Annex 1

to Decision of the Ministry of Finance No. 16 of 17.02.2004

For interim and annual reporting

BALANCE SHEET

As of 1 January 2007

Codes

Form No.1 as per OKUD

0502071

Date (year, month, day)

Organization

RUE Beltelecom (consolidated)

as per OKULP

101007741

Taxpayer identification code 101007 741

as per UNP

Type of activity

Telecommunications services

as per OKED

64200

Form of ownership

State

as per OKOPF

1400

110

Management body

Ministry of Communications and Informatization

as per SOOU

012140

Unit of measure:

Million rubles

as per OKEI

407

Address: 6, Engels Str., Minsk, 220030

Check sum

Approval date

Submission date

ASSETS

Line item

As at the beginning of the reporting year

As at the end of the reporting period

1

2

3

4

I. NON-CURRENT ASSETS

Fixed assets (01, 02)

110

1,828,766

2,248,435

Intangible assets (04, 05)

120

3,439

3,625

Profitable investments in tangible assets (02, 03)

130

0

0

Investments in non-current assets (07,08)

140

56,664

46,055

Other non-current assets

150

0

0

TOTAL SECTION I

190

1,888,869

2,298,115

II. CURRENT ASSETS

Inventories and expenses, including:

210

118,045

124,505

raw materials, materials and other assets (10, 14, 15, 16)

211

49,361

64,062

rearers and fatteners (11)

212

232

225

incomplete production (trading costs) (20, 21, 23, 29, 44)

213

68,452

60,218

other inventories and expenses

214

0

0

Taxes on assets acquired (18, 76)

220

23,989

18,632

Finished products and goods (40, 41, 43)

230

2,427

1,969

Dispatched goods, work performed, services provided (45, 46)

240

518

547

Accounts receivable, including:

250

126,924

122,262

settlements with buyers and

customers

251

98,776

91,677

settlements with founders

on contribution to the

authorized fund (75)

252

0

365

settlement with various debtors and creditors (60, 76)

253

18,764

20,192

other accounts receivable

254

9,384

10,028

Financial investments (58, 59)

260

7,574

6,989

Cash (50, 51, 52, 55, 57)

270

21,726

23,308

Other current assets

280

-

-

TOTAL SECTION II

290

301,203

298,212

BALANCE

390

2,190,072

2,596,327

LIABILITIES

Line item

As at the beginning of the reporting year

As at the end of the reporting period

1

2

3

4

III. SOURCES OF INTERNAL FUNDS

Authorized fund (80)

510

17,988

17,988

Treasury stock (81)

515

0

0

Reserve fund (82)

520

2,551

3,652

Additional fund (83)

530

1,893,584

2,336, 000

Retained profit (84)

540

16,281

25,089

Uncovered loss (84)

550

0

0

Special-purpose funding (86)

560

3,342

7,748

TOTAL SECTION III

590

1,933,746

2,390,477

IV. PROFIT AND LOSS

Reserve for future expenses (96)

610

0

2

Prepaid expenses (97)

620

-5,282

-7,024

Deferred income (98)

630

97, 659

85,023

Profit for the reporting year (99)

640

0

0

Loss for the reporting year (99)

650

0

0

Other profit and loss

660

-75

-79

TOTAL SECTION IV

690

92,302

77,922

V. SETTLEMENTS

Short-term credits and loans (66)

710

8,350

3,618

Long-term credits and loans (67)

720

10,481

7,096

Accounts payable, including:

730

145,193

117,214

trade liability (60)

731

99,844

69,975

wages payable (70)

732

7,764

8,699

payments for other transactions with personnel (71, 73)

733

21

14

tax and fee liability (68)

734

23,430

22,720

social insurance and security payments (69)

735

3,153

3,635

dividend payments to shareholders (founders) (75)

736

1,026

0

settlements with various debtors and creditors (62, 76)

737

9,955

12,171

Other liabilities

740

-

-

TOTAL SECTION V

790

164,024

127,928

BALANCE

890

2,190,072

2,596,327

REFERENCE – AVAILABILITY OF ASSETS ACCOUNTED FOR IN THE OFF-BALANCE ACCOUNTS

At the end of the reporting period

Leased fixed assets (001)

43

Material assets accepted for safe storage (002)

3, 563

Materials to be processed (003)

1

Goods taken on commission (004)

576

Equipment to be installed (005)

