СONTENTS

Appeal of the President of the Republic of . 1 Introductory remarks of General Director 2 I. SHARE CAPITAL 3 Issue of Shares 3 Dynamics of dividend payments on equity issues 3 Data on Investment in other companies of the JSC Firm "BashInformSvyaz" 3

Share Capital and Securities 4 II. CORPORATE ACTIONS 5

Data on Board of Directors activities 5 Board of Directors 6

Managerial Board 7 Data on the activities of Executive Bodies of the Company 8

Data on the activities of Auditing Committee 9

IIII. DATA ON THE COMPANY 10 General Data on the Company 10 Finance Indicators and Production Figures 12 Map of Interregional Centres of Electric Communication 13

Branch Subsidiaries of the JSC Firm "BashInformSvyaz" 14 Main Events of 2002 year 15

IV. LINES OF THE COMPANY'S ACTIVITY 16

Intercity and International Communication 16 Local Communication 17 Marketing 18

Information Technologies 19

Tariff Policy 20 Social & Personnel Policy 21

Communication Networks Development 22 V. PERSPECTIVES OF SOCIAL DEVELOPMENT 23

VI. FINANCIAL AND ECONOMIC ACTIVITIES OF THE COMPANY 24

Financial and Economic Indicators of Activities 24 Consolidated Balance-sheet 25

Profits and Losses for 2002 25 VII. RESULTS OF THE COMPANY'S ACTIVITY 26

Conclusion of the Revisory Commission 27 Conclusion of the Auditing Committee 27 28 29 Dear Friends! Glad to congratulate You with the 10th Anniversary of the Joint-Stock Company Firm "BashInformSvyaz"! For this short period of time You together with the Republic have taken a considerable step in your development . Being one of the most important sector of the production and social infrastructure of our society the communication industry has made an appreciable contribution to all achievements of Bashkortostan. "BashInformSvyaz", the main communication provider in Bashkortostan, plays the leading role in realization of the programme "People's Telephone". Today 80% of the families living in the cities and towns have their own telephone. We are planning sizeable changes in establishment of telephone communication in the rural ares. The telephone communication is becoming up-to- date - there appear new types of communication - paging, mobile and others. That is the result of intensive introduction of the latest hightech equipment - digital Automatic Telephone Stations, radio relay and optical communication lines. Under the conditions of the world wide information revolution Your Company plays an active role in creation of the common information space in our country. The developed market of telecommunication and information technologies is being created nowadays. Number of PCs, and local networks is constantly increasing as well as the number of Internet users. Taking part in equipping of the organs of state administration, production, science and education sectors You contribute to valuable integration of Bashkortostan into world economy. The programme of development of the JSC "BashInformSvyaz" for 2001 - 2010 years, elaborated in accordance with the Concept of Russian telecommunication services market development, makes it possible to rise to the level of Eastern Europe. You are to complete the establishment of telephone communication in the urban and rural ares, to create high-capacity telecommunication network in Bashkortostan on the base of available digital technologies. I am sure that Your highly qualified and united collective is up to these great tasks. I wish you every happiness, health to You and your families, success in all your affairs in favour of native Bashkortostan and !

President of the Republic of Bashkortostan������������������������������������������������������������������������������Rakhimov M.

1 Ladies and Gentlemen! I am glad to greet you on behalf of all workers of the Joint-Stock Company "BashInformSvyaz". The modern society is developing thanks to high-tech telecommunication services. Under the conditions of the 21st century the economics is based first of all on the high technologies and the latest communication facilities. We realize all the possibilities and do all the best to provide the population of our Republic, enterprises, bodies of administration and management with reliable and up-to-date communication. Our Joint-Stock Company is considered to be the main provider of electric communication on the territory of the Republic of Bashkortostan, providing all the categories of users with wide range of services. JSC "BashInformSvyaz" is developing in accordance with spirit of the times, fantastic capacities of modern technique. New generation does not imagine its future without Internet, data transfer, mobile communication, IP-telephony. To make all the above services more moderate is one of our tasks. For the last several years the Joint-Stock Company has been considerably changed, crux of these changes is to restructure the Company into a highly profitable and investment attractive enterprise. In 2002 we celebrate the 10th anniversary of the Company. That was the year of creation and internal restructuring aimed at improvement of management efficiency and competitiveness ofthe Company. As a result of the positive restructuring we have established powerful and profitable Company. We associate our future and long-term perspectives with great growth of economy and infrastructure development in our Republic. Submitting the annual report of the JSC "BashInformSvyaz" for 2002 year for approval of the general shareholders' meeting I want to say that I am satisfied with the results of the Company's managers, specialists and other employees work. Thanks to their efforts the Company gains the opportunity to pay dividends to its shareholders for 2002. I hope that all plans of social and economic development will be realized with great success and the Company will gain new impulse for its development.

