SISTEMA JSFC Investor Presentation November 2003 Agenda

SISTEMA JSFC Investor Presentation November 2003

Agenda Company Overview Strategy and Operations Financial Review

Company Overview

Investment Highlights n Largest non-natural resource based holding in Russia n Diversified portfolio of assets, asset value of US$5. 5 bn n Strong growth history and perspectives n Strategic partnerships with leading international players n History of successful management of major projects in Russia n Industry leadership n Geographic leadership - Moscow market Sistema is a leading Russian holding company with a high growth potential 4

History and Ownership Debut $350 m Eurobond; purchase of controlling stake in MTS IPO Vladimir Evtushenkov Management and directors 78. 1% 21. 9% Acquired control of MTS and MGTS Sistema JSFC Invested in MTS Won privatisation tender for MGTS Sistema founded Telecoms Technology Acquisition of assets in insurance, retail and technology sectors Real Estate 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Insurance Other businesses 2003 Consistent development of asset base and transparent ownership structure 5

Key Shareholders and Managers Company Management Vladimir P. Evtushenkov Majority Shareholder (78%) Shareholder Meeting Chairman of the Board Founder of Sistema Chairman of the Board of Directors Internal Audit Department Corporate Strategy Committee President Evgeny G. Novitsky Director President of Sistema since 1995 Board of Management Finance & Investment Committee Alexander Y. Goncharuk Finance & Investment Strategy & Development PR and Corporate Communication Property and Legal Director General Director of OAO CSC Levan S. Vasadze Arkady I. Volsky First Vice President Independent Director Strategy and Development President of the Russian Union of Industrialists and Entrepreneurs Alexey N. Buyanov Stanislav V. Emelyanov First Vice President, CFO Independent Director Finance and Investment Academician, Head of International Scientific Research Institute of Automatic Control 6

Corporate Governance n Strong commitment to establish checks and balances within the Company: – Finance and Investment Committee empowered to vet all major investment decisions – International Consulting Council set up in May 2003 as advisory body for key strategic matters – 2 out of 13 Bo. D members are independent n High transparency and disclosure standards – Among first Russian companies to disclose beneficial owners in 2002 – High quality of corporate governance in publicly traded subsidiaries § MTS: S&P Corporate Governance Score of 7. 4, highest among Russian companies – In 2003, Sistema created Investor Relations Department § Single point of contact for investors, analysts and media – In 2003, Sistema initiated semi-annual public disclosure of US GAAP financial reports n Sistema’s role as an investor in its subsidiaries as a guarantee of the profound understanding of transparency requirements Sistema adheres to the highest standards of corporate governance 7

Portfolio Composition Four business sectors make up the core of Sistema’s investment portfolio Sistema Asset Value Breakdown Sistema Sales Breakdown 8

Strategy and Operations

Strategic Goals n Investing into companies with leading competitive positions Return-based Strategy n Establishing sales and earnings targets for operating companies n Disposing of underperforming assets Portfolio Diversification Strategic Partnerships Management capability n Building a balanced portfolio of operating companies n Growing size and value of technology, insurance, real estate and retail businesses n Successful development of strategic partnerships n Acquiring know-how, management skills and market knowledge n Attracting, developing and motivating professionals and building an effective management structure Focused business development strategy 10

Telecommunications n MTS, the largest mobile operator in Central and Eastern Europe with over 15 mn subscribers in November 2003 n Sistema’s telecom division is the leading telecom provider in the traditional and alternative fixed-line segments in Moscow with over 4. 7 mn active lines in service and a market share of over 60% in 1 H 2003 n Sistema is Moscow’s leading dial-up and broadband Internet services provider with a market share of 41% in 2002 Sistema Wireless 50. 6% MTS Internet & data services Fixed-line 56%* MGTS 84% MTU-Intel Incumbent 60% P-Com 11% MCC 72% 73% 59% MTUInform 84% Golden Line Comstar Telmos Alternative operators * voting interest The largest diversified telecom portfolio in Russia 11

Technology n Russia’s leading semiconductor manufacturer in Zelenograd with more than 40 -year history n High-quality manufacturing process is ISO-9001 certified n Significant share of export revenues n Extensive R&D capabilities, 500 scientists employed n Considerable market potential: Sitronics, Russia’s consumer electronics umbrella brand, operates in $5 bn market (2002) n Recently established presence in the telecom equipment market in Russia ($3. 4 bn in 2002) via Czech manufacturer Strom Telecom Technology Division 100% Scientific Center Elaks 70% 56% Mikron 51% VZPPMikron 28% Corona 99% Elion NIITM 70% 28% 8% Strom. Telecom 8% Telecom Equipment and Software ICM R&D Sitronics Industrial & Consumer Electronics 80% Microelectronics 52% 64% Kvant Angstrem-M Leading diversified technology business in Russia 12

Insurance n One of the leading insurance companies in a high-growth Russian insurance market of $9. 6 bn (in 2002) n Strategic partnership with Allianz AG (45. 27% of ROSNO) bringing industry expertise and improving efficiency n Nationwide coverage: 78 branches located throughout the Russian Federation Insurance Division 47% (51% voting) ROSNO n Diversified portfolio (over 160) of tailormade insurance products n Prudent insurance policies based on international standards Top 3 Russian insurer leveraging on combination of local experience and international know how 13

