of each of
employees and internal audit service in general.

Basic functions of Internal Audit Department
1. Periodic control over compliance of financial and business transactions with Company‟s interests.
2. Independent assessment and analysis of Company‟s financial standing in general, its branches and
structural divisions, effectiveness of assets disposal.
3. Periodic control over Company‟s observance of legal acts and other regulations (including local
regulations) governing Company‟s business, resolutions of General meeting of shareholders, Board of
Directors, sole and collegial executive bodies.
4. Checking for effectiveness of internal control system in connection with transactions with interest.
5. Assessment of reliability of accounting statements and day-to-day information of Company, its branches
and structural divisions.
6. Assessment of risks in connection with Company‟s corporate management and business.
7. Detection of fraud in course of inspections.
8. Advise on financial and tax regulations structural divisions of Company‟s General Directorate.
9. Cooperation with external auditors, taxation and other controlling authorities.
10. Methodical support of Department of internal audit, development of procedures and methods of
inspections.
11. Analysis of professional training of Department of internal audit staff, participation in planning and
arranging professional improvement programs.




                                                                                                               69
Subordination of internal audit service, cooperation with issuer‟s executive bodies and Board of Directors:
Department of internal audit was established in Company. Functionally it reports to Board of Directors,
administratively – to CEO, while functional subordination means that within the functions imposed on
Department, and administrative subordination means that within the labor regulations.

Cooperation of issuer‟s internal audit service and external auditor:
Department of internal audit in compliance with the functions imposed by Charter on Department shall
cooperate with Company‟s external auditors on all the matters related to Department‟s authority.

Provisions restricting use of corporate (insider) information in Company are included in job descriptions and
charters on departments and sectors of Company.

The Issuer approved internal document, provided rules for insider information using prevention:

Policy on the procedure for use of the information about Far East Telecom‟s business, its securities and
transactions with them which is not public and illegal use or disclosure of which may have material effect on
the market value of Far East Telecom‟s securities

The Policy is disclosed in the Internet at corporate web-site:
        www.dsv.ru/ru/about/korp_upravlenie/ - in Russian language;
        http://www.dsv.ru/add_files/insiderinformationdisclosurepolicy.doc - in English language.


5.5. Information on the members of the Issuer’s financial and business
operation control bodies

Name of the Issuer‟s financial and business operation control body: Inspection Commission

  Koroleva Olga Grigorievna
  (Chairman)
  Year of birth: 1950
  Education:high

Person‟s Positions during Latest 5 Years:

        Period of time                        Name of employer                                Title
    since            till
2005            Present time    OJSC "Svyazinvest"                               Chief Accountant
2005            2008            OJSC "HIPROSVYAZ"                                Chairman of the Inspection
                                                                                 Commission
2005            2006            OJSC “Uralsvyazinform”                           Chairman of the Inspection
                                                                                 Commission
2006            Present time    OJSC “Uralsvyazinform”                           The Board of Director‟s
                                                                                 member
2005            2006            OJSC “Central Telegraph”                         Chairman of the Inspection
                                                                                 Commission
2005            Present time    OJSC “Volgatelecom”                              Chairman of the Inspection
                                                                                 Commission
2005            Present time    OJSC "MC NTT"                                    The Inspection Commission‟s
                                                                                 member
2006            Present time    OJSC “Rostelecom”                                The Inspection Commission‟s
                                                                                 member
2006            Present time    OJSC “Sibirtelecom”                              The Inspection Commission‟s




                                                                                                              70
                                                                                   member
2005            Present time    OJSC “Center telecom”                              The Inspection Commission‟s
                                                                                   member
2008            2010            OJSC “North-West Telecom”                          The Inspection Commission‟s
                                                                                   member
2005            Present time    OJSC “Far East Telecom”                            The Inspection Commission‟s
                                                                                   member
2010            Present time    OJSC “South Telecom”                               The Inspection Commission‟s
                                                                                   member



Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

  Zubova Tatyana Yurievna
  Year of birth: 1960
  Education: High
Person‟s Positions during Latest 5 Years:


        Period of time                         Name of employer                                  Title
    since            till
2008            Present time    OJSC Svyazinvest                                   Head of division of
                                                                                   methodology of accounting
                                                                                   department
2006            2007            CJSC Nizhegorodskaya Mibile                        Inspection Committee member
                                Communications”
2006            2009            OJSC South Telecommunications Company              Inspection Committee member
2007            2008            OJSC Uralsvyazinform                               Inspection Committee member
2007            2008            OJSC Central telegraph                             Inspection Committee member
2007            2009            CJSC Baikal Vest Com                               Inspection Committee member
2005            2007            OJSC Volga Telecom                                 Inspection Committee member




                                                                                                                71
2005            2006            CJSC Startcom                                      Inspector
2005            2006            CJSC Eniseisk Telecom                              Inspection Committee member
2009            Present time    OJSC Noth-West Telecom                             Inspection Committee member
2009            Present time    OJSC Far East Telecom                              Inspection Committee member



Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

  Kosarev Sergey Ninelevich
  Год рождения: 1961
  Education: high

Person‟s Positions during Latest 5 Years:

        Period of time                         Name of employer                                  Title
    since              till
2005            2009            OJSC “Svyazinvest”                                 Deputy of director – head of
                                                                                   modernization and
                                                                                   telecommunications
                                                                                   development of strategic
                                                                                   development department
2009            Present time    OJSC “Svyazinvest”                                 Deputy of head for
                                                                                   coordination relations with
                                                                                   regulative and governing state
                                                                                   authority division of middle
                                                                                   term planning division
2008            2010            OJSC “South Telecom”                               The Inspection Commission
                                                                                   member
2006            2006            OJSC "Uralsvyazinform"                             Executive commission member
2006            2008            OJSC "North-West Telecom"                          The Inspection Commission
                                                                                   member




                                                                                                                  72
2009            Present time    CJSC "Eniseisktelecom"                             The Inspection Commission
                                                                                   member
2010            Present time    OJSC "Far East Telecom"                            The Inspection Commission
                                                                                   member



Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

  Kozyreva Elena Vasilievna
  Year of birth: 1962
  Education: high

Person‟s Positions during Latest 5 Years:

        Period of time                         Name of employer                                  Title
    since              till
2001            2006            OJSC “Svyazinvest”                                 Head specialist of budget
                                                                                   planning
2007            2007            CJSC "LeasingPoint"                                Senior project manager
2007            2009            OJSC “Center Telecom”                              Deputy of budget planning
                                                                                   division
2009            Present time    OJSC “Svyazinvest”                                 Head of group in budget
                                                                                   planning division
2005            2006            OJSC “Far East Telecom”                            The Inspection Commission
                                                                                   member
2010            Present time    OJSC “Far East Telecom”                            The Inspection Commission
                                                                                   member
2005            2006            CJSC "Nizhegorodskaya sotovaya svyaz"              The Inspection Commission
                                                                                   member
Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.




                                                                                                                73
Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.

  Punina Ekaterina Alexandrovna
  Year of birth: 1973
  Education: high

Person‟s Positions during Latest 5 Years:

        Period of time                         Name of employer                                  Title
    since              till
2009            2010            OJSC “Svyazinvest"                                 Deputy of head of division of
                                                                                   department for corporate
                                                                                   governance and law support
2010            Present time    OJSC “Far East Telecom”                            Member of the Inspection
                                                                                   commission
2006            2009            OJSC “Svyazinvest”                                 Senior specialist of department
                                                                                   for corporate governance and
                                                                                   law support
2004            2009            OJSC “Svyazinvest”                                 Senior specialist of corporate
                                                                                   governance department
2008            2009            OJSC "Central telecommunications Company"          The Inspection Commission
                                                                                   member
2009            2010            OJSC "HIPROSVYAZ"                                  The Inspection Commission
                                                                                   member
2010            Present time    CJSC "Centel"                                      The Inspection Commission
                                                                                   member


Person‟s share in the Issuer‟s authorized capital/ordinary shares: Person has no share in the Issuer‟s authorized
capital and ordinary shares.

Number of the issuer‟s shares of each category/type which may be purchased by the person as a result of
exercising any right on the Issuer‟s options: Options have not been issued by the Issuer.

Shares in the Issuer‟s subsidiaries/dependent companies: Person has no shares in the Issuer‟s subsidiaries and



                                                                                                                74
dependent companies.

Nature of any family ties with any persons being members of the Issuer‟s management bodies and/or control
bodies over issuer‟s financial and business activities: There no family ties.

Data on facts of person brining to administrative account for law violation in sphere of finance, taxes, and fees,
securities market, and criminal liability (previous conviction having) for crime in sphere of economics, or against
State Government:

The person has not been brought to the mentioned types of accounts.

Data on person‟s positions in governance bodies of companies during the court about bankruptcy, or one of
procedure of bankruptcy was began in compliance with Russian Federation about bankruptcy:

Person did not work on the mentioned positions.


5.6. Information about size of reward, preferences and/or compensation of expenses to issuer’s
bodies for control over issuer’s financial and business activities
  Data on remuneration for each governance body (excluding person, executing duties of sole executive body of
  the Issuer governance). All types of rewards including salaries, bonuses, commissions, benefits, and (or)
  preferences, compensations of expenses, as well as other property grants for the last finished fiscal year shall
  be indicated below:

  Inspection Commission:

All kinds of rewards, Roubles                                                                                         2 572 527
Including:
Rewards, Roubles                                                                                                             0
Bonuses, Roubles                                                                                                             0
Commission, Roubles                                                                                                          0
Benefits, Roubles                                                                                                            0
Preferences and/or compensation of expenses, Roubles                                                                         0
Other property grants, Roubles                                                                                               0
Other, Roubles                                                                                                               0
Total, Roubles                                                                                                        2 572 527


  Data about agreements about payments in current financial year:
  The following terms of remuneration payment to members of the Inspection committee is set by
  “the Inspection Committee Charter”:
  All documentary confirmed expenses related to Inspection Committee members‟ duties execution
  shall be reimbursed to the members of Inspection Committee.
        Quarterly reward of 250,000 Roubles shall be paid to each member of Inspection Committee
during the period of their duties execution.
        Inspection Committee Chairman‟s reward shall be paid with factor 1.3.
        If there was re-election of Inspection Committee or leaving some members according to
clause 8 of Inspection Committee Charter during a quarter, reward to a member of Inspection
Committee shall be paid proportionally actually worked time in the quarter.

     Remuneration for governance body by results of the last financial year, which was determined
     (approved) by authorized corporate governance body of the issuer, but have not been paid by the
     end of reported period:



                                                                                                                75
    There were no mentioned factors during the reported period.

5.7. Information about number and summary on education and structure of issuer’s staff
members (personnel) and changes in their number


                              Indicator                                 3rd Quarter
                                                                           2010
Average number of employees, persons                                           9 394
Employees having higher professional education                                  35.6
Labor fund, Roubles                                                          838 871
Social welfare fund, Roubles                                                  49 373
Total funds spent, Roubles                                                   888 244


        Decrease of average number of employees takes place within the implementation of
Program for employees‟ amount optimization.
        Employees make material effect to financial-business activity of the Issuer (core
employees): there are no employees who make material effect to financial-business activity of the
Issuer.
        Information about creation of trade union by employees: There are regional trade unions
are in each region of Far East Federal District. There is no interregional trade union in OJSC Far
East Telecom.


5.8. Information about any issuer’s liabilities to staff members (personnel) regarding their
possible participation in issuer’s share (joint-stock) capital ((co-op share fund)

        There are no issuer‟s agreements and liabilities to staff members (personnel) regarding
their possible participation in issuer‟s share capital.
        Options were not granted to issuer‟s staff members (personnel). Issuer did not approve and
register options.




                                                                                               76
      VI. Information about members (shareholders) of issuer and about
               transactions with interest entered into by issuer
6.1. Information about total number of issuer’s members (shareholders)
        Total number of persons registered in register of shareholders as on the date of reported period
end: 13,943
        Including total number of nominal holders of issuer‟s shares: 10

6.2. Information about issuer’s members (shareholders) holding at least 5 percent of its share
(joint-stock) capital (co-op share fund) or at least 5 percent of its ordinary shares and
information about members (shareholders) of such persons holding at least 20 percent of share
(joint-stock) capital (co-op share fund) or at least 20 percent of their ordinary shares

Full name: Open joint stock company Telecommunication Investment Company
Short name: OJSC Svyazinvest
Taxpayer‟s ID: 7710158355
Location: 119121, Moscow, Plyuschiha Street,.55, building 2
Share in issuer‟s authorized capital: 38.13 %
Share of ordinary shares: 50.56%

Full name: Russian Fund of Federal Pproperty
Short name: RFFI
Taxpayer‟s ID: 7704097841
Location: 9 Leninsky Prospekt St., Moscow 119049
Share in issuer‟s shareholder‟s (member‟s) authorized capital: 25% - 2 shares
Share of issuer‟s shareholder‟s ordinary shares belonging to that entity: 25% - 2 shares
Share in issuer‟s authorized capital: 0%
Share of issuer‟s ordinary shares, belonging to that entity: 0%

Full name: Open Joint Stock Company of long distance and international communications
“Rostelecom”
Short name: OJSC “Rostelecom”
Location: 15, Dostoevskogo str., Saint-Petersburg, Russia 191002
Taxpayer‟s ID: 7707049388
OGRN: 1027700198767
Share in issuer‟s shareholder‟s (member‟s) authorized capital: 25%
Share of issuer‟s shareholder‟s ordinary shares belonging to that entity: 25%
Share in issuer‟s authorized capital: 0%
Share of issuer‟s ordinary shares, belonging to that entity: 0%

6.3. Information about share of State or municipality in issuer’s share capital, special right
(golden share)

Share in the Issuer‟s authorized capital owned by constituent entities of the Russian Federation – There
is no such share in authorized capital of the Issuer.

Share of authorized capital of the Issuer, owned by subject of Russian Federation
    There is no such share in authorized capital of the Issuer.

  Share of authorized capital of the Issuer, owned by municipal bodies of Russian Federation:




                                                                                                     77
     There is no such share in authorized capital of the Issuer.

  Fact of having special right of Russian Federation, subjects of Russian Federation, municipal subjects to
  participate in the Issuer government (gold share), term of such right validity:
    There are no such rights.



6.4. Information about restrictions for participation in issuer’s share (joint-stock) capital (co-op
share fund)
Issuer‟s Articles of Association do not provide for any restrictions belonging to one shareholder and/or their
total par value and/or maximal number of votes granted to one shareholder.
Legal acts of the Russian Federation and other regulations of the Russian Federation do not provide for any
restrictions on share of participation of foreign entities in issuer‟s authorized capital.
There are no other restrictions in connection with participation in issuer‟s authorized capital.


