Shareholders TILTS COMMUNICATIONS A/S, Ostergate 38, LVL ,-- Postbox 2256, 1019, Copenhagen, Denmark

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1 LATTELEKOM Valnu 30, LV-1050 Riga Tel Fax info@lattelekom.lv Legal form SIA - Limited liability company Comp. Register , Nr last entry on Uniform reg.no Shareholders TILTS COMMUNICATIONS A/S, Ostergate 38, LVL ,-- Postbox 2256, 1019, Copenhagen, Denmark Valsts AS, bezpelnas organizacija LVL ,-- PRIVATIZACIJAS AGENTURA, K.Valdemara iela 31, LV-1887, Riga Share capital Management LVL ,-- Gundars Strautmanis, president, right of signature born , Anninmuizas 30-44, Riga Leena Suhonena, executive manager, right of signature Talis Galdins, deputy executive manager Simo Sakari Poutanen, deputy executive manager, right of signature born , J. Basanaviciaus 16/5-18, 2006, Vilna, Lithuania Guntis Berzins, member of the board of directors born , Baznicas 45-6, Riga Ivars Bilinskis, member of the board of directors born , Bikernieku 77-12, Riga Indra Samite, member of the board of directors born , Juglas 4/4-11, Jurmala Valdis Lokenbahs, member of the board of directors born , Brivibas 39-22, LV-1050, Riga Viktors Kulbergs, member of the board of directors born , Cinitaju 9, Riga Christer Nykopp, member of the board of directors Teollisuuskatu 15, P.O.Box 600, , Sonera, Finland Timo Sakari Vitanens, member of the board of directors Arvo Kukko, member of the board of directors Olli Juhani Ranta, member of the board of directors born , Hameenteie 20B17, Helsinki, Finland Antti Pellervo Koivisto, member of the council Rusthollarintie 13 D 32, FIN-00910, Helsinki, Finland Janne Tapani Yli-Ayho, member of the council Kauppalantie 15 G, Finland Anri Leimanis, lawyer, right of signature All rights reserved.

2 born , Brivibas , Riga Anita Puka, head of financial accounting department, right of signature General data LATTELEKOM is a the only operator of fixed telecommunications network in Latvia. Services: basic telecommunication services: local and international, public phones; data services: ISDN, dial-up and leased line Internet services (under trademark Apollo), X25 and LAN-to-LAN services; supplementary services for business customers: Free Phone (800-series) and Premium Rate (900- and 909- series); trade and installation of customer premises equipment; various additional services: Directory Inquiry Service, telephone directories, telemarketing, etc. Situated on the above mentioned address LINE OF BUSINESS Telecommunications (64.20) Staff pers pers pers pers pers pers pers. Annual sales 1994 LVL , LVL , LVL , LVL , LVL , LVL , (consolidated) LVL , LVL , (consolidated) LVL , LVL , (consolidated) LVL ,-- Real estate Total balance value: LVL ,-- (on ). Assets (consolidated) Intangible assets LVL ,-- Fixed assets LVL ,-- Long-term financial investment LVL ,-- Inventory LVL ,-- Debtors LVL ,-- Cash LVL ,-- Liabilities Stock equity LVL ,-- All rights reserved.

