The Meeting approved the OJSC MGTS Annual Report, Balance Sheet, Profit and Loss Statement, and Profit and Loss Distribution for the fiscal year 2001 presented by the Company's Board of Directors.

As OJSC MGTS General Director Mr. Vladimir S. Lagutin stated in his Report to the General Meeting of Shareholders, in 2001, the development of the Company's network continued in a dynamic manner: the increment of the installed capacity made up 58 190 numbers; eight (8) telephone exchanges were constructed in the Moscow districts where agglomerations of newly built houses are located; Eighty-Eight Thousand and Three Hundred Sixty-Five (88 365) telephone installation requests were granted, out of which 65 118 were filed by the districts' residents. The city's outgoing traffic constituted 30.5 billion minutes, which exceeded by 14% the previous year indicator. In the reporting year, the Start-Up System of the OJSC MGTS Public Data Network (PDN) was launched into commercial operation that comprised the main core of the Network and the first 40 nodes providing access to the phone exchanges in the city. In the year just ended, the OJSC MGTS operating revenue amounted to 6.7 billion rubles, which is 29.3% higher as that in 2000. The last year's (2001) net profit constituted 366.4 million rubles according to the Russian accounting standards, or US$55 million as per the US GAAP system. Besides, the OJSC MGTS General Director noted an active presence of the Company's securities in the Russian Federation financial market, which enables OJSC "Moscow City Telephone Network" to successfully master the role, pretty new to domestic business, of a renowned and recognized issuer.

The Meeting elected the new OJSC MGTS Board of Directors of 12 persons: six (6) nominees being from JSC "MKNT and Co., five (5) nominees - from JSC "Svyazinvest", and 1 representative was proposed from amongst the minority shareholders. At the first new Board of Directors meeting that was held direct after the General Meeting of Shareholders, Mr. Nail Ismailov was re-elected Chairman of the OJSC MGTS Board of Directors.

A new OJSC MGTS Internal Audit Commission of 5 persons was also elected.

CJSC "Deloitte & Touche, CIS" was named External Auditor for OJSC MGTS once again.

The Company's General Meeting of Shareholders adopted a new version of the OJSC MGTS Charter.

The General Meeting of Shareholders approved new respective versions of the Rules of Procedure of the Meeting, Regulations on the Company's Board of Directors, Internal Audit Commission, Management Board, and that of the Regulations on the OJSC MGTS General Director.

The Meeting approved the decision of the Board of Directors on the amount, term, procedure and form of the annual dividends repayment as per the common and preferred shares. The payouts on the common and preferred shares 0.68 ruble and 2.29511 rubles a piece respectively will be made from 2 September to 31 December 2002 out of the net profit of the Company. It is intended to allocate the amounts totaling to 24.81% of the net profit for the dividends repayment.

It was resolved by the Shareholders' Meeting to increase the OJSC MGTS Charter Capital up to Three Billion Eight Hundred Thirty-One Million and Eight Hundred and Two Thousand (3 831 802 000) rubles by a twofold raising of the nominal value of the placed shares of all categories at the expense of the funds generated from revaluation of the Company's fixed assets. The placement of the shares will be effected through converting all categories of the shares placed at the face value of 20 rubles into the shares of respective categories at the 40 rubles' nominal value.

The conversion will be carried out on the first business day upon the expiry of fourteen (14) calendar days from the date of the state registration of the issued shares.