6.5. Information about changes in structure and participation of issuer’s shareholders
(members) holding at least 5 percent of its share (joint-stock) capital (co-op share fund) or at
least 5 percent of its ordinary shares

Issuer‟s shareholders who owned at least 5 per cent of the Issuer‟s Charter Capital and at least 5 per
cent of the Issuer‟s ordinary stock as of the date of compiling of the list of persons authorized to participate in
   each Shareholders‟ Meeting held within the last 5 completed fiscal years, and the last ended quarter:

  Date of making list of persons entitled to attend issuer‟s General meeting of shareholders: April 28, 2006

  List of shareholders:
    Full shareholder‟s name: Open joint stock company Telecommunication Investment Company, OJSC
    Svyazinvest
    Share in authorized capital belonging to that shareholder, %: 38.13
    Ordinary shares belonging to that shareholder, %: 50.56

  Date of making list of persons entitled to attend issuer‟s General meeting of shareholders: August 28, 2006

  List of shareholders:
    Full shareholder‟s name: Open joint stock company Telecommunication Investment Company, OJSC
    Svyazinvest
    Share in authorized capital belonging to that shareholder, %: 38.13
    Ordinary shares belonging to that shareholder, %: 50.56



  Date of making list of persons entitled to attend issuer‟s General meeting of shareholders: April 18, 2007

  List of shareholders:
    Full shareholder‟s name: Open joint stock company Telecommunication Investment Company, OJSC
    Svyazinvest
    Share in authorized capital belonging to that shareholder, %: 38.13
    Ordinary shares belonging to that shareholder, %: 50.56



  Date of making list of persons entitled to attend issuer‟s General meeting of shareholders: April 24, 2008

  List of shareholders:
    Full shareholder‟s name: Open joint stock company Telecommunication Investment Company, OJSC




                                                                                                                      78
     Svyazinvest
     Share in authorized capital belonging to that shareholder, %: 38.13
     Ordinary shares belonging to that shareholder, %: 50.56

  Date of making list of persons entitled to attend issuer‟s General meeting of shareholders: September 11,
  2008

  List of shareholders:
    Full shareholder‟s name: Open joint stock company Telecommunication Investment Company, OJSC
    Svyazinvest
    Share in authorized capital belonging to that shareholder, %: 38.13
    Ordinary shares belonging to that shareholder, %: 50.56

  Date of making list of persons entitled to attend issuer‟s General meeting of shareholders: April 24, 2009

  List of shareholders:
    Full shareholder‟s name: Open joint stock company Telecommunication Investment Company, OJSC
    Svyazinvest
    Share in authorized capital belonging to that shareholder, %: 38.13
    Ordinary shares belonging to that shareholder, %: 50.56


6.6. Information on interested-party transactions effected by the Issuer

  Data about quantity, value in money of interested parties transactions made by the issue, and recognized by Russian
  Federation law as interested party deals, and required approving of corporate governance bodies, by the end of
  reporting period

                              Item                                  Total amount             Value in Roubles
Total number and total amount of money regarding                                 12                       37 211 749
transactions with interest entered into by issuer in the
reported period which required approval of issuer‟s
authorized management body, transactions/Roubles
Number and amount of money regarding transactions with                             0                                    0
interest entered into by issuer in the reported period which
were approved by General meeting of issuer‟s members
(shareholders), transactions/ Roubles
Number and amount of money regarding transactions with                           12                       37 211 749
interest entered into by issuer in the reported period which
were approved by issuer‟s Board of Directors (supervisory
board), transactions/ Roubles
Number and amount of money regarding transactions with                             0                                    0
interest entered into by issuer in the reported period which
required approval but were not approved by issuer‟s
authorized management body, transactions/ Roubles

         Transactions (groups of related transactions) values of which are 5 and more percent of balance-sheet
value of issuer‟s assets as per accounting data as on the latest reporting date before that transaction entered into
by issuer in the latest reporting period:
         The Issuer had no such transactions in the reporting period

         Transactions (groups of related transactions) with interest which required approval but were not
approved by issuer‟s authorized management body (resolution on approval of which by Board of Directors
(supervisory board) or General meeting of shareholders was not made in cases when such approval was
mandatory in compliance with regulations of the Russian Federation:




                                                                                                                   79
        The Issuer had no such transactions in the reporting quarter



6.7. Information about accounts receivable

  At the end of reporting period

                       Type of accounts receivables                          Term of payment
                                                                           Under 1
                                                                            year      Above 1 year
Receivables from buyers and principals, thousand Roubles                      1 246 201                 0
              including overdue, thousand Roubles                               182 310        x
Bills receivable, thousand Roubles                                                   0                  0
              including overdue, thousand Roubles                                    0         x
Receivables from members/incorporators as to contributions in                        0                  0
authorized capital, thousand Roubles
              including overdue, thousand Roubles                                    0         x
Advances receivable, thousand Roubles                                          521 160                  0
              including overdue, thousand Roubles                              100 400         x
Other receivables, thousand rubles                                             578 593                832
             including overdue, thousand Roubles                                17 161         x
Total, thousand Roubles                                                       2 345 954               832
               including overdue, thousand Roubles                             299 871         x


Debtors owing at least 10 percent of the total accounts receivables on March 31, 2009: there are no
such debtors.




                                                                                                      80
VII. Issuer’s accounting statements and other financial information
7.1. Issuer’s annual accounting statements

Annual accounting statements should not be disclosed in the quarterly report.


7.2. Quarterly accounting statement of the Issuer for the last finished reporting period

9 months, 2010

                                 BALANCE SHEET

                                                                                                    CODE
                           Translation from Russian
                                  Language
                                                                     Form № 01 по ОКУД             0710001
                                                                        Date (year, month,
 As of                September 30, 2010                                             day)


 Company              OJSC “Far East Telecom”                                        OKPO code     1163193


 TIN                  2540014227                                                            TIN   2540014227
 Type of                                                                                          05401136400
 business             Telecommunications services                               OKVED code             0
 Corporate
 structure /
 ownership
 status               OJSC/mixed                                       OKOPF/OKFS code                49

 Quantity unit:       Thousand Roubles                                               OKEI code       384
                      57 Svetlanskaya Str., Vladivostok Russia 690950
 Address:

                    ASSETS                          Line code
                      1                                  2                      3                    4
I. NON-CURRENT ASSETS
Intangible assets                                       110                                80                 71
Fixed assets                                            120                         10 325 956       10 032 105
Capital outlays                                         130                           955 152         1 503 133
Income-bearing investments                              135                                 0                 0
Long-term financial investments                         140                          3 933 008        5 150 006
other long-term financial investments                   145                                94            917 092
Deferred tax assets                                     148                           111 267              15 800
Other non-current assets                                150                          1 671 968        1 712 072
Total for Section I                                     190                         16 997 431       18 413 187
II. Current Assets




                                                                                                              81
Inventories                                      210                      535 094                   634 027
raw and other materials, and other similar       211                      443 929                   595 100
inventories
animals for farming                              212                              0                       0
work in process (distribution costs)             213                            0                         0
finished products and goods for reselling        214                          997                       879
goods shipped                                    215                            0                         0
deferred expenses                                216                       90 168                    38 048
other inventories and expenses                   217                              0                       0
Value-added tax on acquired inventories          220                       70 150                    48 123
Accounts payable (payments are expected in       230                         1 844                      832
the period more than 12 months after balance
sheet date closing)
including:                                       231                              0                       0
due from buyers and customers (62, 76, 82)
Accounts receivables (payments are expected      240                     1 455 619                 2 059 288
during 12 months)
including:                                       241                     1 124 499                 1 246 201
due from buyers and customers (62, 76, 82)
Short-term financial investment (56,58,82)       250                      155 439                       242
loans for term less than 12 months               251                              0                       0
shares, bought back from shareholders            252                              0                -844 510
other short term investments                     253                              0                       0
Monetary assets                                  260                      145 065                    65 958
Other current assets                             270                          278                       577
Total for Section II                             290                     2 363 489                 2 809 047
TOTAL (line 190 + line 290)                      300                    19 360 920             21 222 234


                                                           At accounting period       At accounting period
                LIABILITIES                    Line code
                                                                  open                       close
                       1                          2                 3                          4
III. CAPITAL AND PROVISIONS
Charter capital                                  410                     2 535 006                 2 535 006
Treasury shares repurchased from                 411                              0                -844 510
shareholders
Additional capital                               420                      574 609                   567 717
Reserve capital Past retained profits /          430                      126 751                   126 751
uncovered losses
Reserves made in accordance with law             431                              0                       0
requirements
Reserves made in accordance with                 432                              0                       0
requirements of founding documents
Retained profits / uncovered losses for the      470                     6 647 992                 8 288 389
accounting year
TOTAL for section III                            490                     9 884 358             10 673 353
IV. NON CURRENT LIABILITIES




                                                                                                        82
Loans and credits                                  510                   3 359 449             6 291 791
Deferred tax liabilities                           515                     412 054               461 036
Other long term liabilities                        520                       7 901                       0
Total for Section IV                               590                   3 779 404             6 752 827
V. CURRENT LIABILITIES
Loans и credits                                    610                   3 461 397             1 277 583
Accounts payable                                   620                   1 655 321             1 818 292
owing to suppliers and contractors                 621                     703 366               783 104
compensation owed to employees                     622                      81 218               115 042
owing to government extra-budgetary funds          623                      33 099                43 000
owing to subsidiaries                              623                              0                    0
taxes and levies owing                             624                     356 691               424 201
owing to other creditors                           625                     203 523               152 486
Outstanding revenue distributions due to           630                      42 515               286 241
participants (founders)
Deferred revenue                                   640                      48 447                45 742
Provisions for future expenses                     650                     419 051               339 937
Other short term current liabilities               660                      70 427                28 259
Total for Section V                                690                   5 697 158             3 796 054
TOTAL (sum of line 490 + line 590 + line           700                  19 360 920            21 222 234
690)


                                 Assets recorded on below-line accounts
                                                  Line     At accounting period         At accounting
                      Item
                                                  code             open                  period close
                        1                           2               3                         4
Fixed assets taken on lease                       910                     171 368                225 891
including: those obtained by way of leasing       911                           0                        0
Inventories accepted for custody                  920                      16 442                 14 407
Goods accepted for sale on a commission           930                          14                       14
basis
Dues from insolvent debtors written off as        940                     241 788                203 422
losses
Collateral received to secure obligations and     950                          92                        0
payments
Collateral provided to secure obligations and     960                   2 018 507                163 060
payments
Wear of housing stock                             970                       4 496                  4 823
Wear of landscaping facilities and other like     980                          67                       74
amenities
Intangible assets, received to use                990                           0                        0




                                                                                                        83
                             PROFIT AND LOSS STATEMENT
                              Translation from Russian Language
                                                                                           CODES
                                                                        OKUD Form No. 2 0710002
                                                                        Date (year, month, 30.06.201
 For                                9 months, 2010                                    day)     0


 Company           OJSC “Far East Telecom”                                      OKPO code
                                                                                                25400142
 TIN               25400014227                                                           TIN       27
 Type of
 business          Telecommunications services                                OKVED code           64.20.11
 Corporate
 structure /
 ownership                                                                   OKOPF/OKFS
 status            OJSC/Mixed                                                       code             49
 Quantity
 unit:             Thousands Roubles                                             OKEI code           384

                   57, Svetlanskaya str., Vladivostok
 Address:          Russia 690091



                   Name of item                      Line                            For the corresponding
                                                     code   For the accounting
                                                                                     period of the previous
                                                                  period
                                                                                              year
                                                      2             3                          4
Revenue from and Expenditures for regular
business operations
Net proceeds from the sale of goods, products,       010             10 443 270                     9 941 660
works, and services (less value-added tax,
excises, and other similar obligatory
deductions)
Costs of goods, products, works, and services        020                -7 690 210                 -7 352 363
sold
Gross profit                                         029                2 753 060                   2 589 297
Commercial expenses                                  030                        0                             0
Administrative expenses                              040                        0                             0
Profits / losses from operating                      050                2 753 060                   2 589 297
Operational incomes and losses
Interest income                                      060                   22 233                      9 237
Interest expense payable                             070                 -525 808                   -409 087




                                                                                                           84
Incomes from participating in other organizations         080                   700 432                        54 167
Other incomes                                             090                   435 269                       426 734
Other losses                                              100                   -669 448                      -599 341
Non disposal incomes                                      120                          0                             0
Non disposal expenses                                     130                              0                            0
Profit (loss) before taxes                                140                  2 715 738                     2 071 007
Deferred tax assets                                       141                    -95 429                       -26 428
Deferred tax liabilities                                  142                    -50 254                       -25 994
Current profit tax                                        150                   -381 748                      -381 683
Net Profit (losses) for reporting period                  190                  2 172 812                     1 626 951
REFERENCE
Constant tax liabilities (assets)                         200                   -138 371                       -71 824
Basic earnings (losses) per share                         201                              0                            0
Diluted earnings (losses) per share                       202                              0                            0



                     Name of item                   Line                                       For the corresponding
                                                    code        For the accounting
                                                                                               period of the previous
                                                                      period
                                                                                                        year
                                                                прибыль       убыток           прибыль       убыток
                           1                         2            3             4                 5            6
Fines, late charges. and penalties                  230               248           -414              383          -378
acknowledged or which are to be recovered
under judgments issued by courts of general
jurisdiction or courts of state arbitration

Past profits / (losses) of previous years           240           39 663       -64 028            36 207      -77 250
Compensation for losses caused by the non-          250               970           -717              696      -2 579
performance or improper performance of
liabilities
Exchange rate differentials in transactions         260            4 379        -4 603            19 666      -24 917
executed in foreign currency
Provisions for valuations                           270                   0    -58 614                   0    -44 962
Receivables and payables write off                  280            9 317        -1 349             1 899           -420




                                                                                                                    85
7.3. Accounting statements of the issuer for the last financial year
Information is not disclosed in the report.

7.4. Data about accounting policy of the issuer

This Charter on accounting policy of open joint-stock company Far East Telecommunications
Company (hereinafter referred to as Company) is developed in compliance with the provisions of the
Russian Federation law.

For the purposes of this Charter, Accounting Policy shall mean reasonable and disclosed to various
users group of accounting methods – primary observations, monetary valuation, current grouping and
final aggregation of business activity‟s facts for the purpose of getting maximally updated, full,
unbiased and reliable financial and management information.

In cases when accounting regulations system of the Russian Federation does not provide for
accounting methods on any certain matter, Company developed relative accounting method based on
effective Provisions on accounting and International Financial Reporting Standards when creating
Accounting Policy.
.
Company‟s Accounting Policy being the basis of accounting system is aimed to ensure:
- observance of basic accounting principles – completeness, timeliness, prudence, priority of content
over form, consistency, rationality;
- observance of general requirements to accounting statements: materiality, neutrality, comparability,
compatibility;
- reliability of statements made up by Company – accounting, tax, management, statistical;
- unification of methods for arrangement and keeping of accounting in Company in general and in its
divisions1;
- timeliness and reaction flexibility of accounting system to changing conditions of financial and
business activities including those set forth by changes in laws and regulations.

This Charter along with general mandatory requirements and rules accounts for telecommunications
company‟s specifics:
- internal documents regulating accounting process from the point of view of sector‟s specifics;
- a great number of divisions in come cases remote from Company‟s headquarters;

Charter describes accounting methods used for establishment of accounting policy which materially
effect the assessment and decision making by users of accounting statements concerned, failure to
know which makes impossible reliable assessment of financial statements, cash-flow or financial
results of Company‟s business.

Accounting methods utilized by Company when establishing this Accounting Policy shall be approved
by order of Company‟s CEO and applied since January 1, 2009.

This Charter should govern activities of all the persons in dealing with matters set forth by Accounting
Policy:
Company‟s top management;

1
 For the purpose of this paper, Company‟s divisions shall mean if not otherwise specified, General Directorate,
branches and their structural divisions.




                                                                                                              86
heads of branches and structural divisions in charge for arrangement and situation in accounting in
divisions subordinate to them;
staff of services and departments in charge for timely development, review, introduction of regulations
and reference materials to executing divisions;
staff of services and departments in charge for timely submission of primary documents to accounting
department;
staff of accounting department in charge for timely and due execution of all kinds of accounting and
making reliable statements of any kind whatsoever;
other staff.

Accounting Policy shall be established for 2009 and shall not be subject to change except for the
following cases:
change of the Russian Federation regulations or accounting regulations;
development of new accounting methods by Company;
material change of business conditions as a result of restructure, change of business, etc.

Accounting Policy shall be amended since the beginning of the reporting year (beginning of fiscal
year) if other is not provided by the reason of such change.

Company‟s Chief Accountant shall be in charge for observance of methodology.

In the course of accounting, Company is governed by methodical instructions on accounting spheres
approved by Order of Company‟s Chief Executive Officer.




                                                                                                     87
        1. ORGANIZATIONAL ASPECTS OF ACCOUNTING POLICY

        1.1. General information on electric telecommunications company

Company‟s Articles of Association set the following kinds of activities:
local and intra-zone communications;
local, intra-zone, long-distance national and international communications via pay-phones and public
access
points;
long-distance national and international communications;
cellular mobile communications GSM-900;
mobile radiotelephone communications;
mobile radio communications;
radiopaging;
radiopaging with VHF FM multiple channel;
communication channel lease;
telematic services (including e-mail), access to information resources, information directory inquiry
service,
Telefax service, Comfax service, Bureaufax service, message processing service, voice message
service, voice
traffic service, audio conference and video conference service, intellectual network service;
data transfer services;
telegraph services (including telegrams), AT/Telex network services;
cable TV service;
wire broadcasting;
TV broadcasting services using transmitting equipment;
radio broadcasting using transmitting equipment;
local telephone communication services using radio access equipment;
TV broadcasting using transmitting equipment (MMDS);
works related to use of information being secrets of state;
actions and/or services in connection with protection of secrets of state;
actions and/or services in connection with protection of secrets of state related to cryptographic body‟s
work;
actions and/or services in connection with protection of secrets of state to the extent of engineering
information
security;
arrangement and actions to provide communication security and other security protected by law;
buildings and structures design including special sections: environment protection, fire safety, etc.;
draft project and project documentation expertise;
construction, capital repair, re-construction, extension, engineering re-equipment of communication
infrastructure;
construction, capital repair, re-construction, engineering re-equipment of civil infrastructure;
geodesic and cartographic business;
training and advanced training of engineering staff, production staff, management;
engineering maintenance, repair and sale of cash registers;
engineering maintenance, repair and sale of communication devices;
installation, repair and engineering maintenance of signaling systems;
arrangements for restoration of communication networks and equipment when broken or damaged;
priority communication services for the interests of defense, state administration, security and law
enforcement;


                                                                                                       88
arrangements to provide communication services in emergency situations;
implementation of mobilization plans for getting communication networks ready and arrangements in
emergency situations;
consulting services;
trading and procurement activities.

