Consolidated financial statements

Independent Auditors’ Report

To the Shareholders and Board of Directors
OJSC Rostelecom

We have audited the accompanying consolidated financial statements of OJSC Rostelecom (the “Company”) and its subsidiaries (the “Group”), which comprise the consolidated statements of financial position as at 31 December 2012, 2011 and 2010, and the consolidated statements of comprehensive income, changes in equity and cash flows for 2012, 2011 and 2010, and notes, comprising a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Сonsolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on the fair presentation of these consolidated financial statements based on our audit. We conducted our audit in accordance with Russian Federal Auditing Standards and International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to express an opinion on the fair presentation of these consolidated financial statements.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as at 31 December 2012, 2011 and 2010, and its financial performance and its cash flows for 2012, 2011 and 2010 in accordance with International Financial Reporting Standards.

Mr. Shvetsov A.V., Director, power of attorney dated 1 October 2010 No. 55/10
ZAO KPMG
21 March 2013
Moscow, Russian Federation

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