The explanatory note to the accounting report of the open joint-stock company "Sibirtelecom" for 2002 (стр. 3 )

4.Analysis and assessment of the structure of the balance

The structure of the balance was characterized with the following figures on December 31, 2002.

Table No 2

Figure	December 31, 2002	Standard С (*)
The rate of the absolute liquidity	0,11
The rate of the current liquidity	0,79	1 – 1,5
The rate of the maintenance security of turnover means	- 0,56	> 0.1
Profitability of sales	22,75

* The standard characterizes the satisfied the structure of the balance

Note

The rate of the absolute liquidity characterizes general providing the company with the turnover means for economic activities and paying urgent debts. It is defined in the ratio of the actual cost of turnover means in the form of stores, finished products, money, debts of other companies and people and other turnover assets (the total of Part II in the assets of the balance-sheet) to the most liabilities of the company in the form of short-term credits, short-term loans, debts (the total of Part V in the liabilities of the balance-sheet).

The rate of the maintenance security of turnover means characterizes the availability if the own turnover means which are necessary for the financial stability. It is defined in the ratio of the difference between the internal funds (the total of Part III in the liabilities of the balance-sheet) and the actual cost of the stores and other non-turnover assets to the actual turnover means in the form of the stores, non finished manufacture, finished products, money, debts of other companies and people and other turnover assets (the total of Part II in the assets of the balance - sheet).

4.1.Liquidity and financial resources

Today it is necessary to obtain funds to finance the modernization of the networks because of the growing competition in the market of telecommunications. But the current procedures of forming table of charges do not allow the company to obtain enough money for the development. At the same time the company do not have free access to the external financial resources. Because of this situation the liquidity of the company is not certain. Besides, the company does not have permanent resources of long - term financing. So there is the overdrawing of short-term liabilities of the company to the working assets. The overdrawing is 917,765,000 rubles on December 31, 2002.

The company carries on looking for additional resources of long - term financing, but the directors do not guarantee that these additional resources may be found on the acceptable commercial conditions. The company may have to use financing in a foreign currency in the future. The liabilities in a foreign currency reside in some internal risk because of changing of the rate of exchange, and the company does not have possibilities for hedging.

The company intends to use resources of financing:

issue of bonds, restructuring of outstanding credits in Vnesheconombank (the total is 10,888,000 euros), money on account of the company, flows of money from main kinds of activity, financial resources of Russian lending agencies, commodity credits from equipment suppliers.

Besides, the directors of the company managed to defer payments, and they think there will be such possibilities in the future if the company is short of turnover means.

At the same time the directors of the company think that the flows of money from main kinds of activity will be enough to finance current operations. So the suggested financial report was not corrected according to the above-mentioned factors of uncertainty.

5. The flow of profits in 2002

Table No3

Type of activity	Выручка (Line 010 from Form No 2)	Cost value (Line 020,030, 040 from Form No 2)	Profit (Line 050 from Form No 2)	The flow of profits in D,%
2002	2001	2002	2001	2002	2001
(including the joined companies)
Communication services		9305446	9160667	7317471	2752162	1987975	764187
Others	297967	294325	272308	251294	25659	43031	-17372
Total		9599771	9432975	7568765	2777821	2031006	746815

According to the totals of the year 2002 there is increase of profits from communications services. The detailed analysis of the financial and economic activity of the open joint-stock company "Sibirtelecom" is in the annual report of the company.

The information about the flow of the main investments of the company to the authorized capitals of the branch companies, dependent companies and other ones.

