Balance sheet on

Assets (mln. bel. rubles) Long-term assets _____________________ Intangibles assets ___________________ current assets: - inventories and expenditures________________ cash _______________________ receivables and other __________________ Total: assets ___________________________

Liabilities (mln. bel. rubles) Internal funds ____________ Long-term obligations ___ Payables and other liabilities________________ Total: liabilities_________________________

Financial statement from January 1, 2005 to January 1, (mln. bel. rubles) Gross income on sale ___________ Production and sale costs___________________ Profit on sales ___________ Net profit on non-sale and other operations Balance profit ______________________

Long-term assets Long-term assets include: depreciated cost of fixed capital and long leased fixed assets, long-term investments, equipment to be installed, capital construction in progress. (mln. bel. rubles) Fixed capital (depreciated cost) __ Long leased fixed asset (depreciated cost)___________ 0 Long-term investments _______ Equipment to be installed _________________ Incomplete capital constructions _____ Total: ________________________________

Intangibles Intangibles represent residual cost of tangible assets (mln. bel. rubles) 3 439

Internal funds Internal funds include: registered stock, special-purpose funds, purpose-oriented credits and returns, leases. (mln. bel. rubles) Registered stock ________________________ Special-purpose funds ___________ Purpose-oriented credits and returns _____ Leases __________________ 0 Reserve sources of internal funds ___ Losses born in previous years ___________ 0 Accounting year losses____________________ 0 Total: __________________________________

Long-term financial obligations Long term obligations are long-term bank credits, taken by the branches for implementation of capital investment programs. (mln. bel. rubles)

Payables and other liabilities Payables and other liabilities include: short-term credits and loans, accounts payable, future income and и other short-term liabilities. (mln. bel. rubles) Short-term credits and loans ___________ Accounts payable ___________________ Future income _________________ Other short-term liabilities _____________ 0 Total: __________________________________

Production and sale costs Cost of production and sale of telecommunications services include VAT and deductions to various funds.

Operating receipts / expenses Operating receipts associated with any delivered/received services are recognized in the same period when they have been paid. Expenses are recognized in the period they have been actually incurred regardless of the time of payments (advance or next).

Fixed assets Initial value of fixed assets includes total expenditures for settlements and allowance for contractors, material and labor cost, and interest paid up to the date of putting the perspective assets into operation. Retired fixed assets (depreciation or salvaging) are removed from the balance with account of depreciation. Profit or loss resulting from the fixed assets retirement is recognized in the profit-loss for the period when depreciation or salvaging occurred.

Depreciation Subject to normative life, fixed assets depreciation is calculated by a straight-line method starting from the first day of month following the one when the respective asset has been put into operation.

Accounts receivable Accounts receivable are estimated in the balance sheet on the basis of the amount due.

Cost of borrowings Costs of attracting loans for major construction or procurement of fixed assets are capitalized as part of the initial cost of the respective fixed assets and are charged to expenditures throughout the depreciable life of the asset.

Foreign exchange operations Foreign currency and assets acquired for foreign currency, receivables and payables are reported at the National Bank exchange rate in effect on the business transaction date of regular accounting.

Taxation Taxable profit is calculated from the balance profit, which is made up of the revenue from all telecommunications services, other values (including fixed assets, inventories, intangibles, securities) and revenues from nontrading transactions, less expenses on the said transactions. The method applied for calculation of revenue from services is a component part of the Beltelecom accounting policy. In 2004, Beltelecom recognized delivered services as the associated service bills had been paid.

Allocation to the budget for social needs and extra –budgetary funds Beltelecom makes allocations to the fund of social protection of population and employment fund from its wages fund. The allocations are charged against the period for which wages have been calculated. All deductions are made in accordance with the standards in effect in the reporting period.

Allocations to the budget for social needs and extra-budgetary funds Beltelecom makes contributions to the fund for support of agricultural food producers, agricultural science, highway fund; purpose-oriented local budget funds for stabilization of agricultural and food producers economics; to housing investment funds and living-space unkeeping and repair funds, from products paid. Beltelecom makes deductions to the innovation fund from the previous period products by charging them against the cost and to the stabilization fund from proceeds from accumulation of profit tax.

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