Company has three levels of management:
Head Office;
Branches;
Structural divisions.

Company may exercise licensed kinds of activities only subject to receipt of relevant license.

1.2.   Principles of Accounting Departments Organization

“Accounting Department” means the complex of structural units and officials collecting initial
information, processing and analyzing it and making reports for various groups of users.

Specialized accounting department means Company‟s structural division collecting, processing and
grouping information in form of consolidated registers of analytical and synthetic accounting, making
accounting entries.
Depending on the level of corporate structure, specialized accounting department includes:
On Company‟s Head Office level: department of accounting and methodology, department of tax
accounting and methodology; department of consolidated accounting;
On branch‟s level: service for accounting non-current assets, service for accounting settlements with
staff, service/sector for accounting goods and valuables, service/sector for accounting of settlements
with debtors and creditors, service/sector for accounting of financial results and cash assets,
hereinafter referred to as services of accounting unit. Specialized accounting services include: tax
accounting service, consolidated reports service.

Functional services (eg., Department of budgeting and investments planning, Department of strategic
business development and marketing, Department for relations with telecommunications providers,
Department of sales and service, Department of engineering development, Department for use of
telecommunications, service for economy, service for telecommunications, service for relations with
telecommunications providers, service for capital construction, service for procurement, line shop,
transportation shop, station shop, etc.) exercise the functions for collecting and processing initial
information for its further registration in accounting system.

On each management level, accounting service provides collecting and processing of information for
the purpose to furnish users with data for developing, reasoning and making decisions on their level of
management and to furnish higher management bodies with the information required for developing,
reasoning and making decisions on higher level of management.

Principles of separation of powers and responsibilities of accounting services on each of the three
management levels (vertically) and inside each management level (horizontally) are governed by
Charter on accounting principles. That Charter sets forth the structure, functions and tasks of
specialized and functional accounting services. Distribution of duties and relations between
specialized and functional services are governed by Charter on accounting principles and Charter on
documents exchange system.

Accounting and control are done by Company‟s accounting division as an integral part of specialized
accounting service headed by chief accountant. Company‟s accounting service includes accounting
departments of branches directly headed by chief accountants of branches

                                                                                                    89
1.3. Documents Exchange and Accounting Documents Processing Technology

In Company, rules and procedures of documents exchange, its schedule and technology for processing
initial accounting documents including:
procedure for creating initial documents;
procedure for inspection of initial documents;
procedure and delivery deadline to be recorded in accounting;
procedure for delivery to archives
are governed by Charter on documents exchange system.

Company utilizes unified forms of initial accounting documents approved by State Committee for
Statistics of the RF.
When accounting business operations for which unified forms are not provided for, own forms of
initial accounting documents (including those included in Charter on documents exchange system)
containing required details set forth by Federal Act of 21.11.1996 No 129-FZ On accounting, Charter
on documents exchange system, and approved by internal regulation documents (guidelines).

Power to sign initial accounting documents shall be set forth by internal regulation documents
(guidelines).

Registers of accounting is created (accounted) with using computer aids, kept electronically, and
printed by order.

           1.4. Procedure for Arrangement and Doing Inventory of Assets and Liabilities

All Company‟s assets shall be subject to inventory regardless from their location, as well as all kinds
of liabilities.

Inventory in Company shall be within the following period:
fixed assets (including leasehold) – at least once each two years as on October 31 of the reported year;
intangibles – annually as on November 30 of the reported year;
incomplete capital construction and other capital investments – annually as on October 31 of the
reported year;
raw materials, precious metals, equipment for installation, semi-finished products, goods, finished
products stock, and goods and valuables and equipment for installation accepted and delivered for
safekeeping and processing – annually as on October 31 of the reported year;
money for telecommunication services on stock and delivered for sale – annually as on October 31 of
the reported year;
unfinished goods – quarterly as on the end of quarter;
income and expenses of future periods – annually as on December 31 of the reported year;
money on bank accounts – annually as on December 31 of the reported year;
cash – at least one each quarter;
long-term financial investments – annually as on December 31 of the reported year;
short-term financial investments, monetary document – quarterly as on the end of quarter;
settlements with customers and principals (account 62) and reserve for doubtful receivables of
customers and contractors – quarterly as on the end of quarter;
settlements with telecommunication operators (account 60, 62) - quarterly as on the end of quarter,
settlements with suppliers and contractors (account 60) and other debtors and creditors (account 76) –
once a year as on December 31 of the reported year;

credits and loans settlements - annually as on December 31 of the reported year;



                                                                                                      90
taxes and mandatory payments to budget and non-budget funds, purposed funding - annually as on
December 31 of the reported year;
internal operational settlements – at least once a quarter;

settlements with employees, advance holders - quarterly as on the end of quarter;

reserve for contingent liabilities, reserve for depreciation of investments in securities, reserve for
decrease of value of valuables, reserve for future expenses, reserve for works/services used without
supporting documents, reserve for shortages detected - annually as on December 31 of the reported
year;

ensuring liabilities and payments received and given - annually as on December 31 of the reported
year.

 To do inventory, full-time inventory committees shall be established on Company‟s Head Office level
and Directorate of branches, their composition shall be approved by:
for Company‟s Head Office – by Company‟s Chief Executive Officer;
for Branches – by deputy Chief Executive Officer – head of a branch.

Detailed procedure for arrangement and doing inventory of assets and liabilities of Company shall be
set forth in Charter on procedure for inventory of assets and liabilities and measures to ensure safety of
assets.

                           1.5. Accounting Statements Making Procedure

Company‟s accounting statements shall be made as per procedures and in terms set forth by Federal
Act of 21.11.96 No 129-FZ On accounting and other regulations of the Russian Federation governing
accounting and accounting statements.

Company‟s accounting statements shall be made by Department of consolidated statements of
Company‟s Head Office based on aggregated information about assets, liabilities and Company‟s
performance results accounting for information submitted Department of accounting and
methodology, Department of tax accounting and methodology of Head Office, services for
consolidated statements of branches.
Statements are made by services for consolidated statements of branches based on the data submitted
by accounting unit services, tax accounting service and accounting departments of corporate divisions.

When making accounting statements, forms developed by Company accounting for recommendations
contained in respective regulations shall be used.

Internal accounting statement forms and exact periods of their submission are listed in Charter on
procedure for making Company‟s accounting statements.

                            1.6. Company’s Working Chart of Accounts

All Company‟s divisions shall use Unified chart of accounts when doing accounting (Appendix 1).

Procedure for use of Unified chart of accounts shall be governed by Instruction for Use of Unified
Chart of Accounts (hereinafter is UCA).

                   2. METHODICAL ASPECTS OF ACCOUNTING POLICY



                                                                                                         91
                               2.1. Intangible assets accounting procedure

Re-evaluation of intangibles shall not be made.
In 2009 intangible assets shall not be checked to depreciation.

Amount of deprecation allowance on intangibles shall be determined on monthly basis calculated
based on their initial value and life using linear method.

Expected life of intangibles shall be determined when they are registered for accounting by special
commission and approved by Company‟s Chief Executive Officer.

Term of intangibles using shall be checked to neediness of specification annually as on December 31
of the reported year.
Term of shall be a subject to specification in case if evaluated term during of which it is supposed to
use of assets have been changed for 12 months and more.
In case of intangibles using term changing new sum of depreciation deductions shall be calculated on
the base of residual cost and new remain term of intangibles using, since the 1st day of month
following after month which the decision about term of using change was made in.

Charge-off of intellectual property objects shall be done by accumulation on account 05 „Depreciation
of intangibles‟ of depreciation amounts calculated by linear method.

                               2.3.     Inventories Accounting Procedure

Actual cost-price of stock in Company‟s accounting is determined using accounts 15 „Procurement
and purchase of inventories‟ and 16 „Change of inventory value‟.

Accounting of inventories on accounts 10 „Materials‟ and 41 „Goods‟ regarding wholesale goods is
done based on book price.

Inventories (feedstock, materials, goods) are accepted for accounting at book price meaning:
when buying inventories for money – supplier‟s price under supply/sale and purchase contract;
when making inventories by company – actual costs related to production;
when making inventories contribution in company‟s authorized capital – monetary valuation agreed
upon with incorporators in compliance with the provisions of Act On joint-stock companies;
when receiving inventories under gift agreement (gratis) and remaining from fixed assets and other
assets retirement – current market value as on the date of registration for accounting;
when receiving inventories under contracts providing for execution of liabilities (payment) in non-
monetary form –cost of assets assigned or to be assigned by Company 2.

Transport and procuring costs (TPC) and costs on making materials fit for use for the purposes set by
Company shall be taken stock of on account 16 „Change of inventory value‟ regardless from specific
weight of TPC or the size of change from the book value of materials.
Retail goods are shown in accounting at sale prices.


2
  Value of assets assigned or to be assigned by Company shall be set based on the price used to determine the
value of similar assets by Company in comparable conditions. When it is impossible to determine the value of
assets assigned or to be assigned by company, the value of stock received by Company under contracts
providing for execution of liabilities (payment) in non-monetary form shall be determined based on the value
for which similar stock is purchased in comparable conditions.



                                                                                                                92
Ordering and delivering costs for goods for sale via retail and wholesale network to Company‟s
storehouses shall be included to the account 16 “Change of inventory value‟.

Unfinished goods are assessed at actual production cost-price.

Finished goods are assessed at actual production cost-price without using account 40 „Production of
goods (works/services)‟.

Workwear and tools purchased and owned by Company are taken stock of at the amount of actual
purchase costs on debit of account 10 „Materials‟.

Workwear and tools under 20,000 Roubles per unit purchased since 01.01.2008 and workwear and
tools under 10,000 rubles per unit not put into use as on 31.12.2007 with any life and workwear and
tools with life under 12 months with any cost per unit are written off on cost accounts in full as they
are put into operation.

Workwear and tools over 20,000 Roubles per unit purchased since 01.01.2008 or those not put into
operation as on 31.12.2007 and life over 12 months after putting into operation are taken stock of on
accounts „Workwear in use‟ and “Tools in use” discharged within their life. Value subject to discharge
shall be calculated by the following formulation:

      Price of workwear, tools                          Х    Amount of days in reported year
      Term of actual use (days)

Retiring inventories are assessed by the following methods:
At average value:
feedstock;
materials;
finished goods;
goods for resale.

At each unit‟s cost-price:
Metal breakage, precious metals;
assets meeting the conditions set forth by clause 4 of Provisions on accounting 6/2001 „Accounting of
fixed assets‟ under 20,000 rubles per unit.
Workwear, tools;
Values received for free;
Values founded by result of inventarization;
Materials received by result of dismantle;
Values purchased for implementation of purpose investments programs.

         2.4.     Procedure for re-calculation of assets and liabilities in foreign currency

Company‟s cash, bank accounts, monetary instruments, short-term and long-term securities, money in
settlements with entities and individuals including loans receivable and payable, debts receivable
acquired by assignment of right of claim (except for advances receivable and payable and
prepayments) in foreign currency shall be calculated in rubles as on the date of transactions in foreign
currency and as on reporting date.

                               2.5.    Revenues generating procedure




                                                                                                          93
For accounting purposes, common Company‟s kinds of activities are divided into basic and non-basic.

Basic kinds of activities mean those which are directly connected with telecommunication services.
All other kinds of activities are non-basic.

Common activities are as follows:
Basic:
local telephone communication services (urban and rural telephones):
including universal communication services,
intra-zone telephone services;
documentary telecommunications, telematic services, data transfer;
mobile radiotelephone (cellular) communications;
mobile radio communications;
broadcasting, TV, satellite communications;
wire broadcasting;
connecting and traffic transfer services;
connecting services;
call initialization and termination services;
services accompanying long-distance and international communications by long-distance and
international
operators;
other basic kinds of activities.

Non-basic:
lease of Company‟s assets;
shipping services;
making telecommunication products;
trade;
public catering;
construction;
information and computer services;
publishing (issue of reference-books, newspapers);
intermediary services (agency, commission);
access to power services;
education services;
security services;
everyday consumer services;
recreation services;
advertising;
other activities meeting the above criteria.

Revenues differing from revenues from common kinds of activities are considered other.

                              2.6.    Expenses generating procedure

For expenses accounting purposes, common Company‟s kinds of activities are divided into basic and
non-basic.

Accounting provides separate cost accounting by kinds of services, works and products which are he
objects of calculation.


                                                                                                     94
To distribute costs of basic kinds of activities into calculation objects Company utilizes costs
accounting by production processes.

Production process means expressly determined activity (sequence of actions or complex of functions
and tasks) not limited in time and having identifiable result.

To distribute costs by calculation objects, processes are divided into basic production processes,
auxiliary production processes and joint processes.

Basic production processes mean those related to telecommunication services.

Auxiliary production processes mean those required for basic and joint production processes and
indirectly related to telecommunication services.

Joint production processes mean those required for basic production processes but not related to
telecommunication services.
Cost distributions are based on actual indicators of Company‟s production performance set forth by
Methodical guideline on cost accounting.

All costs related to basic kinds of activities are indirect, i.e., not distributed directly but among
calculation objects and considered in the course of production processes.

Costs on basic kinds of activities are shown on accounts 30 „Basic production processes‟ and 31
„Auxiliary production processes‟.

Costs on non-basic kinds of activities are shown on accounts 23 „Auxiliary productions‟, 29 „Servicing
productions and facilities‟ and 44 „Selling costs‟ in the course of kinds of activities.

Full cost-price of services, works and products is calculated without specifying administrative and
commercial costs.

Costs on joint production processes are shown on account 32 „Joint production processes‟.

Costs on account 31 „Auxiliary production processes‟ are distributed between basic and joint
production processes on accounts 30 „Basic production processes‟ and 32 „Joint production processes‟
based on information about distribution basis submitted by production services at the end of reporting
period.

Costs on account 30 „Basic production processes‟ are distributed on account 20 „Basic production‟ by
calculation objects (services) based on information about distribution basis submitted by production
services at the end of reporting period and on account 33 „Costs on maintenance of equipment‟ by
kinds of equipment of some nominal digital network made by engineering services on annual basis.
Distribution of costs by kinds of equipment is done in compliance with rated data of engineering
services on rate of equipment engagement in basic production processes.

Costs on account 33 „Costs on maintenance of equipment‟ are distributed on account 20 „Basic
production‟ by calculation objects (services) based on information from engineering services on
intensity and length of operation of each kind of equipment for certain service which are calculated in
the beginning of each year or in case of material changes in topography of communication network.

To calculate cost-price of services, works, products, production of non-basic activities, actual costs on


                                                                                                        95
services provided, finished works and goods delivered to storage gathered on accounts 23 „Auxiliary
production‟ and 29 „Servicing productions and facilities‟ are written off to account 43 „Finished
products‟ (in case of production of finished goods), respective accounts of production processes (in
case of services/works for basic activities) or account 90 „Sales‟, subaccount 90-04 „Cost-price of
sales on non-basic kinds of activities‟ (in case of services/works for third parties). Balance on debit of
accounts 23 „Auxiliary production‟ and 29 „Servicing productions and facilities‟ reflect the value of
unfinished goods balance.

Costs gathered on account of joint production processes 32 „Joint production processes‟ are written off
at the end of reported period to account 20 „Basic production‟ proportionally to the amount of costs
distributed to respective accounts.

Costs on providing telecommunication services gathered by kinds of services on account 20 „Basic
production‟ are fully written off at the end of reporting period to account 90 „Sales‟, subaccount 90-02
„Cost-price of sales‟ with analysis by calculation objects (services).

Procedure for accounting and calculating cost-price of products (works/services) of non-basic kinds of
activities shall be set forth by Company on its own in compliance with recommendations of sector‟s
guidelines governing the said procedure in the sectors covering that kind of non-basic activities.

                       2.7.     Future periods expenses accounting procedure

Future periods expenses include the following expenses which are accepted in the reported period but
cannot be included in cost-price of sold services, works, goods of this reported period, for example:
expenses in connection with new productions or kinds of products before actual sale;
expenses on payment of future vacations;
discount on bills and bond loans;
expenses on purchase of licenses;
expenses on insurance of assets;
expenses in connection with software and database purchase under purchase or exchange contracts if
those assets do not comply with the conditions set forth for intangible assets;
expenses in connection with early purchase of leasehold assets;
other.

Future periods expenses shall be evenly written off for respective sources of coverage within the
period they are related to. If it is impossible to detect the period for writing off the expenses incurred,
such period shall be set forth by special commission and approved by Chief Executive Officer or
authorized person‟s order.

Expenses in connection with software and database purchase shall be written off to current expenses
since the first day of the month following the month of beginning their use in goods production,
providing services or for administrative needs of company.

