Lattelekom Annual Report 2000 - Lattelecom

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c o n t e n t s
2 Introduction 3 Highlights of 2000 4 Our Vision 6 President’s Statement
8 Chief Executive Officer’s Statement 10 Board of Directors 12 Lattelekom Equity Structure
13 Lattelekom Operational Review
14 Customer Service 16 Voice Services 19 Data Services
22 Apollo Internet Services 24 Call Centre Services
26 Payphone Services 27 Training Centre 28 Lattelekom Sakaru Sistémas
29 Information Systems 30 Network Development 32 Employees
34 Operational Statistics and Lattelekom Digital Access Network 36 Financial Review
38 Investments Made in Districts of Latvia
39 Report of the Board of Directors and Financial Statements
40 Report of the Board of Directors 43 Auditors’ Report
44 Income Statement 45 Balance Sheet
46 Statement of Changes in Equity 47 Cash Flow Statement
48 Notes to the Financial Statements 66 Five Year Statistics
1

i n t r o d u c t i o n
In 2000 the Republic of Latvia
celebrated the tenth anniversary
since declaration of independence.
Restoration of the national
economy and modernisation came
along with restoration of the
country’s independence.
Telecommunications is one of the
industries having undergone
the most rapid development
over the time.
The industry is most directly
related to the volume and speed of
information circulation and today,
at the time of globalisation,
the development rate of national
economy also very much depends
on telecommunications.
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Calculations made back in 1990 showed that large financial resources were needed
to fully develop the telecommunications network in Latvia, therefore a decision
was made to attract investments to communications area in co-operation with
foreign partners.
The most significant step in modernisation of the telecommunications network
was made on 14 January 1994 with signing of the Umbrella Agreement between
the Republic of Latvia and the consortium TILTS Communications, and with the
establishment of the company Lattelekom SIA. 51% of Lattelekom’s share
capital belongs to the Republic of Latvia, and 49% - to the consortium TILTS
Communications. 63% of TILTS Communications shares belonged to the
company Cable&Wireless of Great Britain, 27% - to the Finnish company
Telecom Finland (now Sonera), and 10% - to the International Finance
Corporation. In 1998 British owned shares were sold to the Finnish Sonera - the
company now holding 90% of TILTS Communications shares.
To successfully perform modernisation of the national telecommunications
network, in accordance with the legislation of the Republic of Latvia the
company was granted exclusive rights to provide basic telecommunications
network services till 2013. Presumably monopoly rights will expire already by
2003. These changes are determined by the development trends in the
telecommunications industry, the agreement with the World Trade Organisation
and Directives of the European Union, aimed at adjustment of the national
legislation to the EU standards.
The seventh year of telecommunications network modernisation has come
to an end. Lattelekom has invested LVL 351 million in network development
since 1994. Fibre optic trunk network covering all the country has been built,
with international connections to Sweden, Estonia, Lithuania and Belarus.
A total of 16 modern digital exchanges have been installed in Riga and districts
of Latvia. Two out of them provide international communications. With the
installation of RSUs (remote subscriber units), the digital network has become
available in all 26 district centres of Latvia. Currently over one half of subscriber
lines are connected to the digital network. Nearly all Lattelekom subscribers can
make national and international calls without operator’s assistance. The waiting
list for telephone line installation was reduced from 177 thousand in 1990 to
19 thousand by the end of 2000.
Data transmission network covering all the country has been built and is being
further developed. Data transmission network is being successfully used by
financial institutions, banks and information service providers. Lattelekom has
also established 4 Call Centres that meet the requirements of the modern world.
Call Centres are located in Riga, Cesis, Liepaja and Rezekne. Services of these
Call Centres are available to customers throughout Latvia.
Lately, Lattelekom started offering manifold data transmission services and
Internet connections using the latest technologies.
Work on telecommunications network modernisation is still ongoing and modern
telecommunications services are becoming available to increasingly more people
in Latvia, offering the same opportunities like in the most of industrialised
Western countries are being offered. Large capital investments and successful
co-operation among foreign and Latvian experts has allowed in a comparatively
short time to substantially reduce the big gap between what we had only ten years
ago and what the so important industry for the national economy has become
now.
More information about the company’s operational results, telecommunications
modernisation process, revenue, operational costs, capital expenditure and cash
flow can be found further in the company’s Annual Report for 2000.
The Lattelekom SIA Annual Report for 2000 is published in Latvian and English.
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h i g h l i g h t s o f
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• OVER ONE HALF of telephone lines connected to the digital network
• All telephone lines connected to the digital network in Jelgava — the fourth largest city in Latvia
• Digital exchange RIGA–8 started its operation
• A new Call Centre established in Rezekne
• 36 new services introduced in the market
• Fast data transmission service ULTRA DSL based on ADSL technology
implemented simultaneously with Western countries
• Internet dial–up TARIFFS REDUCED
• Considerable growth in the number of the Internet users achieved with the development
and implementation of the INTERNET DEVELOPMENT PROGRAMME
• Lattelekom is the first telecommunications company in the
Baltic States to offer CUSTOMER SERVICE BY PHONE
• The first daughter company SIA Lattelekom Sakaru Sistémas established
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4
O U R
V I S I O N

To be the leader in
telecommunications and integrated
information technologies
in Latvia
It means:
• to be the company developing the national telecommunications
infrastructure towards an information society
• to be the number one choice to customers in service provision
• to be a reliable business partner
• to be a beneficial company for the shareholders
• to be a good employer
• to be a respectable enterprise
5

President’s
s t a t e m e n t
2000 was a successful year in
Lattelekom’s operations.
Alongside further
modernisation and
development of the
telecommunications
network, Lattelekom
contributed to the
growth of the
national economy and
proved company’s
stability and growth
presenting good
operational and
financial results.
6
Lattelekom invested over LVL 43.8 million in the
modernisation of the national telecommunications and
data transmission network infrastructure. Thus, the
cumulative investment in modernisation since 1994 has
exceeded LVL 351 million. In the same way as in previous
years one of the main tasks under the modernisation plan
was digitalisation of the national fixed telecommunications
network reaching 52.2% by the end of 2000.
Development trends in global telecommunications are
characterised by accelerating proportion of information
technology services. This trend is also prevailing in Latvia,
therefore Lattelekom offered its customers a number of new
information technology and Internet services in 2000.
Lattelekom experts with their knowledge and experience have
facilitated the formation and perfection of a sound regulatory
environment in the telecommunications industry largely contributing
to elaboration of draft laws on Utility Regulators and
Telecommunications. These laws will have a direct impact on the
operations of the Company and the telecommunications industry.
One of the principal tasks for Lattelekom in the review period was rebalancing of
the tariff basket. Lattelekom’s advisory co–operation with the Latvian Privatisation
Agency, Transport Ministry and Telecommunications Tariff Council was continued to
further address telecommunications issues.
Through high level performance at the implementation of telecommunications and information
technology provision project for the needs of the General Meeting of the
Councillors of the European Bank for Reconstruction and Development in 2000,
Lattelekom proved its ability to successfully manage large scale international orders in
co–operation with the Company’s partners. Lattelekom’s contribution to the project was
highly appreciated by the EBRD management and employees.
6

Lattelekom continued collaboration initiated in previous years with telecommunications
operators in our neighbouring countries — Lithuania, Estonia and Russia.
Lattelekom as one of the largest companies in Latvia maintained its position as one of the
biggest among taxpayers in the country. In 2000, the Company paid in taxes over
LVL 28 million.
In 2000, Lattelekom took an active part in tackling social problems of the society and made
an important contribution to the support of cultural events and sports activities.
In the review period Lattelekom’s senior management and employees under the guidance
of the CEO Juhani Vienola continued the implementation of the company’s management
and process reorganisation programme. One of the major programme tasks was to proceed
with the improvement of the company’s support to customer interests and demands. The
application of this programme will help Lattelekom to become a competitive company in
the market of telecommunications services.
The Board of Directors focused their attention on the company’s strategic development
targets and made a great effort in promoting the company’s progress considering economic
and political situation in the country. I would like to thank all the members of the Board
of Directors, who in the review period, under very difficult circumstances, manifested
their high professionalism and sense of responsibility. I would also like to express my
gratitude to Arvo Kukko for his contribution to the work of the Board of Directors. Arvo
Kukko resigned in 2000.
Lattelekom has set new and ambitious tasks for 2001. The greatest effort will be focused
on further modernisation of the national telecommunications network, the approaching liberalisation
of the telecommunications services market and implementation of new services
corresponding to international standards. It will require intensive and responsible work
from Lattelekom’s Board of Directors, senior management and employees to meet the
expectations of our customers and the company’s owners. I believe that with joint efforts
we will succeed in performing our duties and accomplishing the set tasks.
Gundars Strautmanis
President and Chairman of Lattelekom Board of Directors
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Chief Executive Officer’s
s t a t e m e n t
For Lattelekom, 2000
was a successful year
as the Company
continued to follow
the route of
steady growth
and expertly
planned
business
development
according to
the rising demand
of quality services in
the constantly changing
Latvian market environment.
8
In its seventh year of operation,
the Company’s main task remained
network modernisation, gradually replacing the old
analogue network with up-to-date digital one. Modernisation of
the telephone network was conducted throughout Latvia, including cities and rural areas
(Riga and District, Daugavpils, Liepaja, Jelgava and Kuldiga Districts), to ensure
telephone users’ access to quality basic services. This is easily characterised by
certain facts: in the report period, 55,260 telephone lines were cut over to digital network,
reaching the total amount of digital coverage to 52.2% of the fixed telecommunications
network. Due to successful implementation of modernisation projects, Jelgava has become
the biggest city where all telephone lines are connected to the digital network.
Year 2000 saw Lattelekom introducing several advanced services, about which positive
feedback has already been received from their users – businesses and residential
customers. Among these services there are such hi-tech solutions as Ultra DSL,
Virtual Mail, unified business networks for voice and data transmission, E-Call and Fast
Data Net, as well as a range of value-added services now available to users of ordinary
telephone-sets and pay-phones (e.g. Prepaid Calling Card, credit card payments for calls
from pay-phones, etc.).
8

Another business area that received special attention from the Company in the past twelve
months was the development of Internet services. The Internet connection package,
ApolloDisk, has gained popularity among residential customers, while businesses located
in Riga have favoured Apollo connections via Ultra DSL channels. In August of 2000, a
wide and interactive Apollo portal was launched, and it has since become an often-visited
medium for news and information related to a variety of fields in Latvia and the world.
During the second half of the year, Lattelekom took an active part implementing
the national Information Society project. The first achievements in this direction are
associated with the establishment of a unified information network for institutions of the
local government in the town and district of Saldus.
Looking back at other achievements in 2000, the contribution and dedication of
Lattelekom employees must be mentioned while ensuring telecommunications, data
transmission and IT services for the General Meeting of EBRD Councillors held in Riga
last spring. A uniform solution was developed and a project was implemented to ensure the
functionality of voice and data transmission network by interconnecting four meeting
locations in Riga. This may be well regarded as Lattelekom’s first major showcase
of the Company’s development towards the converged services, where voice and data
transmission go hand in hand with IT solutions.
Acknowledging the necessity of a better performance, Lattelekom made a few more steps
in restructuring the organization so that our customers can get all attention they deserve.
In response to customer requirements, the Company elaborated and introduced several
development programmes. By means of implementing those programmes, the development
and delivery service was considerably improved. According to the statistics, all services
provided by Lattelekom are now delivered faster and more accurately than in the previous
years. This has been possible due to introduction of new and more convenient types of
delivery, as well as by optimising the organisation.
In the first half of the year, Lattelekom became the first Baltic telecommunications
operator to introduce customer services by telephone. Our toll-free Call Centre 8008040
accepts service orders and responds to service, billing and delivery queries by telephone
daily. The number of calls answered by our operators at this Call Centre has been growing
steadily every month. To support the increasing popularity of our Call Centres, the
Company opened a new one with 39 workstations in the city of Rezekne. With the launch
of our fourth Call Centre, Lattelekom operators are now able to answer more calls from
customers, the average number of which last year was about 30,000 per day.
In order to take better care of customer conveniences while handling various types of
telecommunications equipment, the first Lattelekom Daughter Company was founded in
September now operating under the name of Lattelekom Sakaru Sistémas, which offers,
installs and maintains various customer premises equipment.
Such achievements in the Company’s operations would not have been possible without
careful financial planning and investment policy. In 2000, the total investment in
modernising the Latvian telecommunications infrastructure amounted up to LVL 34.6
million. However, the Company was operating in the situation of unchanging tariff basket,
thus the revenue increase by 7% (LVL 8.9 million), compared to 1999, continued to show
its efficiency and stability.
With all the success attained by Lattelekom over the past twelve months, I am confident
that the Company will continue to accept more challenges to better its performance, and,
likewise, introduce a number of new services to support the ever-growing demand of
Latvia’s businesses and population in general.
Leena Suhonen
Chief Executive Officer of Lattelekom
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10
b o a r d o f
d i r e c t o r s
Professor Ivars Bi¬inskis
currently leads a research team at the
Institute of Electronics and Computer
Sciences in Riga, which is active in
modern telecommunications theory and
techniques. He is a full member of the
Latvian Academy of Sciences and
the author of more than 160 scientific
and technical publications.
Dr Bi¬inskis joined the Lattelekom
Board in 1994.
Christer Nykopp
joined the Board in 1998. He has been
working with Sonera since 1982 as a
Frequency Spectrum Manager, and
later was appointed Chief Engineer,
head of the Radio Research Office.
Since 1986 he has been working with
the international business of Telecom
Finland and, after 1990, leading important
acquisitions of telecommunications
assets abroad and participating in their
management.
Timo Sakari Virtanen
joined the Board in 2000.
He is currently Director of the
Back-Office since 2000 responsible
for fixed network operating
companies in the Baltic countries.
In 1998 - 1999 he was Managing
Director of a Sonera’s joint venture
in Germany. Before that he has
held several other managerial
positions with Sonera.
Viktors Kulbergs
joined the Board in 1998. He is the
President and CEO of SIA Auto Riga
and President of SIA Auto Palette.
Mr. Kulbergs is an automotive
engineer. He is also a Member of the
Advisory Council, Latvijas Unibanka,
Member of the Council at SIA Air
Baltic, SIA House of Prince Latvia and
the President of Latvian Chamber of
Trade and Commerce.
Indra Såmîte
is a Member of the Riga City Council,
Executive Vice President of the private
pension fund Unipensija and a
Member of the Board of the Norway-
Latvia Business Development Fund.
Mrs Såmîte is a former
Minister of Finance and Deputy in the
Latvian Parliament.
Guntis Bérziñß
has been on the Board of Lattelekom
since 1993. Before becoming the State
Trustee to the Company in 1994, he
was the Director of the
Communications Department at the
Ministry of Transport, following a long
career in telecommunications in
Australia and the United Kingdom.

