1. Reporting entity

The accompanying consolidated financial statements are of OJSC Rostelecom ("Rostelecom" or the "Company"), and its subsidiaries (together the "Group"), which are incorporated in the Russian Federation ("Russia").

The Group provides communication services (including local, intra-zone, long-distance domestic and international fixed-line telephone services, mobile services), data transmission, Internet, Pay TV, VPN and data centers services, rent of communication channels and radio communication services in the territory of Russian Federation. The Group operates the main intercity network and the international telecommunications gateways of the Russian Federation, carrying voice and data traffic that originates in its own network and other national and international operators' networks to other national and international operators for termination.

The Company operates socially important Government programs, including "E-Government", "Unified communication service" and other.

On April 1, 2011, the Company completed the merger with OJSC North-West Telecom, OJSC Centrtelecom, OJSC South Telecommunications Company, OJSC VolgaTelecom, OJSC Uralsvyazinform, OJSC Sibirtelecom, OJSC Far East Telecom (collectively referred to as the Interregional Companies (“IRCs”) and OJSC Dagsvyazinform (“Dagsvyazinform”) with the IRCs and Dagsvyazinform ceasing to exist as separate legal entities and all of their assets (including licenses), rights and liabilities being transferred to the Company as the legal successor of the IRCs and Dagsvyazinform under Russian law. The purpose of the reorganization was to establish an integrated telecommunications operator, a market leader in each segment of the Russian telecommunications market, eliminate internal conflicts of interest, expand into new market segments and optimize costs and capital expenditures.

Rostelecom was established as an open joint stock company on September 23, 1993 in accordance with the Directive of the State Committee on the Management of State Property of Russia No. 1507-r, dated August 27, 1993. As of December 31, 2011, the Government of the Russian Federation controls the Company by indirect holding of 53.2% of the Company’s ordinary shares through OJSC “Svyazinvest”, “Vnesheconombank” and Federal Agency of State properties management.

The Company's headquarters are located in Russian Federation, Moscow at 1st Tverskaya-Yamskaya Street, 14, 125047.