S.M.Gaysin General Director of the JSC "BashInformSvyaz"

2 I. SHARE CAPITAL AND SECURITIES

Share issue

Date and Ordinary Preference Preference Issue number Registration body number of issue shares, shares of A type, shares of B type, registration pcs. pcs. pcs. Ministry of Finance st 1 issue of the Republic April 9, 1993 1 369 613 84 895 785 294 of Bashkortostan 01-1-62 Ministry of Finance 2nd issue Nov. 3, 1995 of the Republic 01-1-1048 126 462 989 5 942 650 of Bashkortostan 29 552 744 rd Ministry of Finance 3 issue Nov. 11, 1995 (not placed and of the Republic 10 000 000 - - therefore annuled) of Bashkortostan 01-1-1050 Federal Security April 05, 1999 4th issue Commission 1-04-00011-А 639 163 010 30 137 725 151 690 190 of Russia 2-04-00011-А TOTAL 766 995 612 36 165 270 182 028 228

Dynamics of dividend payments on equity issues

Ordinary shares Preference shares of A type Preference shares of B type Year of Total Dividend % % % dividend amount rate for 1 Total amount Dividend rate Dividend rate Total amount Dividend rate Dividend rate payment Dividend rate of dividend, share, for 1 share, of dividend, for 1 share, for 1 share, of dividend, for 1 share, for 1 share, rubles rubles rubles rubles rubles rubles rubles rubles rubles

1993 1 023 100 0,747 74,7 63 416 0,747 74,7 586 614 0,747 74,7 1994 1 131 300 0,826 82,6 152 386 1,795 179,5 1 409 602 1,795 179,5 1995 ------1996 - - - 6 027 545 1,00 100,0 3 033 803 0,10 10,0 1997 - - - 2 350 742 0,39 39,0 3 033 803 0,10 10,0 1998 - - - 361 652 0,06 6,0 3 033 803 0,10 10,0 1999 7 669 956 0,01 1,0 3 616 527 0,10 10,0 5 460 846 0,03 3,0 2000 7 669 956 0,01 1,0 3 616 527 0,10 10,0 5 460 846 0,04 4,0 2001 8 694 097 0,01 1,0 6 509 749 0,18 18,0 3 184 564 0,04 4,0

Data on Investment in other companies of JSC Firm "BashInformSvyaz" (as of January 1, 2003)

Legal Address Amount of investments, Amount of investments, Name of the Company rubles % LLC ICC "Express" TIN 0274022246 28 Lenin Str., 450000 118 047 858 49,00 JSC "Mobile Communication of Bashkortostan" 2 Rabkorov Str., Ufa 450106 3 493 300 35,70

JSC "Alfa-Bank-Bashkortostan" TIN 0274061157 28 Lenin Str., Ufa 450000 20 468 644 11,16

JSC "Concern BETO" TIN 0274043528 3 K.Marx Str., Ufa 450025 20 450 0,13

JSC "Bashkir Investment House" TIN 0274029001 2 Rabkorov Str., Ufa 450106 31 250 2,55

LLC CAPB "Bashkiriya" TIN 0274004952 70 Lenin Str., Ufa 450025 8 020 0

LLC "Yumaguzino Reservoir" TIN 0274062584 28 St.Khalturin Str., Ufa 450077 29 873 583 1,20

LLC "Sattelite Telecommunications of Bashkortostan" TIN 0278077510 20/1 50 Let Oktyabrya Str., Ufa 450005 35 000 000 18,75 Association "SDO-Iskra" 40 Leninsky Prospekt, Moscow 117334 116 720 0 "Tovarishestvo" without legal entity organization 32/1 Lenin Str., Ufa 450000 778 462 113 0 LLC "BashTeleComLeasing" TIN 0274079725 32/1 Lenin Str., Ufa 450000 95 000 19,00 TOTAL 985 616 938

