The Group and its Operations Basis of Preparation and Significant Accounting Policies Critical Accounting Estimates, and Judgements in Applying Accounting Policies New Accounting Pronouncements Segment Information Balances and Transactions with Related Parties Property, Plant and Equipment Intangible Assets Other Non-Current Assets Trade and Other Receivables Share Capital Trade and Other Payables Borrowings Deferred Revenue Revenues Expenses by nature Taxes Contingencies, Commitments and Operating Risks Financial Risk Management Fair Value of Financial Instruments

Borrowings

The Group’s bank loans mature within one year and are denominated in Kazakhstani Tenge. The Group does not apply hedge accounting and has not entered into any hedging arrangements in respect of interest rate exposures.

The carrying amount of borrowings approximates their fair value.

On 26 September 2012, the Company signed a Term Loan Facility Agreement with the JSC Citibank Kazakhstan and JSC SB RBS Kazakhstan on provision of 30 billion Tenge to the Company on the terms of a fixed interest rate of 4.6% per annum, one-off transaction fee at 1% of loan amount and the maturity of twelve months, with an extension of up to an additional twelve months, subject to consent of the lenders.

On 17 October 2012, the Company signed a Term Loan Facility Agreement with JSC Citibank Kazakhstan and JSC SB RBS Kazakhstan in connection with a loan in the amount of 15 billion Tenge to the Company on the terms of a fixed interest rate of 3.85% per annum, one-off transaction fee at 1% of loan amount and the maturity date of 26 September 2013, with the extension of up to an additional twelve months, subject to consent of the lenders. The 15 billion Tenge facility is guaranteed by TeliaSonera AB. The Company is subject to the payment of an annual fee in the amount of up to 112.5 million Tenge per annum to TeliaSonera AB for its provision of the guarantee in respect of the KZT 15 billion facility.