3 Reserve LVL ,-- Retained earnings brought forward from LVL ,-- previous years Retained earnings brought forward for the LVL ,-- current financial year Shareholders' funds LVL ,-- Provision for liabilities and chares LVL ,-- Long-term liabilities LVL ,-- Short- term liabilities LVL ,-- BALANCE LVL ,-- Remarks Daughter company: SIA LATTELEKOM SAKARU SISTEMAS (part in capital 100%). Other participation: LATVIJAS MOBILAIS TELEFONS (LMT), SIA (registered on with No , part in capital 23%). AS PIRMAIS SLEGTAIS PENSIJU FONDS (Reg. No , part in capital 48%). LATTELEKOM was established in 1994 after an international tender, which was organized, financed and supervised by the European Union through its PHARE program. The winner was consortium TILTS COMMUNICATIONS (joint venture between Finnish company SONERA 90% and INTERNATIONAL FINANCE CORPORATION 10%). LATTELEKOM Umbrella Agreement was signed in January Under this Agreement 51% of the shares belong to Latvian State and 49% to TILTS COMMUNICATIONS. In the government stake (51% of all LATTELEKOM shares) was transferred under the control of the LATVIAN PRIVATIZATION AGENCY. According to the legislation the LATVIAN PRIVATIZATION AGENCY has appointed three state attorneys that manage the state owned shares and control the fulfilment of the Umbrella Agreement. Presently, the LATVIAN PRIVATIZATION AGENCY is intensively developing negotiations with SONERA about restriction of monopoly rights of LATTELEKOM till One of the most important questions is about the amount of corresponding compensation. Losses 1994 LVL ,-- Losses 1995 LVL ,-- Losses 1996 LVL ,-- Losses 1997 LVL ,-- Losses 1998 LVL ,-- Profit 1999 LVL ,-- Profit 1999 (consolidated) LVL ,-- Profit 2000 LVL ,-- All rights reserved.

4 Profit 2000 (consolidated) LVL ,-- Profit 2001 LVL ,-- Profit 2001 (consolidated) LVL ,-- Auditor: Price Waterhouse Coopers Currency exchange: LVL 1 = EUR 1,764 inflation rate: % % % % % Bankers Mode of payment Hansabanka, Riga mostly within agreed terms, but partly also delayed Credit opinion Business connections are permissible Maximum credit: USD ,-- Balance Sabiedrība ar ierobežotu atbildību LATTELEKOM Code 31/12/ /12/ /12/1999 ASSETS LVL LVL LVL 1. Long-term investments I. Intangible assets 1.Cost of research and development 010 0,-- 0,-- 0,-- 2.Concessions, patents, licenses, trademarks and similar rights and assets 020 0,-- 0,-- 0,-- 3.Other intangible assets , ,-- 0,-- 4.Goodwill 030 0, ,-- 0,-- 5.Advance payments on account for intangible fixed assets ,-- 0,-- 0,-- I. Total , ,-- 0,-- II. Fixed assets 1.Land, buildings, premises , , ,-- 2.Long-term investments in leased tangible fixed assets , , ,-- 3.Machinery and equipment , , ,-- 4.Other fixed assets , , ,-- 5.Payments on account for tangible fixed assets and tangible fixed assets in course of construction , , ,-- 6.Advance payments on account for tangible fixed assets ,-- 0,-- 0,-- II. Total , , ,-- III. Long-term financial investment 1.Participating interests in related enterprises , , ,-- 2.Loans to related enterprises ,-- 0,-- 0,-- 3.Participating interests in associated enterprises , ,-- 0,-- 4.Loans to associated enterprises 160 0,-- 0,-- 0,-- 5.Other securities and investments , , ,-- 6.Other loans , ,-- 0,-- 7.Own shares 190 0,-- 0,-- 0,-- 8.Loans to the shareholders and the management of the company 200 0,-- 0,-- 0,-- III. Total , , ,-- All rights reserved.

5 1.TOTAL , , ,-- 2. Current assets I. Inventory 1.Raw materials , , ,-- 2.Semi-finished goods 240 0,-- 0,-- 0,-- 3.Finished goods, goods on stock , , ,-- 4.Semi-finished orders 260 0,-- 0,-- 0,-- 5.Other accrued liabilities 270 0,-- 869, ,-- 6.Livestock 280 0,-- 0,-- 0,-- I. Total , , ,-- II. Debtors 1.Accounts receivable , , ,-- 2.Amounts owed by related enterprises , ,-- 0,-- 3.Amounts owed by associated enterprises , ,-- 0,-- 4.Other debtors , , ,-- 5.Share capital not paid up 340 0,-- 0,-- 0,-- 6.Short-term loans to the shareholders and the management of the company 350 0,-- 0,-- 0,-- 7.Accruals , , ,-- II. Total , , ,-- III. Securities and capital participation 1.Participating interests in related enterprises 380 0,-- 0,-- 0,-- 2.Own shares 390 0,-- 0,-- 0,-- 3.Other securities and capital participation 400 0,-- 0,-- 0,-- III. Total 410 0,-- 0,-- 0,-- IV. Cash , , ,-- 2. TOTAL , , ,-- BALANCE , , ,-- All rights reserved.

