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					                         INVESTOR PROTECTION ASSOCIATION

        109004, Moscow, ul. Nikoloyamskaya, Business Center “Efimiya” tel./fax797-9642 www.corp-gov.ru


The annual general shareholders meeting of OJSC “MGTS” is scheduled for June 29, 2007, (the record date
May 12, 2007) with the following agenda:

QUESTION No. 1: Approval of the annual report, annual accounting statements, including the income
statement, of the Company by results of the year 2006.
QUESTION No. 2: Allocation of the Company’s profits and losses by results of the reporting (2006) financial
year.
QUESTION No. 3: Approval of the size, form and procedure of payment of dividends in respect of all classes
of shares by results of the financial year 2005.
QUESTION No. 4: Approval of the size, form and procedure of payment of dividends in respect of all classes
of shares by results of the financial year 2006
QUESTION № 5: Election of members to the Company’s Board of Directors.
QUESTION No. 6: Election of the Audit Commission of the Company.
QUESTION No. 7: Approval of the Auditor of the Company for 2007.

Analysis of the issues on the agenda and their possible implications for shareholders:

       I. Approval of the annual report, annual accounting statements, including the income statements, of
the Company by results of the year 2006.

Analysis of the annual financial results:

1. Information on capitalization according to the RTS
           Class of shares                  Month         Number of       Average          Capitalization,
                                                           shares        sales price,            $
                                                                              $
Ordinary stocks                      December 2005        79 829 200        18,25           1 456 882 900
Preferred stocks                     December 2005        15 965 850        14,37            229 468 381
Total                                                                                       1 686 351 281
Ordinary stocks                      December 2006        79 829 200        24,40           1 947 832 480
Preferred stocks                     December 2006        15 965 850        22,60            360 828 210
Total                                                                                       2 308 660 690
The Company’s capitalization soared by 157%.

2. Assets
         Economic indicator                2005            2006                    Deviation
1. Assets, mln. rubles, including:       39842,6         45221,0            5378,4            13,5%
- fixed assets, mln. rubles              32374,3         37952,5            5578,2            17,2%
- operating assets, mln. rubles           7468,3          7268,5            -199,8            -2,7%
2. Net assets, mln. rubles               33137,1         39413,8            6276,7            18,9%
The Company’s capital grew due to increase of the retained profit. The considerable growth of the assets is
accounted for by the reevaluation of the long-term investment into shares of ZAO “United TeleSystems
MGTS” and OJSC “KOMSTAR-OTS”.

3. Several indicators of the Company’s activity in 2006
         Economic indicator                  2005            2006                       Deviation
Revenue, mln. rubles                       18374,0         21592,9           3218,9                 17,5%
Cost, mln. rubles                          12568,4         15555,2           2986,8                 23,8%
Sales profit, mln. rubles                   5805,6          6037,7            232,1                 4,0%
                         INVESTOR PROTECTION ASSOCIATION

        109004, Moscow, ul. Nikoloyamskaya, Business Center “Efimiya” tel./fax797-9642 www.corp-gov.ru

Accounts receivable, mln. rubles             2786,7          3844,9            1058,2            38,0%
Accounts payable, mln. rubles                2253,7          1774,0            -479,7           -21,3%
Net profit (loss), mln. rubles               8791,8          6348,8            -2443            -27,8%
EBITDA, mln. rubles                         13473,6         12021,1           -1452,5           -10,8%
EBITDA, % of revenue                          73,3            55,6              -17,7
Return on sales, %                            31,6            28,0               -3,6
Revenues from provision of communication services make up the major part of the Company’s total revenues
(84%). The revenues grew mainly in connection with charges for inter-zone connections introduced starting
from July 1, 2006, as well as due to increased volume of the services provided. Costs grew mainly because of
amendments in the legislative documents related to the sector “Communication”. Return on sales fell by
3.6%, while profit growth rate slowed down because the costs growth rate exceeded the revenues growth rate.

4. Analysis of liquidity and financial independency ratios:
         Economic indicator                  2005             2006                      Deviation
Current liquidity ratio (norm>2,0)           1,64             1,88               0,24               14,6%
Quick liquidity ratio (norm>1,0)             1,13             1,47               0,33               29,6%
Financial independence ratio (norm>
0,5)                                         0,79              0,83              0,05               6,0%

Working capital ratio (norm> 0,1)
                                             -0,14            -0,04              0,10               -72,0%

Accounts receivable to accounts
payable ratio (norm1,0)                      1,24              2,17              0,93               75,3%

Liquidity and financial independency ratios grew, which is a sign of improved financial condition of the
Company.

