Confidential

1JSFC SISTEMA

SITRONICS Overview

Confidential

2JSFC SISTEMA

Telecommunication Solutions

26% 2005 Revs

IT Solutions

49% 2005 Revs

Consumer Electronics

13% 2005 Revs

EMS

6% 2005 Revs

• Largest technology company in CIS and Eastern Europe• Based in Zelenograd (the Soviet “Silicon Valley”), inherited soviet scientific and R&D

potential in the field of electronics• Headquartered in Moscow, with operations throughout EMEA, CEE, CIS & Russia• Provider of intellectual and technology solutions in the field of:

Telecommunication Solutions; IT Solutions; Microelectronic Solutions; Consumer Electronics; Electronics Manufacturing Services;

• Majority owned by SISTEMA (77% shares), representing 13% of its aggregated revenues for 2005 and being the fastest-growing business segment in its portfolio.

• Exceptional growth over the past few years.• More than 4500 R&D staff, developers and programmers.• Exports to 60 countries (Europe, MEA, North America, South East Asia)

SITRONICS Introduction

Microelectronic Solutions

6% 2005 Revs

SITRONICS Revenue and OIBDA (mln. USD)

96

488

955

4610155

0

200

400

600

800

1000

1200

2003A 2004A 2005A

Sales OIBDA

SITRONICS is the largest high tech company in Central and Eastern Europe

Confidential

3JSFC SISTEMA

EMS

• Benefit from government support• Exploit advantageous geographic locations:• Prague (production of technologically advanced

goods)• Zelenograd (heart of Russia)• Romania (cost effective mass-market production)• JV with foreign companies entering Russian

market.

SITRONICS Strategy

Strategic goal: To become one of the leading players in the field of High-Tech.

Telecommunication Solutions

• INTRACOM and STROM Telecom integration in one company• Strategic alliances in the field of NGN development and

marketing (Cisco, Motorola)• Focus on intellectual services and solutions (billing, CRM, NGN) • Post IPO M&A to gain access to new markets and technologies

(Radio Access, OSS/BSS)

IT Solutions

• Prioritized consulting development• Priority to develop software outsourcing potential• Strengthen international strategic relationships (IBM, Oracle, Intel, etc.)• M&A in CIS (Ukraine, Byelorussia) in order to access new markets and

resources• M&A in Europe/USA to access new customers

Microelectronic Solutions

• Developing 0.13-0.18 micron technology -- targeting domestic orders in biometric IDs, defence, smart cards, RFID.

• Focus on complete value-added chain coverage (chip production, packaging, smart cards)

• Design centre set-up (fabless)• Relocation of obsolete production to VZPP.

Consumer Electronics

• Focus on mobile digital and video products.

• Establish own R&D (design, software and technical solutions development)

• Combination of low costs attributable to developing markets with access to competences of the developed markets • Transition of knowledge and competences from developed markets to developing ones

Group strategic goals and strategy

• Leadership in fast growing markets RF/CIS/CEE/Middle East and Africa

• Accumulation of R&D and scientific capacity of the Soviet heritage• Access to customer bases and technologies through M&A

SITRONICS product portfolio allows it to tap into successive waves of growth

Confidential

4JSFC SISTEMA

Strategic Goal:

• To become one of leading players in the production of telecommunication HW and SW in the EMEA region.

Key existing capabilities:

• Existing, proven technology base, well coordinated R&D team and product portfolio.

• Complex and large scale implementation experience (MTS, MGTS)

Key elements of growth:

• Strategic alliances in the area of development and market-launch of joint solutions (CISCO, MOTOROLA, SIEMENS)

• Increasing market demand for NGN and Billing/CRM solutions

• High performing Sales network using synergies with acquired Intracom Telecom

• M&A delivering extended sales channels, customer base and complementary product lines

SITRONICS Telecommunication Solutions – Overview

Key Products / :Solutions

Key Markets:

History:

Strengths:

Opportunities:

• Fixed / Mobile network solutions• OSS/BSS, Billing and CRM• NGN• Wireline /wireless access & transmission equipment• Content Delivery Network• Terminal devices• System integration & Outsourcing

• Russia, Ukraine, CIS, CEE, Middle East, Africa, USA.

• Strom Telecom (acquired in 2002). Founded in 1993 in the Czech Republic on the basis of Tesla.• Intracom Telecom (acquired in 2006). Founded in 1977 in Greece

• Experience working for clients with significant subscriber base• Advanced R&D Department and own IP products• Sound & well developed product line• Strategic partnerships with Motorola, Cisco and Ericsson

• Leverage extensive experience with SISTEMA/OTE/Vodafone Group customers and convert into major external customer acquisition/references

• Develop strong partnership with industry leaders• Combine product capability, low cost profile and sound financial position to grow external market-share

Highlights

Key competitive advantage lies in its strong experience in implementation of telecom equipment and billing systems for companies with significant subscriber base

Strategy

Confidential

5JSFC SISTEMA

Ukraine 66%

Russia34%

Rebalancing the business portfolio• Prioritized consulting development• Priority to develop software outsourcing potential• Maintain current market share in distribution business