6 Sabiedrība ar ierobežotu atbildību LATTELEKOM Code 31/12/ /12/ /12/1999 LIABILITIES 1. Stockholders' equity 1.Stock equity , , ,-- 2.Share premium account 460 0,-- 0,-- 0,-- 3.Long-term asset revaluation reserve 470 0,-- 0,-- 0,-- 4.Reserves: a) legal reserve , ,-- 0,-- b) reserves for own shares of parts 490 0,-- 0,-- 0,-- c) reserves provided , ,-- 0,-- d) other reserves 510 0,-- 0,-- 0,-- 4. Total , ,-- 0,-- 5.Retained earnings: a) brought forward from previous years , , ,-- b) brought forward for the current financial year , , ,-- 1. TOTAL , , ,-- 2. Provision for liabilities and charges 1.Provision for pensions and similar obligation 560 0,-- 0, ,-- 2.Provision for contingent tax , , ,-- 3.Other provisions , ,-- 0,-- 2. TOTAL , , ,-- 3. Creditors I. Long-term liabilities 1.Debenture loans 600 0,-- 0,-- 0,-- 2.Convertible loans 610 0,-- 0,-- 0,-- 3.Credit institutions , , ,-- 4.Other loans 630 0,-- 0,-- 0,-- 5.Advance payments 640 0,-- 0,-- 0,-- 6.Accounts payable 650 0,-- 0,-- 0,-- 7.Bills of exchange payable 660 0,-- 0,-- 0,-- 8.Amounts owed by related enterprises 670 0,-- 0,-- 0,-- 9.Amounts owed by associated enterprises 680 0,-- 0,-- 0,-- 10.Tax and contributions to social security 690 0,-- 0,-- 0,-- 11.Other creditors , ,-- 0,-- 12.Accruals ,-- 0,-- 0,-- 13.Dividends for the financial year 720 0,-- 0,-- 0,-- 14.Dividends for previous financial year not paid in 730 0,-- 0,-- 0,-- I. Total , , ,-- II. Short- term liabilities 1.Debenture loans 750 0,-- 0,-- 0,-- 2.Convertible loans 760 0,-- 0,-- 0,-- 3.Credit institutions , , ,-- 4.Other loans 780 0,-- 0,-- 0,-- 5.Advance payments , , ,-- 6.Accounts payable , , ,-- 7.Bills of exchange payable 810 0,-- 0,-- 0,-- 8.Amounts owed by related enterprises , ,-- 0,-- 9.Amounts owed by associated enterprises , ,-- 0,-- 10.Tax and contributions to social security , , ,-- 11.Other creditors , , ,-- 12.Accruals , , ,-- All rights reserved.