11
2 0 0 0
Gundars Strautmanis
is the President of Lattelekom and
Chairman of the Board of Directors
on which he has been a member since
the foundation of the company.
Mr Strautmanis is a Professor at Riga
Technical University, and a Board
Director of Latvijas Mobilais Telefons,
the Norway-Latvia Business
Development Fund, a Presidium
member of Latvian Chamber of Trade
and Commerce, a member of
Supervisory Council of Latvijas
Unibanka and an honorary
member of Junior Achievement-Latvia.
Valdis Lokenbahs
joined the Board in 1997.
He is the President and Chairman of
the Board of the company Dati, which
is the major software house in the
Baltic States.
Tapani Holopainen
joined the Board in 1999. He has been
working with Sonera since 1974 and is
currently a Vice President, responsible
for Baltic Operations. Mr Holopainen
is also a Board Director of Lietuvos
Telekomas and a Member of the
Supervisory Council of
Eesti Telekom and EMT.
Kari Oittinen
joined the Board in 1999.
He is a Vice President in Sonera
Capital, a unit responsible for the
Investment Portfolio of Sonera Ltd.
Mr. Oittinen has previously worked
for Monette Kabel- und Elektrowerk
GmbH as a Managing Director and
for Nokia Cable as a Factory Director.
He was Managing Director of TILTS
in 1994 and has been working for
Sonera since the same year.
He is acting also as Board Member
of SIA Latvijas Mobilais Telefons,
Libancell SAL, Turkcell A.S. and
Fintur Holding B.V..
Douglass Gustafson
is the European representative of the
International Finance Corporation.
He has spent his entire career with the
World Bank and IFC. He is a Board
Member of several financial and
industrial companies, which are active
in Eastern Europe.

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l a t t e l e k o m
e q u i t y s t r u c t u r e
Republic
of Latvia
51%
L A T T E L E K O M
til ts
communications
49%
sonera
90%
International
Finance
Corporation
10%

l a t t e l e k o m
o p e r a t i o n a l
r e v i e w
13

14
C U S T O M E R
S E R V I C E
Lattelekom’s objective is to
be the leading telecommunications
and integrated information
technology provider in Latvia.
To achieve this Lattelekom
had to continue its development as
a customer–oriented company,
therefore considerable
changes have been made
in customer service
strategy in 2000.
Alongside introduction of
customer service by
telephone, the company
started to offer its
customers a full range
of integrated telecommunications
and information
technology services
and solutions.
Besides, Lattelekom customers can now receive bills by e–mail.
The company continued to improve service quality at
Customer Service Centres thoroughly repairing
Customer Service Centre premises in Rezekne, Daugavpils,
Jelgava, Liepaja, Balvi and Aluksne.
More than before Lattelekom is focusing its efforts
on the provision of information to customers not only
about services provided by the company itself,
but also about the development
trends in the industry.
Customer service by telephone. In the year under review, with the
establishment of Customer Service 8008040, Lattelekom became the first
telecommunications company in the Baltic States offering customer service
by telephone.
Customer service 8008040 is available free of charge. It provides
information about telecommunications services offered by Lattelekom
and registers service applications, including the ones for telephone line
implementation, and their initiation.
Reorganisation of the company was needed to achieve this, and it took place in the first
half of 2000.
Integrated solutions. Lattelekom offers integrated information technology and
telecommunications solutions to companies and state institutions, and provides various
public events with telecommunications services. Using integrated solutions Lattelekom
also participates in various projects as part of information society development.
Following consultation with customers and identification of their needs, integrated
solutions are developed to offer, implement and maintain a set of most efficient and
optimal information technologies and telecommunications services meeting the specific
customer needs. Integrated solutions involve external and internal communications
technologies, company management and billing systems, computerised workstations and
information technology infrastructure. Thus, with the help of integrated solutions,
the company’s resources are being utilised most efficiently and involvement with a
number of firms in search of the best technical solution is no longer necessary. This is in
the hands of Lattelekom experts, who simultaneously ensure service quality control around
the clock.

Proof of the success of integrated solutions
concept is the provision of information
technology and telecommunications services
for the needs of EBRD General
Meeting, which took place in May in Riga,
live broadcast of the 8 th Latvian
Children’s Song and Dance Festival on the
Internet, which was the first project of the
kind in Latvia, and participation in the
implementation of information society
project in Jaunpils, Saldus district,
and in Kuldiga district.
Information to customers.
During the review period,
Lattelekom showed more
concern about the
provision of information
to customers on the
company’s operations.
To achieve this, three
issues of the magazine
Tonis have been published.
The magazine is mainly
delivered to and aimed at
companies and state institutions.
The magazine presents information about
Lattelekom services, the progress of
telecommunications network modernisation,
and articles on possibilities offered
by modern telecommunications and
novelties in the world. Tonis has already gained customer approval and presumably in the
future it will be released quarterly.
Once in two months, all Lattelekom subscribers receive a brochure Hallo,
which accompanies the telephone bill. The brochure offers information about all activities
of interest to customers. Additional information is also available on the other side of the
bill, as before.
In late 2000, Lattelekom’s web site www.lattelekom.lv was given a new design and is
accessible to everyone. The website offers information about the company, its history,
services and tariffs. Also, an interactive link with the visitors is being maintained on the
Internet website.
Improvement of process management. In order to continue to develop
customer–oriented operations and to improve company’s performance, it is
necessary for Lattelekom to assess its efficiency and take measures to better it.
Process development has been one of the top priorities to Lattelekom for
several years. It serves to improve the company’s efficiency. In 2000, The First
Choice Programme of the process development was successfully implemented,
merging five projects with a view to evolve management system and
customer–oriented processes.
In the process of The First Choice implementation following the new customer
service strategy, two relevant processes were considerably improved — Bring
Offers to Market and Sell and Deliver Services. With the improvement of the
management system, administration of processes and development projects
was modernised.
Process development has resulted in a considerable reduction of service delivery times,
now delivering voice services twice as quickly than earlier, and the improvement of delivery
accuracy. On the basis of programme practice in the company several development
programmes were introduced allowing to administer development projects more successfully,
and to use the company's resources more rationally giving financial benefits that
could be measured in hundreds of thousands of lats, and increasing customer satisfaction
with the received services alongside customer loyalty towards Lattelekom.
15

Lattelekom is the biggest
telecommunications company
in Latvia, and under the
legislation of the Republic of Latvia
the company enjoys exclusive
rights to provide basic
telecommunications
services.
At the end of 2000,
the number of Lattelekom
telephone subscriber lines
increased slightly,
reaching 734,693 lines.
82% of them were
residential customer lines,
and 18% — telephone
lines of companies,
state institutions and
organisations. Compared to
1999, the total number of telephone
lines has increased by 3,166.
Due to the introduction of
new technologies the number of
telephone lines has become steady,
which is a positive trend.
On 31 December 2000,
there were 31 telephone lines per
100 inhabitants in Latvia,
which is by 0.8 more compared
to the previous year.
16
V O I C E
S E R V I C E S
Over one half of all telephone lines (52.2%), have been connected to the digital
network offering customers the basic telecommunications services and a number of
value added services.
In 2000, the number of people waiting for telephone installation slightly dropped,
now totalling in 19,197. For comparison — in 1994, when modernisation of fixed
telecommunications network in Latvia was started, there were around 131 thousand
potential customers on the waiting list.
With a view to improve service quality of the analogue network in the shortest
timescales possible, Lattelekom carried out technical modernisation of the
analogue network alongside the network digitalisation. Currently, customers
can place national and international calls without operator’s assistance from
722,601 telephone lines. Modernisation of the analogue network has also
enabled wider usage of telephone lines for data transmission, e.g., while
surfing the web.
Due to the increasing importance of data transmission services in the
modern world, presumably in the future more telephone lines will be
adjusted for the provision of more advanced services, using ADSL and
ISDN possibilities.
A telephone line can be used not only to make local, national and international
calls, receive and deliver facsimiles and use the Internet via dial–up, but also to
receive other value added services, e.g., Voice Mail, Calling Card, which make
everyday life easier and allow to appreciate the benefits of modern telecommunications.
Voice Mail services. In 2000, Lattelekom continued to evolve Voice Mail services
implementing such services as Fax Mail, Unified Voice and Fax Mail, Virtual Mail, and
Caller Identification. The number of Voice Mail service users has almost doubled.
Lattelekom has been offering digital network service Voice Mail since mid–1999.
The popularity of the service, being free of charge and operating on the principle of an
answering machine, is still growing among the company’s customers. Besides, customers
do not have to buy special equipment for recording messages. Users of Voice Mail can
retrieve voice messages even if they were not at home or the telephone line was busy.
Voice messages can be retrieved not only from a customer’s telephone set, but also from
any other digital network telephone set with tone dialling, as well as from payphones and
mobile phones.
Services Fax Mail and Unified Voice and Fax Mail, introduced in 2000, allow receiving
and delivering of voice and fax messages. Fax messages received can be printed both from
the fax machine connected to the customer’s telephone line and from other fax machines,
provided they are connected to a digital telephone line.
In May 2000, services Voice Mail and Unified Voice and Fax Mail were supplemented
with additional mailboxes. It is a convenient and beneficial feature if several people, e.g.,
a family, use these services on one digital telephone line.
In November 2000, Lattelekom introduced two more new services. The service Virtual
Mail is designated for customers who are neither fixed, nor mobile telephone subscribers.

However, the existing telephone line
subscribers can also use the service.
Virtual Mail is a voice mailbox with its
own telephone number without any
geographical attachment.
The other innovation is Caller
Identification. If subscribing to the service
Caller Identification, users of services
Voice Mail, Fax Mail, Unified Voice and
Fax Mail and Virtual Mail get an
announcement about the telephone number
the message has arrived from prior to
retrieval of the message.
Pre-paid calling card. The development
of telecommunications network at the end
of 2000 allowed implementation of yet
another service, which gave customers the
possibility to use telecommunications
services more freely. Pre–paid Calling
Card, or simply Calling Card, allows
making calls from any fixed telephone
with tone dialling in Latvia or abroad,
including payphones. The main benefit
of Calling Card is that payment for
calls is settled by the holder of the card
and not the telephone line subscriber as telecommunications
services are paid for upon the purchase of Calling Card.
Also, these calls are absent from the bill received by the
actual telephone subscriber.
Calling Cards can also be used for calling mobile telephone
users, Information or Entertainment Lines and people abroad.
These calls can be made even if access to these lines is barred
for the relevant telephone line. Besides, international calls from
Calling Cards are by 10% cheaper.
In 2000, Calling Cards with face value of LVL 3 and LVL 10 were
available. Presumably, the service will be given a wider functionality in 2001.
Telephone+. Services of this group have been available to Lattelekom digital
network subscribers throughout Latvia since 1997. Telephone+ comprises three different
call forwarding services, Call Waiting, Password, Password Plus, Please, do not disturb!,
Reminder and Short Telephone Number. Call forwarding services and the service
Call Waiting are the most widely used.
Services Fixed Forwarding and Announcement of New Telephone Numbers are convenient
for Lattelekom customers who are changing apartments and cannot keep the former
telephone line.
17

18
Free Phone 800. Since 1997 Lattelekom has been offering the service Free Phone 800
to companies.
107 companies had subscribed to the service Free Phone 800 by the end of 2000.
The number of free phone lines has grown by 46%, while the number of
call minutes to 800 series numbers has increased by 38%.
The service Free Phone is essential to companies, as the service is a good
tool to enhance their customer service both for the receipt of orders and the
provision of information. The service Free Phone helps companies maintain
a direct link with their customers and to improve their service quality.
The service Free Phone 800 is widely used by taxi service firms, banks,
social and state health care establishments, Latvian food manufacturers and
other enterprises and establishments. Many legal entities use the service to
provide their customers with information free of charge, and learn about
customer needs and views.
International Free Phone. Companies operating in international markets are offered
the service International Free Phone providing allocation of a free telephone number in
the country of customer’s choice.
Information and Entertainment Lines. Since 1997 Lattelekom has been offering
service providers additional premium rate services on the basis of Information Line (900
series numbers) and Entertainment Line (909 series numbers). Subscribers of these
telephone lines can choose from the tariffs offered by Lattelekom the most appropriate
charge for calls which is higher than the charge for national calls, corresponding to the
specific character of their services. Lattelekom supports service providers with
corresponding technical set–up.
These services help people to receive a variety of information and tips without leaving
home or office.
On the basis of 900 series services, Lattelekom has established such services as Internet
Dial–Up 900 and Charity Line 900. These services have made premium rate services much
more popular. The service Charity Line 900 allows the usage of 900 series numbers for
charity purposes.
Lattelekom offers discounts and tariff plans. Lattelekom offers 30% discounts
for all calls on working day evenings, and 75% discounts on Saturdays, Sundays and state
holidays.
Lattelekom also offers several tariff plans. Tariff plan Choice No. 1 is convenient for
customers not exceeding the limit of 50 minutes a month on local calls. Tariff plan
Public is devised for customers spending over 67 minutes a month on calls to mobile
telephone subscribers.
The tariff plan Profi is aimed at customers spending over 450 minutes a month on calls to
mobile telephone subscribers and at customers with PABX connected to the Lattelekom
network via ISDN30 or R2CAS connections.
Lattelekom offers a possibility to bar calls to premium rate numbers.
To enable customers to bar outgoing calls to Information Lines (900 series numbers)
or Entertainment Lines (909 series numbers), if necessary, Lattelekom offers the service
Call Barring to 909 Line Numbers or Call Barring to 900/909 Line Numbers both to
digital and analogue network subscribers throughout Latvia.

D A T A T R A N S M I S S I O N
S E R V I C E S
2000 brought change in the
development of Lattelekom.
Keeping abreast with the latest
trends of global economy,
information technologies and
telecommunications development,
the company has turned from a
simple voice service provider into
a provider of modern integrated
telecommunications and
information technology services.
The development of data
transmission and storage
services allows speaking about
the creation of an appropriate
environment for a new economy.
It brings benefits not only to
the population but also to
companies, as the new
economy opens more
opportunities for the
usage of the Internet,
telecommunications and
information technologies.
Year 2000 was a significant one in the development
of Lattelekom with several substantial achievements in the field
of data transmission that were introduced within the framework of the
Company’s Internet and IP platform development programme.
Five new services were introduced — Ultra DSL, Fast Data Net, E–Call,
Service Level Agreement (SLA), Unified Data Business Network. Internet
dial–up tariffs were also considerably reduced.
A number of data services has been available in the market
for several years enjoying sound customer loyalty.
They serve as a basis for the establishment of new companies
and expansion of the existing ones. Demand for these services
tends to grow every year.
The most relevant projects in 2001 are fast Internet
connection provision to residential customers — establishment
of Home DSL — and Datorcentrs. Datorcentrs is a complex
service for customers and it involves customer data storage,
maintenance and security.
Ultra DSL. As promised in late 1999, Lattelekom launched a new fast data
transmission service Ultra DSL in the market in June 2000. Using Ultra DSL,
Lattelekom offers fast permanent Internet connection with download rate up to
2 megabits per second. The service is based on the ADSL technology that was
first used by North American telecommunications companies two years ago.
The technology was introduced in Latvia at the same time as in Western European
countries.
The ADSL (asymmetric digital subscriber line) technology for broadband data transmission
with a rate of up to 2 megabits per second allows the usage of regular copper
telephone lines, and simultaneous data transmission and usage of a telephone line.
At the end of 2000, Ultra DSL was available to over 60% of population in Riga. In 2001,
the Ultra DSL service will become available to Lattelekom subscribers outside Riga.
Within half a year after the launch of the Ultra DSL service, almost 300 subscribers use
the benefits of the new technology. The service is particularly advantageous to medium
and small businesses.
At the end of 2000, Lattelekom signed agreements with several Internet service providers
in Latvia for distribution of Ultra DSL.
In September 2000, Ultra DSL trial station was opened at Lattelekom Customer Service
Centre premises in Riga. The trial station was at the disposal of everyone willing to make
sure that the latest and most modern telecommunications technologies are of high quality,
simple and available also to residential customers.
19