0

Registered high-security forms (006)

38

Bad debt write-off (007)

710

Performance bonds taken (008)

0

Performance bonds issued (009)

14,408

Amortization fund for fixed assets reproduction (010)

6,807

Fixed assets let on lease (011)

83,372

Intangible assets received for use (012)

0

Amortization fund for intangible assets reproduction (013)

1,688

Loss of fixed assets cost (014)

1,197

Director ________________ K.S. Tikar

(signature) (Surname, Initials)

Chief Accountant (Accountant)_________ V.Ya. Shurak

(signature) (Surname, Initials)

Date: 05 March 2007

Annex 2

to Decision of the Ministry of Finance No. 16 of 17.02.2004 (as revised by Decision No. 40 of 31.03.2005 issued by the Ministry of Finance)

For interim and annual reporting

PROFIT AND LOSS STATEMENT

For the period starting on 1 January 2006 and ending on 31 December 2006

CODES

Form No.2 as per OKUD

502072

Date (year, month, day)

Organization

RUE Beltelecom (consolidated)

as per OKULP

Taxpayer identification code 101007 741

as per UNP

Type of activity

Telecommunications services

as per OKED

Form of ownership

State

as per OKOPF

Management body

Ministry of Communications and Informatization

as per SOOU

Unit of measure:

Million rubles

as per OKEI

Address: 6, Engels Str., Minsk, 220030

Description of product

Line item

For reporting period

For the same period of preceding year

1

2

3

4

I. RECEIPTS AND EXPENDITURES BY TYPES OF ACTIVITY

Proceeds of the sale of products, goods, works and services

010

1,125,624

955,385

Taxes included in the proceeds of the sale of products, goods, works and services

020

108,219

104,257

Proceeds of the sale of products, goods, works and services (less VAT, excises and similar compulsory charges) (010-020)

030

1,017,405

851,128

Including: budgetary subsidy for covering difference in prices and rates

031

437

307

Cost of products, goods, works and services sold

040

852,538

721,971

Administrative costs

050

0

0

Commercial costs

060

53

0

Profit/loss on sales (030-040-050-060)

070

164,814

129,157

II. OPERATING INCOME ND EXPENSES

0

0

Operating income

080

91,688

66,438

Taxes included in operating income

090

2,909

2 144

Operating income (less VAT and other compulsory charges) (080-090)

100

88,779

64,294

including:

gains on sale of assets (other than securities and

foreign currency)

101

4,292

3,575

gains on sales of trading securities

102

0

0

gains on share in other entities

103

7,090

15,264

other operating income

104

77,397

45,455

Operating expenses

110

74,802

43,527

including:

expenses on sale of assets (other than securities and

foreign currency)

111

2,839

2,513

expenses on securities transactions

112

0

0

other operating expenses

113

71,963

41,014

Profit (/Loss) on joint venture

120

0

0

Profit (Loss) from operating income and expenses (100-110+/-120)

130

13,977

20,767

III. NONTRADING INCOME AND EXPENSES

0

0

Nontrading income

140

8,569

9,333

Taxes included in nontrading income

150

526

681

Nontrading income ((less VAT, excises and similar compulsory charges) (140-150)

160

8,043

8,652

Nontrading expenses

170

40,916

68,459

Total provisions for losses

180

0

0

Profit (loss) from nontrading income and expenses (160-170+180)

190

-32,873

-59,807

PROFIT/LOSS FOR REPORTING PERIOD (+/-070+/-130+/-190)

200

145,918

90,117

Taxes and fees levied from income

210

73,294

60,840

Expenses and payments from income

220

108

119

Total income tax allowance

230

0

0

PROFIT/LOSS TO BE DISTRIBUTED (+/-200-210-220-230)

240

72,516

29,158

Description of product

Line item

At the end of reporting period

Income

Expenses

1

2

3

4

Upkeep of communal services

171

15

2,479

Charges, fines, and contractual penalties

172

1,907

68

Written-off payables and receivables

173

19

320

Differences in exchange and in the amount

174

411

154

Charity

175

-

1,379

Deficiency, loss or damage of assets

176

20

46

Extraordinary items

177

-

-

Other income and expenses

178

5,671

36,470

Director ________________ K.S. Tikar

(signature) (Surname, Initials)

Chief Accountant (Accountant) _________ V.Ya. Shurak

(signature) (Surname, Initials)

Date: 05 March 2007