Certification and licensing shall be written off to current expenses since the first day of the month
following the month of validity start of licenses and certificates.
For accounting statements expenses in connection with software and database purchase used over 12
months and expenses in connection with early purchase of leasehold assets shall be included in other
noncurrent assets.

                                 2.8. Settlements accounting procedure

Non-monetary settlements shall be accounted separately using account 76.15.



                                                                                                          96
For accounting purposes, capital advances are classified as other noncurrent assets.

                        2.9. Credits and loans received accounting procedure

Company shall transfer long-term credits and loans payable to short-term (to relevant subaccount of
account 66 „Settlements on short-term credits and loans‟) at the moment when under terms and
conditions of loan/credit contract 365 days remain till repayment of principal amount.

If company receives a long-term loan under a contract which provides periodic repayment of loan,
when 365 days remain till repayment of the next part of loan, it becomes short-term part of long-term
debt on respective subaccount of account 66 „Settlements on short-term credits and loans‟.

In case of short-term loan contract prolongation or moving the time for repayment of short-term part
of long term loan so that loan or the said part of loan repayment period be over 365 days, loan payable
or part of loan partially repaid shall be moved from short-term accounts payable to long-term accounts
payable (to respective subaccount of account 67 „Settlements on long-term credits and loans‟).

Interest income payable to loan grantor shall be accrued evenly (monthly) as per rate set forth in
contract. If contract provides for payment of interest not on the last day of a month, interest payable
shall be accrued in the amount of interest payable at the end of a month.

For loans received in monetary form by issue of own bills of exchange or bonds which were used
directly (in full or in part) for establishment of investments assets, discount amount is attributed to
future periods expenses with further writing off by equal portions on monthly basis within the period
of securities circulation of the increase in investments assets value until including them in fixed assets.

Interest payable on loans received in monetary form by issue of own bills of exchange or bonds which
were used directly (in full or in part) for establishment of investments assets shall be attributed to the
increase of investments assets value until including them in fixed assets.

For bonds placed at price higher than par value, the difference between placing price and par value
shall be attributed to future periods expenses with further writing off to other incomes by equal
portions on monthly basis within the period of securities circulation.

For bills of exchange 'at sight but not earlier' the basis period for accepting expense in the amount of
discount shall mean the period of bills of exchange circulation determined from the date of bill of
exchange issue till the earliest date of presentation of bill of exchange for payment.

Extra costs in connection with loans and credits and placement of borrowings shall be included in
other expenses in the reported period when the said costs were incurred.

 2.10. Internal business settlements and information submitted by separate divisions accounting
                                            procedure

For internal turnover accounting Company uses account 79 „Internal business settlements‟.

All financial and business operations between Company‟s divisions shall be done via notifications
(letters of advice) on higher management level:
- operations between structural divisions shall be done via directorates of respective branches;
- operations between branches shall be done by Company‟s General Directorate.

                2.11. Procedure for establishment and use of special purpose funds


                                                                                                           97
Company shall not establish any funds from undistributed profit of reported year except for funds
which are provided for by Company‟s incorporation documents.

Procedure for establishment and use of the said funds shall be determined by General meeting of
Company‟s shareholders accounting for provisions of Act On joint-stock companies.

                        2.12. Procedure for establishment and use of reserves

Company shall establish the following reserves:
reserve for depreciation of financial investments (as on the end of the reported year);
reserves for doubtful receivables in settlements with customers (monthly);
reserves for doubtful receivables on advances made and other receivables (as on the end of the
reported year);
reserve for depreciation of valuables (as on the end of the reported year);
reserves for future expenses (monthly);
reserves for contingent liabilities (as on the end of the reported year);
reserves for services without supporting documents (as on the end of the reported year);
reserves for shortages detected (as on the end of the reported year).

Reserves for doubtful receivables in settlements with customers shall be established monthly before
making accounting statements with respect to all doubtful receivables in Company‟s balance-sheet.

Reserves for doubtful receivables in settlements with customers shall be established based on the
results of debts receivable, and doubtful receivables shall mean receivables not paid within contract
period and not secured with pledge, suretyship, bank guarantee.

Because individual analysis of each doubtful receivable for telecommunication services is impossible
due to large number of subscribers, reserve shall be assessed accounting for analysis of receivables
paid and shall be established for group of similar debtors.

Reserves for doubtful receivables on advances made shall be established based on the results of
inventory of advances made when probability of receipt of assets/services is doubtful.

Reserves for doubtful receivables on other receivables shall be established based on the results of
inventory of other receivables when payment in full is admitted low-probability.

Reserves for doubtful receivables on advances made and other receivables shall be assessed and
approved individually for debtors which are considered material. Reserves accrued shall be included in
other expenses.
Reserve for works, services without supporting documents shall be established for works and services
without any initial accounting documents meeting terms, but expenses recognition meetings, and
conditions for acceptance of expenses set forth by Charter on accounting „Accounting of
organization‟s expenses‟ (PBU 10/1999). Expenses on establishment of reserve shall be included in
common activities expenses or other expenses depending on the sort of liability.
Reserves for shortages detected shall be accrued if material shortage is detected based on assessment
of probability of return by faulty persons of the amounts accrued to shortage. Expenses on
establishment of reserve shall be included in other expenses.
Size of reserve for condition liabilities shall be discounted in case if such liability has been classified
as long term liability (the Company shall evaluate term of expected maturity of condition liability
during the term under 12 months).




                                                                                                        98
                            2.13. State assistance accounting procedure

Company shall accept for accounting the budget funding including resources differing from money
subject to the following conditions:

   -   there is surety that terms and conditions of such funding will be fulfilled by company. It may
       be acknowledged by contract concluded by company, decisions made and publically
       announced, feasibility studies, project and cost-estimate documents approved, etc.;
   -   there is surety that the said funding will be received. It may be acknowledged by budget
       schedule approved, notification of budget funding, limits of budget liabilities, acts of
       acceptance of resources and other relevant documents.

                             2.14. Financial investments accounting procedure

   Financial investments for accounting purposes are classified by kinds of investments and term.

   In case of sale or other retirement including redemption of securities, assessment of retiring
   securities is made at
   initial value of the first securities purchased (FIFO), assessment of retiring non-issuance securities
   – at actual value of each security.

   By term, financial investments are divided into:
   Long-term – investments made with intention to receive income for over 12 months since the
   reported date if
   their repayment period exceeds 12 months since the reported date;
   Short-term:
   investments made without intention to receive income over 12 months;
   investments with repayment period set under 12 months since the reported date;
   securities purchased for resale regardless from their redemption period.
   Long-term financial investments shall be subject to transfer to short-term:
   upon resolution made by Board of Directors to sell financial investments subject to firm plan to do
   such sale within 12 months beginning since the date of resolution to sell;
   if period before redemption date becomes under 12 months since the reported date.

   Short-term financial investments with repayment period set over 12 months since the reported date
   shall be transferred to long-term (to respective account) in case of change of the initial intention to
   receive income within under 12 months since the reported date.

   Initial value of financial investments purchased on commercial basis shall mean the amount of
   actual costs in connection with such purchase.

   Initial value of financial investments purchased on contractual basis providing for payment in
   rubles equivalent to the amount in foreign currency (nominal money units) shall be established
   accounting for differences arising prior to acceptance of assets as financial investments.

   For debt securities, the difference between actual costs on purchase of securities and par value is
   not attributed to financial results.

   Value of financial investments for which it is possible to duly determine current market value shall
   be adjusted as on the end of the reported year.

   Procedure for accounting of expenses on research and development.

                                                                                                         99
    For accounting purposes, finished R&D results obtained on which shall not be subject to legal
    protection under current law or subject to legal protection but not made up in compliance with the
    procedures established by law shall be considered other noncurrent assets.

    Expenses on R&D shall be written off by linear method to common activities expenses since the
    1st day of the month following the month in which actual use of results obtained began to be used
    in production of goods, providing services and doing works or for administrative expenses.

    R&D expenses paying off shall be set after R&D completion by special committee and approved
    by order within the economic benefit/income period but under one year.

                                   2.16. Procedure of income tax accounting

    The Company determines amount of current income tax on the basis of tax declaration on income
    tax.

                                                2.17. Segments

Based upon organizational and management structure the Company marks out the following segments for the
purpose of accounting:

             –    Head office of OJSC “Far East Telecom”
             –    Amursky branch of OJSC “Far East Telecom”
             –    Kamchatsky branch of OJSC “Far East Telecom”
             –    Magadansky branch of OJSC “Far East Telecom”
             –    Primorsky branch of OJSC “Far East Telecom”
             –    Sakhalinsky branch of OJSC “Far East Telecom”
             –    Khabarovsky branch of OJSC “Far East Telecom”.

The following results of business segments are disclosed:
       Revenue of segment – revenue, represented in profit and loss statement of the company, which is
       concerned to business segment and formed in result of transactions with purchasers;
       Profit (loss) of segment – net profit (loss), represented in profit and loss statement of the company, which
       is concerned to the business segment;
       Depreciation charges per fixed assets and intangible assets of the segment – expenses, appeared in result
       of gradual transference of fixed assets and intangible assets value to cost of service of the business
       segment;
       Assets of segment – fixed assets, intangible assets, inventories, accounts receivables, cash and other
       assets is concerned to mentioned segments, as well as that part of assets, which is soundly distributed to
       segment;
       Liabilities of the segment – accounts payable to suppliers, personnel, advances, received and other
       liabilities, is concerned related to reported segment, as well as that part of liabilities, which soundly
       distributed to segment;
       Capital investments of reporting segment consists capital investments to fixed assets and intangible
       assets.

Financial investments, deferred tax assets on profit tax and other assets used in the course of solution
of Company‟s general tasks shall be included in assets of segment “Head office of OJSC “far East
Telecom””.
Liabilities to budget, loans and credits, liabilities to leasehold assets, deferred tax liabilities on profit
tax and other liabilities arising in the course of solution of Company‟s general tasks shall be included
in liabilities of segment “Head office of OJSC “far East Telecom””.

Expenses, assets, liabilities related to two and more reported segments shall be distributed between


                                                                                                               100
reported segments proportionally with revenue.


7.5. Information about export and share of export in total sales
  Issuer does not do export of products (goods/works/services).

7.6. Information about value of issuer’s real estate and material changes in issuer’s assets since
the latest fiscal year ending date

Total value of issuer‟s real estate at the end of reported quarter: 1,752,737 000thousand Roubles
Accumulated depreciation: 605,499,000 thousand Roubles
Valuation of real estate owned or long-tem leasehold by issuer within the latest 12 months was not done.

  Information about material changing in the list of real estate of the issuer, made during 12 months before the
  end of the reported quarter:

  There is no material changing in the list of real estate of the issuer, made during 12 months before the end
  of the reported quarter.


  Data about any acquisitions or retirement of assets of the issuer if the book value of such assets is not more
  than 5 percents of total the Issuer‟s, as well as data on any material changing assets value in the list of other
  assets of the Issuer after the date of the end of the last finished fiscal years till the end of reported quarter:

     There was no such changing.

7.7. Information about issuer’s participation in court proceedings if such participation may have
material effect on issuer’s financial and business activity

There are no judicial proceeding of such type are no in the company‟s activity.

At the same time, the Issuer is going to report the following:

Interregional inspection of Federal Tax Authority for the largest taxpayers No 7 (further – tax authority)
made decision No 22 as of 30 December 2009 to make answerable for tax legislation violation by result of tax
inspectorate of the Issuer‟s business for period of time from 2006 to 2008.

In according with this decision tax authority believes that incomes from gratuitous using of copyright subjects
have not included to expenses account by the Issuer, as well as reimbursement of the Board of Director‟s
members have been unfounded included to expenses for purposes of taxation.

Total sum of tax claims to the issuer (including taxes, fines, and penalties) is 14,806,396 Roubles 82 kopeks.
The Issuer does not agree with claims with total value of 14,569,492 Roubles 26 kopeks, where 13,353,897
Roubles 18 kopeks are taxes, 539,258 Roubles 38 kopeks are fines, and 676,336 Roubles 70 kopeks are
penalties.

The Issuer appealed to mentioned above decision of tax authority. By result of consideration of appeal the
decision of tax authority was partially changed (sum of appears was decreased to 21,372 Roubles, penalties
were also changed.

The Issuer is going to appeal the decision of tax authority in the Arbitration court of Moscow. The following
case hearing is appointed to November 30, 2010.


  VIII. Additional information on the Issuer and the issue securities it sold
8.1. Additional information on the Issuer




                                                                                                                   101
8.1.1. Amount and structure of the Issuer’s Equity Capital

Size of issuer‟s authorized capital (Roubles): 2,535,006,440
Division of authorized capital by share categories:

   Ordinary registered book-entry shares:
    total amount of par value (Roubles): 1,911,628,420
    percentage in authorized capital: 75.409214 %

   Preferred registered book-entry shares:
    total amount of par value (Roubles): 623,378,020
    percentage in authorized capital: 24.590786 %

The Issuer‟s ordinary shares are traded abroad of Russia in form of American Depository Receipts (ADR).
OJSC Far East Telecom‟s ADRs have been traded at USA over-the-counter market since 2001, and also
included to listing at Deutsche Borse and Berlin Stock Exchange since 25 January 2006 at the section of
«Open Market» («Freiverkehr of the Deutsche Borse and Berlin Stock Exchanges»).

Share of stocks, traded abroad of Russian Federation in total amount of shares of one category - potentially
possible share: In accordance with Provisions on procedure of FFCM granting permission to issued in by
Russian issuers securities trading abroad of Russian Federation as of April 08, 2006 – not more than 30% of
total amount of issued ordinary shares of OJSC Far East Telecom can be traded abroad of Russia.

    Other information about The Issuer‟s shares trading abroad of Russian Federation: none.

8.1.2. Information about change of size of issuer’s share (equity) capital
  There are not changing in share capital.

8.1.3. Information about establishment and use of provision fund and other issuer’s funds

  For the reported quarter:
    Data on establishment and use of provision fund and other issuer‟s funds formed on the issuer‟s net profit:
    Name of fund: provision fund
    Fund‟s size, approved by incorporation documents: 126,751,000
    Fund size in monetary assets, Roubles: 126,751,000
    Fund‟s size in share (equity) capital of the issuer: 5
    Payments to the fund, done during the reported period: 0
    Money of the fund spent during the reported period: 0
    Purpose of the fund‟s money spending:
    There is no spending during the last 5 years.

8.1.4. Information about the procedure for summoning and convening meeting (sitting) of
issuer’s supreme management body

Name of issuer‟s supreme management body: General meeting of Company‟s shareholders.
Procedure for notifying shareholders of convening meetings of issuer‟s supreme management body:
The notification about convening any General Meeting of shareholders shall be made not later than 30 days
prior to the date of its convening except for the case when any extraordinary General Meeting of shareholders
shall be convened within 40 days since the date of submitting the request about its convening (since the
moment of deciding on its convening) and the notification about the convening of the meeting shall be
announced not later than 20 days prior to the date of its convening.
Within the prescribed period, the notification about convening any General Meeting of shareholders shall be
sent to each person included in the list of persons entitled to attend General Meeting of shareholders by
registered mail or delivered to each of the said persons against signature or published in the printed
periodical Rossiyskaya Gazeta.




                                                                                                             102
Persons entitled to attend General Meeting of shareholders shall be submitted the following

information/materials to the address(es) advised in the notification about convening General Meeting of

shareholders:

- annual accounting statements including auditor‟s report, report of Company‟s Inspection committee based on

the results of inspection of annual accounting statements,

- information about candidates to Company‟s Board of Directors, Company‟s Inspection committee,
- draft amendments and changes in Company‟s Articles of Association or draft new version of Company‟s
Articles of Association,
- Company‟s draft internal documents,
- Other draft documents adoption of which is provided for by draft resolutions of general shareholders
meeting,
- draft resolutions of General Meeting of shareholders,
- other information/materials required for submission in compliance with the current laws,
- other information/materials for making decisions on the matters of general shareholders meeting agenda
included by the board of directors in the list of information/materials submitted to shareholders when making
arrangements for convening general shareholders meeting.

Persons (bodies) entitled to summon (demand convening) of extraordinary General meeting/sitting of issuer‟s
supreme management body and procedure for the said demands sending/submitting:
Any extraordinary General Meeting of shareholders shall be convened by the decision of the Board of Directors

by its own initiative, demand of Company‟s Inspection committee, Company‟s auditor and shareholder(s)

holding at least 10 percent of Company‟s voting shares as on the date of the said demand. Any extraordinary

General Meeting of shareholders by demand of Company‟s Inspection committee, Company‟s auditor and

shareholder(s) holding at least 10 percent of Company‟s voting shares shall be summoned by Company‟s Board

of Directors.