3 I. SHARE CAPITAL AND SECURITIES

Share Capital and Securities

Share capital of the JSC Firm "BashInformSvyaz" comes to 985 189 110 rubles that is placed into 985 189 110 shares at nominal value of 1 ruble for each share. 46,08% of shares is passed into the public ownership, including 28,24% - federal ownership and 17,84% - ownership of the Republic of Bashkortostan. Total number of shareholders makes more than 14 thousand, including 90% of natural persons. Register of shareholders is being kept by the JSC "Central Registry" (License No. 10-0001-00283 issued by the Federal Security Commission of Russia on the 4th of February 2003). The corporation stock is circulating on the RTS stock exchange since 1997 and appears on the share list for RTS index calculation which is considered to be an important indicator of the Russian securities market behaviour.The RTS index is being calculated on the basis of the on-line data on purchase and sale transactions effected with the most realizable stock on the Russian Commodity Exchange. In 2002 there were concluded 24 transations with the corporation stock for the total sum of 302 thousand US dollars. The JSC Firm "BashInformSvyaz" is striving for openness and transparency both for its shareholders and its potential investors. The information concerning the Company's activities is provided in Internet either on the Company's own site or on the site for the National Association of the stock market participants. In 2002 the JSC Firm "BashInformSvyaz" floated a bond issue for the total sum of 150 mln.rubles on the Moscow Interbank Foreign Currency Exchange (MIFCE) which is to be repaid in three years. The bonds are circulating on the secondary market and are in stable demand that makes it possible to include them into the 1st level Quotation. All the funds obtained from the bond issue have been allocated for realization of some paying-off projects on Telecommunication network development - intellectual platform creation, network of services construction, CDMA network expansion, construction of new digital Automatic Telephone Stations (ATS) in Ufa city and Behaviour of income from realization the Republic of Bashkortostan. of communication services In 2002 there were also underwritten JSC "BashInformSvyaz" 4 issues of the"telephone bonds"for the 1998 1999 2000 2001 2002 total sum of 7 129 500 rubles, and their owners, either the organizations or the 2196596 population, have the right to get 1727554 extraordinary access to the telephone 1326200 network of general use. 954013 730687 1262064 The Company's fruitful activity makes 956330 it possible to make regular payments of 686556 471911 dividends more than other analogue 312281 companies of the Urals and Volga Regions.In the final analysis of 2002 the Board of Directors recommends to pay dividends on shares with some increase total income from realization of communication as compared with the last year. services, thousand of rubles volume of realization of communication services provided to the population, thousand of rubles

4 II. CORPORATE ACTIONS

Data on Board of Directors activities

Board of Directors consists of 11 persons. Chairman of Board - Sigakov Nikolay Ivanovich. Deputy Chairman of Board - Gaysin Salavat Mukhtarovich. Secretary of Board - Kuznetsov Pavel Fedorovich.

Composition of Board of Directors:

Quantity of JSC "BashInformSvyaz" shares that belongs to the control person Full name Post Ordinary shares, Preference shares, pcs. pcs. Andrievskiy Deputy Head of the Department for Industry, Construction, Transport and Communication Property at the Ministry for - - Vladimir Aleksandrovich Property of Russia Ardislamov First Deputy Minister of Industry, Foreign Economic - - Vil Kamilevich Relations and Trade of the Republic of Bashkortostan

Gaysin General Director of the JSC "BashInformSvyaz" 31 322 2 130 Salavat Mukhtarovich Gribov Chief of a division of the Department for Industry, Construction, T ransport and Communication Property at the Ministry of - - Sergey Aleksandrovich Property of Russia Ibragimov Deputy General Director of JSC "BashInformSvyaz 18 040 - Rafail Minnikhanovich Kivakov Counsel of General Director of JSC "CentrTeleCom" Yury Aleksandrovich - - Kvashnin First Deputy General Director of JSC "BashInformSvyaz" 358 266 Petr Stepanovich 2 130 Sigakov General Director of Corporation "UralTekhnoStroy" - - Nikolay Ivanovich

Tagirov Chief of a division of the Ministry for Property of the - - Ramil Abdulkhaevich Republic of Bashkortostan Timoshenko Head of the Department for Economic and Investment Policy at the Ministry for Communications and Information - - Lyubov Stepanovna of Russia

