SISTEMA JSFC

Investor Presentation

November 2003

Agenda

Company Overview

Strategy and Operations

Financial Review

Company Overview

4

Investment Highlights

Largest non-natural resource based holding in Russia

Diversified portfolio of assets, asset value of US$5.5bn

Strong growth history and perspectives

Strategic partnerships with leading international players

History of successful management of major projects in Russia

Industry leadership

Geographic leadership - Moscow market

Sistema is a leading Russian holding company with a high growth potential

5

History and Ownership

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Sistema founded

Won privatisation tender for MGTS

Invested in MTS

Acquired control of MTS and MGTS

MTS IPO

Acquisition of assets in insurance, retail and technology sectors

Consistent development of asset base and transparent ownership structure

2003

Debut $350m Eurobond; purchase of controlling

stake in MTS

Vladimir Evtushenkov

Management and directors

78.1% 21.9%

Telecoms Technology Insurance

Real EstateOther

businesses

Sistema JSFC

6

Board of Management

Key Shareholders and Managers

Company Management Vladimir P. Evtushenkov

Majority Shareholder (78%)

Chairman of the Board

Founder of Sistema

Evgeny G. Novitsky

Director

President of Sistema since 1995

Alexander Y. Goncharuk

Director

General Director of OAO CSC

Arkady I. Volsky

Independent Director

President of the Russian Union of Industrialists and Entrepreneurs

Stanislav V. Emelyanov

Independent Director

Academician, Head of International Scientific Research Institute of Automatic Control

Levan S. Vasadze

First Vice President

Strategy and Development

Alexey N. Buyanov

First Vice President, CFO

Finance and Investment

Shareholder Meeting

Chairman of the Board of DirectorsBoard of Directors

President

Internal Audit Department

Corporate Strategy

Committee

Finance & Investment Committee

Finance & Investment

Strategy & Development

PR and Corporate

Communication

Property and Legal

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Corporate Governance

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 BoD members are independent

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

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

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Portfolio Composition Four business sectors make up the core of Sistema’s investment portfolio

Sistema Asset Value Breakdown Sistema Sales Breakdown

Telecommunications80.3%

Other7.8%Technology

1.4%

Insurance3.3%

Finance and Securities7.2%

Finance and Securities1.0%

Insurance4.9%

Technology1.7% Other

5.3%

Telecommunications87.1%

Strategy and Operations

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Strategic Goals

Focused business development strategy

Building a balanced portfolio of operating companies Growing size and value of technology, insurance, real estate and retail

businesses

Portfolio Diversification

Return-based Strategy Investing into companies with leading competitive positions Establishing sales and earnings targets for operating companies Disposing of underperforming assets

Management capability

Attracting, developing and motivating professionals and building an effective management structure

Strategic Partnerships Successful development of strategic partnerships Acquiring know-how, management skills and market knowledge

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Telecommunications

MTS, the largest mobile operator in Central and Eastern Europe with over 15mn subscribers in November 2003

Sistema’s telecom division is the leading telecom provider in the traditional and alternative fixed-line segments in Moscow with over 4.7mn active lines in service and a market share of over 60% in 1H2003

Sistema is Moscow’s leading dial-up and broadband Internet services provider with a market share of 41% in 2002

The largest diversified telecom portfolio in Russia

Wireless

P-Com

Fixed-line

MGTS

MTU-Inform

Comstar

Telmos

Internet &data

services

MTU-Intel

Golden Line

Alternative operators

Incumbent

MCC

50.6%

60%

11%

56%*

72%

73%

59%

84%

84%

Sistema

MTS

* voting interest

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Microelectronics

Telecom Equipment and Software

Industrial &Consumer Electronics

Sitronics99%

Technology

Russia’s leading semiconductor manufacturer in Zelenograd with more than 40-year history

High-quality manufacturing process is ISO-9001 certified

Significant share of export revenues

Extensive R&D capabilities, 500 scientists employed

Considerable market potential: Sitronics, Russia’s consumer electronics umbrella brand, operates in $5bn market (2002)

Recently established presence in the telecom equipment market in Russia ($3.4bn in 2002) via Czech manufacturer Strom Telecom

Leading diversified technology business in Russia

Technology Division

100% Scientific Center

56% Mikron

28%Corona

Elion70%

Elaks64%

VZPP-Mikron

51%

52%

Kvant28%

70%

Strom-Telecom

80% Angstrem8%

Angstrem-M8%

R&D

NIITM

ICM

13

Insurance

One of the leading insurance companies in a high-growth Russian insurance market of $9.6bn (in 2002)

Strategic partnership with Allianz AG (45.27% of ROSNO) bringing industry expertise and improving efficiency

Nationwide coverage: 78 branches located throughout the Russian Federation

Diversified portfolio (over 160) of tailor-made insurance products

Prudent insurance policies based on international standards

Top 3 Russian insurer leveraging on combination of local experience and international know how

47% (51% voting)