Internet dial-up tariffs reduced. In
early autumn of 2000, Lattelekom reduced
tariffs for the service Internet dial–up 900.
Tariffs were considerably reduced on
weekends, state holidays and during
evening hours, and the charge per minute
related to time spent in the Internet.
Contracts were signed with several
Internet service providers in Latvia on the
use of the new tariff plan.
Thanks to this dial–up tariff policy, the
number of Internet dial–up users in Latvia
increased by 29% during the last three
months of 2000, and the total time spent in
the Internet using dial–up service
increased by 43%.
Service Level Agreement (SLA).
Reliable data transmission is one of the
primary necessities for businesses.
Lattelekom has developed a new service
guaranteeing extra security for the existing
data transmission services — Service Level
Agreement (SLA)
20
The Service Level Agreement provides a higher maintenance level for services that
are being provided using digital leased lines. The service ensures shorter fault clearance
time than provided by ordinary agreement, and if fault clearance time is exceeded,
the customer receives compensation.
Fast Data Net. During the period under review, Lattelekom initiated the Fast Data Net
service to companies requiring data transmission of large volumes. This technology
provides data transmission with a rate of up to 1 gigabit per second, which presently
is the highest one available in Latvia. GigaEthernet, ATM technology and fibre optic cable
network is being used to provide this service.
Unified Data Business Network. In late 2000, Lattelekom was the first
telecommunications company in the Baltic States to develop and offer customers a data
transmission service, which is one of the milestones of the new
economy. The service Unified Data Business Network is a
virtual private data transmission network providing customers
transmission of information at the level of Internet
Protocol (IP). The service was created on the basis of
Lattelekom public data transmission network providing
equivalent quality and security to private networks as it
ensures constant control of its operation.
Internets Frame Relay
Internets
darbinieks
årzemés
VIENOTAIS
aitas datu tîkls BIZNESA
TÈKLS
Åtrgaitas dat
darbinieki
måjås
biznesa
klienti
klients
klienti
årzemés
darbinieki
pie klienta
DSL ISDN
Mobilais tålrunis

E-Call. In October 2000, Lattelekom introduced the service E–Call for owners of the
Internet home page. Subscription to E–Call enables home page visitors to make calls to a
telephone number indicated by the service subscriber from any computer in the world.
The service E–Call is convenient for companies using the Internet home page a lot to offer
their goods and services and to co–operate with their customers.
Additional ISDN services introduced. Lattelekom has been offering its customers
ISDN services for the third year on end. The number of service users doubled in 2000.
In April 2000, a new ISDN group service ISDN 2+ DATI was introduced, the usage of
which does not require the ISDN card or a modem for connection to the Internet.
ISDN is a data and voice transmission solution, convenient for literally all businesses.
ISDN services allow more efficient use of company resources, reduction of their
expenses for telecommunications services and the provision of high quality
communications and data transmission at 128 kbit/s. One ISDN line can handle
up to eight ISDN equipment units — telephone sets, fax machines and a
computer for browsing the Internet. ISDN provides two simultaneous
connections. It means that simultaneous use of the Internet or fax machine
and a telephone is possible.
Currently, Lattelekom offers three ISDN2 group services — ISDN 2,
ISDN 2+, ISDN 2+ DATI and the service ISDN 30 enabling large
companies to have 30 simultaneous telephone calls, connecting of a PABX,
allocating up to 100 telephone numbers and performing data transmission
with a rate of up to 2 megabits per second.
Digital leased lines. Lattelekom offers digital leased lines for data
transmission ensuring data transmission rate of up to 2 megabits per second.
Lattelekom uses Alcatel data transmission systems in providing this service. Digital leased
lines are convenient for customers demanding high quality telecommunications services
and requiring interconnection of computer networks and telecommunications equipment
located at various places, including abroad.
The demand for digital leased lines grew by 44% in 2000.
Lan to LAN. Lattelekom has been offering the LAN to LAN service for several years now.
The service involves connection of computer networks with data transmission rate of up to
2 megabits per second. Besides, the service offers also internal voice circuits. Thus
telephone calls between branches of a company can be made for free. LAN to LAN
performs interconnection of local area computer networks around the clock and it takes
only one PABX to maintain all branches. The service allows reducing company’s
expenses for telecommunications services.
The number of LAN to LAN connections increased by 2.5 times in 2000.
Frame Relay. The Frame Relay service gives possibilities to customers to efficiently
organise information exchange with remote structural units and business partners.
The service enables to link computer networks and several data processing equipment
units into one network. Customers, having chosen this service, are provided with a
connection to data transmission network, virtual connections among several connection
points and permanent service quality control.
The number of Frame Relay connections increased by 2.1 times in 2000.
X.25. X.25 is a package switching technology for high quality data transmission,
and it operates in over 80 countries. Customers use this service for data exchange with
business partners abroad, and for remote control of bank accounts. Customers of
Lattelekom service X.25 are banks, commercial and logistics companies, and foreign
embassies.
The number of X.25 connections has grown by 1.4 times in 2000.
21

A P O L L O I N T E R N E T
S E R V I C E S
The department of
Lattelekom Apollo Internet
services was established in 1997.
Apollo Internet is operating
in a competitive environment and
currently is one of the leading
Internet service providers in Latvia.
Apollo provides Internet services
throughout the country.
22
All services are based on the fixed data transmission
network of Lattelekom.
Apollo has independent international connections guaranteeing
high quality Internet connections and the use of any service
package by customer’s choice.
Year 2000 was fruitful in the operations of Lattelekom’s Internet
service provider Apollo. Usage of the new Ultra DSL technology,
Apollo Disc and other possibilities raised the number of the
Internet connection types. Tariffs were significantly reduced
for the users of Apollo Internet dial–up and permanent connection.
Apollo created the portal www.apollo.lv, thus declaring
themselves in the environment of electronic media.
Dial-up Apollo 9008080 tariffs reduced. Apollo was the first Internet
service provider offering lower tariffs to dial–up users. Tariffs were
substantially reduced on weekends, state holidays and during evening hours,
and discounts were offered related to time spent in the Internet.
Dial–up Apollo 9008080 enables Internet usage without registration and
contractual obligations.
ApolloDisc. In September 2000, a new Internet dial–up service Apollo Disc was
launched in the market. The service is meant for beginners in the Internet. The Apollo Disc
includes Internet dial–up connection, Internet software CD and user’s manual. Apollo Disc
provides dial–up access for one month, which can be extended using the Apollo Card.
ApolloLink. Apollo offers the dial–up service Apollo Link to customers using the
Internet on a regular basis. If Apollo Link is used continuously, the user can enjoy a
gradual reduction of the subscription fee.
In 2000, the number of Apollo dial–up users has grown by 108%, mainly owing to the
new tariffs, now exceeding 13 thousand. Time spent in the Internet by dial–up users has
increased by 128%, reaching 6.5 million minutes in December 2000.

Apollo Ultra connections. Apollo is a leader in sales of Ultra DSL Internet
connections in the market. Apollo Ultra is a permanent Internet connection on the basis of
the new fast data transmission technology ADSL. Apollo offers installation of a permanent
connection to the Internet at a rate of up to 2 Mbit/s. At present these connections are
convenient for small and medium–sized companies. Presumably, in 2001 the Apollo Ultra
service will be available also to residential customers.
Apollo offers various Ultra connections depending on the download speed required by the
customer and the necessity to use local or foreign Internet resources.
Other permanent Internet connections. Apollo also offers other permanent
Internet connections: Apollo Standard Permanent Connection to customers with
exceptionally high demands, Apollo Economy Connection to customers who presently
cannot afford the installation of the Apollo Ultra service, and Apollo for Schools, which is
an especially convenient offer for schools.
These services provide customers unlimited access to the Internet dependent on customer
demands with data transmission rate of up to 10 megabits per second.
Apollo services allow customers to open e–mail addresses, create home pages and
provide domains in the global network. Apollo Help Line offers advice by phone or by
e–mail free of charge.
Apollo portal. The Apollo portal was opened at the end of
August of 2000. Apollo portal differs from other Latvian portals
with unique analytical articles, comments and interviews.
However, such traditional portal elements as browsers, free
e–mail system, interactive discussions, latest news, etc.,
can be also found in the Apollo portal. The portal is proud of
its weekly interactive video–chats with famous people in
Latvia.
The number of Apollo portal visitors has tripled since its
establishment. At the end of 2000, the portal was visited by
more than 6,000 Internet users daily spending there over 13
minutes in average.
23

24
C A L L C E N T R E
S E R V I C E S
In 2000, Lattelekom
Call Centres expanded
their operations and with the
implementation of new technologies
continued their modernisation.
In October, the fourth Lattelekom
Call Centre was opened, this time in
Rezekne. Its operations will
positively tackle employment
problems in the region and
will facilitate the
development of the
infrastructure. The other
Call Centres are located
in Riga, Cesis and
Liepaja. Services of all
four Call Centres are
available throughout
Latvia.
During the review period the importance of Call Centres
in the field of customer service increased, as Lattelekom began
customer service by phone. New services offered by the
Directory Inquiry Service 118 were introduced and a
co–operation agreement was signed with the firm Interinfo Latvijå
on the establishment of the largest information network
118 Information Services.
In 2000, Lattelekom handed over all the functions relating
to receipt and delivery of telegrams to
BOVAS Latvijas Pasts.
The Directory Inquiry Service 118. The Directory Inquiry Service 118
is one of the most popular inquiry services in Latvia. Continuous development
of the Directory Inquiry Service, origination of new services, introduction of
modern technologies, expansion of the database and close co–operation with various
partners in the field is the key to 118 success.
In May 2000, an agreement was signed with the firm Interinfo Latvijå on the
establishment of the information network 118 Information Services. The information
network allows residents to obtain all information they need from anywhere using fixed
telephones, mobile telephones, Internet or telephone directories.
A number of telephone directories were released in 2000 in co–operation with the firm
Interinfo Latvijå — Vidzeme+ 1999/2000, Kurzeme+ 1999/2000, 118 Telephone Directory
Riga 2000/2001, 118 Telephone Directory Zemgale 2000/2001 and 118 Telephone
Directory Latgale 2000/2001. The telephone directories were created using information
available in the database of the Directory Inquiry Service 118, and the directories contain
information on residential and business telephone numbers in the respective regions.
In December 2000, a co–operation agreement was signed with AS Preses nams
offering the residents of Latvia the possibility to subscribe to newspapers published by the
publishing house via the Directory Inquiry Service 118. The agreement concluded with the
travel agency Türisms un informåcija is beneficial to customers as it allows booking trips,
ordering tickets, etc., via the Directory Inquiry Service 118. With a view to expand the 118
database, an agreement with VAS Latvijas Dzelzce§ (Latvian Railways) was signed providing
that time tables and the relevant changes in railway traffic will be submitted to the
118 database.

In 2000, Call Centres introduced several
new services — Telemarketing, 118 Direct
Connection and White Pages. The service
Telemarketing involves summary of
incoming calls and making calls with a
defined target at the request of a customer
using Lattelekom Call Centre resources.
The service offers to carry out various
activities, e.g., market research by phone,
sales of goods and services by phone,
improvement of customer care to firms and
companies with the assistance of
Lattelekom Call Centres. The service
118 Direct Connection allows customers to
learn the necessary telephone numbers and
to have their calls put through to the
desired number immediately. White Pages
allow residential customers to provide
additional information, e.g., a
mobile telephone number, an
e–mail address, for the entry
into the database.
During the period under
review, 118 made available
inquiries in the form of short
messages to mobile telephone
users and visits to the
118 Internet home page in
WAP format.
The content and design of the
home page www.118.lv underwent
considerable improvement in 2000.
Customer Service 8008040. In 2000, Lattelekom transferred its Customer Service
functions to free Customer Service number 8008040. Customer Service operators
provide information on services, register orders and, if possible, activate the requested
service immediately.
Other operator services. A centralised Fault Reporting Service 114 has been
operating for several years now on the basis of modern technologies registering all faults
reported by Lattelekom customers.
International Call Centre number 115 is being used when customers wish to place
international calls and use any of the value added services offered by the Call Centre
(International Inquiries, Barring of Call Duration, etc.). Simultaneously, the National
Call Centre can be reached on 116 for placing national calls and usage of value
added services (Collect Calls, Transfer Charge Call, Conference Call, etc.). The service
Collect Call has become particularly popular among customers. Around 60,000 customers
use the service every month, besides the number of users tends to grow. In 2000, 115
and 116 service operators connected 0.8 million calls.
The introduction of a new operational platform utilising advanced technologies
CTI (Computer Telephony Integration) and IVR (Interactive Voice Response)
allowed increasing the amount of Lattelekom Call Centre services.
It ensured the increase of the capacity of Call Centres and more rational usage
of the available resources.
Lattelekom Call Centre employees have contributed know–how to various
companies such as Lietuvos Telekomas, Lintel, Latvijas Unibanka,
Baltikums, and Hobby Hall.
25

International calls and calls
to information and emergency
services can be made also from
Lattelekom payphones.
Notwithstanding the rapid growth of
mobile telephone users in Latvia,
the number of installed payphones
in 2000 rose by 219 currently
reaching a total of 3,704 payphones
throughout Latvia, 3,464 of which
are chipcard–operated
and the remaining 240 accept both
coins and chipcards.
In the period under review,
103 payphones have been installed
at educational establishments,
hostels and service hotels.
A total of 573 payphones were
installed at educational
establishments and
their premises.
26
P A Y P H O N E
S E R V I C E S
452 payphones have been installed at health care,
rehabilitation and social care centres, old people’s houses and social
homes, out of which 47 payphones were installed in 2000.
In 2000, Lattelekom started offering a new service allowing VISA and EuroCard
/MasterCard users to pay for telecommunication services with credit cards, thus
facilitating communications for foreign visitors in Latvia. Currently, the service is
available from 3,056 payphones.
From 2000 payphone booths in Vecriga are equipped with telephone directories.
Lattelekom payphones can be called from both Lattelekom public telecommunications network
and mobile phones. Statistics show that the service Call the Payphone has become
widely popular. The use of the service averaged 367 times a month throughout the year.
The service Collect Call — 116 has proved to be particularly convenient
for customers. Namely, if a person has no TELEcard or coins,
116 operator’s assistance can be used to check if the other person, a
Lattelekom subscriber, is ready to pay for the call before the
connection is made. During the period under review, the service
was used over 749 thousand times. The service is popular among
students and soldiers of the State Military Service.
Nearly 2 million TELEcards were sold in 2000.
TELEcards have a unique design that can be used for
advertisements or information on culture, sports and charity
activities, and references. Also it is possible to create a TELEcard
with one’s photo and text on it. Lattelekom also offers to place
advertisements on payphone displays.