7 13.Dividends for the financial year 870 0,-- 0,-- 0,-- 14.Dividends for previous financial year not paid in 880 0,-- 0,-- 0,-- II. Total , , ,-- 3. TOTAL , , ,-- BALANCE , , ,-- PROFIT AND LOSS STATEMENT Sabiedrība ar ierobežotu atbildību LATTELEKOM Code 31/12/ /12/ /12/ /12/ /12/ /12/1999 LVL LVL LVL 1. Net turnover , , ,-- 2. Production costs , , ,-- 3. Gross profit or loss , , ,-- 4. Distribution costs 040 0,-- 0,-- 0,-- 5. Administrative costs , , ,-- 6. Other operating income , , ,-- 7. Other operating costs , , ,-- 8. Income from participating interests , , ,-- 9. Income from other capital participation, securities and loans 090 0,-- 0,-- 0,-- forming part of the long-term assets 10. Other interests receivable and similar income , , , Write-offs of financial fixed assets, securities and capital 110 0,-- 0,-- 0,-- participation held as current assets 12. Interest payable and similar charges , , , Profit or loss before extra ordinary items and taxes , , , Extraordinary income 140 0,-- 0,-- 0, Extraordinary charges 150 0,-- 0,-- 0, Profit or loss before taxes , , , Tax on profit for the financial year , , , Other taxes , , , Net profit or loss for the financial year , , ,-- Balance (consolidated) Sabiedrība ar ierobežotu atbildību LATTELEKOM Code 31/12/ /12/ /12/1999 ASSETS LVL LVL LVL 1. Long-term investments I. Intangible assets 1.Cost of research and development 010 0,-- 0,-- 0,-- 2.Concessions, patents, licenses, trademarks and similar rights and assets 020 0,-- 0,-- 0,-- 3.Other intangible assets , ,-- 0,-- 4.Goodwill 030 0, ,-- 0,-- All rights reserved.

8 5.Advance payments on account for intangible fixed assets ,-- 0,-- 0,-- I. Total , ,-- 0,-- II. Fixed assets 1.Land, buildings, premises , , ,-- 2.Long-term investments in leased tangible fixed assets , , ,-- 3.Machinery and equipment , , ,-- 4.Other fixed assets , , ,-- 5.Payments on account for tangible fixed assets and tangible fixed assets in course of construction , , ,-- 6.Advance payments on account for tangible fixed assets ,-- 0,-- 0,-- II. Total , , ,-- III. Long-term financial investment 1.Participating interests in related enterprises 130 0, , ,-- 2.Loans to related enterprises 140 0,-- 0,-- 0,-- 3.Participating interests in associated enterprises ,-- 0,-- 0,-- 4.Loans to associated enterprises 160 0,-- 0,-- 0,-- 5.Other securities and investments , , ,-- 6.Other loans , ,-- 0,-- 7.Own shares 190 0,-- 0,-- 0,-- 8.Loans to the shareholders and the management of the company 200 0,-- 0,-- 0,-- III. Total , , ,-- 1.TOTAL , , ,-- 2. Current assets I. Inventory 1.Raw materials , , ,-- 2.Semi-finished goods 240 0,-- 0,-- 0,-- 3.Finished goods, goods on stock , , ,-- 4.Semi-finished orders 260 0,-- 0,-- 0,-- 5.Other accrued liabilities 270 0, , ,-- 6.Livestock 280 0,-- 0,-- 0,-- I. Total , , ,-- II. Debtors 1.Accounts receivable , , ,-- 2.Amounts owed by related enterprises 310 0, ,-- 0,-- 3.Amounts owed by associated enterprises ,-- 0,-- 0,-- 4.Other debtors , , ,-- 5.Share capital not paid up 340 0,-- 0,-- 0,-- 6.Short-term loans to the shareholders and the management of the company 350 0,-- 0,-- 0,-- 7.Accruals , , ,-- II. Total , , ,-- III. Securities and capital participation 1.Participating interests in related enterprises 380 0,-- 0,-- 0,-- 2.Own shares 390 0,-- 0,-- 0,-- 3.Other securities and capital participation 400 0,-- 0,-- 0,-- III. Total 410 0,-- 0,-- 0,-- IV. Cash , , ,-- 2. TOTAL , , ,-- BALANCE , , ,-- All rights reserved.