Regional expansion• Expansion of presence – the only pan-CIS SI company• Target acquisition of branded system integrators to gain

access to new markets• Expand off-shore software programming to serve European

and US clientsResearch & Development

• Expand resource facilities in CIS’ largest science centres - Kiev, Dubna and Novosibirsk

Tapping synergies with Sistema• Secure corporate IT contracts in the telecom, insurance and

other industries

SITRONICS IT Solutions - Overview

SITRONICS 51% owned subsidiary Kvazar-Micro is one of the biggest IT companies in Russia, CIS and Eastern Europe

Revenue Breakdown (2005)

• One of the largest IT Solutions companies in CIS/CEE• Established 1990 as Kvazar-Micro• Sitronics owns 51% of Kvazar-Micro

• Systems integration, Software development and outsourcing, VAS, BPO• PC Distribution

• Russia, Ukraine, CIS, Western Europe• Russian and Ukrainian IT markets are among fastest growing IT markets in the

world

• CIS/CEE IT markets are expected to grow faster than IT markets of Western Europe and America (15-25 % vs. 5% annually for the next 4-5 years)

• Russia and Ukraine have the 3rd and 5th largest number of certified IT professionals in the world

Ukraine 42%

Russia 41%

East Europe

5%

Other 12%

Distribution 78% of sales

System Integration22% of sales

Highlights Strategy

Brief overview:

Main businessactivities:

Key Markets and Market Trends:

Growth Rates of Eastern Europe IT Markets

4.0%

4.7%

5.3%

10.0%

10.4%

12.0%

16.6%

Japan

W. Europe

N. America

MEA

Asipac

Latam

CEE

Confidential

6JSFC SISTEMA

SITRONICS Microelectronic Solutions - Overview

Sales Breakdown

• Designs, manufactures and distributes semiconductor products and components• Incorporates smart cards production facilities• The business has some of the most advanced mass-production facilities in the CIS (0.8µ - 2µ)• In-house R&D department• Anticipated transition to new technology (0.18µ - 0.13µ, on 8’’ wafers) and continued product

diversification

• Production of microchips on wafers (secondary power supply sources in accordance with the bipolar technology)

• Production of packaged microchips• Production of flexible microchip modules

(Planned for 2006) • Production of microchips for e-passports

(Planned for 2007)• Production of smart cards (the full spectrum) and related solutions

• 0.13-0.18 μ technology transfer project with STM• Microchip packaging project with Infineon• JV in the field of Smart cards production with G&D

Regional By Segment

SITRONICS is the leading Russian company in the microelectronics segment providing a base for establishing the newest technologies for manufacturing of microelectronic components

Highlights StrategyEnhance position as CIS/CEE largest semiconductor manufacturerKey strategic actions:• Launch new technology (0.18µ - 013µ), targeting sim-cards

market and government orders in the field of biometric ID+s and defence contractors

• Sustainable growth of the smart cards business in the field of SIM cards, financial, transportation and RFID cards

• Diversification into high margin, complementary businesses (smart cards, flexible microchips packaging, power electronics production )

• Further development of the design centre, Introduction of a full range of ASIC-vendor services

• Develop scientific/technological partnership with Russia’s top companies (RAO UES, Russian Railways, etc.)

• Retain current market share in power management device through enhancing cost efficiency

Brief overview:

Main businessactivities:

Projects with industry leaders:

Confidential

7JSFC SISTEMA

SITRONICS Consumer Electronics and EMS - Overview

Growth Opportunities

Highlights StrategyBrief overview:

Main products:

Key markets:

• Mid-market brand sells consumer electronics under the SITRONICS brand with main focus on mobile devices and Video products

• The largest and most technologically advanced electronics manufacturing sites located in Russia, Czech Republic, Greece and Romania.

• Offers facilities for end-to-end OEM production.• State-of-the-art assembly sites• Clean room class 100,000• Qualified R&D staff• Extensive quality control and ERP system• World renowned strategic partners and clients

• SITRONICS CE main product lines include: – TV/Video products (LCD TVs, DVD and HTH, Set-top-boxes) – Portable/Mobile (Mobile Phones, Portable Digital Electronics,

• Russia & Ukraine

• Become leading provider of EMS services in CIS (market share ≥15-20%) by offering a wide variety of complex services from logistics to manufacturing.

• Focus on mobile digital and video products. • Establish own R&D (design, software and technical solutions

development)• Exploit advantageous geographic locations:

– Prague (production of technologically advanced goods)– Zelenograd (heart of Russia)– Romania (cost effective mass-market production)

• JV with foreign companies entering Russian market.

Manufacturing and Research Expertise• Capitalize on technology innovations by setting up engineering

R&D centers in partnership with leading international companies.

Modern manufacturing capacity, extensive R&D expertise and strong brand awareness make SITRONICS one of the top Consumer Electronics companies in Russia

• Secure government orders• Further development of own R&D capabilities and design center• Product line diversification by increase in value-added Hi-Tech

products• Strategic partnerships with the leading brands to attain full

loading of assembling facilities• To become manufacturing and logistics hub for our clients on

their way to Europe

Confidential

8JSFC SISTEMA

Thank you!