T R A I N I N G
C E N T R E
In 1994, the formation of the Training Centre was started. The Training Centre
offers employees knowledge and skills required for work within Lattelekom. In order to
facilitate the increase of the Company’s business efficiency, more attention is being paid
to special training programmes. In December 2000, the first fourteen Lattelekom
employees were given a diploma for completion of the programme “Diploma in
telecommunications management”. Also a programme on “Salesmen training”
has now been developed for service sales experts and a programme on
“Trade management” — for managers. Over twenty new training courses were
established in 2000.
Every single Lattelekom employee has attended an average of 7.2 days on training
either at the Training Centre of Lattelekom or other local or foreign business
schools in Latvia.
During the review period, the Training Centre has actively offered its services —
training courses and seminars to external customers. Each external customer has
spent an average of 2.3 days at the Lattelekom Training Centre.
The major customers of the Training Centre are Latvenergo, Rîgas Slimokase, Delfi,
Latvijas Mobilais Telefons, Latvijas Unibanka, The Technical University of Riga,
Ministry of Defence of the Republic of Latvia, Latvija Statoil and
Komerccentrs DATI grupa. Also, employees of Lietuvos Telekomas were among the
students of the Lattelekom Training Centre.
27

LATTELEKOM SAKARU SIST‰MAS
SIA Lattelekom Sakaru Sistémas as
the Daughter Company of Lattelekom
was established on 1 September,
2000. All the necessary work
experience in sales of wide range
customer premises equipment,
installation and maintenance was
obtained in three years at Lattelekom
Customer Premises Equipment
Department. Transformation of the
department into a daughter company
was necessary as the equipment sales
were expanding and the number of
customers had considerably increased.
Lattelekom Sakaru Sistémas offers manifold
telecommunications equipment — telephone
sets produced in Latvia and abroad, ISDN
equipment, video telephone sets, various
PABXs, fax machines, computers, photocopiers,
and other technical equipment needed
for offices and homes.
28
Lattelekom Sakaru Sistémas arranges distribution of telecommunications equipment by
directly contacting customers and via dealer network. The equipment is also available at
Lattelekom Customer Service Centres. Nevertheless, the company is more concerned with
the establishment of direct contact with its customers. High professionalism of Lattelekom
Sakaru Sistémas employees in the field, and their excellent knowledge of the fixed
telecommunications network allows to put this strategy into practice. This helps
customers choose the best technical solution they need.
From 1 November Lattelekom Sakaru Sistémas, in co–operation with Lattelekom Apollo
Internet Services Department, started offering the service Apollo PC. The service involves
delivery of a computer along with Internet dial–up connection on a hire purchase basis.
Over 400 customers have chosen the Apollo PC.
In February 2000, a telecommunications showroom was opened for the convenience of
customers in Riga, where they can have a closer look at the available equipment, try the
equipment and get advice from telecommunications equipment experts.
Lattelekom Sakaru Sistémas offers Lattelekom customers telephone sets on hire purchase.
In 2000, Lattelekom Sakaru Sistémas sold over 15,000 certified telephone sets — a number
that is twice as high as it was in 1999, the company also sold and installed 150 PABXs.
Companies and state organisations representing various industries are among Lattelekom
Sakaru Sistémas customers — the Prosecutor’s Office of the Republic of Latvia, Ministry
of Justice, Ministry of Education and Science, Land Service of the Republic of Latvia,
Latvijas Kråjbanka, Latvijas Unibanka, Pauls Stradins Hospital, State Centre of
Tuberculosis and Lung Diseases, hotel Riga and Hotel Grand Palace, Skai Baltija,
Balticovo, the Embassy of Japan and others.

I N F O R M A T I O N
S Y S T E M S
Successful performance
of Lattelekom cannot be
pictured without the provision
of high quality information systems
and their adequate operation
holding the responsibility
for technical support at the
implementation of new products
and optimisation of
service delivery processes.
In 2000, Lattelekom made
significant improvements in several
information systems related
to operational provision.
Functionality of order processing
management system PAPS
was substantially increased,
sales support system
SIEBEL enhanced and the Company’s resources planning
and administration system SAP further developed.
Also the data storage system supporting service analysis
was improved.
In the period under review, a project on implementation of a new billing and customer
service system was started with a view to replace the old–fashioned system ATLAS.
Information systems supporting company’s operation run on the computer network,
hardware and software infrastructure that is constantly being improved and perfected in
harmony with information processing requirements of the company. Currently, Lattelekom
has over 3,900 computerised workstations and 106 servers in two data centres (operating
systems UNIX, Windows NT and Novell NetWare). The company exploits only unified and
licensed software.
In 2000, Lattelekom IT Services Division was transformed into a profit centre Information
Systems and it started providing services also to external customers. The largest project of
the kind was successful provision of information technology infrastructure for the needs
of the General Meeting of Councillors of the European Bank for Reconstruction and
Development.
With the improvement of various information technology systems, Lattelekom employees
gain expertise highly valued in the modern world. Successful participation in consultancy
and system development projects in Great Britain, Sweden, Finland and Estonia bears
proof of professional qualifications of Lattelekom experts in information technologies.
29

2000 was the seventh year of
Lattelekom’s telecommunications
network modernisation.
A modern and well–organised
telecommunications infrastructure is
the basis for introduction of new
and advanced services in the
market, and plays an important role
in the development of the national
economy in Latvia and the
development process of information
society in the country.
Capital expenditure projects are
the basis of telecommunications
network development,
providing modernisation,
digitalisation and expansion
of the existing network,
introduction of new
services and technologies,
and improvement of quality
of the existing services.
30
N E T W O R K
D E V E L O P M E N T
A new digital exchange
installed. In 2000, a new modern
digital exchange in Riga (Riga–8)
was installed. Work on the project
Riga–7 implementation was continued.
Modernisation project in Kuldiga district
is also drawing to an end.
At the time of the Riga–8 project implementation
one of the last analogue
exchanges providing communications to
customers in the central part of Riga was
replaced with modern equipment. Cable
network within the range of exchange
operation is being reconstructed and
adjusted so that subscribers can use modern
telecommunications services, e.g.,
Ultra DSL.
At present, 16 digital exchanges are
installed in Latvia as a part of the network
modernisation plan — two international
exchanges, eight exchanges in Riga, and
one in Cesis, Rezekne, Daugavpils,
Jelgava, Liepaja and Ventspils. These
exchanges and their RSUs allow the provision
of digital network services in all district
centres throughout Latvia. Besides,
all telecommunications between Riga and
district centres are being organised using
only fibre optic cable trunk network or
digital microwave lines, which guarantee
high quality communications.
In 2000, 44 remote subscriber units of digital exchanges were installed or expanded in 35
populated areas in Latvia.
Digital network services are now available to over half of Lattelekom’s
subscribers throughout Latvia. In the period under review, cut–over of telephone
lines to the digital network was continued, and communications quality improvement
projects for analogue telephone lines were carried out throughout Latvia. At the end of
2000, the proportion of telephone lines connected to the digital network exceeded one half,
and now constitutes 52.2% of the total number of telephone lines, which is by 9% more
than the previous year. The number of digital telephone lines now equals to 383 333,
which is by almost 70 thousand more than a year ago.
New telephone lines were connected to the digital network in all districts of Latvia, the
majority of them being in Riga and districts of Daugavpils, Liepaja, Riga, Jelgava and
Kuldiga. Jelgava is the biggest town in Latvia and the third district centre alongside Cesis
and Ventspils, where all telephone lines are connected to the digital network. In six districts
of Latvia the digitalisation rate currently exceeds 50%: Ventspils district — 84%,
Kuldiga district — 80%, Jelgava and Riga districts — 73%, Rezekne district — 65%, and
Liepaja district — 55%.
At the end of 2000, 73% of telephone lines were connected to the digital
network in Riga, Riga district and Jurmala, 51% — in Kurzeme, 28% — in
Latgale, 24% — in Zemgale, and 17% — in Vidzeme.
With the implementation of analogue network modernisation projects and
expansion of the digital network, the number of telephone lines from which
national and international calls can be made without operators’ assistance
increased from 715,949 lines to 722,601 lines in 2000.
Quality improvement. Alongside telecommunications network
modernisation Lattelekom has been also performing quality improvement
of the analogue telephone lines for several years now. Strengthening or
replacing the weakest links in the telecommunications network is part of the
quality improvement process. Various communications quality improvement
projects have been completed in the recent years throughout the country.
In order to improve communications quality, a Quality Programme was developed, within
the framework of which 27 projects were carried out in 2000.
With the improvement of communications quality, the security and reliability of the
analogue network elements was increased, penetrability of voice circuits broadened, as the
result of which, for instance, access to the Internet has become faster and more convenient
also for the analogue network subscribers in rural areas.
Within the framework of the Quality Programme also a number of complex projects
were implemented, with a view to fully replace 11 analogue exchanges with RSUs of the
digital network, and to perform partial or complete reconstruction of the cable network.
It improves service quality, allows customers to receive a wide range of value added
services and enables installation of telephone lines to new customers.
The drop in the number of faults registered in 2000 bears proof of quality improvement.
A year ago there was an average of 3.3 faults per 100 telephone lines per month, but in
2000 it was only 2.4 — a number that complies with the average standards in the industrialised
countries. 97.7% of faults detected in residential customer telephone lines are
being cleared at the agreed fault clearance time, which is 48 hours. Fault clearance time
for business lines is 24 hours, and 91.7% of faults are cleared within these target times.
After the completion of modernisation of the still existing analogue exchanges and with
proportional growth of the digital network, further development of cable network will
become the focus of the Quality Programme.
Fibre optic trunk network is expanding. Fibre optic network is one of the essential
elements of modern telecommunications. It provides high volume communications traffic
and data transmission, and ensures high communications quality. The construction of fibre
optic trunk network with international connections was started back in 1994 by embedding

of a fibre optic submarine cable connecting
Latvia with Sweden.
At present, Lattelekom has embedded
2,225.54 km of fibre optic cables. Western
and Eastern optic cable loops are built, and
communications between Riga and district
centres are provided via digital trunk
network. Five international connections
have been established — two to Estonia,
one to Belarus, Lithuania and Sweden.
Copper cables are used only for communications
with Russia. However, Lattelekom
has built a fibre optic cable line up to the
border with Russia.
In 2000, the development of fibre optic
network was continued. A total of over 460
km of fibre optic cables were constructed
during the period under review. It is
approximately twice as much as a year
ago. The construction of the 269 km long
fibre optic cable line from Daugavpils to
Valmiera was completed. With the
construction of the fibre optic line
Valmiera — Valka, the second international
connection to Estonia was established.
Alongside the development of modern
data transmission network, fibre optic
access network of 44 km of cables was
constructed in Riga. Demands of large
companies such as banks for broadband
data transmission services with a transmission
rate higher than 2 megabits per
second can be met using fibre optic cables. Currently, Lattelekom can offer data transmission
services with a transmission rate of up to 1 gigabit per second.
A change in data transmission network development. The ever–growing
demand for data transmission services has promoted also the development of Lattelekom
data transmission network and introduction of new technologies. In 2000, broadband
data transmission trunk network was built. It was constructed using new IP and AT
technologies. Lattelekom provides data transmission services with a rate from 10 Mbit/s to
1000 Mbit/s via this network.
The narrow–band data transmission network providing services with a data transmission
rate of up to 2 Mbit/s, was further developed. In 2000, 50 data transmission nodes
were installed in various places in Latvia, and the total number of data transmission nodes
has now reached 187.
The importance of international communications is increasing. International
services continued developing during the period under review. In 2000, traffic exchange
in international exchanges of Lattelekom increased by 2.7%. The volume of outgoing
traffic increased by 4% exceeding 58 million minutes.
In the area of international communications, the importance of traffic carried using
Internet Protocol (IP) format is constantly growing. In 2000, its volume grew by over four
times, and the trend shows that it will continue growing rapidly also in the future.
It can be explained by the well–established co–operation with one of the leading
companies in the world — UUNet.
In 2000, Lattelekom obtained ISVR (International Simple Voice Resale) licence for service
provision in Great Britain, and started wholesale trade of the Internet connections abroad.
Lattelekom holds the leading position in the Latvian market in this area, as the wholesale
of the capacity of international Internet connections sold in 2000 has quadrupled.
In 2000, co–operation agreements on Frame Relay service provision were concluded with
Cable & Wireless, Eesti Telefon, Lietuvos Telekomas and Rostelekom.
The number of international communications circuits increased by 88 totalling in 2,434,
besides, all these circuits are digital.
31

A company is what
its employees are, a company
can accomplish only
as much as its employees can.
Being aware of the truth
of these words, Lattelekom
has done a lot to have its
employees feel socially protected,
to make sure they earn appropriate
salaries, see possibilities for
professional growth and individual
improvement, as well–motivated
employees are the key to success
of each company.
Lattelekom employs over
4,300 people.
32
E M P L O Y E E S
Appraisal of employees. In 2000, performance appraisal and certification of
professional expertise of over 400 fitters and electricians working for
Lattelekom, and of 150 employees employed by Customer Services was performed
to improve the level of their professional performance and to offer possibilities for further
development. The quality and delivery accuracy of services provided by the Company
to a large extent depends on these employees. Therefore, professional employees in these
areas are the basis of success of the company.
For the third year in a row, Lattelekom has been consistently assessing the individual performance
of each employee, and their contribution to the company. It also helps to learn
about employees’ individual training needs that are closely related to successful
succession, and career planning.

Collective Agreement. The Collective Agreement on salaries and social protection
of employees signed between the employer and Trade Union of Communications
Employees of Latvia has been in effect since 1 April, 1998.
Social guarantees. Lattelekom has a health insurance programme introduced, as the
Company cares for its employees. In 2000, a contract was signed with the insurance
company Rîgas Slimokase for the employees’ health insurance.
Lattelekom was the first company in Latvia, which already in 1999 established a closed
pension fund — non–profit organisation, finance and credit joint stock Company
“Lattelekom Closed Pension Fund”. Lattelekom is its founder and shareholder. The stock
company “Lattelekom Closed Pension Fund” was established with an aim to offer its
employees extra social guarantees — manage Lattelekom’s contributions on behalf of
its employees to provide additional pension capital upon the retirement of Lattelekom
employees.
All Lattelekom permanent employees with 12 months continuous length of service and
a contract for minimum another 12 months are participants of “The First Pension Plan”.
Monthly contributions are made to the Lattelekom Closed pension Fund in favour of
pension plan participants in the amount of 5% of each pension plan participant’s salary.
Information for employees. Efficient communication is a crucial issue in large
companies. It is important to have all employees informed about activities taking place
both within the company and outside. Therefore Lattelekom has developed several ways of
not only informing employees but also providing a dialogue link with the senior
management of the company.
Approximately 3,500 employees out of over 4,300 working for Lattelekom have access to
the Company’s internal network — the Intranet. It is a very efficient way for employees to
quickly access the necessary information and find out about the activities taking place
within the Company.
The Intranet presents topical information on events within Lattelekom and hot topics
in the telecommunications industry in general. Information in the Intranet is being
updated on a daily basis.
In November 2000, the Company’s internal newspaper Lattelekom Ziñas celebrated its
sixth anniversary and simultaneously changed its design. The newspaper is making
progress every year and becoming ever more attractive both in design and content.
The newspaper consists of 20 pages and is issued monthly.
33

800
700
600
500
400
300
200
100
0
500
400
300
200
100
50
25
0
731
740
742
34
1996
1997
o p e r a t i o n a l
s t a t i s t i c s
1998
732
1999
Total number
of customer lines (‘000)
382
313
219
181
1996
1997
1998
1999
735
2000
422
2000
Digital switch
installed capacity (‘000)
35
30
25
20
15
10
5
0
200
175
150
125
100
75
0
29.4
30.0
30.1
30.2
1996
1997
1998
Line penetration
per 100 inhabitants
140
133
107
1996
1997
1998
1999
152
1999
31.0
2000
170
2000
Installed telephone
lines per employee
140
120
100
80
60
40
20
0
60
50
40
30
20
10
0
102
1996
1997 72
1998 40
1999 20
19
Waiting list (‘000)
43
50
55
56
1996
1997
1998
1999
2000
58
2000
Outgoing international
traffic (million minutes)
800
700
600
500
400
300
200
100
0
2750
2500
2250
2000
1750
1500
0
143
398
616
716
1996
1997
1998
1999
International
direct-dial lines (‘000)
2201
2110
2555
1996
1997
1998
2346
1999
723
2000
2434
2000
Number of
international circuits