9 Sabiedrība ar ierobežotu atbildību LATTELEKOM Code 31/12/ /12/ /12/1999 LIABILITIES 1. Stockholders' equity 1.Stock equity , , ,-- 2.Share premium account 460 0,-- 0,-- 0,-- 3.Long-term asset revaluation reserve 470 0,-- 0,-- 0,-- 4.Reserves: a) legal reserve , ,-- 0,-- b) reserves for own shares of parts , ,-- 0,-- c) reserves provided 500 0,-- 0,-- 0,-- d) other reserves 510 0,-- 0,-- 0,-- 4. Total , ,-- 0,-- 5.Retained earnings: a) brought forward from previous years , , ,-- b) brought forward for the current financial year , , ,-- 1. TOTAL , , ,-- 2. Provision for liabilities and charges 1.Provision for pensions and similar obligation 560 0,-- 0, ,-- 2.Provision for contingent tax , , ,-- 3.Other provisions , ,-- 0,-- 2. TOTAL , , ,-- 3. Creditors I. Long-term liabilities 1.Debenture loans 600 0,-- 0,-- 0,-- 2.Convertible loans 610 0,-- 0,-- 0,-- 3.Credit institutions , , ,-- 4.Other loans 630 0,-- 0,-- 0,-- 5.Advance payments 640 0,-- 0,-- 0,-- 6.Accounts payable 650 0,-- 0,-- 0,-- 7.Bills of exchange payable 660 0,-- 0,-- 0,-- 8.Amounts owed by related enterprises 670 0,-- 0,-- 0,-- 9.Amounts owed by associated enterprises 680 0,-- 0,-- 0,-- 10.Tax and contributions to social security 690 0,-- 0,-- 0,-- 11.Other creditors , ,-- 0,-- 12.Accruals ,-- 0,-- 0,-- 13.Dividends for the financial year 720 0,-- 0,-- 0,-- 14.Dividends for previous financial year not paid in 730 0,-- 0,-- 0,-- I. Total , , ,-- II. Short- term liabilities 1.Debenture loans 750 0,-- 0,-- 0,-- 2.Convertible loans 760 0,-- 0,-- 0,-- 3.Credit institutions , , ,-- 4.Other loans 780 0,-- 0,-- 0,-- 5.Advance payments , , ,-- 6.Accounts payable , , ,-- 7.Bills of exchange payable 810 0,-- 0,-- 0,-- 8.Amounts owed by related enterprises 820 0, ,-- 0,-- 9.Amounts owed by associated enterprises ,-- 0,-- 0,-- 10.Tax and contributions to social security , , ,-- 11.Other creditors , , ,-- 12.Accruals , , ,-- All rights reserved.

10 13.Dividends for the financial year 870 0,-- 0,-- 0,-- 14.Dividends for previous financial year not paid in 880 0,-- 0,-- 0,-- II. Total , , ,-- 3. TOTAL , , ,-- BALANCE , , ,-- PROFIT AND LOSS STATEMENT (consolidated) Sabiedrība ar ierobežotu atbildību LATTELEKOM Code 31/12/ /12/ /12/ /12/ /12/ /12/1999 LVL LVL LVL 1. Net turnover , , ,-- 2. Production costs , , ,-- 3. Gross profit or loss , , ,-- 4. Distribution costs 040 0,-- 0,-- 0,-- 5. Administrative costs , , ,-- 6. Other operating income , , ,-- 7. Other operating costs , , ,-- 8. Income from participating interests , , ,-- 9. Income from other capital participation, securities and loans 090 0,-- 0,-- 0,-- forming part of the long-term assets 10. Other interests receivable and similar income , , , Write-offs of financial fixed assets, securities and capital 110 0,-- 0,-- 0,-- participation held as current assets 12. Interest payable and similar charges , , , Profit or loss before extra ordinary items and taxes , , , Extraordinary income 140 0,-- 0,-- 0, Extraordinary charges 150 0,-- 0,-- 0, Profit or loss before taxes , , , Tax on profit for the financial year , , , Other taxes , , , Net profit or loss for the financial year , , ,-- END OF REPORT All rights reserved.

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