Chesskiy Deputy General Director of JSC "BashInformSvyaz" 24 708 2 130 Vladimir Mardukhovich Director of the branch subsidiary "Ufa Municipal Telephone Network"

The Board of Directors coordinates its management activity on the basis of semiannual plans of work. The Board held 10 meetings and considered 38 matters of organization, financial and economic activity of the Company

5 Board of Directors

Sigakov Nikolay Ivanovich General Director of Corporation "UralTekhnoStroy", Chairman of Board

Timoshenko Lyubov Stepanovna Head of the Department for Economic and Investment Policy at the Ministry for Gaysin Communications and Salavat Mukhtarovich Information of Russia, General Director of the official representative of JSC "BashInformSvyaz", the Ministry for Property of Deputy Chairman of Board the Russian Federation

Andrievskiy Vladimir Aleksandrovich Deputy Head of the Department Kvashnin for Industry, Construction, h Petr Stepanovic Transport and Communication First Deputy General Director Property at the Ministry for of JSC "BashInformSvyaz" Property of Russia

Chesskiy Gribov Vladimir Mardukhovich Sergey Aleksandrovich Deputy General Director of Chief of a division of the JSC "BashInformSvyaz" Department for Industry, Director of the branch subsidiary Construction, Transport and "Ufa Municipal Telephone Network" Communication Property at the Ministry of Property of Russia

Ibragimov Kivakov Rafail Minnikhanovich Yury Aleksandrovich Deputy General Director of Counsel of General JSC "BashInformSvyaz" for development Director of JSC "CentrTeleCom"

Ardislamov Vil Kamilevich Tagirov First Deputy Minister of Industry, Ramil Abdulkhaevich Foreign Economic Relations and Chief of a division of the Trade of the Republic Ministry for Property of the of Bashkortostan Republic of Bashkortostan

6 MANAGERIAL BOARD

Gaysin Salavat Mukhtarovich General Director of the JSC "BashInformSvyaz", Deputy Chairman of Board

Kvashnin Petr Stepanovich First Deputy General Director Akhmetshina of JSC "BashInformSvyaz" Faniya Nigmatyanovna Chief Accountant

Yanyshev Shavkat Barievich Deputy General Director of JSC "BashInformSvyaz", Technical Director, Director of the Republican Center Iskuzhin of Inter-town Communications Rasikh Akhmetganeevich Chief of Juridical Division

Ganeev Ilgiz Irgaleevich Biryukova Deputy General Director for Olga Anatolyevna Commerce, Supplies and Transport Chief of Economics & Planning Division

Kobelev Kurnosov Vladimir Aleksandrovich Evgeniy Borisovich Deputy General Director of Director for Economics Inter-Regional Center of and Finance Electric Communications

Dusov Kuznetsov Don Akramovich Pavel Fedorovich Deputy General Director Assistant General Director, for Common Matters Secretary of Board of Directors and Personnel and Managerial Board

7 II. CORPORATE ACTIONS Basic decisions made by the Board of Directors:

on personal composition of the collective executive body; on issue and placement of the documentary interest bearing bonds; on dealings approval; on setting-up of the branch subsidiary "Salavat Municipal Communication Centre"; on approval of the Board budget expenses (quarterly); on approval of the reports submitted by the securities issuer (quarterly); on the results of the Company's activity for 9 months of 2002 and on the tasks for realization of social & economic development forecast for 2002; on approval of the programme of development of the JSC "BashInformSvyaz" for 2003; on final report on the Company's financial & economic activity in 2002 and the tasks for 2003; on new wording of Articles of Association of the JSC "BashInformSvyaz"; on selection of auditors on a competition basis to audit the JSC "BashInformSvyaz"; on preparation and holding of an annual shareholders' general meeting.