Liepaja
l a t t e l e k o m
d i g i t a l a c c e s s n e t w o r k
Optical cable lines
Submarine
cable to Sweden
Kuldiga
Jurmala
Limbazi
Riga
Rujiena
Salacgriva
Cesis
Livani
Aluksne
Vilaka
Plavinas
Vilani
Jekabpils
Preili
Karsava
Rezekne
Kraslava
Malnava
Belarus
35

36
F I N A N C I A L
r e v i e w
Year 2000 was a
financially successful
year for Lattelekom.
As a national
telecommunications
operator Lattelekom
is directly affected by
the general economic
environment in Latvia.
During 2000 Latvian economy
grew by 6.6% in GDP terms,
unemployment rate
came down to 7.8%
and inflation was only 1.8%
compared to the 3.2%
in the previous year.
On this background Lattelekom managed
to achieve revenue growth of 7%,
operating profit increase of 17% and a net
profit result by 10% higher than in 1999.
For the first time since incorporation in
1994, year 2000 profit exceeded the
deficit in retained earnings putting the
Company in a position to offer dividends
to its shareholders.
Revenue. Although Lattelekom still
held monopoly rights for providing fixed
line telecommunications services in
Latvia, the Company faced competition
from the fast growing mobile
telecommunications sector, as well as
call-back operators and providers of IP
telephony services. There were no tariff
increases during the year, and Lattelekom
managed to achieve revenue growth
by constantly improving quality of
services and bringing new offers to
market. As a result the number of fixed
telephone lines started to grow again
after the decline in 1999 and reached
735 thousand at the end of the year.
Total group revenue and other operating income for the year at LVL 138.4 million was
LVL 9.1 million or 7% higher than the previous year. The structure of revenue continued
to change towards higher proportion of domestic telephone services (66%) and other
telecommunications services (14%) and smaller share of international telephone services
(20%). The highest growth areas were data services, revenue from Internet services, call
centre services and sales of telecommunications equipment.
Operating results. EBITDA (earnings before interest, tax, depreciation and losses
from disposals of assets) was LVL 63.3 million (LVL 55.5 million in 1999).
EBITDA margin (from revenue and other operating income) increased from 43% in 1999
to 46% in 2000.
The improvement in margin was achieved by tight control over costs – operating costs
excluding depreciation increased only by 2% compared to the 7% increase in revenue
and 16% increase in other operating income.
EBITDA is included here as an indicator, which is commonly used in the communications
industry and investor community, although it is not a generally accepted accounting term,
and should not be construed as an alternative to operating profit and cash flow.
Group operating profit at LVL 26.0 million was by 17% higher than during the
previous year. This increase was due to the same factors that raised the EBITDA level,
but operating profit growth was limited by the 13% or LVL 4.1 million higher
depreciation charges as a result of further investments into the network.
During the year total headcount decreased by 10% to 4,335. Labour efficiency in terms
of operating profit per employee increased by 30%. Although the number of customer telephone
lines increased, the ratio of telephone lines per employee improved from
152 in 1999 to 170 in 2000. However, this result is still below the industry benchmarks.
Capital expenditure. Capital expenditure on fixed assets during the year was
LVL 43.8 million (LVL 47.8 million in 1999). This reflects further investment in
the modernisation and expansion of the network, as well as related support systems.
Total capital investments since the beginning of modernisation programme in
1994 reached LVL 351 million by the end of year 2000.
Associated undertaking. Lattelekom’s ownership interest in Latvijas Mobilais
Telefons (LMT) is 23%. Due to the high growth rate of LMT, Lattelekom’s share
of LMT’s net profit for the year increased by 28% to LVL 5.8 million.
Subsidiary. The wholly owned subsidiary Lattelekom Sakaru Sistémas was established
in August 2000 with the aim to strengthen Lattelekom’s leading role in sales of
customer premises equipment in Latvia. During the four months of operations the
subsidiary contributed LVL 185 thousand to consolidated group revenue.
Financial items. Net finance costs of the group were LVL 3.8 million in 2000
compared to LVL 4.4 million in 1999. This reduction was due to the smaller interest
spread. Average interest rate on borrowings decreased from 9.4% in 1999 to 7.4%
in 2000, at the same time Lattelekom enjoyed by 1 percentage point higher interest
rate on its cash balances.
Also included in this figure is a net foreign exchange loss of 0.5 million (LVL 0.7 million
in 1999).
Taxation. Until the end of 1999 the Parent Company - Lattelekom SIA enjoyed 100%
corporate income tax holidays available for companies with considerable amounts
of foreign investment. In years 2000 and 2001 a reduced tax rate at 50% of the standard
rate applies to the Company, and a full rate thereafter. Tax holidays do not extend
to subsidiary.

150
125
100
75
50
25
0
80
70
60
50
40
30
20
10
0
25
20
15
10
5
0
30
40
50
60
20
10
0
116.6
95.9
77.8
1996
1997
1998
129.3
1999
138.4
2000
Revenue and other operating
income (million LVL)
45.7
30.9
1996
1997
71.6
1998
47.8
1999
43.8
2000
Capital expenditure (million LVL)
9.2
0.7
1996
1997
20.8
1998
21.3
1999
23.3
2000
Net profit (million LVL)
1996 22.3
1997 38.2
1998
52.7
1999
55.5
63.3
2000
EBITDA (million LVL)
As Lattelekom started to pay corporate income tax in 2000 after the period of the 100% tax
holidays, the total income tax charge in 2000 increased by LVL 3.0 million,
and by further LVL 0.6 million due to increse in deferred tax provisions. Tax charges in
previous years consisted of deferred tax amounts only.
Lattelekom is among the ten largest tax payers in Latvia. More than LVL 28 million
in cash terms were paid in various taxes during year 2000, including 6.5 million of taxes
paid on behalf of employees and LVL 0.3 million withheld from non-resident entities.
At the time of preparation of this Annual Report a regular tax inspection by
Latvian tax authorities was in process covering period 1997-1999. As their work
has not been completed yet, it is not possible to establish its effect, if any, on these
financial statements or any adjustments needed.
Net profit. Net profit of the group in year 2000 was LVL 23.3 million, an increase
of 10% over the previous year results, giving the return on capital employed of 14.6%
(13.3% in 1999).
Treasury and funding activities. Group Treasury’s role is to support the value
creation in the operative telecommunications business. All borrowings and foreign
exchange activities are carried out as a result of underlying business transactions.
The Group does not undertake speculative transactions that would increase its currency or
interest rate exposure. Counterparty risk is closely monitored.
Lattelekom continues to maintain a broad portfolio of debt, diversified by source
and maturities. Since the operating cash inflows are mainly denominated in LVL,
the preferred currency for borrowings is the LVL.
As at the end of the year, all Lattelekom’s borrowings were in LVL and amounted to
LVL 25.0 million (LVL 37.9 million at the end of 1999). LVL 8.5 million of those
borrowings will mature in 2001. In addition the company has a syndicated multi-currency
revolving credit facility of USD 60 million that expires in December 2001.
The finance contract with the European Investment bank provides Lattelekom with a
credit facility of EUR 50 million. Availability of those financial resources is conditional
upon commercial guarantees not yet arranged.
The business operations of the Group give rise to certain exposure to risks related
to currency and interest rates. Currency exposure risk is hedged using spot, forward rate
and swap contracts. Treasury reviews its hedging strategies on regular basis in order to
ensure that the most effective and efficient methods are being used. Although the
hedging possibilities in the LVL marketplace continue to improve, the range of products
available is still limited.
Cash flow. Net cash flow from operations increased by LVL 11.3 million to
LVL 57.9 million. As there were no material changes in working capital, most of
this increase is due to the higher revenue and improved profitability. Cash used in
investing activities was LVL 40.0 million (LVL 44.2 million in 1999), and Lattelekom
was able to lower the level of borrowings by LVL 12.9 million (LVL 3.5 million in 1999).
Net borrowing position after deducting cash balances was LVL 14.5 million
compared to LVL 32.4 million at the end of 1999.
Shareholders equity. Following the allocation of 1999 profits to legal reserves
and covering the prior period losses, the balance of retained earnings still was LVL 13.8
million negative at the beginning of the year. This negative reserve originated upon
incorporation of the company in 1994 when the intangible asset representing the
exclusive rights to provide fixed line telecommunications services in Latvia with
a value of LVL 70.6 million was written off directly to equity. Year 2000 profit
finally makes the retained earnings reserves positive, thus enabling the Company to offer
dividends to shareholders for the first time.
37

Liepaja
23.0
38
Ventspils
16.4
Kuldiga
11.9
investments made
in dist r i c t s o f
l a t v i a
Talsi
3.3
Tukums
2.4
Saldus
5.6 Dobele
2.4
( m i l l i o n l v l )
Jelgava
17.0
Riga
194.6
Bauska
2.5
Limbazi
1.4
Ogre
4.8
Valmiera
4.3
Cesis
10.8
Aizkraukle
3.9
Valka
2.6
Jekabpils
4.4
Gulbene
2.5
Madona
1.4
Preili
3.4
Daugavpils
13.0
Aluksne
0.9
Balvi
2.5
Rezekne
8.1
Kraslava
5.9
Ludza
2.1

eport of the board of directors
a n d
f i n a n c i a l s t a t e m e n t s
c o n t e n t s
39 Report of the Board of Directors and Financial Statements
40 Report of the Board of Directors 43 Auditors’ Report
44 Income Statement 45 Balance Sheet
46 Statement of Changes in Equity 47 Cash Flow Statement
48 Notes to the Financial Statements 66 Five Year Statistics
39

Report of the Board of Directors
The Board of Directors of Lattelekom presents the report and accounts of Lattelekom and consolidated Group accounts
for the financial year ended December 31, 2000.
Principal activities and business review
In 2000 Lattelekom maintained its position as the biggest provider of full range of telecommunications services, with
the exception of mobile services, in Latvia in terms of turnover and number of customers.
Regardless of its exclusive rights to provide all types of basic telecommunications services granted by the law,
Lattelekom management has started to prepare the Company for operation in a competitive market, at the same time
continuing to develop the telecommunications network infrastructure and basic telecommunications services
throughout the country.
Special attention in 2000 was paid to provision of value added services based on new technologies such as data
transmission, Ultra DSL (high speed data access via traditional telephone lines), fast data network, Intelligent Network
(IN) services – Virtual Private Network and Pre-paid calling cards and call center services. Internet services were
provided under a brand name Apollo.
During the next year of operations Lattelekom will pay special attention to the deployment of the data network with
the aim of ensuring its availability as widely as possible throughout Latvia, especially to schools, libraries, local
government institutions, as well as other socially and economically important centers.
The total number of telephone lines at the end of 2000 was 734,693 (731,527 in 1999). The percentage of subscriber
lines connected to digital exchanges reached 52.2% (42.9% in 1999).
Share capital
The share capital of Lattelekom is LVL 196,281,000 consisting of 196,281 shares with a par value of LVL 1,000. No
changes in the ownership structure of Lattelekom have been registered in 2000. The Privatization Agency on behalf of
the Republic of Latvia is the holder of 100,100 shares representing 51% of the share capital. TILTS Communications
A/S owns 96,181 shares or 49% of the share capital. TILTS Communications A/S shareholders are Sonera Holdings
B.V. with 90% and International Finance Corporation with 10% of shares.
An international arbitration proceeding has been initiated in 2000 by TILTS Communications A/S against the Republic
of Latvia on the basis of the Umbrella Agreement concluded in 1994 between the Republic of Latvia, TILTS
Communications A/S and Lattelekom.
Subsidiaries and associated companies
SIA Latvijas Mobilais Telefons
Lattelekom owns 23% of the share capital in SIA Latvijas Mobilais Telefons, which in 2000 maintained and strengthened
its leading role in the mobile telephony market in Latvia, increasing its customer base by more than 65 thousand to total
of 270 thousand. At the end of 2000, its subscriber base corresponded to 11.4% of Latvia’s population (8.3% in 1999).
SIA Lattelekom Sakaru Sistémas
Lattelekom owns 100% of the share capital in SIA Lattelekom Sakaru Sistémas, established in August 2000 on the
basis of the existing Lattelekom organisational unit. Incorporation of the subsidiary strengthened Lattelekom’s leading
position in sales of customer premises equipment in Latvia. The core business of the new company is oriented towards
specialisation in sales and servicing of quality customer services equipment. SIA Lattelekom Sakaru Sistémas had
approximately 40% of the PBX market and 30% of the fixed telephone sets market in the country.
A/S Lattelekom Closed Pension Fund
Lattelekom and SIA Lattelekom Sakaru Sistémas made contributions on behalf of their employees to non-profit
organisation finance and credit joint stock company Lattelekom Closed Pension Fund.
40

Report of the Board of Directors
During the period Lattelekom made contributions in the amount of LVL 1 million. A/S Lattelekom Closed Pension
Fund is the largest private pension fund in Latvia and the Baltic countries. At the end of 2000 LVL 5.1 million were
accrued in the private accounts of its 4,678 members (increase by 23.5% compared to 1999).
Annual operational results
Group revenue in year 2000 reached LVL 136.5 million, an increase of 7% compared to 1999. There were no tariff
changes for basic telecommunications services during the year, but the composition of total revenue continued to
change towards greater proportion of domestic and other telecommunications services and smaller share of
international voice services.
Group operating profit at LVL 26.0 million was by 17% higher than during the previous year due to strict control over
costs and despite the 13% or LVL 4.1 million growth of depreciation charges as a result of further investments in the
network.
Net income share of subsidiaries and associates increased by almost 28% as a result of high growth of Latvijas
Mobilais Telefons. The parent company started to pay corporate income tax in year 2000 after a period of tax holidays,
therefore the total income tax charge showed a considerable increase of LVL 3.6 million. The net profit of the Group
in year 2000 was LVL 23.3 million, an increase of 10% compared to the previous year.
In year 2000 Lattelekom continued the modernisation programme making capital investments of LVL 43.8 million.
Cumulative capital expenditure on modernisation since 1994 reached LVL 351 million.
Further details of Parent Company and Group operational results of 2000 are disclosed on pages 44 to 65 of this report.
Proposal on payment of dividends
Lattelekom Board of Directors proposes to distribute a total of LVL 2.750 million as a dividend to shareholders of the
Company, and to allocate the rest of the net profit of the year 2000 for covering the accumulated losses of prior periods
and creating the statutory and voluntary reserves.
Directors
The following persons served as Board Directors in 2000:
G.Strautmanis (Chairman), G.Bérziñß (re-appointed on December 18, 2000), I.Bi¬inskis, I.Såmîte, V.Lokenbahs (reappointed
on December 18, 2000), V.Kulbergs, Ch.Nykopp, T.Holopainen, D.Gustafson, K.Oittinen and T.Virtanen
(appointed on March 31, 2000). Board Director Arvo Kukko resigned on March 31, 2000.
Disclosable interests
No members of the Board of Directors or members of their families or legal entities controlled by them own or have
interests in shares or share options in Lattelekom. As at the date of this Report, no member of the Board of Directors has
or had any disclosable interest in the shares of Lattelekom’s subsidiaries nor any disclosable interest in any contracts or
arrangements either subsisting at the end of 2000 or entered into since the end of the previous financial year.
Statement of the Board member’s liability in respect of the Annual Report
The members of the Board of Directors are required by Latvian law and International Standards on Auditing to prepare
an annual report and accounts for each financial year giving a true and fair view of the state of affairs of the Company
and of the profit and loss of the Company.
According to the Management Agreement entered into between Lattelekom, TILTS Communications A/S, the day-to-day
management, operation, and management of Lattelekom moneys, staff policies, training of personnel, as well as
restructuring of the Company is performed and ensured by TILTS Communications A/S.
41