Any extraordinary General Meeting of shareholders summoned by demand of Company‟s Inspection committee,

Company‟s auditor and shareholder(s) holding at least 10 percent of Company‟s voting shares shall be convened

within 40 days since the day of submitting of the demand to hold that extraordinary General Meeting of

shareholders.

Any extraordinary General Meeting of shareholders summoned by demand of Company‟s Inspection committee,
Company‟s auditor and shareholder(s) holding at least 10 percent of Company‟s voting shares the agenda of
which includes the matter on electing the members of Company‟s Board of Directors shall be convened within
70 days since the day of submitting of the demand to hold that extraordinary General Meeting of shareholders.

Should the number of Company‟s Board of Directors members be less than required for quorum to convene
Company‟s Board of Directors meetings, the extraordinary General Meeting of shareholders summoned by the
decision of Company‟ Board of Directors by its own initiative for the purpose to decide on electing Company‟s
Board of Directors shall be convened within 70 days since the moment of making the decision to hold it by
Company‟s Board of Directors.

While making arrangements for any extraordinary General Meeting of shareholders the agenda of which

contains the matter on electing Company‟s Board of Directors, any shareholder(s) jointly owning at least 2



                                                                                                         103
percent of Company‟s voting shares, shall be entitled to move candidates to Company‟s Board of Directors

provided for by these Articles of Association. Such offers shall be received by Company not later than 30 days

before the date of holding that extraordinary General Meeting of shareholders.

Procedure for setting the date of meeting/sitting of issuer‟s supreme management body: annual General meeting
of shareholders is convened not earlier than four and not later than six months after the end of fiscal year.

Persons entitled to bring matters in the agenda of issuer‟s supreme management body meeting/sitting and
procedure for the said offers:
Any shareholder(s) jointly owning at least 2 percent of Company‟s voting shares, shall be entitled to bring
matters in the agenda of any annual General Meeting of shareholders and move candidates in Company‟s
Board of Directors, Company‟s Inspection committee, the number of which may not exceed the number of
persons in the relevant body as provided for by these Articles of Association. The said offers shall be received
by Company not later than 60 days since the fiscal year end.

Persons entitled to see information/materials submitted for preparation and convening meeting/sitting of issuer‟s
supreme management body and procedure for seeing the said information/materials:
Persons entitled to see information/materials submitted for preparation and convening General meeting of
shareholders are as follows:
- Company‟s shareholders
- nominal holders registered in register maintenance system
-members of management bodies and bodies for control over Company‟s business
- Company‟s auditor
- underwriters of Company‟s securities placing and/or circulation
- potential buyers of Company‟s shares
- other persons concerned.
When preparing for General meeting of shareholders Company‟s Board of Directors shall set:
form of General meeting of shareholders;
date, time and venue of General meeting of shareholders and postal address where filled in ballots should be
sent or in case of holding General meeting of shareholders in form of absentee vote the deadline for accepting
voting ballots and postal address where filled in ballots should be sent;
beginning of registration of persons attending General meeting of shareholders;
date of making the list of persons entitled to attend General meeting of shareholders;
agenda of General meeting of shareholders;
type(s) of preferred shares holders of which have the right of vote on agenda matters of General meeting of
shareholders;
procedure for notifying shareholders of General meeting of shareholders;
list of information/materials submitted to shareholders when preparing to hold General meeting of
shareholders and procedure of their submission;
form and wording of voting ballot.
Company allows shareholders attending General meeting see the information giving full view of Company‟s
business required to make reasonable weighed decisions on agenda matters of General meeting.

Shareholders may see the information:
        at Company‟s office,
        in Company‟s branches,
        on Company‟s web page: www.dsv.ru / www.dsv.ru/en/

The information submitted to shareholders shall be set forth by Company‟s Articles of Association and
Charter on procedure for holding General meeting of shareholders.

8.1.5. Information about commercial entities in which issuer has at least 5 percent of equity
(joint-stock) capital (co-op share fund) or at least 5 percent of ordinary shares



                                                                                                             104
The list of commercial organizations in which the Issuer owns at least 5 percents of share capital or at least 5
percents of the ordinary stocks as of the end of the reported quarter:

Full name: Limited liability company Interdaltelecom
Short name: Interdaltelecom Co., Ltd.
Location: 2-a, Verhneportovaya str., Vladivostok Russia 690600
   TIN: 2540004765
   OGRN: 1022502267765
Issuer‟s share in entity‟s authorized capital: 100%
Share of entity‟s ordinary shares belonging to issuer: none
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none

Full name: Limited liability company Wireless information technologies
Short name: WIT Co., Ltd.
Location: 220 Lenina St., Yuzhno-Sakhalinsk 693000
   TIN: 7708134325
   OGRN: 1027700235870
Issuer‟s share in entity‟s authorized capital: 100 %
Share of entity‟s ordinary shares belonging to issuer: none
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none

Full name: Closed joint-stock company AKOS
Short name: CJSC AKOS
Location: 38a Prospekt 100 Let Vladivostoku, Vladivostok 690048
   TIN: 2540001972
   OGRN: 1022502272792
Issuer‟s share in entity‟s authorized capital: 94.45 % - indirect control via Integrator.ru
Share of commercial entity‟s ordinary shares belonging to issuer: 94.45 % indirect control via Integrator.ru
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none

Full name: Open joint-stock company Sakhatelecom
Short name: OJSC Sakhatelecom
Location: 22 Kurashova St., Yakutsk 677000
   TIN: 1435143422
   OGRN: 1031402074550
Issuer‟s share in entity‟s authorized capital: 100%
Share of commercial entity‟s ordinary shares belonging to issuer: 100%
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none

Full name: Limited liability company Magalaskom
Short name: Magalaskom Co., Ltd.
Location: 2a Lenina St., Magadan 685000
   INN: 4909003447
   OGRN: 1024900973206
Issuer‟s share in entity‟s authorized capital: 50%
Share of entity‟s ordinary shares belonging to issuer: none
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none




                                                                                                                   105
Full name: Limited liability company Kamalaskom
Short name: Kamalaskom Co., Ltd.
Location: 56 Lenina St., Petropavlovsk-Kamchatsky 683000
   TIN: 4101028271
   OGRN: 1034100643543
Issuer‟s share in entity‟s authorized capital: 50 %
Share of entity‟s ordinary shares belonging to issuer: none
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none

Full name: Closed joint-stock company Tranksikom
Short name: CJSC Truknsikom
Location: 2 Per. Febrichny St., Khabarovsk 680020
   TIN: Information is not available
   OGRN: 1042700213929
Issuer‟s share in entity‟s authorized capital: 25%
Share of commercial entity‟s ordinary shares belonging to issuer: 25%
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none

Full name: Open joint-stock company Imperial
Short name: OJSC Imperial
Location: 6building 2, 74 Pionerskaya St., Komsomolsk-on-Amur, Khabarovsk Krai 681027
   TIN: 2727020412
   OGRN: 1042700213929
Issuer‟s share in entity‟s authorized capital: 19.6 %
Share of commercial entity‟s ordinary shares belonging to issuer: 19.6%
Entity‟s participation in issuer‟s authorized capital: 0.3%
Share of issuer‟s ordinary shares belonging to entity: 0%

Full name: Closed joint-stock company Rostelegraph
Short name: CJSC Rostelegraph
Location: 7 Tverskaya St., Moscow 103375
   TIN: 7710161372
   OGRN: 1037739752478
Issuer‟s share in entity‟s authorized capital: 13.7%
Share of commercial entity‟s ordinary shares belonging to issuer: 13.7%
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none

Full name: Open joint-stock company Birobidzhan trading company
Short name: OJSC Birobidzhan trading company
Location: 78-a Pionerskaya St., Birobidzhan 679000
   TIN: 7901020453
   OGRN: 1027900513728
Issuer‟s share in entity‟s authorized capital: 10%
Share of commercial entity‟s ordinary shares belonging to issuer: 10%
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none

Full name: Open joint-stock company Telecommunications of Nakhodka free economic zone Short
name: OJSC Rokotel


                                                                                          106
Location: 14 Sportivnaya Str., Nakhodka 692900
   TIN: 2508012480
   OGRN: 1022500700540
Issuer‟s share in entity‟s authorized capital: 8.47%
Share of commercial entity‟s ordinary shares belonging to issuer: 8.47 %
Entity‟s participation in issuer‟s authorized capital: none
Share of issuer‟s ordinary shares belonging to entity: none



8.1.6. Information about material deals entered into by issuer

  For 2005
There were no material deals (groups of deals) with liabilities of 10 and more percent of the issuer‟s book
value of assets in accordance to the issuer‟s accounting statements in the latest reporting period.

  For 2006
Material deals (groups of deals) with liabilities of 10 and more percent of the issuer‟s book value of assets in
accordance to the issuer‟s accounting statements in the latest reporting period:
    Date of transaction: December 12, 2006
    Type and subject of transaction:
    purchase-sale
    Substance of the deal, including rights and liabilities set, change or stopping of the deal:
    Seller is obligated to give to the ownership of purchaser, but purchaser is obligated to take and pay 764,769
    (seven hundred sixty four thousands seven hundred sixty nine) ordinary shares of OJSC “Sakhatelecom”,
    which is equal 51% of the authorized capital of the company.
    Term of obligations implementation: Right of ownership is transact to Purchaser in order, set by Russian
    Federation law and purchase-sale agreement after the full payment of shares. Seller is obligated to make
    ownership change procedure during 5 (five) calendar days since the moment of cash inflow to account of the
    seller, but not early receiving of positive approve to transaction of Federal antimonopoly committee by
    purchaser.
    Transaction sizes: Purchaser is OJSC Far East Telecom, seller is Ministry of property relations of Skha
    Republic (Yakutia)
    Size of transaction in money value: 2,295,000,000
    Currency: RUR
    Size of transaction in percents of the issuer‟s assets value: 16.2383
    Value of the issuer assets at the end date of the reporting period (quarter, year), previous to transaction making
    (date of agreement signing) and in for which prepared accounting statements in accordance with law of Russian
    Federation: 14,133,224,000
    Transaction is not a large deal.

    Data about transaction approve:
       Corporate governance body of the Issuer, made the decision abour transaction approve: The Board of
       Directors of OJSC Far East Telecom
       Date of approve: 08.12.2006
       Date of minutes preparing: 08.12.2006
       Number of minutes: № 7
    no

  For 2007
There were no material deals (groups of deals) with liabilities of 10 and more percent of the issuer‟s book
value of assets in accordance to the issuer‟s accounting statements in the latest reporting period.

  For 2008
There were no material deals (groups of deals) with liabilities of 10 and more percent of the issuer‟s book
value of assets in accordance to the issuer‟s accounting statements in the latest reporting period.

  For 2009
There were no material deals (groups of deals) with liabilities of 10 and more percent of the issuer‟s book
value of assets in accordance to the issuer‟s accounting statements in the latest reporting period.


                                                                                                                    107
  For the reported quarter:
There were no material deals (groups of deals) with liabilities of 10 and more percent of the issuer‟s book
value of assets in accordance to the issuer‟s accounting statements in the latest reporting period.

8.1.7. Information about issuer’s credit ratings

         Credit rating story within the latest ended 5 fiscal years preceding the date of approval of quarterly
report including rating value and date of granting/changing:

         Credit rating subject (issuer, issuer‟s securities): Issuer

         Credit rating for the date of approval of the quarter report:
Entity granting credit rating:
         - full corporate name: Fitch Ratings Ltd.
         - short corporate name: Fitch Ratings
         - Location: Eldon House 2 Eldon Street London EC2M 7UA, Great Britain

Brief description of rating granting method:

During rating process internationally credit agency Fitch Rating uses quality as well as quantity methods of
analysts for evaluation of business and financial risks of issuers issued obligations securities with fixed yield.
The international credit ratings evaluate the ability to fulfill obligations in foreign or national currencies.
Ratings in foreign and national currencies are comparable internationally. The rating in the national
currency evaluates the ability to make payments only in the currency and under the jurisdiction of a certain
country.

Ratings are used for comparing of issuers with different industry specialization and country. There is some
interrelation between sort-term and long-term ratings because they are based on fundamental parameters of
credit pay ability of the company. As rule analytical process covers operational results and financial data
minimum for five years, as well as forecasts prepared be the company itself and rating agency.

To find more information about rating, granted by Fitch Ratings LTD please study agency corporate web-site:
http://www.fitchratings.ru

  Credit rating at the end of reported period: ВB-


Credit rating story within the latest ended 5 fiscal years:

       Date                                               Long term credit rating
2004                В
2005                В
2006                В
2007                В+
2008                B+
2009                BB


Other information about credit rating:
According with Fitch Ratings terms ratings of level “B” shall be recognized as considerably speculative. The
B ratings mean the presence of considerable credit risks with a limited “safety margin”. Financial obligations
are currently fulfilled, but the ability to continue payments depends on a stable and favorable business
environment and economic situation.
The ratings may be supplemented with the sign “+” or “-” to denote the relative position within the main
rating categories. These signs are not added to the AAA ratings or rating categories lower than CCC.




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8.2. Information about each category (type) of issuer’s shares

 Category: ordinary
 Par value of each share: 20 (twenty) Roubles
 Number of shares floating (number of shares which are not cancelled or redeemed): 95,581,421 (ninety-five
 million five hundred and eighty-one thousand four hundred and twenty-one)
 Number of extra shares under placing (number of extra issue‟s shares, for which the placing report was not
 registered by state): none
 Number of authorized shares: 2,937,604 (two million nine hundred and thirty-seven thousand six hundred
 and four)
 Number of shares in issuer‟s balance sheet: none
 Number of extra shares which may be placed as a result of conversion of placed securities convertible into
 shares or as a result of execution of liabilities on issuer‟s options: none

  Shares issues of this type:

    Date of state                                        State registration number
     registration
April 20, 2004          1-02-30166-F


 Rights attributable to ordinary shares:
 Rights of ordinary shares:
 Each shareholders holding Company‟s ordinary shares shall be entitled to:
       receive dividends as provided for by current law of the Russian Federation and Articles of
       Association should they be declared by Company;
       attend General meeting of Company‟s shareholders as provided for by current law of the
       Russian Federation;
       receive part of Company‟s assets remaining upon its liquidation in proportion to the
       number of shares held by him.
Company‟s Articles of Association do not provide for limitation of maximal number of shares
belonging to one shareholder.

Category: preferred
 Par value of each share: 20 (twenty) rubles
 Number of shares floating (number of shares which are not cancelled or redeemed): 31 168 901 (thirty-one
 million one hundred and sixty-eight thousand nine hundred and one)
 Number of extra shares under placing (number of extra issue‟s shares, for which the placing report was not
 registered by state): none
 Number of authorized shares: 2,004,374 (two million four thousand three hundred and seventy-four)
 Number of shares in issuer‟s balance sheet: none
 Number of extra shares which may be placed as a result of conversion of placed securities convertible into
 shares or as a result of execution of liabilities on issuer‟s options: none

 State registration number and date of state registration of this shares type:


    Date of state                                        State registration number
    registration
April 20, 2004          2-0230166-F


 Rights attributable to preferred shares:
 Rights of preferred shares:
        Owners of preferred shares shall be entitled to receive annual fixed dividend except for cases
        provided for by Articles of Association. Total amount paid as the dividend on each preferred share
        shall be set at 10 percent of Company‟s net earnings in the latest fiscal year divided by the number of


                                                                                                           109
        shares which make up 25 percent of Company‟s authorized capital. Meantime, should the amount of
        dividends paid by Company on each ordinary share in any year exceed the amount to be paid as
        dividends on each preferred share, the amount of dividends paid on the latter shall be increased to
        the amount of dividends paid on ordinary shares.
        Owners of preferred shares shall be entitled to attend General Meeting of shareholders with the right
        to vote on matters of Company‟s restructuring and winding up and bringing amendments and
        changes in Company‟s Articles of Association when the said amendments limit the rights of the said
        shareholders.
        Owners of preferred shares shall be entitled to attend General Meeting of shareholders with the right
        to vote on all the agenda matters in case if General Meeting of shareholders regardless from the
        reason thereof made no decision on payment of dividends or decided on incomplete payment of
        dividends on preferred shares. That right is vested to preferred shares owners since the meeting
        following the annual meeting of shareholders which failed to decide on payment of dividends and
        shall cease at the moment of the first payment of dividends on the said shares in full.
        Owners of preferred shares shall have the rights provided for by clauses 7.2.3, 7.2.4, 7.2.5, 7.2.6,
        7.2.7, 7.2.8, 7.2.10, 7.2.11, 7.2.12 of Articles of Association for the owners of Company‟s ordinary
        shares. Those rights shall be vested to shareholders owning preferred shares including the case when
        those shares are not voting.
Company‟s Articles of Association do not provide for limitation of maximal number of shares
belonging to one shareholder.

