Transparency and Reporting

Best Practice Transparency

Transparency enables MTS to reduce investment risk, minimize the cost of capital and increase the overall value of the Company. As a public company with equity and debt traded on global exchanges, MTS complies with the requirements of a number of jurisdictions, including:

• U.S. legislation for foreign private issuers and NYSE rules and regulations for its ADS listing;
• Luxemburg for its debt securities;
• MTS adheres to Russian laws and securities regulations, including rules regarding MTS shares on the MICEX and RTS exchanges.

Newer regulations, such as the Sarbanes-Oxley Act (2002), requiring certification and independent audit of Company control over financial reporting, necessitate additional work for management and employees. The Company is SOX-compliant after certification at the end of 2006.

Detailed Reporting

Another critical part of the Company’s compliance efforts is information disclosure. The Company’s information disclosure efforts include:

• Publication of quarterly un-audited and yearly audited financial statements in both U.S. GAAP and Russian Accounting Standards (RAS) with relevant independent auditor opinions and the Company annual review;
• Adherence to disclosure requirements of both Russian and U.S. securities laws as well as rules of the NYSE;
• Timely conference calls to discuss quarterly results or other important corporate events;
• Participation in industry conferences and gatherings; and
• Regular meetings with investors, shareholders and related analysts.

Disclosure enables the Company to engage in an ongoing dialogue with audiences around the world, providing the Company’s management with invaluable insights into the markets where MTS operates or may enter. This enables the Company’s management to understand more fully the factors directly impacting MTS’ business.