5. Business activity analysis
         Economic indicator                  2005             2006                      Deviation
Assets’ turnover, times                      0,46             0,48               0,02               3,5%
Return on equity
                                             0,59              0,57             -0,01               -2,3%

Accounts payable turnover, times
                                             8,15             12,17              4,02               49,3%

Accounts receivable turnover, times
                                             6,59              5,62             -0,98               -14,8%

The slowed down accounts receivable turnover is explained by a 38% increase of accounts receivable by results
of the year.

We recommend voting “FOR” on the 1st question on the agenda.

    II. Allocation of the Company’s profits and losses by results of the reporting (2006) financial year.
   It is suggested that the Annual general shareholders meeting should approve of non-payment of dividends on the
Company’s shares of all classes.

      The following allocation of profits (losses) of the Company by results of 2006 financial year is suggested
for approval:
                         INVESTOR PROTECTION ASSOCIATION

        109004, Moscow, ul. Nikoloyamskaya, Business Center “Efimiya” tel./fax797-9642 www.corp-gov.ru

                                                                                  Sum, thousand
                                 Economic indicator
                                                                                     rubles
 Retained profit (loss) of the reporting period:                                      6 349
 to be allocated:
 for dividend payment in total:                                                         1 333
 including
 - for preferred stocks in the amount of
 - for ordinary stocks in the amount of
 for repayment of obligations                                                           1 966
 for reevaluation of shares of Komstar OTS                                              2 635
 for capital investment                                                                  414

COMMENTS: It is suggested to allocate 10% of net profit for dividends on preferred shares and 11% of net
profit for dividends on ordinary shares (no dividends were paid by results of the previous year). Obligations in
the amount of 1,966m rubles to be paid off include bank credits, commercial credits, loans and financial
leasing. Reevaluation of shares of OJSC “KOMSTAR-OTS” is connected with adjustment of their balance
sheet value up to the market level. Capital investments are to be allocated for reconstruction of automatic
telephone switches.
We recommend voting “FOR” on the 2nd question on the agenda.

        III. Approval of the size, form and procedure of payment of dividends in respect of all classes of
shares by results of the financial year 2005.
        The draft resolution of the Annual general shareholders meeting stipulates non-payment of annual
dividends on ordinary and preferred shares of OJSC “MGTS” by results of the year 2005.
COMMENTS: We believe that the resolution on non-payment of dividends violates the respective right of
shareholders stipulated by the Federal Law “On joint stock companies”. In 2005 OJSC “MGTS” earned a
record-breaking net profit amounting to 8.8b rubles and holders of preferred shares could account for 10% of
the net profit. However, in view of the fact that 60% of the Company’s profit turned out to be only “on paper”
in connection with reevaluation of the three former subsidiaries which now are a part of “KOMSTAR-OTS” it
was decided by the AGM to pay no dividends.
We recommend voting “AGAINST” on the 3d question on the agenda.

        IV. Approval of the size, form and procedure of payment of dividends in respect of all classes of
shares by results of the financial year 2006.
        The draft resolution suggested for approval of the AGM stipulates:
- the annual dividend of 8.75 rubles for one ordinary share to be paid in monetary equivalent during the period
June 29, 2007 – December 31, 2007;
- the annual dividend of 39.77 rubles for one preferred share to be paid in monetary equivalent during the
period June 29, 2007 – December 31, 2007.
We recommend voting “FOR” on the 4th question on the agenda.


        V. Election of members to the Board of Directors of the Company.

 №         Name of the candidate                                    Position1
                                           Deputy general director for corporate governance of ZAO
   1   Andreuchenko Kirill Igorevich
                                           “Sistema Telecom”


   2   Antonyuk Boris Dmitrievich          Deputy IT and Communications Minister of the RF
                      INVESTOR PROTECTION ASSOCIATION

     109004, Moscow, ul. Nikoloyamskaya, Business Center “Efimiya” tel./fax797-9642 www.corp-gov.ru


3    Breuer Wolfgang Joseph           Vice President for technologies of OJSC “KOMSTAR-OTS”


                                      President of the International public organization
4    Varakin Leonid Egorovich
                                      “International public academy of communications”


5    Goltsov Alexey Valentinovich     General director of OJSC “MGTS”


                                      Vice President – Operating director of OJSC “KOMSTAR-
6    Goncharuk Alexey Yuryevich
                                      OTS”


                                      Vice President for strategy and development of OJSC
7    Gorbunov Alexey Evgenyevich
                                      “KOMSTAR-OTS”


8    John Julian Malone               Head of the Moscow branch of VEUS Holding

     Dudchenko Vladimir               Operating director of the Moscow representative office of
9
     Vladimirovich *                  NCH Advisors, Inc.”