Real Estate n Sistema Hals is one of the leading real estate developers in Moscow with numerous international awards n Real estate was one of our initial businesses - we started it early in ‘ 90 s Real Estate Division 98% n Specializes in developing premium offices, luxury apartments, retail space and cottages n We have an excellent track record in developing premium offices foreign corporates, having completed projects for Daimler-Chrysler, Dresdner Bank, BNP, Samsung Electronics, and others Sistema Hals 86% Hals-Management Landchaft 99% Sistema-Temp n Very attractive portfolio of projects in Moscow’s booming real estate market Highly prominent segment with high cash generation capacity 14

Other Businesses: Ownership Structure Other Businesses Retail 71% Detsky Mir 100% Detsky Mir Center Travel services 91% Banking and Finance 56% VAO Intourist Oil & Gas 95% MBRD 30% East-West United Bank Sistema. NEFT 33% Mass media 100% Sistema Mass Media Pharmaceuticals 74% Medical Technology Holding Company International operations 99% ECU-Gest Belkamneft 83% UPK Nedra 15

Portfolio Management n Core businesses: – Main recipients of Sistema’s own investments – Board level involvement mainly – Emphasis on strategy, cash flow and key managers n Non-core businesses: – Mostly self-funded, recipients of residual Sistema’s own investments – Sistema closely involved with business process engineering Sistema’s approach to managing an individual operating company is based on the business segment and development stage 16

Financial Review

Financial Strategy n Sound approach to financing: – Core businesses financing through a combination of Sistema’s equity, own debt and involvement of strategic partners – Non-Core Businesses financing mostly through internal cash flow generation and partnering initiatives n Commitment to optimize the quality and maturity profile of the debt portfolio n Diversification of debt instruments: – Domestic ruble market (holding and subsidiary level financing) – International debt capital markets § Sistema US$350 mn Reg S Eurobond issue outstanding § Sistema 144 A/ Reg S Eurobond planned § Established MTS Eurobond curve (Global and 144 A/Reg S issues) ‒ Project financing § Equity financing (potential application of MTS model to other subsidiaries) 18

Financial Strategy: Cash Flow Sources As an operating holding company, Sistema has three major cash flow sources: n Dividend Cash Flows – Starting in 2002 MTS has changed its policy of dividend distribution with payout levels established in a shareholder agreement between Sistema and Deutsche Telekom, which should provide holding company with sound cash upstream – In future, as our businesses mature, we expect dividends to become a significant recurring cash flow source for the holding company n Income from Real Estate – Real Estate segment is different from our other business lines as it is capable to generate significant cashflows for the holding company in the short to mid term while other businesses (except for MTS) are at earlier stages of development n Capital Gains Potential – We are quite flexible in respect of non-core asset disposals and are taking a tactical approach to managing our interests in these businesses n In addition to three major sources, Sistema receives consulting/management fees which are generally balanced against holding company’s administration costs 19

Sistema in Russian Economy Context Rapid improvement in Russian economic profile creates unique opportunities for Sistema rapid development n Strong economic growth: 6. 2 -6. 4% GDP growth GDP / Industrial Production Growth, %YOY expectations for 2003 n Large FX (US$61 bn) and fiscal (US$7 bn) reserves n Budget surplus since 2000 (2% of GDP so far in 2003) n Stable exchange rate and declining inflation (13. 2% as of September 2003) n Wide spread corporate restructuring and growing labour productivity CPI, %YOY n Progress of structural reforms in key areas (tax, natural monopolies, land administration) n Moody’s upgrade to investment category (“Baa 3” rating) as an evidence of economical and political progress recognition 20

Financial Performance Selected Items from US GAAP Audited Consolidated Financial Statements (1)Total Debt excludes notes payable and includes capital leases Significant change of financial results in 1 H 2003 due to MTS consolidation 21

Profitability Return on Capital Employed Return on Total Assets Return on Equity Note: 1. ROCE calculated as (Operating Income + Depreciation&Amortisation) / Average (Shareholders’ Equity + Total Debt) 2. ROTA calculated as (Operating Income + Depreciation&Amortisation) / Average Total Assets 3. ROE calculated as Net Income / Average Shareholders’ Equity Sustainable profitability and efficient use of capital 22

Credit Ratio Analysis CFO / Net Interest Total Debt / CFO Total Debt/Total Assets 33. 5% 2000 36. 6% 27. 7% 25. 7% 2001 2002 1 H 2003 Note: 1. CFO/Net Interest is calculated as Cash flow from operations / (Interest Expense - Interest Income) Moderate level of debt as compared against operating statistics and asset base 23

Asset Protection n Sistema’s two largest investments include listed companies, MTS and MGTS (MTS is listed on NYSE, MGTS is listed in Russia) n MTS and MGTS stakes value exceeds the total amount of consolidated debt by a significant margin On the holding company level, Sistema’s credit strength is supported by a sufficiently large portfolio of traded securities - MTS and MGTS shares 24