34. Subsequent events

Acquisition of treasury shares by LLC MOBITEL

In February 2012 LLC MOBITEL completed the acquisition of additional 3.86% of ordinary shares of the Company for 19,000. As a result LLC MOBITEL increased its ownership of ordinary shares of the Company to 6.55%.

To facilitate the financing of the acquisition in January 2012 the Board of Directors of the Company approved decision on issue of guarantee to OJSC Bank VTB for the benefit of LLC MOBITEL with regard to counterparty’s liabilities on credit agreements for amount of 8,300 for 1 year period starting from January 31, 2012.

Acquisition of non-controlling interest in OJSC National Telecommunications

In February 2012 the Group acquired an additional 28.23% interest in OJSC National Telecommunications from OJSC Gazprombank for 13,826, increasing its ownership to 100%.

Acquisiotion of GNC-ALFA

In February 2012 the Group acquired 75% minus one share of GNC-ALFA for USD 22.5 miillion (682).

GNC-ALFA is the largest independent Internet and data provider in Armenia. It operates a modern fibreoptic network, which passes through 70% of the territory of the Republic of Armenia.

The acquisition of GNC-ALFA is part of the Group's international expansion policy. The acquisition of a control stake in GNC-ALFA provides the Group with access to a well-developed infrastructure for broadband and pay-TV services in the Armenian telecommunications market, a market which has a significant growth potential.

Acquisition of LLC Enter

In February 2012 the Group acquired 100% interest in CJSC Enter, a broadband Internet services provider to individual subscribers in Barnaul, Novokuznetsk and Tyumen, for 305.

The acquisition of CJSC Enter reflects the Group's strategy to increase its subscriber base and modernise its network infrastructure. The deal also serves as an alternative to capital expenditure in CJSC Enter's regions.

CJSC Enter's network infrastructure was built in 2010 and it is among the most modern networks in the three cities it serves.

Bonds issue

In March 2012 the Board of Directors of the Company approved decision on issue of non-convertible documentary interest-bearer bonds for a total nominal value of 100,000. The number of bonds approved for issue equals to 100,000,000.The offering price is 1,000 RUB per bond.

Reorganization of OJSC Rostelecom

The Decree № 340 on the reorganisation of OJSC Rostelecom was signed by the President of Russia on March 24, 2012. The Decree states that a united company will be created by merging Svyazinvest and its total assets with Rostelecom.

As a result of the merger described in Note 9 the crossholding with OJSC Svyazinvest will be eliminated which will result in reduction of Group’s equity by the amount of the difference of the Group’s investment in OJSC Svyazinvest and the carrying value of OAO Svyazinvest’s assets other than its investment in the Company.