Insurance Division

ROSNO

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Real Estate

Highly prominent segment with high cash generation capacity

Sistema Hals is one of the leading real estate developers in Moscow with numerous international awards

Real estate was one of our initial businesses - we started it early in ‘90s

Specializes in developing premium offices, luxury apartments, retail space and cottages

We have an excellent track record in developing premium offices for foreign corporates, having completed projects for Daimler-Chrysler, Dresdner Bank, BNP, Samsung Electronics, and others

Very attractive portfolio of projects in Moscow’s booming real estate market

98%

LandchaftSistema Hals

98%

Real Estate Division

Hals-Management Sistema-Temp

86% 99%

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Other Businesses: Ownership Structure

Other Businesses

Retail

Detsky Mir

Detsky Mir Center

Travel services

Oil & Gas Mass mediaPharmaceu-

ticalsInternational operations

VAO Intourist

Sistema-NEFT

Sistema Mass Media

Medical Technology

Holding Company

ECU-Gest

71%

100%

91% 95% 100% 74% 99%

Belkamneft

UPK Nedra

33%

83%

Banking and Finance

MBRD

East-WestUnited Bank

30%

56%

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Portfolio Management

Core businesses:

– Main recipients of Sistema’s own investments

– Board level involvement mainly

– Emphasis on strategy, cash flow and key managers

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

Financial Review

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Financial Strategy

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

Commitment to optimize the quality and maturity profile of the debt portfolio

Diversification of debt instruments:

– Domestic ruble market (holding and subsidiary level financing)

– International debt capital markets Sistema US$350mn Reg S Eurobond issue outstanding

Sistema 144A/ Reg S Eurobond planned

Established MTS Eurobond curve (Global and 144A/Reg S issues)

‒ Project financing

Equity financing (potential application of MTS model to other subsidiaries)

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Financial Strategy: Cash Flow Sources

As an operating holding company, Sistema has three major cash flow sources:

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

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

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

In addition to three major sources, Sistema receives consulting/management fees which are generally balanced against holding company’s administration costs

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Sistema in Russian Economy Context

Rapid improvement in Russian economic profile creates unique opportunities for Sistema rapid development

Strong economic growth: 6.2-6.4% GDP growth expectations for 2003

Large FX (US$61bn) and fiscal (US$7bn) reserves

Budget surplus since 2000 (2% of GDP so far in 2003)

Stable exchange rate and declining inflation (13.2% as of September 2003)

Wide spread corporate restructuring and growing labour productivity

Progress of structural reforms in key areas (tax, natural monopolies, land and administration)

Moody’s upgrade to investment category (“Baa3” rating) as an evidence of economical and political progress recognition

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GDP / Industrial Production Growth, %YOY

CPI, %YOY

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Financial Performance

Selected Items from US GAAP Audited Consolidated Financial Statements

Significant change of financial results in 1H2003 due to MTS consolidation

(1)Total Debt excludes notes payable and includes capital leases

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Profitability

29.8%34.4% 36.4%34.4%

2000 2001 2002 1H2003

Sustainable profitability and efficient use of capital

Return on Capital Employed Return on Total Assets Return on Equity

14.3%17.3% 17.2% 17.9%

2000 2001 2002 1H2003

25.4%

39.1%32.9%

14.7%

2000 2001 2002 1H2003

Note:1. ROCE calculated as (Operating Income + Depreciation&Amortisation) / Average (Shareholders’ Equity + Total Debt)2. ROTA calculated as (Operating Income + Depreciation&Amortisation) / Average Total Assets3. ROE calculated as Net Income / Average Shareholders’ Equity

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Credit Ratio Analysis

Moderate level of debt as compared against operating statistics and asset base

CFO / Net Interest Total Debt / CFO Total Debt/Total Assets

33.5%27.7% 25.7%

36.6%

2000 2001 2002 1H2003

4.2

2.0

4.8

2.6

2000 2001 2002 1H2003

4.2

6.5

2.7

4.4

2000 2001 2002 1H2003

Note:1. CFO/Net Interest is calculated as Cash flow from operations / (Interest Expense - Interest Income)

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Asset Protection

Total Debt at 31 December 2002 $599.1

Liquid Investments (1) 1,748.0

Liquid Investments / Total Debt 2.9x

Total Debt at 1 July 2003 2,019.9

Liquid Investments (2) 3,268.0

Liquid Investments / Total Debt 1.6x

(1) Liquid investments represent 40.6% stake in MTS and 46% stake in MGTS valued as of 31 December 2002

(2) Liquid investments represent 50.6% stake in MTS and 46% stake in MGTS valued as of 1 July 2003

On the holding company level, Sistema’s credit strength is supported by a sufficiently large portfolio of traded securities - MTS and MGTS shares

Sistema’s two largest investments include listed companies, MTS and MGTS (MTS is listed on NYSE, MGTS is listed in Russia)

MTS and MGTS stakes value exceeds the total amount of consolidated debt by a significant margin