Moscow, Russia - June 30, 2006 - Sistema (LSE: SSA) the largest private sector consumer services company in Russia and the CIS, today held its Annual General Meeting of shareholders.

All resolutions proposed to the meeting were approved and included approval by the shareholders of:

• A cash dividend of RUR 28.0 per share (equivalent to US$ 1.03 per share or US$ 0.02 per GDR) for the twelve months ended 31 December 2005. The total dividend payable amounts to RUR 270.2 million (US$ 9.98 million), which is equivalent to approximately 2% of Sistema's US GAAP consolidated net income for 2005.
• The election of the members of the Board of Directors as follows:
o Vladimir Evtushenkov - Chairman
o Alexander Goncharuk - Chief Executive Officer
o Evgeny Novitsky - Non-executive Director
o Dmitry Zubov - Non-executive Director
o Vyacheslav Kopiev - Non-executive Director
o Alexander Leiviman - Non-executive Director
o Nikolai Mikhailov - independent Director
o Sergey Drozdov - Senior Vice President
o Alexander Gorbatovsky - independent Director
o Stephan Newhouse - independent Director
o Ron Sommer - independent Director

• The appointment of Audit-Garantia-M and Deloitte & Touche as Sistema's auditors for 2006 in accordance with RAS and US GAAP, respectively

• The extension of the notice period to 100 days following the year end for shareholders to propose nominees to the Board of Directors and items for consideration at the Annual General Meeting
• The split of the 9,650,000 existing Sistema ordinary shares with a par value of RUR 90 into 482,500,000 ordinary shares with a par value of RUR 1.8, representing a 1:50 split ratio. As a result of the split, the GDR to ordinary share ratio will change from 1:50 to 1:1.
• The regulation of Sistema's Management Board
• The regulation of Sistema's President
• The regulation of the remuneration for the members of the Board of Directors
The Board of Directors has also held its first meeting following the Annual General Meeting, and re-elected Vladimir Evtushenkov as Chairman and Vyacheslav Kopiev and Dmitry Zubov as the Deputy Chairmen of the Board of Directors.