Table No 10-1

	Contracted Name	Full Name	Code of Page from Form No 1	Balance Cost January 1st, 2002 (thousands of rubles)	Credit	Debit	Balance Cost January 1st, 2002 (thousands of rubles)
	Long-term investment (06, 82)	140	95266	687	9952	86002
	Investment in branch companies	141	49000	64	2411	46653
Kemerovo	CJSC "Stack GSM	The closed joint-stock company "Sotovy Telefon Kuzbassa GSM"	141	55	59		114
Barnaul	CJSC "Altel"	The closed joint-stock company "Altayskaya telecommikatsionay companya"	141	1968			1968
Tomsk	PSO Ekrantelecom, Ltd	Private Security Organisation Ekrantelecom, Limited Liability Company	141	9339			9339
Novosibirsk	OJSC "NGTS-PAGE"	The open joint-stock company "NGTS-PAGE"	141	2395			2395
Novosibirsk	Region-cet, CJSC	The closed joint-stock company "Region-cet"	141	66			66
Novosibirsk	RINET, OJSC	The open joint-stock company "Regional Informational Nets"	141	77			77
Omsk	TC TAKO, Ltd	Telephone Company TAKO, Limited Liability Company Компания "ТАКО"	141	0			0
Barnaul	ALTINCOM, CJSC	The closed joint-stock company "Altayskay Investment Company"	141	329			329
Barnaul	SCCC, CJSC	The closed joint-stock company "South Siberian Cellular Communication	141	28			28
Krasnoiarsk	ETK, CJSC	The closed joint-stock company "Eneseytelekom"	141	19800			19800
Irkutsk	BWK, CJSC	The closed joint-stock company "Baikalwestkom"	141	12537			12537
Kemerovo		The closed joint-stock company "Kedr RMC"		2396	5	2401	0
Chita		Limited Liability Company "Selling House "Electrosviaz"		10		10	0
	Investments to dependent companies	142	8340	2	281	8061
Novosibirsk	NOVOCOM, CJSC	The closed joint-stock company "NOVOCOM"	142	2080			2080
Novosibirsk	TeleRoss-Novosibirsk, CJSC	The closed joint-stock company "TeleRoss - Novosibirsk "	142	230			230
Novosibirsk	NCC-450, CJSC	The closed joint-stock company "Novosibirsk Cellular Communication-450"	142	25			25
Novosibirsk	SCS-900, CJSC	The closed joint-stock company "Siberian cellular systems-900"	142	30			30
Omsk	SMC Cviazinteh, Ltd	Scientific and manufacturing company "Cviazinteh", Limited Liability Company	142	5			5
Irkutsk	ATC-41, CJSC	The closed joint-stock company "ATC-41"	142	1985			1985
Irkutsk	ATC-32, CJSC	The closed joint-stock company "ATC-32"	142	6			6
Irkutsk	ICH, OJSC	The open joint-stock company "Irkutsk clearing house"	142	680			680
Tomsk	YellowPages-Tomsktelecom, CJSC	The closed joint-stock company " YellowPages-Tomsktelecom"	142	1	2		3
Chita	ChitaNET, CJSC	The closed joint-stock company "ChitaNET"	142	357			357
Gorno-Altaysk	G – ACC, CJSC	The closed joint-stock company "Gorno-Altaysk cellular communication"	142	15			15
Novosibirsk	DN and TCS N, OJSC	The open joint-stock company "Digital network and telecommunication systems of Novosibirsk Region"	142	27			27
Omsk	OCC, CJSC	The closed joint-stock company "Omsk cellular communication"	142	13			13
Ulan-Ude	JSC Mobiltelecom, OJSC	The open joint-stock company "Joint-stock company of developing telephone communication "Mobiltelecom"	142	2599			2599
Novosibirsk	SIMedia-Sibir, Ltd	Limited liability company "Sviazinvest-Media-Sibir"	142	3			3
Novosibirsk	SIBTON, CJSC	The closed joint-stock company "SIBTON"	142	4			4
Tomsk		The closed joint-stock company "Tomskkocmosviaz"	142	281		281	0
	Investments to other companies:	143	25310	54	2217	23147
Novosibirsk, Barnaul, Omsk, Irkutsk	ROSTELEGRAGH, CJSC	The closed joint-stock company "Russian document electrical communication "ROSTELEGRAGH"	143	80			80
Chita	CIT, CJSC	The closed joint-stock company "Communication and information technologies"	143	145		24	121
Chita	Zabtelecom, Ltd	Limited Liability Company "Telephone company "Zabtelecom"	143	931			931
Barnaul	Altaytelefonstroy, Ltd	Limited Liability Company " ltaytelefonstroy"	143	19			19
Barnaul	Eliennetwork, CJSC	The closed joint-stock company "Eliennetwork"	143	162			162
Omsk	CCC, CJSC	The closed joint-stock company "Siberian cellular communication"	143	1710			1710
Ulan-Ude	Kontinental-Link, Ltd ООО	Limited Liability Company "Kontinental-Link "	143	6			6