Data on the activities of Executive Bodies of the Company

The Company's sole executive body - General Director Gaysin Salavat Mukhtarovich. Date of appointment - May 25, 2001. Term of powers - 5 years Personal composition of Managerial Board: Quantity of JSC "BashInformSvyaz" shares that belongs Full name Post to the control person Ordinary shares, Preference shares, pcs. pcs. Gaysin Salavat Mukhtarovich General Director 31 322 2 130 Akhmetshina Faniya Nigmatyanovna Chief Accountant 97 282 4 260 Biryukova Olga Anatolyevna Chief of Economics & Planning Division 50 784 1 704 Ganeev Ilgiz Irgaleevich Deputy General Director 161 091 1 704

Dusov Don Akramovich Deputy General Director 91 428 1 704

Iskuzhin Rasikh Akhmetganeevich Chief of Juridical Division 12 000 -

Kvashnin Petr Stepanovich First Deputy General Director 358 266 2 130

Kobelev Vladimir Aleksandrovich Deputy General Director 3 180 -

Kuznetsov Pavel Fedorovich Secretary of Board of Directors and Managerial 5 964 Board, Assistant General Director 1 704 Kurnosov Evgeniy Borisovich Director of Sterlitamak Inter-Regional 209 276 Center of Electric Communications 2 130 Deputy General Director of JSC "BashInformSvyaz",Technical Yanyshev Shavkat Barievich Director, Director of the RC of Inter-town Communications 105 222 1 704

The Managerial Board has considered 67 matters in 2002. 58 decisions have been taken under control.

8 II. CORPORATE ACTIONS Basic decisions made the Managerial Board

on restructuring of the JSC "BashInformSvyaz"; on introduction of ASR "START" and KSU "ETALON"; on annual balance - sheet of the JSC "BashInformSvyaz" for 2001 and on making a proposal to the Board of Directors for disposition of the unappropriated profit for 2001; on desired results of the Company's activity for the 1st quarter and on the plan of social & economic development for the 2nd quarter of 2002; reports of the directors of the local Centres of Electric Communications on the results of the branches' activity for the 1st quarter of 2002 and aspects of the branches' restructuring; on the Company's capital investments use in the 1st quarter of 2002 and tasks for investment programme realization in the 2nd quarter of 2002; on relations with mobile communication operators on the market of communication services of the Republic of Bashkortostan; on preparation of the programme for telephone communication establishment in ; on completion of the first stage of the Company's branches consolidation; on further improvement of the Company's structure; on measures for preparation and celebration of the 10th anniversary of the JSC "BashInformSvyaz" on realization of capital construction plan in 2002 and on capital construction forecast for 2003; on the Company's social & economic development forecast for 2003; on capital construction forecast for 2003; During the report year there were three joint sessions with the Presidium of the republican committee of the Communication Service Workers Trade Union of Bashkortostan that made the following decisions: on Tariff Agreement between the republican committee of the Communication Service Workers Trade Union of Bashkortostan abd the JSC "BashInformSvyaz"; on final round of the Third Republican Festival of amateur talent activities of the communication service workers, dedicated to the 10th anniversary of the JSC Firm "BashInformSvyaz"; on organization of the children' and teenagers' holidays. Information on the activities of the Board of Directors and the Company's executive bodies was published in mass media: newspapers "Respublika Bashkortostan", "Komsomolskaya Pravda", "Kommersant", "Izvestiya", "Svyazist Bashkortostana", "Vechernaya Ufa", "Delovoy Mir", "Ufimskiye Vedomosti", "Molodyozhnaya Gazeta"; magazines "Panorama Bashkortostana", "Kyzyl Tan", Vsya Ufa", "Chelyabinsk", "Direktor", as well as in the encyclopaedic directories and on its own Internet - site.

Data on the Company's Auditing Committee Activities

The Auditing Committee of the JSC Firm "Bashinformsvyaz" was appointed by its Shareholders' Meeting dated the 6th of June 2002. The Committee consists of 5 following persons:

1. Rizvanov Rais Zakievich - Chairman, 2. Tuygildin Aynur Yunirovich, 3. Tukaev Gabdulla Akhmetkhanovich, 4. Sadchikova Olga Viktorovna, 5. Blokhin Alexey Yuryevich.

During the whole report period the Auditing Committee was working according to the elaborated action programme. The Committee hold 4 meetings and 4 revisions on its own initiative. It has been confirmed by the Auditing Committee that the balance is made to show the Company's assets and liabilities as of January 1, 2003 and financial results for 2002 according to the standard requirements. As a result of the revisions the Committee has provided the following recommendations: - to strengthen control of actvity of the Company's branches; - to take measures to increase the efficiency of work in order to decrease the debit indebtedness of the Company; - to improve the material and technical provision of the Company's branches; - to take measures for in-time payment of dividend.