Other information about shares advised by shareholders at its discretion: none


8.3. Сведения о предыдущих выпусках эмиссионных ценных бумаг эмитента, за исключением
акций эмитента

8.3. Information about previous issues of issuer’s equity securities except for issuer’s shares
8.3.1. Information about issues where all securities are cancelled (redeemed)

  1) Type of security: bonds
  Securities form: non documentary for the bearer
  Series: I
  State registration number of the issue: 4-01-30166F
  Date of state registration of the issue: 19 October 1998
  Registering authority doing state registration of bonds issue, state registration number and date of state
  registration: Federal commission for securities market


  Fact of registering of additional issues of securities: No
  Amount of securities of the issue: 250,000
  Face value of each security of the issue, Roubles. 100
  Total value of the issue, Roubles: 25,000,000

  Term of the issue maturity: 16 November 2001
  Reason for the issue maturity: liabilities execution

  2) Type of security: bonds
  Securities form: non documentary for the bearer
  Series: II
  State registration number of the issue: 4-02-30166-F
  Date of state registration of the issue: 16 August 1999
  Registering authority doing state registration of bonds issue, state registration number and date of state
  registration: Federal commission for securities market

  Fact of registering of additional issues of securities: No
  Amount of securities of the issue: 3,000



                                                                                                               110
Face value of each security of the issue, Roubles: 3,000
Total value of the issue, Roubles: 9,000,000

Term of the issue maturity: 12.01.2001
Reason for the issue maturity: liabilities execution

3) Type of security: bonds
Securities form: non documentary for the bearer
Series: III
State registration number of the issue: 4-03-30166-F
Date of state registration of the issue: 08.16.1999
Registering authority doing state registration of bonds issue, state registration number and date of state
registration: Federal commission for securities market

Fact of registering of additional issues of securities: No
Amount of securities of the issue: 7,000
Face value of each security of the issue, Roubles: 3,000
Total value of the issue, Roubles: 21,000,000

Date of state registration of the issue: 12.01.1999
Registering authority doing state registration of bonds issue, state registration number and date of state
registration: Federal commission for securities market

4) Type of security: bonds
Securities form: non documentary for the bearer
Series: IV
State registration number of the issue: 4-04-30166-F
Date of state registration of the issue: 02.21.2002
Registering authority doing state registration of bonds issue, state registration number and date of state
registration: Federal commission for securities market

Fact of registering of additional issues of securities: No
Amount of securities of the issue: 400
Face value of each security of the issue, Roubles: 7,000
Total value of the issue, Roubles: 2,800,000
Term of the issue maturity: 02.01.2003
Reason for the issue maturity: liabilities execution

5) Type of security: bonds
Securities form: non documentary for the bearer
Series: V
State registration number of the issue: 4-05-30166-F
Date of state registration of the issue: 02.21.2002
Registering authority doing state registration of bonds issue, state registration number and date of state
registration: Federal commission for securities market

Fact of registering of additional issues of securities: No
Amount of securities of the issue: 400
Face value of each security of the issue, Roubles: 7,000
Total value of the issue, Roubles: 2,800,000

Term of the issue maturity: 02.10.2003
Reason for the issue maturity: liabilities execution

6) Type of security: bonds



                                                                                                             111
Securities form: non documentary for the bearer
Series: VI

State registration number of the issue: 4-05-30166-F
Date of state registration of the issue: 02.21.2002
Registering authority doing state registration of bonds issue, state registration number and date of state
registration: Federal commission for securities market

Fact of registering of additional issues of securities: No
Amount of securities of the issue: 400
Face value of each security of the issue, Roubles: 7,000
Total value of the issue, Roubles: 2,800,000

Term of the issue maturity: 02.20.2003
Reason for the issue maturity: liabilities execution

7) Type of security: bonds
Securities form: non documentary for the bearer
Series: VII

State registration number of the issue: 4-05-30166-F
Date of state registration of the issue: 02.21.2002
Registering authority doing state registration of bonds issue, state registration number and date of state
registration: Federal commission for securities market

Fact of registering of additional issues of securities: No
Amount of securities of the issue: 400
Face value of each security of the issue, Roubles: 7,000
Total value of the issue, Roubles: 2,800,000


Term of the issue maturity: 02.01.2003
Reason for the issue maturity: liabilities execution

8) Type of security: bonds
Securities form: non documentary for the bearer
Series: VIII

State registration number of the issue: 4-05-30166-F
Date of state registration of the issue: 02.21.2002
Registering authority doing state registration of bonds issue, state registration number and date of state
registration: Federal commission for securities market

Fact of registering of additional issues of securities: No
Amount of securities of the issue: 400
Face value of each security of the issue, Roubles: 7,000
Total value of the issue, Roubles: 2,800,000

Term of the issue maturity: 03.10.2003
Reason for the issue maturity: liabilities execution

9) Type of security: bonds
Securities form: non documentary for the bearer
Series: D1

State registration number of the issue: 4-09-30166-F


                                                                                                             112
  Date of state registration of the issue: 07.18.2003
  Registering authority doing state registration of bonds issue, state registration number and date of state
  registration: Federal commission for securities market

  Fact of registering of additional issues of securities: No
  Amount of securities of the issue: 1,000,000
  Face value of each security of the issue, Roubles: 1,000
  Total value of the issue, Roubles: 1,000,000,000

  Term of the issue maturity: 11.15.2006
  Reason for the issue maturity: liabilities execution


  10) Type of security: bonds
  Securities form: non documentary for the bearer
  Series: D3

  State registration number of the issue: 4-11-30166-F
  Date of state registration of the issue: 05.04.2006
  Registering authority doing state registration of bonds issue, state registration number and date of state
  registration: Federal commission for securities market

  Fact of registering of additional issues of securities: No
  Amount of securities of the issue: 1,500,000
  Face value of each security of the issue, Roubles: 1,000
  Total value of the issue, Roubles: 1,500,000,000

  Term of the issue maturity: 06.03.2009
  Reason for the issue maturity: liabilities execution

8.3.2. Information about issued securities, which are traded

Type of security: bonds
Securities form: inconvertible interest bearing documentary bearer bonds with mandatory centralized
keeping

  Series: D2
  With obligated centralized keeping of securities

  Data on depositor of the securities:
    Full depositor‟s name: CJSC "National Depository Center"
    Short depositor‟s name: CJSC NDC
    Location: 1/13 build 4, Sredny Kislovsky Pereulok, Moscow Russia 125009

    Data on license to depository service:
       Number: 177-03431-000100
       Date of license issue: 12.04.2000
       Date of license expiration:
       not limited in time
       Name of licenser: FFMS of Russian Federation
  Amount of securities: 2,000,000
  Face value of each security of the issue, Roubles: 1,000
  Total value of the issue, Roubles: 2,000,000,000

  State registration number of the issue: 4-10-30166-F



                                                                                                               113
Date of state registration of the issue: 04.05.2006
Registering authority doing state registration of bonds issue, state registration number and date of state
registration: Federal commission for securities market

Date of state registration of report with result of securities sale: 07.13.2006
Authority made state registration of report with result of securities sale: FFMS of Russia
Fact of registering of additional issues of securities: No

Right of securities:

Information is disclosed in Prospect of Securities.

Securities of the issue is sold: Yes
Type of securities selling: open subscription

Term of securities selling:

   Information is disclosed in Prospect of Securities and Decision about securities issue.


Order of securities selling:

Information is disclosed in Prospect of Securities and Decision about securities issue.

Price of securities selling

   Information is disclosed in Prospect of Securities and Decision about securities issue.

 Preferential right

   Order of preferential right to securities purchasing have not been provided.

Circumstances and order of securities repayment

   Information is disclosed in Prospect of Securities and Decision about securities issue.


Indicate share, which non selling makes the issue (additional issue) of securities abortive, and return order of
money, paid for securities of the issue (additional issue), in case if it was considered as abortive

   Such share is not indicated.

Order and circumstances of securities maturity

Information is disclosed in Prospect of Securities and Decision about securities issue.

 Size of interest rate of yield (coupon) payable per bonds, order and circumstances of it payment:

Information is disclosed in Prospect of Securities and Decision about securities issue.

Type of security: bonds
Form of security: documentary to the bearer
Series: BO-05
With obligated centralized keeping of securities

Data on depositor of the securities:
  Full depositor‟s name: CJSC "National Depository Center"
  Short depositor‟s name: CJSC NDC


                                                                                                             114
  Location: 1/13 build 4, Sredny Kislovsky Pereulok, Moscow Russia 125009

  Data on license to depository service:
     Number: 177-03431-000100
     Date of issue: 04.12.2000
     Date of license expiration:
     not limited in time
     Authority issued the license: FFMS of Russia
Amount of securities of the issue: 1,500,000
Face value of each security of the issue, Roubles: 1,000
Total value of the issue, Roubles: 1,500,000,000

State registration number of the issue: 4В02-05-30166-F
Date of state registration of the issue: 05.27.2009
Registering authority doing state registration of bonds issue, state registration number and date of state
registration: stock exchange

Date of state registration of report with result of securities sale: the state registration is not required
Authority made state registration of report with result of securities sale: FFMS of Russia
Fact of registering of additional issues of securities: No

Rights of bonds owners:
Bonds are direct, unqualified liabilities of Open Joint Stock Company “Far East Telecommunications
Company”. Each bond of the issue grants to it owners equal rights.

1. Owner of bonds has a right to receive face value of bonds in case of its maturity (remain of face value, in
case if its part have been already paid by owner of bonds) bonds in term, provided by Decision about
securities issue and Prospect of securities.

2. Owned of bonds has right to receive coupon yield (percent of face value remain of bond) by the end of
coupon period.

3. Owner of bond has a right to money return in case if issue was recognized as ineffective or invalid in
compliance with Russian Federation legislation.

4. Owner of bonds has a right to require all or part of all bonds buyback in cases and under circumstances,
provided by Decision about securities issue and Prospect of securities.

5. Owner of bonds has a right to require prescheduled bonds maturity and payment of cumulative coupon
yield per bonds, calculated at the date of liabilities execution on prescheduled bonds maturity, in case if
shares or bonds of all categories and types of the Issuer„s is excluded from list of securities admitted to the
trading (except of cases of bonds delisting because of trading period end.

Requirements (applications) about prescheduled bonds maturity in the mentioned case shall be represented
to the Issuer during 30 (thirty) days since disclosure of information about right to require prescheduled
such bonds maturity, and in case if shares of all types, and bonds of all categories and types of the Issuer
have not been included to the list of securities, admitted to exchange trading after its exclusion, - during 30
days till the date of bonds maturity (date of bond‟s term of maturity end in case if such maturity is
executing during the determined term (period of time)).

Cost of prescheduled bonds maturity shall not be less than face value (remain of face value in case if its
part has been already paid to owners of bonds) and cumulated percent (coupon) yield, which shall be paid
owners of bonds taking to account amount of days past since the date of beginning of respondent interest
(coupon) period and till the date of such yield payment).

6. In case of the Issuer liquidation the owners of bonds have a right to receive money in turn, established in
compliance with clause 64 of Civil Code of Russian Federation.

All bond debts of the Issuer regarding this bonds issue legally equal and obligated to payment.


                                                                                                              115
7. Owner of bonds has a right to sell freely and in any way alienate bonds in case of observation of
circumstances about the trading of bonds can be done only at the stock exchange.

The issuer is obligated to support bond‟s owner rights observation in case if owner non violate current
legislation of Russian Federation.

Securities of the issue are sold: Yes
Type of securities selling: open subscription

 Term of selling:
Commercial papers placement may be began not early than in seven days since the moment of disclosing
information about admission of commercial papers to the trading at stock exchange by the Issuer and Stock
Exchange. Note about admission of Commercial papers to the trading during the process of its placement
and procedure of disclosure of information contained in Prospect of Securities shall be published by the
Issuer in accordance with terms and procedures indicated in point 11 of the Decision About Securities
Issuing and in point 2.9. of Prospect of Securities. Date of commercial papers placement beginning is set
fourth by responsible corporate governance body of the Issuer.
In case if at the moment of event appearance, the issuer must disclose information about in accordance with
current federal legislations, and also legislative acts of federal authority of executive power at the securities
market, there were approved terms and procedure for such event disclosure other than indicated in Decision
About Securities Issuing and Prospect of Securities the information about the event shall be disclosed in
terms and in accordance with procedure indicated in federal laws and legislative acts of federal authority of
executive power at the securities market, applied at the moment of event appearance.

Notice about the date of commercial papers issue beginning shall be published by the issuer in accordance
with requirement of Information Disclosing Provision for Issuers of Securities, approved by order of
Federal Financial Market Service as of October 10, 2006 No 06-117/пз-н in following terms:

• in news line of information disclosure agency AKM or Interfax or other information disclosure agencies,
authorized by federal enforcement authority for securities market to disclose information at securities
market (further – in a news line) – not later than 5 (five) days before securities issue beginning;

• at the Issuer‟s web-site at the following address in the Internet: http://www.dsv.ru – not later than 4 (four)
days till commercial papers issue beginning. Date of commercial papers issue beginning, defined by
responsible corporate governance body of the issuer, can be changed by its decision under the
circumstances of observant requirements for information disclosure about changing the date of commercial
papers issue beginning set fourth by law of Russian Federation, Decision About Securities Issuing and
Prospect of Securities. In case the Issuer makes decision to change date of commercial papers issue
beginning, disclosed in compliance with procedure mentioned above, the Issuer must publish notice about
date of commercial papers issue beginning in a news line and at the corporate web-site in the Internet not
later than 1 (one) day till such date coming.
The end date of placement and its determining:
The End date of commercial papers issue is recognized the earliest of the following dates:
а) 5th (fifth) work day since the date of commercial papers issue beginning;
b) date of placement of the last commercial paper of the issue, but not later one month since the date of
commercial papers issue beginning.

Date of selling of commercial papers, determined by authority body of the Issuer, may be changed by it‟s
decision under the circumstances of compliance of requirements to disclosure order of information about
changing the date of selling beginning, determined by legislation of Russian Federation, Decision about
securities, and Prospect of securities.
In case if the Issuer has made a decision about date of securities selling, disclosed in accordance with
mentioned above, the Issuer have to announce notice about date of sale beginning changing in news line
and the web-page in the Internet not later than 1 (one) day till the date of such date coming.

Order of securities selling:

The information is disclosed in Prospect of securities and Decision about securities issue.

Price of selling:



                                                                                                             116
Price of securities issuing and procedure of its determining:
       Price of bonds issuing at the first and further days of the issuing shall be determined as 100 (one
hundred) percents of commercial paper‟s face value which is equal to 1,000 (one thousand) Roubles for one
bond.
       Beginning from the second day of commercial papers issuing the buyer by making purchase-selling
deal shall pay accumulated coupon yield per commercial paper (ACY) defined by the following formula:
ACY = FV * R1 * (T - T0) / 365/ 100%, where
ACY - accumulated coupon yield, Roubles;
       FV – face value of one bond, Roubles;
       R1 – interest rate of the first coupon period, annual interest rate;
       T – Current date of bonds issuing;
       T0 – date of beginning of commercial papers placement;
       Size of accumulated coupon yield per one commercial paper shall be determined accuracy to one
copeck. (The rounding off is made in accordance with rules of a mathematical rounding off. Thus it is
necessary to understand as a rule of a mathematical rounding off method in accordance with which value of
whole copeck is not changed in case if the first figure after one rounding off is in the interval from 0 to 4, and
is changed by increasing by one unit in case if the first after rounding off one is in the interval from 5 to 9).

     In case if the preferred right for securities purchasing was provided during the securities selling the price
     and order of selling price determining for persons (entities) having such preferred right shall be
     additionally indicated: the preferred right was not provided.

The Preferred right:
The giving of preferred right to purchase securities to the Issuer:
There is no preferred right to purchase securities of the issue.

  Terms and order of securities payment:
    Срок оплаты размещаемых ценных бумаг:

     Bonds shall be sold only after payment. Money of trading participants shall be registered at the trading
     accounts in NON PROFIT ORGANIZATION CLOSED JOINT STOCK COMPANY “CALCULATION
     PALATA OF MICEX STOCK EXCHANGE”(hereinafter CP MICEX)in amount, enough for bonds full
     payment, indicated in application for purchasing of bonds, including all required fees.

     Form of securities payment:

     Purchasing of bonds shall be done in form of monetary payment in Russian Federation currency by
     cashless settlement. Possibility of down payment is not provided.

     Order of payment for bonds:
     Monetary calculation for deals of bonds purchasing-sale through CP MICEX in compliance with Rules
     of clearing in CJSC MICEX at the securities market. Monetary calculations shall be made at the day of
     deals closing. Cash received as payment for bonds of the issue, shall be entered in to account of
     Organizer in CP MICEX.