Report of the Board of Directors
Significant events after the end of period under review
Chief Executive Officer Juhani Vienola resigned on January 31, 2001 due to expiration of the employment contract.
The Board of Directors appointed Leena Suhonen the new Chief Executive Officer.
There have been no other events subsequent to end of the period under review that could materially affect the financial
statements for the year ended 31 December 2000.
Auditors
The audit of financial information set out on pages 44 to 65 was carried out by the auditing company
PricewaterhouseCoopers SIA in accordance with Latvian legislation and International Standards on Auditing.
On behalf of the board of directors
Gundars Strautmanis
President and Chairman of the Board
Guntis Bérziñß
Member of the Board
Riga, February 14, 2001
42

Auditors’ Report
To the shareholders of SIA Lattelekom
We have audited the accompanying consolidated financial statements of Lattelekom Group (the Group) and financial
statements of SIA Lattelekom (the Company) for the year ended 31 December 2000 set out on pages 44 to 65. These
financial statements are the responsibility of the Company’s management, as referred on page 42. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion, the financial statements give a true and fair view of the financial position of the Group and the
Company as of 31 December 2000 and of the results of their operations and cash flows for the year then ended in
accordance with International Accounting Standards.
PricewaterhouseCoopers SIA
14 February 2001
43

Lattelekom Group
Income Statement for the Year Ended 31 December 2000
Group Parent Parent and Group
2000 2000 1999
Note LVL‘000 LVL‘000 LVL‘000
Revenue 1 136,526 136,341 127,636
Other operating income 1 1,920 1,942 1,659
Payments to other telecommunications operators 2 (17,287) (17,287) (17,368)
Employee costs 3 (26,830) (26,794) (25,907)
Depreciation and amortisation 8,9 (36,741) (36,741) (32,620)
Management and technology transfer fees 23b (2,351) (2,351) (2,593)
Other operating expenses 4 (28,698) (28,573) (27,923)
Losses on disposal of assets (535) (535) (687)
Operating profit 26,004 26,002 22,197
Finance costs 5 (3,800) (3,801) (4,355)
Net income from subsidiaries and associates 11 5,837 5,838 4,563
Profit before tax 28,041 28,039 22,405
Income tax 6 (4,724) (4,722) (1,153)
Net profit 23,317 23,317 21,252
Earnings per share (in LVL) 7 159.62 159.62 145.48
The notes on pages from 48 to 65 form an integral part of these financial statements.
44

Lattelekom Group
Balance Sheet as of 31 December 2000
Group Parent Parent and Group
2000 2000 1999
Note LVL‘000 LVL‘000 LVL‘000
ASSETS
Non-current assets
Intangible assets 8 9,617 9,617 10,866
Property, plant and equipment 9 219,691 219,690 212,167
Investments in subsidiary undertakings 10 – 201 –
Investments in associated undertakings 11 14,131 14,131 9,860
Other investments 218 218 146
Non-current receivables 33 30 –
243,690 243,887 233,039
Current assets
Inventory 12 2,805 2,751 2,788
Receivables and prepayments 13 20,001 19,892 20,088
Cash and cash equivalents 14 10,457 10,443 5,481
45
33,263 33,086 28,357
Total assets 276,953276,973 261,396
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital 15 146,079 146,079 146,079
Reserves 21 3,910 3,910 –
Retained earnings/(accumulated losses) 9,490 9,490 (9,917)
159,479 159,479 136,162
Non-current liabilities
Redeemable share capital 16 50,735 50,735 50,202
Borrowings 17 16,500 16,500 13,000
Provisions 18a – – 719
Deferred tax liabilities 6 13,505 13,505 11,675
Other liabilities 18b 498 498 651
81,238 81,238 76,247
Current liabilities
Trade and other payables 19 23,194 23,219 21,273
Borrowings and overdrafts 17 8,500 8,500 24,925
Current tax liabilities 1,288 1,286 –
Provisions for liabilities and charges 20 3,254 3,251 2,789
36,236 36,256 48,987
Total equity and liabilities 276,953276,973 261,396
The notes on pages 48 to 65 form an integral part of these financial statements.
The financial statements on pages 44 to 65 were approved by the Board of Directors on February 14, 2001 and were
signed on its behalf by:
Gundars Strautmanis Guntis Bérziñß
President and Chairman of the Board Member of the Board

Lattelekom Group
Statement of Changes in Equity for the Year Ended 31 December 2000
Retained
earnings/
Share (Accumulated
Note capital Reserves losses) Total
LVL‘000 LVL‘000 LVL‘000 LVL‘000
Balance at 31 December 1998 146,079 – (31,743) 114,336
– share of associate’s equity prior to acquiring
significant influence 11 – – 574 574
– net profit for the year 1999 – – 21,252 21,252
Balance at 31 December 1999 146,079 – (9,917) 136,162
– transfers 21 – 3,910 (3,910) –
– net profit for the year 2000 – – 23,317 23,317
Balance at 31 December 2000 146,079 3,910 9,490 159,479
The notes on pages 48 to 65 form an integral part of these financial statements.
46

Lattelekom Group
Cash Flow Statement for the Year Ended 31 December 2000
Group Parent Parent and Group
2000 2000 1999
Note LVL‘000 LVL‘000 LVL‘000
Operating activities
Operating profit 26,004 26,002 22,197
Adjustments for:
Depreciation and amortisation 8,9 36,741 36,741 32,620
Loss on disposal of assets 394 394 701
Foreign exchange difference 82 82 (657)
Operating profit before working capital changes 63,221 63,219 54,861
Decrease in trade and other receivables 41 145 1,058
(Increase) decrease in inventories (24) 38 2,295
Decrease in trade payables (56) (34) (7,110)
Cash generated from operations 63,182 63,368 51,104
Dividends received 11 1,566 1,566 769
Interest received 396 395 315
Interest paid (including capitalised portion) (5,683) (5,683) (5,637)
Tax paid (1,606) (1,606) –
Net cash from operating activities 57,855 58,040 46,551
Investing activities
Purchase of intangible assets (1,822) (1,822) –
Purchase of property, plant and equipment (38,200) (38,199) (44,355)
Investment in subsidiary undertakings 10 – (200) –
Purchase of investments (73) (73) (35)
Proceeds from sale of PPE and investments 141 141 230
Net cash used in investing activities (39,954) (40,153) (44,160)
Financing activities
Proceeds from borrowings 12,000 12,000 26,425
Repayments of amounts borrowed (24,925) (24,925) (29,968)
Net cash used in financing activities 17 (12,925) (12,925) (3,543)
Net increase (decrease) in cash and cash equivalents 4,976 4,962 (1,152)
Cash and cash equivalents at beginning of period 5,481 5,481 6,633
Cash and cash equivalents at end of period 14 10,457 10,4435,481
The notes on pages 48 to 65 form an integral part of these financial statements.
47

Lattelekom Group
Notes to the Financial Statements
GENERAL INFORMATION
Lattelekom SIA (the Parent Company) was established on 14 January, 1994 as a joint venture between Latvian
government and international consortium TILTS Communications A/S. The Republic of Latvia owns 51% of equity
capital of Lattelekom SIA and TILTS Communications A/S owns 49%. The shareholders of TILTS Communications A/S
are the Sonera Holdings B.V. (90%) and the International Finance Corporation (10%).
Lattelekom SIA is incorporated as a limited liability company with the registered address: 30 Valnu street, Riga,
LV 1050, Latvia. The principal activities of the Parent Company are the provision of fixed network telecommunications
services (telephone and call centre services, data transmission and internet, as well as other
telecommunications services) to both business and residential customers. Upon the incorporation of the joint venture,
Lattelekom SIA was granted exclusive rights to provide fixed network telecommunications services in Latvia until
2013. However, subsequently the Latvian government has declared its intention to liberalise the market by 2003.
Lattelekom Sakaru Sistémas SIA (the Subsidiary) was established on 16 August, 2000, as a wholly owned
Lattelekom SIA subsidiary, and company’s results of operations have been consolidated from the month of formation.
The principal activities of the Subsidiary are sales and servicing of telecommunications and data equipment.
The non-profit joint stock company Lattelekom Closed Pension Fund (Pension Fund), which was established in 1999
to provide retirement benefits to employees, is a nominal subsidiary of Lattelekom SIA. The Parent Company does
not have the power to govern the financial and operating policies of the Pension Fund and all risks and benefits arising
from Pension Fund activities will accrue to Lattelekom’s employees – members of the pension plan. Therefore,
according to International Accounting Standards it is not a subsidiary undertaking for accounting purposes.
Accordingly it is not accounted for as investment in subsidiary undertakings in the Parent Company’s accounts and is
excluded from consolidation.
STATEMENT OF ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these consolidated and the Parent Company’s financial
statements are set out below.
(a) Basis of preparation
These consolidated financial statements and the financial statements of the Parent Company have been prepared in
accordance with and comply with International Accounting Standards. The amounts shown in these financial
statements are derived from the group companies’ accounting records, maintained following Latvian accounting
regulations. The financial statements are prepared under the historical cost convention. All amounts shown in these
financial statements are presented in thousands of Latvian Lats (LVL) unless stipulated differently. Balances disclosed
as at 31 December reflect the position as at the close of business on that date. Comparative figures of the Group and
the Parent Company for the year 1999 are the same as the subsidiary was founded only in 2000.
(b) Group accounting
(i) Subsidiary undertakings
The consolidated financial statements include all subsidiaries that are controlled by the parent company. Control is
presumed to exist where more than a half of subsidiary’s voting rights is controlled by the Parent Company or it
otherwise has power to exercise control over the operation. All intercompany transactions, balances and unrealised
gains on transactions between group companies are eliminated as part of the consolidation process. Investments in
subsidiary undertakings are accounted for under the equity method in the Parent Company’s financial statements.
(ii) Associated undertakings
Investments in associated undertakings are accounted for by the equity method of accounting. These are undertakings
in which the Group has between 20% and 50% of the voting rights and over which the Group exercises significant
influence, but which it does not control.
48

Lattelekom Group
Notes to the Financial Statements
Equity accounting involves recognising in the income statement the Group’s share of the associate’s profit or loss for
the year. Dividends received from the associate reduce the carrying amount of the investment. The Group’s interest in
the associate is carried in the balance sheet at an amount that reflects its share of the net assets of the associate
including any goodwill on acquisition. Equity method investments are reported as non-current assets in the Group’s
and the Parent Company’s balance sheet.
(c) Investments
Long-term investments into other entities where ownership percentage is less than 20%, are reported as non-current
assets in the Group’s and Parent Company’s balance sheet and stated at acquisition cost. The carrying value of these
investments is reduced to recognise a decline other than temporary in the value of investments, such reduction being
determined and made for each investment individually.
(d) Foreign currencies
All transactions denominated in foreign currencies are converted to Lats at the Bank of Latvia rate prevailing on the
day the transaction took place. Gains and losses resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies, are recognised in the income
statement. At the year end foreign currency financial assets and liabilities are translated at the Bank of Latvia rate of
exchange ruling at 31 December and all associated exchange differences are dealt with through the income statement.
Exchange gains and losses relating to hedge transactions are recognised in the income statement in the same period as
the exchange differences on the items covered by the hedge transactions. Costs on such contracts are amortised over
the life of the hedge contract. Gains and losses on contracts which are no longer designated as hedges are included in
the Income Statement.
Exchange rates against the USD and EUR in the last two years have been:
2000 1999
Average (USD:LVL) LVL 0.6063 LVL 0.5850
As at 31 December (USD:LVL) LVL 0.6130 LVL 0.5830
Average (EUR:LVL) LVL 0.5600 LVL 0.6242
As at 31 December (EUR:LVL) LVL 0.5700 LVL 0.5875
(e) Financial Instruments
Financial instruments carried on the balance sheet include cash and bank balances, investments, receivables, trade
creditors, leases and borrowings. The particular recognition methods adopted are disclosed in the individual policy
statements associated with each item.
Foreign currency forward contracts protect the Group from movements in exchange rates by establishing the rate at
which a foreign currency asset or liability will be settled. Any increase or decrease in the amount required to settle the
asset or liability is off-set by a corresponding movement in the value of the forward exchange contract. The gains and
losses are therefore off-set.
(f) Intangible assets
Intangible assets comprise costs of computer software licences and related implementation costs, which are capitalised
and amortised using the straight-line method over their useful lives (3-5 years).
Where the software is an integral part of the related hardware that cannot operate without that specific software,
computer software is treated as property, plant and equipment.
49

(g) Property, plant and equipment
Lattelekom Group
Notes to the Financial Statements
All property, plant and equipment are stated at historical cost less accumulated depreciation. Depreciation of tangible
property, plant and equipment is calculated using the straight line method to write off the costs of each asset to their
residual values over their estimated useful life as follows:
2000
years
Buildings 20–40
Lineplant 20–40
Switching equipment 5–8
Other telecommunications equipment 3–8
Other fixed assets 3–7
Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately
to its recoverable amount. Land is not depreciated as it is deemed to have an indefinite life.
Leasehold improvements are included with buildings and amortised over the shorter of the useful life of the building
and the term of lease.
Interest costs on borrowings to finance the construction of property, plant and equipment are capitalised as part of the
cost of the asset during the period of time that is required to complete and prepare the property for its intended use.
Operating expenses directly attributable to the construction of property, plant and equipment are capitalised during the
same period as interest costs using hourly rates that approximate the proportion of operating costs incurred during the
construction process.
Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying amount
and are taken into account in determining operating profit.
(h) Leases
Leases of assets under which the lessee assumes substantially all the benefits and risks of ownership are classified as
finance leases. All other leases are classified as operating leases.
(i) Group company is a lessor
When assets are leased out under an operating lease, income from operating leases is recognised in the income
statement on a straight line basis over the lease term. Initial direct costs incurred specifically to earn revenues from an
operating lease are recognised as expenses in the income statement in the period in which they are incurred.
If Group company is a financial lessor, company reflects the asset in balance sheet as a receivable. Lease income is
recognised over the term of the lease on the basis of constant periodic rate of return.
(ii) Group company is a lessee
Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified
as operating leases. Payments made under operating leases are charged to the income statement on a straight-line basis
over the period of the lease.
If Group company is a financial lessee, the company recognises in the balance sheet the fixed assets as well as
liabilities measured at the lower of the fair value of the leased property or the present value of the minimum lease
payments. Each lease payment is allocated between the liability and finance charge so as to achieve a constant rate on
the finance balance outstanding. The interest element of the finance cost is charged to the income statement over the
lease period. The fixed asset acquired under finance lease is depreciated over the shorter of the useful life of the asset
or the lease term.
50

