Additional information

This annual report provides information on Kcell and its subsidiaries (collectively referred to as the "Group"). Comparative information about Kcell competitors and other organizations, and the macroeconomic overview of the CIS and other states, was gathered from publicly available sources (statistics, research, international agencies, company reports).

Contact Information

Kcell Joint Stock Company (Kcell JSC)
Registered office:
Building 100, Samal-2 Microdistrict
Almaty 050051, Republic of Kazakhstan

Mailing address:
2G, Timiryazev Street
Almaty 050013, Republic of Kazakhstan
Tel.: +7 727 258 2755
Fax: +7 (727) 258 2768
www.kcell.kz

Investor Relations

Irina Shol
Tel.: +7 (727) 2582755, ext. 1205
Email: Irina.Shol@kcell.kz, Investor_Relations@kcell.kz

Registrar

JSC “The Integrated Securities Registrar”
Address: 141 Abylai Khan Prospect
Almaty 050000, Republic of Kazakhstan
Tel.: 8 (727) 272-47-60 Fax: 8 (727) 272-47-66
www.tisr.kz

Auditor

PricewaterhouseCoopers LLP
Address: 34/A Al-Farabi Avenue
Almaty 050059, Republic of Kazakhstan
Tel: +7 727 330 3200
Fax: +7 727 244 6868
www.pwc.com/kz

PricewaterhouseCoopers LLP audited the financial statements of Kcell JSC for 2009-2012. The percent of remuneration paid to the auditor for rendering non-audit services from the amount of remuneration paid for rendering audit services was 5% in 2009, 34% in 2010, 35% in 2011 and 17% in 2012.

Glossary

List of Abbreviations Used in the Text of the Annual Report

JSC joint stock company
GHZ gigahertz
km kilometer
MB megabyte
MHz megahertz
MNP mobile number portability
BIA broadband Internet access

Explanation of Key Financial Terms and Figures Used in the Annual Report

ARMU Average revenue per minute.
ARPU Average revenue per user.
ARMB Average revenue per MB
CAPEX Capital expenditures and advances paid for property, plant and equipment as well as software and licenses including investments in tangible and intangible non-current assets, but excluding goodwill and fair value adjustments recognized in acquisitions, and excluding the recording of assets retirement obligations.
EBITDA Earnings before Interest, Taxes, Depreciation and Amortization
Operating Leverage A measurement of the degree to which a company incurs a combination of fixed and variable costs.

Explanation of Industry-Specific Terms Used in the Annual Report

3G The third generation of cellular wireless standards providing high-speed data transmissions and supporting multimedia applications such as full-motion video, video conferencing and Internet access.
4G The fourth generation of cellular wireless standards.
call center Center for servicing calls.
DPI Deep Packet Inspection is a technology for collecting statistical data and validating and filtering network data packets based on their content.
EDGE GSM evolution with enhanced data rates. It is an evolution of GPRS and enables throughput at rates that are three to four times faster than GRPS.
EPSI Rating Customer satisfaction with quality of service.
GPRS General packet radio service is provides direct connections of the base stations to the internet, thus bypassing the switching systems typically used to connect mobile traffic to fixed networks. GPRS provides users of mobile communications services better data access capability with virtually instant and permanent connections, at speeds almost ten times higher than GSM.
GSM The global system for mobile communications с разделением времени (TDMA) и частоте (FDMA). GSM systems operate primarily in the 900 MHz (GSM 900) and 1800 MHz (GSM 1800, also referred to as DCS 1800) frequency bands.
GSM-900 See definition for 'œGSM'.
HSPA Evolved high-speed packet access (high-speed ​​packet data transfer).
IVR Iinteractive voice response is a system of pre-recorded voice messages that route calls within the call center.
LTE A standard for improving mobile data transfer technologies developed by 3GPP (3rd Generation Partnership Project).
LTE TDD Advanced time-division duplexing technology.
MMS Multimedia messaging service is a standard for advanced wireless terminals that allows users to send and receive messages with multimedia content, such as images, audio and video clips, in non-real time.
MOU Minutes of use of voice services by a caller.
MVNO Mobile virtual network operator is a cellular operator that uses existing infrastructure of another operator but sells services under its own brand.
SMS Short message service is a mobile communication system that allows users to share alphanumeric messages up to 160 characters between mobile devices through a short message service center.
UMTS Universal mobile telecommunications system.
VAS-services Value-added services.
WCDMA Wideband code division multiple access.
WIMAX Worldwide Interoperability for Microwave Access is the successor to Wi-Fi; it is a general term used to describe any network with an IEEE 802.16 standard radio signal with radius up to 80 km and with a capacity of up to 75 bits per second.

Disclaimer

This annual report is drawn up using information, which is relevant as of date of drawing up the report. Some statements in this report may have an estimating nature and relate to various risks and uncertainties. Some of these statements may include the usage of estimating terms such as “estimates”, “supposes”, “expects”, ”may”, “according to estimations”, “intends to”, “will”, “will continue to”, “must”, “would ”, “is planning to”, “roughly” or other similar statements or their negative forms, derivatives or other similar terms. Such estimations include all information, which is not a historical fact. They are to be found in several sections of this annual report and include statements referring to intentions, estimations or current expectations of the Company with regard to the results of its activities, financial standing, liquidity, prospective development, growth, Company strategies as well as the industry, in which it operates. Owing to their nature, such estimations are connected with risks and uncertainties, because they refer to the events and depend of circumstances, which may or may not occur in future.

Estimations do not guarantee future performance indicators, and actual performance results, financial standing, liquidity of the Company and the changes to the industry, in which the Company operates, may be significantly different from the ones specified in the estimations contained in this claim. At the same time, even if performance results, financial standing, liquidity of the Company or the changes to the industry, in which the Company operates, correspond to the estimations, contained in this annual report, such results or changes may not serve as evidence of certain results or changes in subsequent periods. Significant factors that may cause such differences may include, among others, general economic conditions and the market condition, including prices of goods and the demand for the Company services; circumstances connected with competition in sectors, where the Company and its clients compete; changes to state regulations and state policies with regard to the maintenance of the telecommunications sector in Kazakhstan; changes to the requirements of the tax laws, including changes to the tax rates, new tax laws and changes to the interpretation of the tax laws; fluctuations of the interest rates and other capital market conditions; fluctuations of the exchange rates; economic and political conditions on international markets, including changes to the government, as well as time factors, consequences and other uncertainties of future actions. Estimates concerning the Company’s development are current only on the date when they are made. Except in cases where it is required by law, Kcell is under no obligation to update them in light of new information or future events.

The Company accordingly does not assume any liability for losses that may be incurred by persons or entities acting based on estimates in this annual report. Such estimates should not be regarded as the most probable outcomes, since they represent only one of many scenarios.