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Annual Report 2008

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Annual Report 2008 2008 ANNUAL REPORT 2008 ANNUAL REPORT TABLE OF CONTENTS SITRONICS overview About SITRONICS ...................................................4 Key events 2008 .....................................................5 Business Geography ..............................................7 Chairman statement ..................................9 Ceo’s statement .........................................11 Financial and operational highlights .....................13 Key Markets ..........................................................15 Operating and Financial Performance Overview Group Overview .................................................16 Segmental Overview ..........................................17 Business overview Overview of the Main Business Segments SITRONICS Telecommunication Solutions .........19 SITRONICS IT Solutions .....................................21 SITRONICS Microelectronics .............................23 Research and development .................................25 Corporate governance General information ..............................................26 Asset structure ......................................................27 Board of directors .................................................28 Committees of the Board of Directors ..................31 Top management .................................................32 To shareholders & investors Shareholder Capital ..............................................36 General Shareholder Meeting /Dividend Policy ....37 Risks .....................................................................39 Social responsibility Social Responsibility .............................................41 Human Resources ................................................42 Financial statements ...............................43 Contacts ...........................................................92 ABOUT SITRONICS 4 SITRONICS SITRONICS is a leading hi-tech company in Eastern Eu- Strengthening Market Position: We are intended to be- ANNUAL REPORT 2008 rope providing telecommunication solutions, information come a key partner of the Government in the field of in- technologies, system integration and consulting, as well frastructure improvements in Russia and CIS countries. as development and production of microelectronics. Performance: We are currently centralizing all the Today, SITRONICS provides services to over 3,500 clients management functions to reduce costs, improve per- globally. SITRONICS has over 10,000 employees with ap- formance and competitiveness of our products. prox. 4,500 involved into research and development. Promising Partnerships: We have established solid re- In February 2007, SITRONICS made an initial public of- lations with the global technology leaders and continue fering (SITR) on the London Stock Exchange (LSE. Its seeking new partners. The global collaboration opens new shares are also listed on the Russian Trading System horizons, enables for the implementation of challenging (RTS) and the Moscow Stock Exchange (MSE) ex- unique projects and supporting the industry progress. changes in Russia. The Company was established in December 2002 as Concern Scientific Centre which constituent a joint ven- ture of Russian microelectronics supplier NIIME and Mik- ron and the Czech manufacturer of telecommunication equipment and software STROM Telecom. Acquisition of Business structure the controlling interest in the Ukrainian Kvazar-Micro, the leading IT supplier in Ukraine and establishment of IT- related business segment in July 2004 became the next step in its development. In 2005, the assets of Concern Scientific Centre, Kvazar-Micro and SITRONICS supply- Information Telecom ing consumer electronics under SITRONICS were united Technologies Solutions under SITRONICS brand name. Acquisition of the con- trolling interest of Greek INTRACOM TELECOM in June 2006 brought the Company into telecommunication mar- kets of Southern Europe, Middle East and Africa, ensured Micro- Consumer the significant synergy of the product line, as well as pro- electronics Goods and Services vided an access to the wide range of R&D practices. SITRONICS is a part of CJFC Sistema – a leading public diversified company focused on the service market. SITRONICS has been nominated the largest Russian IT- A leading provider of comprehensive solutions in the company in 2008 under rating agency “Expert”. field of systems for supporting operation and business activities, next generation networks, broadband The mission of SITRONICS lies in contributing to the glob- access networks and solutions for digital television. al development of high technology industry and genera- Provides services for manufacturing electronics for tion of knowledge economy in Russian and worldwide. telecoms and IT-market companies under contract as well as for third-party manufacturers of consumer electronics. Development Principles A leading Russian manufacturer of microelectronics providing a complete chain for manufacturing and Leadership: We are striving to become an interna- delivery of integrated circuits, solutions based on tional hi-tech company with a leading position in the smart and RFID-technologies: SIM-cards, bank key markets cards, transport and contact-type smart cards. One of the leading providers of solutions, products Innovation: We are developing competitive products and services in the area of information technologies based on our partners’ technologies and our own strong within CIS countries and Eastern Europe. solutions. Key Events of 2008 July A contract signed for the development of a 2.5G net- work for K-TELECOM, the largest mobile communica- SITRONICS OVERVIEW January tion operator in Armenia for US$ 24 million. 5 SITRONICS entered in a number of major contracts and promising partner agreements. In particular, coop- August eration between Kvazar-Micro and LAMPERTZ, the world SITRONICS – Nanotechnologies Project was included leading supplier of physical security of IT systems began. into the list of programmes financed from the Investment Fund of the Russian Federation. February A new product market lunch– SITRONICS Dateri- umTM” Mobile Data Processing Centres (MDPC). SITRONICS took part at the MOBILE WORLD CON- GRESS 2008 International Exhibition and Conference in September Barcelona, where it presented advanced decisions in A contract signed with the Ministry of Education of the sphere of convergent online billing, switching and Romania for 122.5 million on furnishing computer class- service management. es in over 8,000 schools. Turnkey construction of the communication network March for the telecommunications services operator Sistema A facility agreement entered into with Dresdner Bank Shyam TeleServices in India (now MTS India) complet- AG for US$ 75 million with duration of one year and ed. The amount of contract is US$ 5.7 million. annual interest rate 9.25%. Cash assets mobilized ac- cording to this facility agreement are channelled for the October partial refinancing of current liabilities and financing the floating capital of subsidiaries. SITRONICS is recognized as The Largest High Tech Company per Capitalization Level according to the Ex- pert 400 rating of major Russian companies. April SITRONICS Microelectronics Solutions Segment The strategy of development of Kristall for 2008 – 2010 signed a contract with the Chinese company CMC on approved. Main objectives: creating competitive products the supply of microchips for the electronic equipment for based on in-house technologies and partner solutions, US$ 29 million. making the company the key partner of the country, cre- ating partnerships with the world technological leaders. November According to the Moscow Management School May Skolkovo’s rating SITRONICS became one of the top 25 The first phase of works completed on the develop- major transnational companies of Russia. ment of IT infrastructure of Warid Telecom – telecom- A contract concluded with the Wightman Telecom munications operator in Uganda, Africa. The contractual communication operator (Canada, Ontario) on the im- value amounts to US$ 22.7 million. plementation of the in-house fs|cdn solution, which en- Presence in the Middle East is enhanced. A 40 mil- sures rendering IPTV services. lion contract signed with Syrian Wireless Organization for the construction of a new wireless telecommunica- tion network in Syria. December SITRONICS entered into the agreement with the June leading Armenian cellular communication operator K- Development of the WiBAS networks began for the six Telecom for US$ 24 million. major operators of Europe and Asia: T-Mobile in Slovakia, By the Resolution of the Government Committee Globul in Bulgaria, Smart Telecom in Ireland, MTS in Russia, on Enhancing Stability of the Development of Russian Kazakhtelecom in Kazakhstan and Mediacom in Poland. Economy SITRONICS is included into the list of back- Entry to the market of Malaysia: launch of the project bone strategic enterprises which comprises 295 leading on developing a WiBAS. companies in total. Atlanta BUSINESS GEOGRAPHY SITRONICS is a leading supplier of hi-tech products in Representative CIS Europe Russian and CIS countries; it has achieved a strong mar- offices Armenia / Yerevan Albania / Tirana ket position in the Central and South Europe and expands Russia Belarus / Minsk Bulgaria / Sophia its presence in Asia, Middle East and Africa. The main fa- Moscow Kazakhstan / Astana Bosnia and cilities of the SITRONICS Telecommunication Solutions are Kazakhstan / Almaty Herzegovina / Sarajevo located
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