(i) Inventories
Lattelekom Group
Notes to the Financial Statements
Inventories are stated at the lower of cost or net realisable value. Cost is determined by the weighted average cost
method. Where the net realisable value of inventories may have fallen below their average cost an appropriate
provision is made against the inventory items concerned to reduce their valuation to net realisable value.
(j) Trade and other receivables
Trade and other receivables comprise items falling due within one year and are recorded in the balance sheet at their
gross value, less provisions for bad and doubtful debts. Doubtful receivables are provided for when management
identify the recovery of the specifically identified trade receivables as doubtful. A general provision is made for
overdue receivables not yet specifically identified as such. This general provision is based on management experience
of losses present in each debtors ageing group at balance sheet date. Bad debts are written off when identified.
(k) Cash and cash equivalents
Cash and cash equivalents comprise current accounts with banks, cash on hand and short-term deposits with the banks.
In the balance sheet, bank overdrafts are included in borrowings in current liabilities.
(l) Provisions for liabilities and charges
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and the
reliable estimate of the amount of the obligation can be made.
Provisions are measured in the balance sheet at the best estimate of the expenditure required to settle the present
obligation at the balance sheet date. Provisions are used only for expenditures for which the provisions were originally
recognised and are reversed if an outflow of resources is no longer probable.
Provisions for employee bonuses are made based on estimated level of achievement of the corporate and individual
objectives according to the Group companies bonus scheme.
(m) Pension benefits
The Group operates a defined contribution pension plan. Monthly contributions are made to the Pension Fund in
favour of pension plan participants in the amount of 5% of each pension plan participant’s salary. The Group
recognises contributions to a defined contribution plan as an expense when an employee has rendered service in
exchange for those contributions.
(n) Deferred income taxation
Deferred taxation is provided using the liability method for all temporary differences arising between the tax bases of
assets and liabilities and their carrying value for financial reporting purposes. Currently enacted tax rates are used to
determine the deferred tax.
The principal temporary differences arise from depreciation on property, plant and equipment, provisions and accruals.
Benefits attributable to the Parent Company as a result of government enacted temporary tax holidays are anticipated
in arriving at the deferred tax liability.
51

(o) Revenue recognition
Lattelekom Group
Notes to the Financial Statements
Revenues are recognised as they are earned. Telecommunications services’ revenues are recognised when the services
are rendered based on usage of the network and facilities. Other revenues are recognised when products are delivered
or services are rendered to customers. Revenues include unbilled calls to the extent that they can be identified and
estimated revenues from domestic and foreign network operators based on accounting rates negotiated directly with
each of those administrations.
Revenue is stated net of VAT and trade discounts and comprises the following:
• International telephone services that cover all revenues from international telephone traffic. Earnings attributed to
the national system but derived from international inbound calls are included. This revenue is stated gross before
out-payments to the other telecommunications administrations.
• Domestic telephone services include revenues from national calls, payphones and the proceeds of rentals and
installations of telephone equipment. Revenue earned from connecting subscribers to the network is recognised upon
service activation.
• Other telecommunications services include interconnect revenue from local mobile operators, Internet, leased circuit
lines.
Other operating income includes income from business activities other than provision of telecommunications services,
such as rental income and income from sales of fixed assets and other long-term investments.
(p) Comparatives
Where an effect of changes in accounting policies or presentation is a material amount the comparative figures are
restated.
In cases when classification of separate balance sheet and income statement items are changed to improve the true and
fair view of Group’s financial position, performance and changes in financial position, comparative figures are restated
according to the new classification.
52

NOTE 1
REVENUE
Lattelekom Group
Notes to the Financial Statements
The Group operations are all considered to fall into one class of business, namely telecommunications, which can be
analysed as follows:
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
By service
International telephone services 26,626 26,626 28,724
Domestic telephone services 90,311 90,314 82,429
Other telecommunications services 19,589 19,401 16,483
Total 136,526 136,341 127,636
Other operating income 1,920 1,942 1,659
Total revenue and other operating income 138,446 138,283 129,295
International telephone services include revenue from foreign operators for use of Lattelekom’s network of
LVL 10.994 million (LVL 11.465 million in 1999).
Other operating income is separated from total revenue amount in 2000 income statement to provide more accurate
information about the Group’s operations.
NOTE 2
PAYMENTS TO OTHER TELECOMMUNICATIONS OPERATORS
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
Foreign telecommunications operators 7,284 7,284 8,392
Domestic telecommunications operators 10,003 10,003 8,976
Total 17,287 17,287 17,368
NOTE 3
EMPLOYEE COSTS
53
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
Salaries and wages 22,086 22,058 20,568
Social insurance tax 6,060 6,053 5,823
Retirement, pension and other benefits 1,278 1,277 2,231
Total before capitalisation 29,424 29,388 28,62
Capitalised to non-current assets (see Note 8, 9b) (2,594) (2,594) (2,715)
Total 26,830 26,794 25,907
2000 2000 1999
Staff at the year ended 31 December 4,335 4,322 4,814
Average number of permanent and temporary
employees during the year 4,747 4,744 5,094

NOTE 4
OTHER OPERATING EXPENSES
Lattelekom Group
Notes to the Financial Statements
54
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
Sales and billing costs 7,112 7,002 5,938
Rent, maintenance and utilities 6,169 6,169 6,536
Network related technical costs 8,092 8,091 7,868
General administration 7,230 7,216 7,005
Land and property tax 490 490 959
29,093 28,968 28,306
Capitalised to non-current assets (see Note 8, 9b) (395) (395) (383)
Total 28,698 28,57327,923
NOTE 5
FINANCE COSTS
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
Interest income (387) (386) (269)
Interest expense
– C-shares coupon (see Note 16, 23d) 2,490 2,490 2,400
– loans 2,229 2,229 3,757
– other (1) (1) 86
– capitalised to non-current assets (see Note 8, 9b) (1,027) (1,027) (2,276)
3,691 3,691 3,967
Net foreign exchange losses 496 496 657
Total 3,800 3,801 4,355
NOTE 6
INCOME TAX
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
Current income tax 2,894 2,892 –
Deferred tax 1,830 1,830 1,153
Total 4,724 4,722 1,153
Share of tax of subsidiaries and associates (see Note 11) 1,351 1,353 1,621
Total income tax 6,075 6,075 2,774

Lattelekom Group
Notes to the Financial Statements
According to the Latvian law “On foreign investments in Latvia” Lattelekom SIA has the benefit of a 100% tax holiday
for the first three years in which it makes net taxable profits after taking into account any tax losses carried forward
and an income tax rate reduced by 50% for the following two years. The year ended on 31 December 2000 has been
the first year when the reduced tax rate applied.
Tax holidays do not apply to the Subsidiary company.
A regular State Revenue Service tax audit of Lattelekom is in process covering periods 1997 to 1999. As the audit is
not completed yet, it is not possible to determinate the effect, if any, on the Company’s tax position and the related
adjustments that may be necessary for the financial statements.
Reconciliation of accounting and taxable profit and analysis of the tax charge
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
Profit before tax 28,041 28,039 22,405
Tax calculated at 25% 7,010 7,010 5,601
Adjusted for effects of:
– expenses not deductible for tax purposes 1,349 1,348 1,312
– income not subject to tax (1,458) (1,459) (1,141)
– effect of tax holiday on deferred tax at applicable tax rates 715 715 (1,507)
– reduced rates of current tax (2,892) (2,892) (3,112)
Total 4,724 4,722 1,153
Deferred income taxes are calculated using the standard tax rate of 25% on the long-term temporary differences and
12.5% on the short-term temporary differences because of the reduced income tax rate for 2001.
Movement on the deferred income tax account is as follows:
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
At beginning of year 11,675 11,675 10,522
Income statement charge 1,830 1,830 1,153
At end of year 13,505 13,505 11,675
Deferred income tax assets and liabilities are off-set as the income taxes relate to the same fiscal authority.
The following amounts are shown in the balance sheet:
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
Deferred tax liability:
Accelerated tax depreciation 14,432 14,432 13,356
Impairment of assets – – (136)
14,432 14,432 13,220
Deferred tax asset:
Provisions and accruals (927) (927) (1,545)
Total net deferred tax liability 13,505 13,505 11,675
55

NOTE 7
EARNINGS PER SHARE
Lattelekom Group
Notes to the Financial Statements
Earnings per share is calculated by dividing the net profit for the year by the number of ordinary shares in issue during
the year.
Group Parent Parent and Group
2000 2000 1999
Net profit attributed to ordinary shares (LVL ‘000) 23,317 23,317 21,252
Number of ordinary shares in issue 146,079 146,079 146,079
Basic and diluted earnings per share (LVL) 159.62 159.62 145.48
The Company has no dilutive potential ordinary shares and therefore diluted earnings per share is the same as the basic
earnings per share.
NOTE 8
INTANGIBLE ASSETS
Software and Software
software implementation
licences in progress Total
LVL’000 LVL’000 LVL’000
Year ended 31 December 1999
Cost 11,269 3,405 14,674
Accumulated amortisation (3,580) (228) (3,808)
Net book amount 7,689 3,177 10,866
Year ended 31 December 2000
Opening net book amount 7,689 3,177 10,866
Additions 3,567 (1,745) 1,822
Disposals (5) – (5)
Amortisation charge (3,294) 228 (3,066)
Closing net book amount 7,957 1,660 9,617
At 31 December 2000
Cost 14,386 1,660 16,046
Accumulated amortisation (6,429) – (6,429)
Net book amount 7,957 1,660 9,617
Previously software and software licences were included in property, plant and equipment balances. In 2000 intangible
assets are presented as a separate line on balance sheet as required by IAS 38 Intangible Assets.
The “Additions” to Intangible assets include incurred operating expenses directly attributable to the implementation of
software and capitalised based on the hours spent on those projects. The total amount of expenses capitalised to
intangible assets was LVL 177 thousand in 2000.
56

Lattelekom Group
Notes to the Financial Statements
NOTE 9
PROPERTY, PLANT AND EQUIPMENT
Other
telecom- Other Capital
Land and Switching munications fixed work in
buildings Lineplant equipment equipment asset progress Total
LVL’000 LVL’000 LVL’000 LVL’000 LVL’000 LVL’000 LVL’000
At 31 December 1999
Cost 18,474 80,249 94,121 61,627 34,522 25,218 314,211
Accumulated depreciation (4,347) (19,218) (44,915) (18,527) (14,985) (52) (102,044)
Net book amount 14,127 61,031 49,206 43,100 19,537 25,166 212,167
Year ended 31 December 2000
Opening net book amount 14,127 61,031 49,206 43,100 19,537 25,166 212,167
Additions 2,129 16,557 4,324 16,396 4,122 (1,560) 41,968
Disposals (289) (214) (24) (234) (8) – (769)
Depreciation charge (719) (4,827) (12,221) (9,044) (6,838) (26) (33,675)
Closing net book amount 15,248 72,547 41,285 50,218 16,813 23,580 219,691
At 31 December 2000
Cost 20,079 96,401 94,992 75,985 37,140 23,658 348,255
Accumulated depreciation (4,831) (23,854) (53,707) (25,767) (20,327) (78) (128,564)
Net book amount 15,248 72,547 41,285 50,218 16,81323,580 219,691
Additions to capital work in progress are shown net of transfers to assets in service.
The ‘Net book amount’ of lineplant at 31 December 2000 includes leased international cable capacity with a book
value of LVL 1.027 million (LVL 1.055 million in 1999).
(a) Leasehold improvements
Included in the land and buildings are the following amounts of leasehold improvements:
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
Cost 1,812 1,812 1,647
Accumulated depreciation (303) (303) (188)
Net book value 1,509 1,509 1,459
Commitments in respect of operating lease agreements are disclosed in Note 22b.
(b) Capitalisation to non– current assets
The ‘Additions’ to tangible property, plant and equipment include capitalised expenses incurred by the Company’s
various departments on capital expenditure projects and capitalised based on the hours spent on those projects. The
interest on loans taken to finance the assets in course of construction is capitalised. The average rate of the interest
capitalised was 7.13% during 2000 (9.4% in 1999). The total amount of expenses capitalised to property, plant and
equipment was LVL 3.839 million in 2000 (LVL 5.374 million in 1999).
57

(c) Title to the assets
Lattelekom Group
Notes to the Financial Statements
Title to majority of properties held by the Parent Company has yet to be registered with the Land Registry. In view of
the difficulties of obtaining adequate documentation concerning each property it may take considerable amount of time
before the Company’s property rights are registered in accordance with Latvian Civil Law. This is common situation
in Latvia at the present time and management does not expect this to inhibit the Company’s operations in the future.
NOTE 10
INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
Number Nominal value
Country of of shares of ordinary share
incorporation in issue capital in issue % interest held
Lattelekom Sakaru Sistémas, SIA Latvia 200,000 LVL 200,000 100
Lattelekom Sakaru Sistémas SIA was established on 16 August, 2000. The principal operations of company are sales
and servicing of telecommunications systems and equipment in Latvia.
NOTE 11
INVESTMENTS IN ASSOCIATED UNDERTAKINGS
Number Nominal value
Country of of shares of ordinary share
incorporation in issue capital in issue % interest held
Latvijas Mobilais Telefons, SIA (LMT) Latvia 11,000 USD 1,100,000 23
There were no changes in the interests held in the associated undertakings in 1999 or 2000 (see Note 23).
Investments in associated companies and the changes there include the following:
Parent and Group Parent and Group
2000 1999
LVL’000 LVL’000
Opening carrying value 9,860 5,491
Share of results before tax 7,188 6,184
Share of tax (see Note 6) (1,351) (1,621)
Net share of results of associate 5,837 4,563
Dividends received (1,566) (769)
Share of associate’s equity prior to acquiring significant influence – 575
Closing carrying value 14,131 9,860
LMT is one of the two mobile communications operators in Latvia. The main activities of LMT are the provision of
mobile telecommunications services, construction, operation and maintenance of mobile telephone networks and
systems in Latvia.
The share of LMT’s equity of LVL 0.574 million attributable to the original 5% holding for the period prior to
obtaining significant influence was recognised in 1999 by way of an adjustment to retained earnings.
58

NOTE 12
INVENTORY
Lattelekom Group
Notes to the Financial Statements
59
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
Inventory held for maintenance and expansion of the
telecommunications system 2,550 2,550 2,540
Inventory for re-sale 255 201 248
Total inventory 2,805 2,751 2,788
NOTE 13
RECEIVABLES AND PREPAYMENTS
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
Trade receivables 10,400 10,319 9,782
Receivables from other telecommunications operators 6,714 6,714 8,197
Prepayments 545 537 683
Other receivables 2,342 2,322 1,426
Total receivables and prepayments 20,001 19,892 20,088
NOTE 14
CASH AND CASH EQUIVALENTS
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
Cash at bank and in hand 1,890 1,878 1,010
Short-term bank deposits 8,567 8,565 4,206
Cash and equivalents in Pension Fund accounts – – 265
Total cash and deposits 10,457 10,4435,481
In 2000 the weighted average interest rate on short-term bank deposits was 4.95% and these deposits had an average
maturity of 8 days (see Note 24b).
The short-term deposit and treasury bills which were held in separate Pension Fund accounts to their maturity date
were transferred to Pension Fund company at the beginning of the year 2000.
OTE 15
ORDINARY SHARE CAPITAL
2000 1999
Number of ordinary shares as at 31 December 146,079 146,079
There have been no changes in share capital during 1999 and 2000. All shares have a nominal value of LVL 1,000.