9 III. DATA ON THE COMPANY

General Information on the Company Data on the Company's Auditor: Name: The JSC Firm "Bashinformsvyaz" was incorporated by privatization of "State enterprise of communication JSC "BDO YunikonRuf" registered by the Inspectorate and informatics "Rossvyazinform" of the Republic of No. 26 of the South Administrative Division of Moscow Bashkortostan" and is considered to be its legal suc- at the Ministry for Taxes & Duties of Russia. cessor. Certificate on Insertion into the Unified State Open Joint-Stock Company Firm "Bashinformsvyaz" was established on the 9th of Octo- Register of Legal Entities series 77 No. 006869528 da- ber 1992 by the Decision No. 37 taken by the State ted February 27, 2003, official registration number Committee for the Management of State Property; was 1037739271701. registered on the 30th of October 1992 by Ordinance Mailing address: 117545, No. 44 made by Head of the Kirovsky District Adminis- Moscow, 125 tration of Ufa city. The JSC Firm "Bashinformsvyaz" is the leading Varshavskoye shoss. supplier of electric communication services in the Re- Phones: (095) 319 4656, 319 6636 public of Bashkortostan, covering 55 areas and 22 cit- Phone/Fax: (095) 319 5909 ies of the Republic, i.e. 144 thousand square kilome- tres with 4,1 mln population. The JSC Firm "Bashinformsvyaz" has 20 branch offices. The Compa- E-mail: [email protected] ny's personnel comes to 10 483 employees. Web: www.bdo.ru

General Director: Dubinsky A.Yu. Full Name: Licence No. E 000547 dated June 25, 2002

Open Joint-Stock Company The audit report is signed by the Director of the Ufa Firm "Bashinformsvyaz" branch of JSC "BDO YunikonRuf" duly authorised by the Order No. 198 issued by the General Director of the Short-cut Name: JSC "BDO YunikonRuf" on the 8th of October 2002. JSC Firm "Bashinformsvyaz" Auditor Asadullin Danis Adisovich - senior auditor for auditing of the Company. Address for contacts:

450000, Republic of Bashkortostan, Ufa city, 32/1 Lenin Street Phone: (3472) 50-23-39 Data on the Company's Registrar: Fax: (3472) 50-73-01 Name: Teletype: 162302 (Voice) JSC "Central Registry" Address: Republic of Bashkortostan, Ufa city, 11 Tol- The Company's representation in Internet: www.bashtel.ru stoy Street Mailing address: 450000, POB 1277 E-mail: Licence No. 10-000-1-00283 [email protected] Date of issue: February 4, 2003 Date of expiry: unlimited General Director: Authority: Federal Commission for Securities Market of Gaysin Salavat Mukhtarovich the Russian Federation Requisite elements of a service agreement with an is- Chief Accountant: suer: Contract No. 1 dated January 13, 1997 "On Se- Akhmetshina Faniya Nigmatyanovna curity Holders Register keeping"

10 III. DATA ON THE COMPANY

Main types of activity

Intercity and international telephone communication

Local telephone communication

Telegraph communication

Data transmission and Internet services

Wireless telephone communication of CDMA standard

Wire communication

Television broadcasting

Radio broadcasting

Paging communication

Services of ISDN digital network

IP - telephony

Providing lease opportunities for communication channels and physical lines

Installation, repair and maintenance of electric communication equipment and objects

Allotment of shares

Registered capital : 985 189 110 rubles. General number of ordinary (voting) shares: 949 023 840 (96,33% in the registered capital) General number of preference shares of "A" type: 36 165 270 (3,67% in the registered capital)

Registered Capital Structure Number of shares % in the preference shares ordinary shares registered (pcs) (pcs) capital Ministry for Property Relations of the Russian 0 278 200 044 28,24 Federation Ministry for Property Relations of the Republic of 175 785 930 17,84 Bashkortostan 0

Legal entities, including: 13 985 927 417 053 816 43,75 JSC "Uralo-Sibirsky Bank" 0 102 434 114 10,40 (nominal holder) JSC "Depositary & Clearing Company" 10 737 043 261 470 799 27,63 (nominal holder) Natural persons 22 179 343 77 984 050 10,17 TOTAL 36 165 270 949 023 840 100%