     Credit organization:
     Full name: NON PROFIT ORGANIZATION CLOSED JOINT STOCK COMPANY “CALCULATION
     PALATA OF MICEX STOCK EXCHANGE”(
     Short name: CP MICEX
     Address: 1/13, build. 8 Sredniy Kislovskiy Pereulok, Moscow Russia 125009
     Postal address: 1/13, build. 8 Sredniy Kislovskiy Pereulok, Moscow Russia 125009
     BIC: 044583505
     C/A: 30105810100000000505
     Essential Elements of account, where monetary funds shall be sent for payment of bonds:
     Owner of the account: «Gazprombank» (Open joint stock company)
     TIN/KPP: 7744001497 / 997950001
     Account: 30401810400100000123
     Other terms and order of payment for securities:
     Payment for bonds by not monetary funds is not provided.
     Beginning from the second day of bonds selling the purchasers shall pay cumulated coupon yield (CCY),


                                                                                                              117
    determined in compliance with clause 8.4 of Decision about securities issue and clause 2.4 of Prospect of
    Securities.
    Organizer shall transfer monetary funds, received from bonds sale, to the Issuer‟s account during the
    period of time, established by contract about execution of agent‟s duties for securities sale at the
    Exchange.


  Indicate share, which non selling makes the issue (additional issue) of securities abortive, and return order of
  money, paid for securities of the issue (additional issue), in case if it was considered as abortive

    Such share is not indicated.

  Order and circumstances of securities maturity

    Maturity of bonds shall be made by monetary funds in currency of Russian Federation by cashless
    settlement. Possibility to choose form of payment by owners of bonds is not provided.

    Order and circumstances of securities maturity
    Term (dates) of bonds maturity and order it determining shall be indicated:
    1 092nd (One thousand ninety second) day since the date of bonds sale beginning.
    date of end:
    dates of beginning and end of bonds of the issue are the same dates.

  Interest (coupon) yield payable per bonds, order and circumstances of payment:

  Yield per bonds is a sum of yields payable per coupon period. Bonds have six coupon periods. Duration of
  each coupon period is determined as equal to 182 (one hundred two) days.

  Coupon yield shall be cumulated to not matured part of the face value. Not matured part of the face value
  shall be determined as difference between face value of one bond and its part, matured during
  prescheduled partial maturity of bonds (in case if decision about partial prescheduled maturity was made
  by the issuer in compliance with accuracy to one hundredth percent share).

  Order of determine of yield payable per each coupon:
  Calculation of payments per one band per each coupon shall be made in compliance with the following
  formula:
  DYj = Cj*Nom*(T(j) - T(j -1)) / (365 * 100%),
  where,
  j – number of coupon period, j = 1-6;
  CYj – coupon yield per each bond (in Roubles);
  Nom – not matured part of bond‟s face value (in Roubles);
  Cj – interest rate of j coupon, in percents annually;
  T(j -1) – date of beginning of j coupon period;
  T(j) – date of the end j coupon period;

  Size of cumulated coupon yield per one bond shall be determined to one kopeck (rounding shall be made in
  compliance with mathematical rules). Rounding rule shall be considered as rounding mathematical
  method where meaning of full kopeck (whole number)shall not be changed in case if the first rounding
  number is equal from 0 to 4, and shall be changed to one if the first rounding number is more than 5 (from
  5 to 9).

8.3.3. Information about issues where issuer’s securities liabilities are not executed (default)
  There are no such issues.

8.4. Information about person(s) submitting guarantee for bonds issue

  State register number of the issue: D2
  Data on person (entity) submitting guarantee for bonds issue:
  Full name of the person (entity): Closed joint-stock company AKOS (successor is Closed Joint Stock



                                                                                                               118
  Company Integrator.ru)
Short name: CJSC AKOS
   Location:
38a Prospekt 100 Let Vladivostoku, Vladivostok Russian federation 690048
  TIN: 2540001972
  OGRN: 1022502272792


8.5. Terms and conditions for execution of liabilities for bonds issue

D2 SERIES
Kind of guarantee (way of guarantee granted): Suretyship
Guarantee amount (rubles): 2,000,000,000 (two billion) rubles and total coupon yield for 2 000 000 (two
million) Bonds.

Terms and conditions of guarantee and procedure for realization of bonds holders rights on guarantee granted:
specified in issue prospectus available at www.dsv.ru

Value of issuer‟s net assets as on the latest reporting date before receiving suretyship (31.12.2005.): 5,310,881
thousand Roubles

Value of surety ship granting entity‟s net assets as on the latest reporting date before receiving suretyship (12.31.
2005.): 45,661 thousand Roubles

Value of suretyship granting entity‟s net assets as on the date of reporting quarter end: 396,899 thousand

Roubles


8.5.1. Circumstances for securing of liabilities for bonds with mortgage coverage
  The Issuer did not issue bonds with mortgage coverage, which liabilities were not executed.

8.6. Information about entities dealing with accounting of rights to issuer’s equity securities

  Person (entity) keeps register of the Issuer‟s securities: Registrar

  Data on registrar
   Full name: Open joint-stock company United registration company
   Short name: OJSC URC
   Location: 15a Kalanchevskaya St., Moscow 107078
    TIN: 7705108630
    OGRN: 1027700036540
   Phone: (095) 504-28-86 Fax: (095) 933-42-21
   E-mail: ork@ork-reestr.ru

   Registrar‟s license for keeping register of securities owners:
   License number: 10-000-1-00314
   Date of issue: 03.30.2004.
   Expiry: unlimited period license
   Issuing authority: Federal commission for securities of Russia
   Date since which register of issuer‟s registered securities is kept by the said registrar: 12.13.2005.

   Issuer‟s documentary securities with mandatory centralized keeping are currently traded (interest bearing
   documentary inconvertible bearer bonds with mandatory centralized keeping D2 series).




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8.7. Information about legislation, regulated capital import and export, which can influence to
dividends payment, percents payments, and other payments to non residents:
  1. Taxation on dividends payable per securities:
  - Clause 25 of Tax Code of RF;
  - Federal laws, regulated agreement about double taxation avoidance between Russian Federation and
  foreign countries.
  2 . Taxation of shares purchase-sale:
  - Clause 25 of Tax Code of RF;
  - Federal laws, regulated agreement about double taxation avoidance between Russian Federation and
  foreign countries.


8.8. Taxation of yield on the Issuer’s issue securities that have been placed or are being placed

  Order of calculation and taxation on profit from dividends are depend on category of dividends receiver: is
  legal entity tax resident or tax non resident?

    1.   Taxation of a legal entity's dividend income on securities placed and being placed in accordance with
         legislation existing as of September 30, 2009.

          If a dividend recipient is a resident of the Russian Federation, the rate of 9% is used on calculating
the income tax, and the amount of tax subject to withholding from a dividend- recipient taxpayer's income
calculates by a fiscal agent according to the formula:
Н = К x Сn x (d - D), where
H – Amount of tax subject to withholding;
K – Ratio between dividends subject to distribution to a taxpayer-dividend recipient and total
     amount of dividends subject to distribution by a fiscal agent;
Cn – Corresponding tax rate determined by sub-paragraphs 1 and 2 of paragraph 3 of article 284
       or by paragraph 4 of the article 224 of present Tax Code;
d – Total amount of dividends subject to distribution by a fiscal agent in favour of all of the
    dividend recipients-taxpayer;
D – Total amount of dividends received by the fiscal agent during the current reporting (tax)
      period and the preceding reporting (tax) period (with the exception of dividends stated in
      the sub-paragraphs 1 of paragraph 3 of article 284 of present Code) before the date of
      distribution of dividends in favour of a dividend recipient-taxpayer on condition that these
      amounts of dividends did not include on defining tax base regarding income received by a
      fiscal agent in the form of dividends.

           If the value of H is negative, responsibility to pay a tax does not arise and refund from budget does
not make.
          The tax is collected from payment source of this income and transferred in the federal budget by a
fiscal agent, who made payment during 10 days from the date of income payment.
          If a dividend recipient is a foreign legal entity having sources of income within territory of the
Russian Federation, the rate of 15% is used on calculation of the income tax. If a fiscal agent pays a foreign
company income, which is taxable in the RF at a lower rate in compliance with international treaties
(agreements), calculation and withholding should make by a fiscal agent according to corresponding lower
tax rates provided the foreign company presents confirmation about its permanent location in the state having
the international treaty (agreement) with the Russian Federation to the fiscal agent; this confirmation should
be certified by the competent body of the corresponding foreign state. In case of executing the confirmation in
foreign language, the fiscal agent should be given the translation into Russian. To avoid a double taxation the
tax amounts having paid in accordance with legislation of the foreign states by a Russian company are
included on paying a tax by this company in the Russian Federation. At the same time, tax amounts paid
outside the Russian Federation should not exceed the tax amount payable by this company in the Russian
Federation. Reckoning will be made if the taxpayer presents the document confirming the tax paying
(withholding) outside Russia; for taxes paid by the company itself this confirmation document should be
certified by the tax authority of corresponding foreign state; for taxes withheld in accordance with the foreign
state legislation or an international treaty by the fiscal agents, the confirmation document should be certified
by a fiscal agent. This confirmation will be valid during the tax period during it is submitted to a fiscal agent


                                                                                                             120
(article 311, Tax Code of Russian Federation). In case of non-submitting the confirmation before the date of
income payment, a fiscal agent has to withhold the income tax of a foreign company.
          If there are separate subdivisions located outside the Russian Federation, the company makes the tax
payment (advance payment of a tax) and submission of the tax calculations and tax returns at its location.
          According to the paragraph 2, Article 312 of the Tax Code, a foreign recipient of income has the
right of return of tax withheld before on income which have been paid him before, for three years since the
end of the tax period in that the income had been paid provided submission of appropriate documents (listed
in Article 312 of the Tax Code of Russian Federation) by a foreign income recipient to a tax body at location
of registration of a fiscal agent.
          Return the tax withheld and paid previously is made during one month from the date of the
submission of an application and mentioned documents.
     Tax amount withheld from income of foreign companies is transferred by a fiscal agent to the federal
budget simultaneously with payment of income in the currency of this income payment or in the Russian
Federation currency as of date of the transferring the tax.

    2.   Taxation of the legal entities' income from realization of securities placed or being placed and bond
         interest rate from an issuer in accordance with legislation existing as of 30.09.2009.

      If a taxpayer is a legal entity and resident of the Russian Federation, income tax is calculated from
income from operations of securities realization and from interest of an issuer's bonds at the rate of 24%;
from them, 6.5% is entered to the federal budget and 17.5% is entered to the subjects of the Russian
Federation budget. For separate categories of taxpayers, tax rate payable to the budgets of the subjects of the
Russian Federation can be reduced by laws of the subjects of RF. At the same time, the indicated tax rate
cannot be below 13.5%. The taxpayers who calculate monthly advance payments according to ex post realized
profit make the advance payments before 28th day of every month following reporting period. According to the
results of the reporting (taxation) period, the amounts of monthly advanced payments having paid during
reporting (taxation) period are included on making the advance payments according to the results of the
reporting period.
      Advance payments according to the results of the reporting period are included on account of tax
payment according to the results of the taxation period. If a taxpayer is a legal entity and non-resident,
receiving income from sources within the Russian Federation territory, income tax is calculated from income
received from realization of shares of Russian companies that have 50% of its assets as immovable located on
the Russian Federation territory, and from bond interests of an issuer at the interest rate of 20%. The tax is
calculated and withheld by a Russian company which pays income to a foreign company at the time of every
payment of income and transferred by a fiscal agent to the federal budget simultaneously with the income
payment in the currency of this income payment or in the Russian Federation currency at the rate of the
Central Bank of the Russian Federation at the date of the tax transferring. If before the date of income
payment a foreign company submits to a fiscal agent the confirmation of its permanent residence in the state
that has an international treaty with the Russian Federation regulating the taxation questions concerning
income for which this international treaty provides preferred treatment of taxation in the Russian Federation,
it is effected the exemption from tax from payment source or tax deduction according to lower rates.



8.9. Information about dividends declared (attributed) and paid to issuer’s shares for the last 5
fiscal years or per each finished fiscal year, in case if the Issuer exists less than 5 years

  Dividend period
    Year: 2005
    Period: full year
  Name of the Issuer‟s governing body deciding on (declaring) payment of dividends on the Issuer‟s shares:
  General shareholders meeting
  Date of meeting of the Issuer‟s management body which decided on payment (declaration) of dividends:
  06.16.2006
  Date of closing register of share owner having the right to receive dividends: 04.28. 2006
  Date of Minutes preparation: 06.16.2006
  Number of Minutes: Minutes No 15

  Category (type) of shares: ordinary



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Declared (attributed) dividends per the Issuer‟s shares of each category/type (per one share), Roubles: 0.9
Total amount of declared (attributed) dividends for all shares of one category/type, Roubles: 86,023,278.9
Total amount of paid dividends for all shares of one category/type, Roubles: 85,168,863.27

Category (type) of shares: preferred, type A
Declared (attributed) dividends per the Issuer‟s shares of each category/type (per one share), Roubles: 2.69
Total amount of declared (attributed) dividends for all shares of one category/type, Roubles 83,844,343.69
Total amount of paid dividends for all shares of one category/type, Roubles: 76,275,483.69

Period for payment of declared dividends on the Issuer‟s shares: 07.03.2006-10.31.2006
Form and other circumstances of declared dividends per the Issuer‟s shares:
Monetary form
Declared dividends per shares of the Issuer have no been paid fully.
Reasons of not full payment:
A number of transfers could not be made due to incorrect details and for a number of shareholders there
are no payment details.

Dividend period
  Year: 2006
  Period: full year
Name of the Issuer‟s governing body deciding on (declaring) payment of dividends on the Issuer‟s shares:
General shareholders meeting
Date of meeting of the Issuer‟s management body which decided on payment (declaration) of dividends:
06.06.2007
Date of closing register of share owner having the right to receive dividends: 04.18.2007
Date of Minutes preparation: 04.18.2007
Number of Minutes: Minutes No 17

Category (type) of shares: ordinary
Declared (attributed) dividends per the Issuer‟s shares of each category/type (per one share), Roubles: 0.8
Total amount of declared (attributed) dividends for all shares of one category/type, Roubles: 76,465,136.8
Total amount of paid dividends for all shares of one category/type, Roubles: 75,485,913.01

Category (type) of shares: preferred, type A
Declared (attributed) dividends per the Issuer‟s shares of each category/type (per one share), Roubles: 2.4
Total amount of declared (attributed) dividends for all shares of one category/type, Roubles 74,805,362.4
Total amount of paid dividends for all shares of one category/type, Roubles: 62,597,019.17

Period for payment of declared dividends on the Issuer‟s shares: 07.03.2009-10.04.2007
Form and other circumstances of declared dividends per the Issuer‟s shares:
Monetary form
Declared dividends per shares of the Issuer have no been paid fully.
Reasons of not full payment:
A number of transfers could not be made due to incorrect details and for a number of shareholders there
are no payment details.

Dividend period
  Year: 2007
  Period: full year
Name of the Issuer‟s governing body deciding on (declaring) payment of dividends on the Issuer‟s shares:
General shareholders meeting
Date of meeting of the Issuer‟s management body which decided on payment (declaration) of dividends:
06.11.2008
Date of closing register of share owner having the right to receive dividends: 04.24.2008
Date of Minutes preparation: 06.16.2008
Number of Minutes: Minutes No 18


                                                                                                               122
  Category (type) of shares: ordinary
  Declared (attributed) dividends per the Issuer‟s shares of each category/type (per one share), Roubles: 0.9232
  Total amount of declared (attributed) dividends for all shares of one category/type, Roubles: 88,240,768
  Total amount of paid dividends for all shares of one category/type, Roubles: 86,929,773.48

  Category (type) of shares: preferred, type A
  Declared (attributed) dividends per the Issuer‟s shares of each category/type (per one share), Roubles: 2.7571
  Total amount of declared (attributed) dividends for all shares of one category/type, Roubles 85,935,777
  Total amount of paid dividends for all shares of one category/type, Roubles: 79,893,046.15

  Period for payment of declared dividends on the Issuer‟s shares: 07.03.2009-10.10.2009
  Form and other circumstances of declared dividends per the Issuer‟s shares:
  Monetary form
  Declared dividends per shares of the Issuer have no been paid fully.
  Reasons of not full payment:
  A number of transfers could not be made due to incorrect details and for a number of shareholders there
  are no payment details.