NOTE 16
REDEEMABLE SHARE CAPITAL
Lattelekom Group
Notes to the Financial Statements
B-shares C-shares 2000 1999
Number of shares as at 31 December 25,602 24,600 50,735 50,202
There have been no changes in the issued redeemable share capital during 1999 and 2000. All redeemable shares have
a nominal value of LVL 1,000.
In accordance with the contractual arrangements with the Republic of Latvia, under the Umbrella Agreement the
redeemable shares have the following terms:
• C-shares earn a coupon of 10% and may be redeemed into debt of 41 million US dollars at Lattelekom’s option. On
such redemption the debt will bear interest at commercially available rates and will mature on 31 December 2003
or earlier at Lattelekom’s option if cash resources permit.
• B-shares have no right to dividends but will be redeemed into debt at the same date as C-shares. If the B-shares are
redeemed into debt, then such debt will mature on 31 December 2013 and will bear no interest until 31 December
2003 after which time a commercial rate of interest will be paid until 31 December 2013;
The share capital according to the articles of association of the company amounts to 196,281 shares of LVL 1,000, which
in terms of the Umbrella Agreement is allocated to ordinary shares (146,079), B shares (25,602) and C shares (24,600)
because Latvian legislation does not provide for such instruments. The management considers that redeemable shares
rank subordinate to other debts of the company and pari passu with the ordinary shares in the event of liquidation.
The fact that these shares are redeemable in terms of the Umbrella Agreement supports classification as debt rather than
equity in terms of International Accounting Standards. The total value of C shares to be repaid upon redemption is fixed
at USD 41 million in the Umbrella Agreement. This amount has been re-translated to LVL at the year-end resulting in
the increase of redeemable share capital of LVL 533 thousand. Such increase due to fluctuations in the exchange rate
does not affect nominal value of redeemable shares or total percentage holding of each shareholder respectively.
NOTE 17
BORROWINGS
Current
60
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
Bank borrowings 8,500 8,500 24,925
Total current borrowings 8,500 8,500 24,925
Maturity of non-current borrowings:
Between 1 and 2 years 11,500 11,500 6,000
Over 2 years 5,000 5,000 7,000
Total non-current borrowings 16,500 16,500 13,000
Total 25,000 25,000 37,925
All borrowings at the end of period are in Lats. Lattelekom SIA has a syndicated four-year revolving credit facility of
USD 60 million that expires in December, 2001. The facility is arranged by the Sumitomo Bank and is subject to semiannual
review for compliance with certain financial statement ratio covenants. As at December 31, 2000 the facility
was not drawn down (December 31, 1999: drawn down LVL 18.425 million).
In addition at December 31, 2000 Lattelekom SIA had undrawn short-term facilities of LVL 1.99 million.
There are no pledges on assets for bank loans.

Weighted average interest rates:
Lattelekom Group
Notes to the Financial Statements
61
Group Parent Parent and Group
2000 2000 1999
bank overdrafts 6.57% 6.57% 8.12%
bank borrowings (including hedging costs) 7.40% 7.40% 9.43%
Variable rate loans raised in Latvian Lats are subject to interest rates between 5.59% and 12.83%, generally based on
RIGIBOR (Riga Interbank Offered Rate) plus margin. Funds raised in US Dollars with variable rates are subject to
interest rates between 6.20% and 7.25% and are based on LIBOR (London Interbank Offered Rate) plus margin. The
bank loans have maturities ranging from 2001 to 2003.
NOTE 18
PROVISIONS
(a) Provision for retirement benefits
The Group operated a defined benefit scheme until July 2000. Under this defined benefit scheme retiring employees
received a lump-sum payment based on years of service. The defined scheme was unfunded and established on
formation of the Company in 1994. At that time the pension fund legislation was not yet developed in Latvia and the
retirement benefit scheme was introduced as an interim support measure for retiring employees. In 1999 Pension Fund
was established and agreement was reached with Employees Representatives on elimination of the defined benefit
scheme from July 2000. Previously accrued provisions were reversed in the company’s accounts. The effect of
discounting the defined benefit scheme is a gain of LVL 675 thousand in operating costs and LVL 44 thousand in
finance costs.
The amounts recognised in the balance sheet are as follows:
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
At beginning of year 719 719 624
Current service cost/ (effect of termination of the scheme) (675) (675) 55
Interest cost/ (reversal of interest costs accrued) (44) (44) 44
Benefits paid – – (4)
At end of year – – 719
(b) Other liabilities
The non-current liability of LVL 498 thousand (LVL 651 thousand in 1999) represents Group’s contractual obligation
to support administrative costs of the Lattelekom Pension Fund up to this amount.

NOTE 19
TRADE AND OTHER PAYABLES
Lattelekom Group
Notes to the Financial Statements
62
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
Trade payables to other telecommunications operators 4,528 4,528 5,315
Other trade payables 5,497 5,556 4,365
Payables related to capital investments 8,586 8,586 5,690
Taxes and social security 1,884 1,879 1,979
Deferred income 677 648 590
Other payables and accruals 2,022 2,022 3,334
Total trade and other payables 23,194 23,219 21,273
NOTE 20
PROVISIONS
The amount of LVL 3.254 million includes provisions for employee annual bonuses, holiday benefits and related taxes
(LVL 2.789 million in 1999).
Provisions for employee bonuses are made based on estimated level of achievement of the corporate and individual
objectives according to the Group companies’ bonus scheme.
NOTE 21
RESERVES
Group Parent Parent and Group
2000 2000 1999
LVL’000 LVL’000 LVL’000
Statutory reserve 913 913 –
Unrealised income from associated undertakings less dividends received 2,997 2,997 –
Total reserves 3,910 3,910 –
According to the Latvian law “On Limited Liability Companies” the Company is obliged to accumulate a statutory
reserve. Mandatory transfers to reserve should be not less than 5% of annual net profit until the reserve thus created
reaches one third of share capital.
According to the Latvian law “On the Annual Accounts of Companies” the amount of investment adjustments resulting
from the current year profits after dividends or losses made by the associated undertakings are in the following year
included in an undistributable reserve “Unrealised income from associated undertakings”.

NOTE 22
COMMITMENTS
Lattelekom Group
Notes to the Financial Statements
(a) Capital commitments
Capital expenditure for orders placed with suppliers of equipment and software at the balance sheet date but not
recognised in the financial statements is as follows:
Parent Parent and Group
2000 1999
LVL’000 LVL’000
Intangible assets 83 –
Property, plant and equipment 3,872 3,900
Total 3,955 3,900
(b) Commitments under operating leases
The Company has operating leases for property. The total amount of annual lease expenses was LVL 0.863 million in
2000 (LVL 1.402 million in 1999). The future minimum lease payments under non-cancellable operating leases for the
period between 1 and 5 years are LVL 0.182 million (LVL 0.217 million in 1999).
NOTE 23
RELATED PARTY TRANSACTIONS
TILTS Communications A/S holds 49% of Lattelekom’s issued ordinary share capital. Transactions between the
Company and TILTS Communications are covered by the terms of the Umbrella Agreement between the Latvian
government and TILTS Communications.
Sonera owns 90% of the shares of TILTS Communications thus indirectly owning 44% of the shares of Lattelekom
SIA.
Latvijas Mobilais Telefons, SIA (LMT) (Lattelekom SIA holding 23% of the shares) is an associated company since
June 1997 (see Note 11).
Under IAS 24, routine trading transactions with the Latvian government including its departments and agencies are
excluded from the scope of related party disclosures. Transactions with related parties were “on arms length basis”.
The following transactions were carried out with related parties:
(a) Sales of services
2000 1999
LVL’000 LVL’000
LMT (interconnection service) 7,423 7,057
Sonera (international telephone traffic) 515 702
TILTS Communications (telecommunications services) 3 –
(b) Purchases of goods and services
63
7,941 7,759
2000 1999
LVL’000 LVL’000
LMT (mobile telephone services, interconnection fee) 7,972 6,973
Sonera (international telephone traffic, various services and equipment) 397 908
TILTS Communications (management, technology transfer and procurement services) 2,404 2,807
10,77310,688

Lattelekom Group
Notes to the Financial Statements
Management fee of LVL 2.327 million (LVL 2.565 million in 1999) and technology transfer fee of LVL 24 thousand
(LVL 28 thousand in 1999) charged by TILTS Communications are in accordance with the agreement signed between
TILTS Communications and Lattelekom. They are paid to cover the cost of TILTS Communications for providing
management and technology transfer services to the Parent Company. Procurement fees of LVL 53 thousand were
charged by TILTS Communications in 2000 (LVL 214 thousand in 1999) for purchasing agency services according the
Procurement agreement between TILTS Communications and Lattelekom.
(c) Outstanding balances arising from sale/purchase of goods/services
2000 1999
LVL’000 LVL’000
Receivables from related parties:
LMT 720 1,088
Sonera 51 234
771 1,322
Payables to related parties:
LMT 761 799
Sonera 12 252
TILTS Communications 182 1,811
64
955 2,862
(d) Redeemable shares
TILTS Communications owns C-shares for the total amount USD 41 million, which are potentially redeemable
according the terms of the Umbrella Agreement. Latvian government holds potentially redeemable B-shares for the
total amount LVL 25.602 million (see Note 16).
TILTS Communications received LVL 2.490 million as 10% C-share coupon for 2000 according to the contractual
terms with the Republic of Latvia (see Note 5). The amount paid in 1999 was LVL 2.400 million.
(e) Director’s remuneration
No members of the Board of Directors or members of their families or legal entities controlled by them own or have
interest in shares or share options of Lattelekom SIA.
The total remuneration of the president and non-executive directors including annual bonuses and other benefits was
LVL 83 thousand in 2000 (LVL 74 thousand in 1999).

NOTE 24
FINANCIAL INSTRUMENTS
Lattelekom Group
Notes to the Financial Statements
(a) Credit risk
Financial assets, which potentially subject the Company to concentrations of credit risk, consist principally of cash,
short-term deposits, trade receivables and prepayments. The Company’s cash equivalents are placed with appropriate
financial institutions. Trade receivables are presented net of allowances for doubtful debts. Credit risk with respect to
trade receivables is limited due to the extent of the Company’s customer base.
(b) Interests rate risk
The Company’s short-term deposits are at fixed interest rates and mature within one year (see Note 14).
At the end of period Lattelekom SIA had borrowings denominated in Lats and an un-used US dollars facility (see Note
17). Interest rates are variable and are set at an agreed premium over appropriate reference rates.
(c) Fair values
At 31 December 2000 and 1999 the carrying amounts of all financial instruments approximated their fair values due
to the short-term maturities of these assets and liabilities.
(d) Currency risk
The short term USD credit facility from a syndicate of international banks had been hedged during the year 2000 using
forward foreign exchange contracts. At 31 December 2000 US dollars borrowing facility is not drawn down therefore
there are no open forward contracts at 31 December 2000 (1999 LVL 18.425 million).
Trade accounts payable at 31 December 2000 included aggregate payables of LVL 5.325 million due in foreign
currencies which had been hedged by short-term deposits in foreign currencies. The balance of short-term deposits to
a value of LVL 1.009 million (LVL 0.304 million in 1999) had been taken out in anticipation of expected future
transactions, however it is not designated as a distinctive hedge and the effect of currency revaluation is accounted for
in the income statement.
65

FIVE YEAR STATISTICS
year ended 31 December
Financial
Profit and loss account
Lattelekom Group
Five Year Statistics
Group Parent and Group
2000 1999 1998 1997 1996
LVL’000 LVL’000 LVL’000 LVL’000 LVL’000
Revenue
International 26,626 28,724 31,877 36,375 35,023
Domestic 90,311 82,429 69,906 49,297 33,957
Other 19,589 16,483 12,997 9,336 8,345
Total revenue 136,526 127,636 114,780 95,008 77,325
Other operating income 1,920 1,659 1,869 889 498
Total 138,446 129,295 116,649 95,897 77,823
Operating costs
Payments to other telecommunications operators (17,287) (17,368) (10,178) (9,498) (10,258)
Employee costs (26,830) (25,907) (21,678) (21,925) (22,015)
Management and tehnology transfer fees (2,351) (2,593) (3,756) (3,341) (3,220)
Other operating costs (28,698) (27,923) (28,342) (22,888) (20,062)
Total costs without depreciation (75,166) (73,791) (63,954) (57,652) (55,555)
EBITDA 63,280 55,504 52,695 38,245 22,268
Depreciation and losses on disposal of assets (37,276) (33,307) (26,660) (21,946) (14,603)
Operating profit 26,004 22,197 26,035 16,299 7,665
Net financial income (expenditure) 2,037 208 (911) (4,273) (3,584)
Income tax (4,724) (1,153) (4,310) (2,810) (3,402)
Profit for the year 23,317 21,252 20,814 9,216 679
Balance sheet
Assets
Intangible and fixed assets 229,308 223,033 208,751 164,621 140,646
Investments 14,382 10,006 5,602 3,333 40
Current assets 33,263 28,357 33,443 27,898 51,420
Total assets 276,953261,396 247,796 195,852 192,106
Liabilities
Redeemable share capital 50,735 50,202 50,202 50,202 50,202
Loans repayable after more than a year 16,500 13,000 15,100 20,700 –
Loans repayable within a year 8,500 24,925 26,369 – –
Current tax liabilities 1,288 – – – –
Deferred tax 13,505 11,675 10,522 6,212 3,402
Current liabilities 23,692 21,924 24,928 18,816 48,962
Provisions for liabilities and charges 3,254 2,789 6,339 6,400 5,234
Total liabilities 117,474 124,515 133,460 102,330 107,800
Net assets 159,479 136,881 114,336 93,522 84,306
Capital expenditure 43,790 47,843 71,570 45,715 30,875
Net cash from operating activities 57,855 46,551 50,311 33,146 13,564
66

Key financial indicators
Lattelekom Group
Five Year Statistics
2000 1999 1998 1997 1996
EBITDA margin 46% 43% 45% 40% 29%
Operating margin 19% 17% 22% 17% 10%
Return on capital employed (ROCE) 14.6% 13.3% 16.0% 10.4% 4.2%
Earnings per share (LVL) 159.62 145.48 142.48 63.09 4.64
Operational
Staff at year end 4,335 4,814 5,293 5,574 6,819
Revenue per employee (LVL) 31,937 26,858 22,038 17,204 11,413
Operating profit per employee (LVL) 5,999 4,611 4,919 2,924 1,124
Revenue per line (LVL) 186 174 155 128 106
Lines per 100 inhabitants 31.0 30.2 30.1 30.0 29.4
Waiting list customers (‘000) 19 20 40 72 102
Total number of telephone lines (‘000) 735 732 742 740 731
Digitalisation rate 52.2% 42.9% 37.1% 27.3% 20.2%
Telephone lines per employee 170 152 140 133 107
Digital exchange installed capacity (‘000 lines) 422 382 313 219 181
Definitions of Key Financial Indicators
EBITDA = operating profit + depreciation and losses on disposal of assets
ROCE =
profit before tax + interest expenses + other financial expenses
capital employed (total assets - non-interest bearing liabilities) average per period
67

Publisher: Lattelekom SIA Communication Division
Design and production: Dizaina Straté©ija SIA, Egîls Pårups
Photography: Gvido Kajons
Printed by: McÅbols AS
Riga 2001

2 0 0 0

Lattelekom SIA
Va–u iela 30
Rîga LV 1050
Latvia
Telephone: +(371) 7055000
Fax: +(371) 7055114
www.lattelekom.lv