11 III. DATA ON THE COMPANY

Finance Indicators and Operating Capabilities

Capacity of ATS (Automatic Telephone Station) brought into operation in 2002 makes 41 690 numbers. General capacity of the assembled ATS - 846 670 numbers. Utilized capacity of ATS - 784 553 numbers (92,66%) GTS (City Telephone Network) digitization level - 60 %, STS digitization level - 22 %. Level of intrazone primary networks digitization - 63, 1 %. Telephone numbers density for 100 families - GTS - 80%, STS - 27,4% 315 kilometres of communication lines were installed in 2002 General length of intercity communication lines - 1 204, 2 km General length of intercity channels - 1 783, 2 thousand channels/km Proceeds of the sale of services for 2002 - 2 295, 6 mln.rubles Balance profit for 2002 - 821,9 mln.rubles

The Company's achievements for 2002

In the estimation of the Organizing Committee of the All-Russia Reward "Russian National Olymp" and the Economics Department of the Russian Academy of Sciences the JSC Firm "Bashinformsvyaz" appears on the list of the leaders in the social and economic sphere in Russia. By the decision of the Expert Council of the Supreme Geneva Institute for Business & Management "INSAM" the title "Business Leader" has been conferred upon the JSC Firm "Bashinformsvyaz" as a result of the international rating programme "Business Leaders Constellation". The programme is implemented on the base of information provided by the noncommercial partnership "National Credit Bureau" promoted by the Russian Chamber of Commerce and Industry, State Committee for Statistics of the Russian Federation, newspaper "Ekonomika i Zhizn", Commercial Business Information Agency. It was for the second time that the General Director of the JSC Firm "Bashinformsvyaz" Gaysin Salavat Mukhtarovich took his deserved place in the professional rating list of russian managers compiled in December 2002 by the Managers Association and the Publishing House "Kommersant". Gaysin S.M. entered the list of five best managers of bashkortostan, and the list of ten best managers of Russia (among the enterprises of communication industry). The Republican Intercity Communication Center became the prize-winner of the Bashkortostan President Prize in the field of quality. The Company was awarded a Cup of Quality and a Diploma of the first degree "For High Quality of Services". In 2002 the General Director of the JSC Firm "Bashinformsvyaz" Gaysin S.M. was awarded the Order of Salavat Yulaev. The C.Scorpio star was named after the JSC Firm "Bashinformsvyaz". That was the original present prepared by MDM Bank for the 10th Anniversary of the JSC Firm "Bashinformsvyaz"

12 Map of Interregional Centres of Electric Communication

13 III. DATA ON THE COMPANY

Branch Subsidiaries of the JSC "BashInformSvyaz"

Inter-Regional Centers of Electric Communications:

1. : 11. : Bizhbulyak Ak'yar RCC, Regional Center of Communications (RCC), RCC, Ermekeevo RCC, Zilair RCC. Kirgiz-Miyaki RCC. 12. : 2. : Bakaly RCC, Buzdyak RCC, Askarovskiy RCC, Sharan RCC, Starosubkhangulovo RCC, Yazykovo RCC. RCC. 13. Sterlitamak: 3. : RCC, Askino RCC, Sterlibashevo RCC, Karaidel RCC, Tolbazy RCC, Mishkino RCC. Fedorovka RCC. 4. Buraevo: Verkhne Tatyshly RCC, Urban Centers of Communications Starobaltachevo RCC. 5. : 14. Oktyabrsk Raevka RCC, 15. Salavat RCC. 6. : 16. Republican Center of Inter-town Communications: Verkhneyarkeevo RCC, Chekmagush RCC. Arkhangelsk RCC, 7. : Krasnousolsk RCC, Ermolaevo RCC. Krasnogorsk RCC. 8. : 17. Republican Radio-Television Isyangulovo RCC, Transmitting Center: Mrakovo RCC. Radio Center of Ufa city. 9. Mesyagutovo: 18. Republican Production & Commercial Bolsheustye RCC, Center "Sputnik" Verkhnekiginsk RCC, 19. Sanatorium-Dispensary "Svyazist" Maloyaz RCC, 20. Ufa Municipal Telephone Network: Novobelokatay RCC. Blagoveshchensk RCC, 10. : Iglino RCC, Kaltasy RCC, Karmaskaly RCC, Kushnarenkovo RCC Nikolo-Berezovo RCC, RCC.

14