  Dividend period
    Year: 2008
    Period: full year
  Name of the Issuer‟s governing body deciding on (declaring) payment of dividends on the Issuer‟s shares:
  General shareholders meeting
  Date of meeting of the Issuer‟s management body which decided on payment (declaration) of dividends:
  06.10.2009
  Date of closing register of share owner having the right to receive dividends: 04.24.2008
  Date of Minutes preparation: 06.10.2009
  Number of Minutes: Minutes No 19

  Category (type) of shares: ordinary
  Declared (attributed) dividends per the Issuer‟s shares of each category/type (per one share), Roubles: 2.7238
  Total amount of declared (attributed) dividends for all shares of one category/type, Roubles: 260,344,675
  Total amount of paid dividends for all shares of one category/type, Roubles: 195,608,793.21

  Category (type) of shares: preferred, type A
  Declared (attributed) dividends per the Issuer‟s shares of each category/type (per one share), Roubles: 5.4772
  Total amount of declared (attributed) dividends for all shares of one category/type, Roubles 170,718,305
  Total amount of paid dividends for all shares of one category/type, Roubles: 156,789,297.79

  Period for payment of declared dividends on the Issuer‟s shares: 07.01.2009-12.31.2009
  Form and other circumstances of declared dividends per the Issuer‟s shares:
  Monetary form
  Declared dividends per shares of the Issuer have no been paid fully.
  Reasons of not full payment:
  A number of transfers could not be made due to incorrect details and for a number of shareholders there
  are no payment details.


8.10. Data on yield paid on bonds issues, for the last 5 finished fiscal years preceding date of
quarter end, and in case is the Issuer exists less than 5 years – for each finished fiscal year,
preceding to end of reported quarter:

  1) Type of security: bonds
  Securities form: non documentary for the bearer


                                                                                                             123
Series: IV
State registration number of the issue: 4-04-30166-F
Date of state registration of the issue: 02.21.2002
Registering authority doing state registration of bonds issue, state registration number and date of state
registration: Federal commission for securities market

Fact of registering of additional issues of securities: No
Amount of securities of the issue: 400
Face value of each security of the issue, Roubles: 7,000
Total value of the issue, Roubles: 2,800,000
Basic data on yield payable per bonds of the issue (face value, interest rate (coupon), other:

Face value (7 000 Roubles)
Interest rate (coupon) (1% of the face value)
Discounted yield is not supposed.

Yield payable per bonds of the issue in money form, per one bond, and total yield per all bonds of the issue:

Yield per one bond: 7,070.
Total yield per all bonds of the issuer (per sold bonds): 2,828,000 Roubles.

Term for yield payable per bonds of the issue:
09.01.2002 – 02.01.2003

Form and other circumstances of yield payment per bonds: Money

Reported period, when yield was paid per bonds of the issue: 2002 (payment was done in 2002)

Total yield, paid per all bonds of the issue of each reported period, when such yield was paid:
2,828,000 Roubles., (per all sold bonds of the issue), paid fully.

Term of the issue maturity: 02.01.2003
Reason for the issue maturity: liabilities execution



2) Type of security: bonds
Securities form: non documentary for the bearer
Series: V
State registration number of the issue: 4-05-30166-F
Date of state registration of the issue: 02.21.2002
Registering authority doing state registration of bonds issue, state registration number and date of state
registration: Federal commission for securities market

Fact of registering of additional issues of securities: No
Amount of securities of the issue: 400
Face value of each security of the issue, Roubles: 7,000
Total value of the issue, Roubles: 2,800,000

Basic data on yield payable per bonds of the issue (face value, interest rate (coupon), other:

Face value (7 000 Roubles)
Interest rate (coupon) (1% of the face value)
Discounted yield is not supposed.

Yield payable per bonds of the issue in money form, per one bond, and total yield per all bonds of the issue:

Yield per one bond: 7,070.
Total yield per all bonds of the issuer (per sold bonds): 2,828,000 Roubles.



                                                                                                             124
Basic data on yield payable per bonds of the issue (face value, interest rate (coupon), other:
Face value (7 000 Roubles)
Interest rate (coupon) (1% of the face value)
Discounted yield is not supposed.

Yield payable per bonds of the issue in money form, per one bond, and total yield per all bonds of the issue:

Yield per one bond: 7,070.
Total yield per all bonds of the issuer (per sold bonds): 2,828,000 Roubles.

Term for yield payable per bonds of the issue:
01.09.2002 – 01.02.2003

Form and other circumstances of yield payment per bonds: Money

Reported period, when yield was paid per bonds of the issue: 2002 (payment was done in 2002)

Total yield, paid per all bonds of the issue of each reported period, when such yield was paid:
2,828,000 Roubles., (per all sold bonds of the issue), paid fully.

Form and other circumstances of yield payment per bonds: Money

Reported period, when yield was paid per bonds of the issue: 2002 (payment was done in 2002)

Total yield, paid per all bonds of the issue of each reported period, when such yield was paid:
2,828,000 Roubles., (per all sold bonds of the issue), paid fully.

3) Type of security: bonds
Securities form: non documentary for the bearer
Series: VI

State registration number of the issue: 4-05-30166-F
Date of state registration of the issue: 02.21.2002
Registering authority doing state registration of bonds issue, state registration number and date of state
registration: Federal commission for securities market

Fact of registering of additional issues of securities: No
Amount of securities of the issue: 400
Face value of each security of the issue, Roubles: 7,000
Total value of the issue, Roubles: 2,800,000

Basic data on yield payable per bonds of the issue (face value, interest rate (coupon), other:
Face value (7 000 Roubles)
Interest rate (coupon) (1% of the face value)
Discounted yield is not supposed.

Yield payable per bonds of the issue in money form, per one bond, and total yield per all bonds of the issue:

Yield per one bond: 7,070.
Total yield per all bonds of the issuer (per sold bonds): 2,828,000 Roubles.

Term for yield payable per bonds of the issue:
10.01.2002 – 02.20.2003

Form and other circumstances of yield payment per bonds: Money

Reported period, when yield was paid per bonds of the issue: 2002 (payment was done in 2002)




                                                                                                             125
Total yield, paid per all bonds of the issue of each reported period, when such yield was paid:
2,828,000 Roubles., (per all sold bonds of the issue), paid fully.

4) Type of security: bonds
Securities form: non documentary for the bearer
Series: VII

State registration number of the issue: 4-05-30166-F
Date of state registration of the issue: 02.21.2002
Registering authority doing state registration of bonds issue, state registration number and date of state
registration: Federal commission for securities market

Fact of registering of additional issues of securities: No
Amount of securities of the issue: 400
Face value of each security of the issue, Roubles: 7,000
Total value of the issue, Roubles: 2,800,000

Basic data on yield payable per bonds of the issue (face value, interest rate (coupon), other:
Face value (7,000 Roubles)
Interest rate (coupon) (1% of the face value)
Discounted yield is not supposed.

Yield payable per bonds of the issue in money form, per one bond, and total yield per all bonds of the issue:

Yield per one bond: 7,070.
Total yield per all bonds of the issuer (per sold bonds): 2,828,000 Roubles.

Term for yield payable per bonds of the issue:
10.15.2002 – 03.01.2003

Form and other circumstances of yield payment per bonds: Money

Reported period, when yield was paid per bonds of the issue: 2002

Total yield, paid per all bonds of the issue of each reported period, when such yield was paid:
In 2002 – yield 2,318,960 Roubles were paid per 328 bonds;
In 2003 – 509,040 Roubles were paid per 72 bonds;
Total yield 2,828,000 Roubles (per all issued bonds of the issuer), paid fully.

5) Type of security: bonds
Securities form: non documentary for the bearer
Series: VIII

State registration number of the issue: 4-05-30166-F
Date of state registration of the issue: 02.21.2002
Registering authority doing state registration of bonds issue, state registration number and date of state
registration: Federal commission for securities market

Fact of registering of additional issues of securities: No
Amount of securities of the issue: 400
Face value of each security of the issue, Roubles: 7,000
Total value of the issue, Roubles: 2,800,000


Basic data on yield payable per bonds of the issue (face value, interest rate (coupon), other:
Face value (7 000 Roubles)
Interest rate (coupon) (1% of the face value)
Discounted yield is not supposed.


                                                                                                             126
Yield payable per bonds of the issue in money form, per one bond, and total yield per all bonds of the issue:

Yield per one bond: 7,070.
Total yield per all bonds of the issuer (per sold bonds): 2,828,000 Roubles.

Term for yield payable per bonds of the issue:
11.15.2002 – 03.10.2003

Form and other circumstances of yield payment per bonds: Money

Reported period, when yield was paid per bonds of the issue: 2002 (payment was done in 2003)

Total yield, paid per all bonds of the issue of each reported period, when such yield was paid:
2,828,000 Roubles (per all issued bonds of the issuer), paid fully.

6) Type of security: bonds
Securities form: non documentary for the bearer
Series: D1

State registration number of the issue: 4-09-30166-F
Date of state registration of the issue: 07.18.2003

Registering authority doing state registration of bonds issue, state registration number and date of state
registration: Federal commission for securities market

Date of state registration of report about results of the issuer: 12.19.2003
Authority made state registration of the report about issue result: FFMS of Russia
Amount of securities of the issue: 1,000,000
Face value of each security of the issue, Roubles: 1,000
Total value of the issue, Roubles: 1,000,000,000

Basic data on yield payable per bonds:
Basic data on yield payable per bonds of the issue (face value, interest rate (coupon), other:

Face value (1,000 Robles)
1st , 2nd coupons - 14,5% of the face value,
3rd, 4th coupon – 15% of the face value,
5th coupon, 6 coupons – 13% of the face value,
Discounted yield is not supposed.

Yield payable per bonds of the issue in cash per one bond and in total for all the issue‟s bonds

 Per one bond:
 1, 2 coupons – 72.30 Roubles; 3, 4 coupons – 74.79 Roubles, 5, 6 coupons – 64.82 Roubles
 In total for all bonds of the issue
  (actually placed):
 1, 2 coupons – 72,300,000 Roubles;
 3, 4 coupons – 74,790,000 Roubles;
 5,6 coupons - 64,820,000 Roubles

 Term for yield payment:
 May 19, 2004.
 November 17, 2004.
 May 18, 2005.
 November 16, 2005.
 May 17, 2006.



                                                                                                             127
 November 15, 2006.

Form and other terms and conditions of yield payment per bonds of the issue:
Cash
Reported period of payment of the yield per bonds of the issue
05.19.2004. – 11.17.2004.
11.17.2004. – 05.18.2005.
05.18.2005. – 11.16.2005.
11.16.2005. – 05.17.2006.
05.17.2006. – 11.15.2006.
Liability fulfilled in full

 Total yield paid per all bonds for each reported period in which such yield was paid:
 72,300,000 Roubles
 72,300,000 Roubles
 74,790,000 Roubles
 74,790,000 Roubles
 64,820,000 Roubles
 64,820,000 Roubles


7) Type of security: bonds
Securities form: non documentary for the bearer
Series: D2

State registration number of the issue: 4-10-30166-F
Date of state registration of the issue: 05.04.2006
Registering authority doing state registration of bonds issue, state registration number and date of state
registration: Federal commission for securities market (FFMS of Russia)

Date of state registration of report about results of the issuer: 07.13.2006
Authority made state registration of the report about issue result: FFMS of Russia
Amount of securities of the issue: 2,000,000
Face value of each security of the issue, Roubles: 1,000
Total value of the issue, Roubles: 2,000,000,000

Basic data on yield payable per bonds:
Basic data on yield payable per bonds of the issue (face value, interest rate (coupon), other:
Face value (1,000 Roubles)
Interest rate (coupon) per the 1st, 2nd , 3rd , 4th , 5th coupons – 8.85 p.a.

Yield payable per bonds of issue in cash per one bond and in total for all issue‟s bonds:
Yield per one bond:
for coupons 1, 2, 3, 4, 5, 6 – 44.13 Roubles.

 In total for all bonds of the issue
  (Actually sold):
 1st - 88.260.000 Roubles
 2nd - 88.260.000 Roubles
 3rd - 88.260.000 Roubles
 4th – 88.260.000 Roubles
 5th - 88.260.000 Roubles
 6th - 88.260.000 Roubles

Term for the yield payment:
 06.03.2009


                                                                                                             128
 Form and other terms and conditions of yield payment per bonds of the issue:
 Cash

 Reported period of payment of the yield per bonds of the issue
 06.07.2006 – 12.06.2006
 12.06.2006 - 06.06.2007
 06.06.2007 – 12.05.2007
 12.05.2007- 06.04.2008
 06.04.2008 – 12.03.2008
 12.03.2008 – 06.03.2009

 Total yield paid on all bonds for each reported period in which such income was paid:
 88.260.000 Roubles
 88.260.000 Roubles
 88.260.000 Roubles
 88.260.000 Roubles
 88.260.000 Roubles
 88.260.000 Roubles


8) Type of security: bonds
Securities form: non documentary for the bearer
Series: D3

State registration number of the issue: 4-11-30166-F
Date of state registration of the issue: 05.04.2006
Registering authority doing state registration of bonds issue, state registration number and date of state
registration: Federal commission for securities market

Fact of registering of additional issues of securities: No
Amount of securities of the issue: 1,500,000
Face value of each security of the issue, Roubles: 1,000
Total value of the issue, Roubles: 1,500,000,000

Term of the issue maturity: 06.03.2009
Reason for the issue maturity: liabilities execution
Type of securities: bonds
Form of securities: именные бездокументарные

Date of state registration of report about results of the issuer: 07.13.2006
Authority made state registration of the report about issue result: FFMS of Russia
Amount of securities of the issue: 1,500,000
Face value of each security of the issue, Roubles: 600
Total value of the issue, Roubles: 900,000,000

Basic data on yield payable per bonds:
Basic data on yield payable per bonds of the issue (face value, interest rate (coupon), other:
With payment of 5th coupon 20% of bonds face value was repaid (200 Roubles),
With payment of 4th coupon 20% of bonds face value was repaid (200 Roubles),
With payment of 3rd coupon 20% of bonds face value was repaid (200 Roubles).

Interest rate per 1, 2, 3, 4, 5, 6 coupons - 8.60 p.a..

Size of the yield payable per bonds of the issue, per one bond and totally per all bonds of the issue:




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  Yield per one bond:
  1, 2, 3 coupons – 42.88 Roubles
  4- – 34.31 Roubles
  5– 25.73 Roubles
  6 – 12.86 Roubles

   Total yield per all bonds of the issue:
    (actually issued):
   1st - 64,320,000 Roubles
   2nd - 64,320,000 Roubles
   3rd - 64,320,000 Roubles
   4th – 51,465,000 Roubles
   5th - 38,595,000 Roubles
   6th – 19,290,000 Roubles

  Term for the yield payment:
   06.03.2009

   Form and other terms and conditions of yield payment per bonds of the issue:
   Cash

  Reported period of payment of the yield per bonds of the issue
06.07.2006 – 12.06.2006
12.06.2006 – 06.06.2007
06.06.2007 – 12.05.2007
12.05.2007 – 06.04.2008
06.04.2008 – 12.03.2008
12.03.2008 – 06.03.2009
Liability fulfilled in full

Total yield paid on all bonds for each reported period in which such income was paid:
1st - 64,320,000 Roubles
2nd - 64,320,000 Roubles
3rd - 64,320,000 Roubles
4th – 51,465,000 Roubles
5th - 38,595,000 Roubles
6th – 19,290,000 Roubles

Type of securities: bonds
Form of security: documentary for the bearer
Series: BO-05
State registration number of the issue: 4В02-05-30166-F
Date of state registration of the issue: 05.27.2009
Authority made state registration of the issue: Stock exchange

State registration of the report about issue results is not required
Amount of bonds in the issue: 1,500,000
Face value of each bond of the issue, Roubles: 1,000
Total face value of the issue, Roubles: 1,500,000,000

Basic data on yield payable per bonds:
Basic data on yield payable per bonds of the issue (face value, interest rate (coupon), other:
First coupon interest rate: 15.00 p.a.

Yield payable per bonds in money form, per one bond of the issue, totally per issue:
Yield per one bond:
1st -4th coupon – 74.79 Roubles




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Total yield per all securities of issue:
1st -4th coupon – 112,185,000.00 Roubles.

Period for yield payment:
20.07.2009

Form and other terms and conditions of yield payment per bonds of the issue:
Cash

Reported period of payment of the yield per bonds of the issue
07.07.2009г. – 01.19.2010
19.01.2010г. - 20.07.2010
Liability fulfilled in full

Total yield paid on all bonds for each reported period in which such income was paid:
112,185,000.00 Roubles


8.10. Other information
        There is no other information.


8.11. Data on represented securities and the Issuer of represented securities, which ownership
rights are confirmed by depository receipts

  The Issuer did not issue represented securities, which ownership rights are confirmed by depository receipts




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