Solid Growth Sustained, Positive Outlook for the Years to Come Moscow, July 9, 2003. Sistema JSFC today announced its consolidated financial and operating results for the year ended December 31, 2002, prepared in accordance with US GAAP. Year 2002 became yet another year of profitable growth for the corporation, with net revenues increasing by 23.7% to $904.1 million, and gross profit rising by 25.9% to $377.2 million. EBITDA increased by 23.2%, reaching $369.6 million, while net profit rose by 22.7%, amounting to $166.2 million. Total assets rose by 18.9% and amounted to $2.33 bln. Evgeny Novitsky, President of Sistema JSFC, said in a statement: "The corporation has further expanded the scope of its operations and made several important acquisitions. We also continued to improve the efficiency of our business and to work towards becoming a world-class company. Looking forward, we see year 2003, the year of Sistema's tenth anniversary, as one of new achievements and uninterrupted growth. This has already been evidenced by the events to date, including our debut in the international capital markets with a Eurobond issue, and the acquisition of an additional 10% in MTS, which we, through our partnership with Deutsche Telekom, have in 7 years developed into the largest cellular operator in Eastern Europe."

Financial Highlights of 2002

The increase in revenues was driven in 2002 both by an increase in sales of 17.7%, which was largely organic, and purely organic growth in revenues from financial services of 59.5%. Segments contributing most to this growth included telecommunications (35.4%), insurance (27.9%) and technology (16.5%). Fastest-growing segments were technology with a growth rate of 154.9%, finance growing by 92.2% and insurance with 56.4% growth. The increase in the cost of sales was generally in line with revenue growth, with gross margin expanding by 0.7% to reach 41.7%. At the same time, selling, distribution and administrative expenses were growing ahead of revenue growth, increasing in the reporting period by 51.9%, from $96.4 million in 2001 to $146.4 million in 2002. The growth is largely attributable to the increase in personnel, marketing and advertising expenses. Sistema's equity share in net income of investees demonstrated positive dynamics, growing by 29%, from $96.6 million in 2001 to $124.6 million in 2002, mainly as a result of the improvement in the performance of MTS. Net income margin remained almost unchanged in the reporting period, at 18.4%. One of the key factors influencing net income was a goodwill impairment charge of $21.5 million relating to the Moscow Bank for Reconstruction and Development (MBRD), which is a one-off item. Operational Highlights of 2002 In 2002 Sistema continued to streamline its business portfolio. The company continued to increase its ownership interests in subsidiaries and affiliates, including MTU-Intel (from 48 to 87%), VAO Intourist (from 55 to 91%), MBRD (from 47 to 52%), and East-West United Bank (from 25 to 30%). Major acquisitions included the purchase of additional 50% in Golden Line and 100% of Strom-Telecom. In line with its strategy of focusing the company's efforts on its primary business divisions, Sistema also divested certain non-core assets, notably its downstream oil operation FPK Kedr-M and Businovsky meat-processing plant. In 2002 Sistema continued to reorganize the management structure of its businesses. In December, a new managing company for the technology segment, OAO CSC, was created, uniting Concern Scientific Center OJSC and Czech company 'STROM Telecom s.r.o.". The management believes that this reorganization will contribute to further growth and development of the technology segment, which is currently a key priority for Sistema. Last year also became a true milestone in terms of transparency and disclosure. Sistema became one of the first Russian companies disclosing information on its beneficial shareholders. Throughout the year the company also continued to strengthen its management team and to improve the corporate structure. The most substantive changes involved the financial team, which is due to the new requirements for business efficiency that the largest Russian companies are all facing today. The soundness of Sistema's strategy, the quality of its management and a high level of transparency were further confirmed by the international rating agencies. In October, the company was assigned a "B" rating by Fitch and a "B-" rating by Standard & Poor's. Sistema entered the Russian fixed income market in November with a 1.2 billion ruble bond issue, which was well received in the Russian investment community. Partnership In 2002 the company continued its successful cooperation with Russian and foreign partners. Global industry investors have long been among them, since Sistema has always been interested in accessing Western capital. This framework of thinking has contributed to the fact that today Sistema has one of the most impressive business portfolios in the area of strategic partnership with foreign investors. We have initiated successful partnerships with major international corporations such as Deutsche Telekom, Allianz AG, Siemens, Volvo, and a number of leading international investment banks, and we intend to keep developing a number of new projects jointly with our partners. Subsequent events and future plans The first half of 2003 has also been beneficial for Sistema. One of the key events was the purchase of an additional 10% stake in MTS from Deutsche Telecom, which brought Sistema's total shareholding to 50.4% and allowed it to consolidate MTS in its financial results starting 1H 2003. The company also continued to be active in the financial markets. In February, Sistema borrowed $100 million in the Russian market under a 1-year credit linked note program. In April, the company entered the international capital markets with a debut 5-year $350 million Eurobond issue, which enjoyed solid demand from investors. Currently Sistema is planning to launch another bond issue on the Russian market - the Securities Commission has recently registered the issue prospectus. In May Sistema acquired a 33% stake in Belkamneft, an oil extraction company in Udmurtia. This transaction became yet another step in the company's oil business restructuring process, which puts a new focus on the development of assets in the oil extraction industry. Going forward, the company intends to further develop its core businesses and search for new attractive investment opportunities. Sistema will also continue to follow the path of increasing transparency and strengthening its corporate governance standards. One of the steps in this direction was the formation of Investor Relations Department, which will serve as a link between the company and the investment community. In 2003 the company established International Advisory Council. The Council's members include Russian and international business leaders, scientists and public figures. The company's management looks to this Council to develop independent appraisals of company's activities and to define strategic priorities of its development. Vladimir Evtushenkov, the Chairman of the Board of Sistema JFSC said: "Business has no frontiers, therefore any Russian company which seriously thinks about its future tries to evaluate global business environment adequately prior to making strategic decisions." For information, please contact: Investor Relations Department Andre Bliznyuk Tel.: +7 095 730 1543 bliznyuk@sistema.ru Press Service Olga Pestereva Tel. +7 095 730 1705 pestereva@sistema.ru