Novosibirsk	CB "Aktsept", OJSC	The open joint-stock company "Commercial bank "Aktsept"	143	4770			4770
Barnaul	JSCB AltayBusiness-bank, OJSC	The open joint-stock company "Joint-stock commercial bank "AltayBusiness-bank"	143	684			684
Omsk	Mobile systems of communication, OJSC	The open joint-stock company "Mobile systems of communication"	143	8			8
Chita	Loktelecom, OJSC	The open joint-stock company "Loktelecom"	143	134			134
Krasnoiarsk	RusLizingCviaz, CJSC	The closed joint-stock company "RusLizingCviaz"	143	2847			2847
Chita	SIBINTERTELECO, CJSC	The closed joint-stock company "SIBINTERTELECO"	143	275			275
Kemerovo	Russian and Italian telephone company, OJSC	The open joint-stock company "Russian and Italian telephone company"	143	415			415
Irkutsk	Kostars, CJSC	The closed joint-stock company Insurance company of the trade union for employees from communication companies "Kostars"	143	51			51
Novosibirsk	JSCB Sibirskiy bank, OJSC	The open joint-stock company "Joint-stock commercial bank "Sibirskiy bank"	143	284			284
Novosibirsk	Sibakadembank, OJSC	The open joint-stock company "Commertial bank of scientific and social development "Sibakadembank"	143	3000			3000
Tomsk	IFC Tomich, CJSC	The closed joint-stock company "Industrial and financial corporation "Tomich"	143	5			5
Kemerovo	JSCB Kuzbassugolbank, OJSC	The open joint-stock company " Joint-stock commercial bank "Kuzbassugolbank"	143	6348			6348
Tomsk	Tomskpromctroybank, OJSC	The open joint-stock company "Tomsk joint-stock investment, commercial, industrial and building bank"	143	620			620
Barnaul	CB Altaykapitalbank, Ltd	Limited Liability Company "Commercial bank "Altaykapitalbank"	143	75			75
Novosibirsk	CJSC ЗАО "СБ"	The closed joint-stock company Siberian exchange stock”	143	0			0
Novosibirsk, Ulan-Ude, Tomsk	CB Sviazbank, OJSC	The open joint-stock company "Regional commercial bank of development, information	143	280	54		334
Ulan-Ude	Siberian SML, OJSC	The open joint-stock company "Commercial bank "Siberian society of mutual loan"	143	154			154
Novosibirsk	Novosibirsk municipal bank, OJSC	The open joint-stock company "Novosibirsk commercial municipal bank"	143	23			23
Krasnoiarsk	JSCB ENESEY, OJSC	The open joint-stock company "Joint-stock commercial bank	143	7			7
Omsk	Omskpromstroybank, OJSC	The open joint-stock company "Omsk investment, commercial, industrial and building bank"	143	10			10
Barnaul, Omsk, Kemerovo	Sberbank of Russia, OJSC	The open joint-stock company "Joint-stock commercial savings and loan bank of Russian Federation	143	76			76
Novosibirsk		Siberian registration company, Ltd	143	60		60	0
Barnaul		The closed joint-stock company “Remtehpredpriyatie”	143	10		10	0
Krasnoiarsk		The closed joint-stock company “Kedr”	143	2029		2029	0
Krasnoiarsk		Krasnoyarsk registration chamber	143	39		39	0
Omsk		The closed joint-stock company “Siberian capital”	143	1		1	0
Omsk		The closed joint-stock company “Telenoves”	143	3		3	0
Chita		Chitapromstroybank, Ltd	143	51		51	0
			143
	Loans	144	400		400	0
	Other long-term investments	145	12216	567	4643	8141
Novosibirsk		Investment	145	5434	542	3441	2536
Irkutsk ( in the balance Novosibirsk)		Bank "Alpari" bill of credit	145	5780		200	5580
Novosibirsk		bill of credit			25		25
Novosibirsk	Non-commercial Partnership "Centre of researching problems of development of telecommunications"	Non-commercial Partnership "Centre of researching problems of development of telecommunications"	143	1000		1000
Novosibirsk	Association "Sibdalsviaz"	Association "Sibdalsviaz"	143	1		1
Tomsk	Association of communication companies of Siberia and the Far East "Sibdalsviaz"	Association of communication companies of Siberia and the Far East "Sibdalsviaz"	143	1	доля	1

The profits received as interests from long-term investments are shown in the article "The profits from collaboration with other organizations" of the report about profits and losses. The profit is 6,056,000 rubles (the profit in 2001 is 13,743,000).