10 Kiselev Alexander Nikolaevich      General director of OJSC “Svyazinvest”

     Kormiltsyna Lyudmila             Head of section of corporate governance and legal department
11
     Alexeevna                        of OJSC “Svyazinvest”


12 Krupnov Alexey Evgenyevich         President of the Infocommunication Union



                                      Deputy director of the department for organizational and
13 Kuznetsova Antonina Yuryevna       special activity of the IT and Communications Ministry of the
                                      RF

                                      No administrative position taken as of the moment of
14 Lagutin Vladimir Sergeevich
                                      nomination


15 Malyavin Viktor Alexeevich         General director of ZAO “KOMSTAR-Direct”


     Mukovozov Oleg
16                                    Corporate governance director of OJSC “KOMSTAR-OTS”
     Gennadyevich


17 Rodionov Ivan Ivanovich            Professor of the State University High School of Economics
                            INVESTOR PROTECTION ASSOCIATION

          109004, Moscow, ul. Nikoloyamskaya, Business Center “Efimiya” tel./fax797-9642 www.corp-gov.ru


                                             Executive director – director of corporate governance and
     18 Savchenko Viktor Dmitrievich
                                             legal department of OJSC “Svyazinvest”


     19 Tokarev Nikolay Vladimirovich        Vice President for finances of OJSC “KOMSTAR-OTS”


                                             No administrative position taken as of the moment of
     20 Franke Hendrikus Johannes
                                             nomination
1
    The positions are indicated as of the date of a candidate’s nomination.

While voting please take into consideration that the candidates nominated by the IPA are marked with
the star “*”.


          VI. Election of members to the Audit Commission of the Company

              Name of the candidate                                     Position1
    №
                                             Director for regional financial control of OJSC “KOMSTAR-
     1    Komarova Irina Ivanovna
                                             OTS”

          Krzhechevskaya Svetlana            Deputy director for internal control and audit of OJSC
     2
          Georgievna                         “KOMSTAR-OTS”
                                            Head of the control and audit section of the finance
     3    Manuylova Marina Semenovna
                                            department of ZAO “Sistema Telecom”
       Markina Marina                       Senior specialist of the control and audit section of the finance
   4
       Vyatcheslavovna                      department of ZAO “Sistema Telecom”
                                            Director for International Financial Reporting of OJSC
   5 Churin Dmitry Mikhailovich
                                            “KOMSTAR-OTS”
1
  The positions are indicated as of the date of a candidate’s nomination.

       VII. Approval of the Auditor of the Company for 2007
        The draft resolution of the Annual General Shareholders meeting stipulates approval of ZAO “Deloitte
and Touche CIS” as auditor of the Company for 2007.
COMMENTS: ZAO “Deloitte and Touche CIS” has the audit license No. Е002417 of 06.11.2002 valid till
06.11.2007. The company audited financial statements of OJSC “MGTS” for the years: 2001, 2002, 2003,
2004, 2005, 2006.
We recommend voting “FOR” on the 7th question on the agenda.


NOTE:

When taking decision on the questions on the agenda we would recommend bearing in mind the
following provisions of the Federal Law “On Joint Stock Companies”:

       Article 49 «A shareholder is entitled to appeal against the decision taken by the AGM if requirements
of the Federal Law “On joint-stock companies”, other normative acts of the Russian Federation or the
Charter of the company are violated in case s/he did not take part in the AGM or voted against the decision
and the decision infringes upon his/her rights and legitimate interests. The claim shall be filed in court
during a six-month period from the date when the shareholder was informed or should have been informed
about the decision taken. The court has a right taking into consideration all circumstances to leave the
                              INVESTOR PROTECTION ASSOCIATION

         109004, Moscow, ul. Nikoloyamskaya, Business Center “Efimiya” tel./fax797-9642 www.corp-gov.ru

decision in force in case the vote of the shareholder could not influence results of the voting, incurred
violations are not substantial or the shareholder suffered no losses as a result of the decision».

        Article 75 «Shareholders holding voting stock are entitled to demand that the company buys back all
or a part of their shares in case of:
        - restructuring of the company or when a large-scale transaction is concluded which is subject to
approval by the AGM in compliance with item 2, article 79 of this Federal Law, if they voted against the
restructuring of the company or approval of the transaction, or did not take part in the voting;
        - changes and amendments made to the Charter of the Company or approval of the Charter of the
Company in the new wording that infringes upon their rights, if they voted against the corresponding
decision or did not take part in the voting».



The recommendations were worked out by:
I. Polovnev
A. Shevchuk

         The information contained in these recommendations was obtained from reliable sources; however, the IPA experts cannot
guarantee its accuracy. Materials provided by SCRIN and the RTS have also been used in preparing these recommendations.

For further information please contact us at 797 96 42/44 or via e-mail: igp@corp-gov.ru.