Open Joint Stock Company

Telecommunications investment company

SVYAZINVEST

55/2, Plushchikha St., Moscow, 119121;

www.svyazinvest.ru

INFORMATION DEPARTMENT

Telephone: (095) 727-0418, facsimile: (095) 727-0475;

pr@svyazinvest.ru

June 06, 2004                                                                                                 Moscow

Svyazinvest held a board meeting on June 25, 2004, with the following participants:

L.D. Reiman – RF Minister of Information Technologies and Telecommunications;

 

B.D. Antonyuk – first deputy Minister of Telecommunications and Informatization of the Russian Federation;

A.V. Anoshkin – aide to the head of administration of the Russian Federation;

S.Yu. Vyazalov – director of the administrative department of the Russian Finance Ministry;

David J. Geovanis – representative of MUSTCOM LIMITED;

Stewart J. Paperin – executive vice-president of the Soros Charity Fund;

V.P. Fatikov – deputy chairman of the Russian Federal Property Fund.

 

The BoD meeting’s agenda included issues relating to Svyazinvest’s 2004 business plan, preparation of the annual shareholders’ meeting, interim examination of the company’s annual report, distribution of profits and losses, analysis of CentreTelecom’s main operating and financial showings, as well as issues on the company’s internal activities.

At the end of the meeting the board of directors adopted decisions on agenda items. They are as follows:

1. To take note of the following figures of Svyazinvest’s financial and economic activities for 2004*:

operating revenue – Rub 148 bln;

operating expenses – Rub 112.6 bln;

operating income – Rub 35.4 bln;

net profit – Rub 16.3 bln.

To take note of the following figures of Svyazinvest’s operating efficiency:

revenue per employee – Rub 459,000;

revenue per telephone line – Rub 5,466;

number of telephone lines per employee – 84 pcs.;

growth rate of revenue from value-added services – 163%.

* The budget is made up of budgets of North West Telecom, CentreTelecom, Volga Telecom, South Telecommunication Company, Uralsvyazinform, SiberiaTelecom, Far EastTelecom, Lensvyaz, Central Telegraph and Dagsvyazinform.

 

2. To approve the agenda of the company’s annual shareholders meeting**. The agenda involves the following issues:

approval of the company’s annual report, annual financial statements, including the income statement (profit and loss account), as well as distribution of the company’s 2003 profit;

accrual and payment of dividends for 2003;

approval of the company’s auditor for 2004;

election of the company’s new board of directors;

election of the company’s audit commission.

** The company’s annual shareholders meeting is expected to be held on August 4, 2004.

 

3. To recommend the company’s annual shareholders meeting to approve the 2003 financial statement.

 

4. To recommend the company’s annual shareholders meeting to earmark Rub 87.6 mln for 2003 dividend payouts, i.e. Rub 0.004441003 per one common share.

 

5. To take note of the analysis of CentreTelecom’s main operating and financial ratios.

 

Svyazinvest’s corporate structure consists of seven super regional telecommunications companies: CentreTelecom, North West Telecom, Volga Telecom, South Telecommunication Company, Uralsvyazinform, Siberia Telecom, Far East Telecom; national LD and ILD operator Rostelecom, 6 telecom operators, not participating in the nationwide telecom restructuring finalized at the end of 2002, and the branch institute Giprosvyaz. The telecom carriers hold licenses and provide local, LD and ILD services, data transmission, Internet access, ISDN wireless subscribe access and cellular services in GSM, NMT-450, AMPS and DAMPS standards. Svyazinvest employs over 357,000 people.

At present, Svyazinves’st top management mainly focus on implementation of the corporate restructuring program, the objective of which is to form a management system able to secure efficient operations and dynamic development of the merged telecom operators.