South Telecommunications Company (OTS USA: STJSY; RTS KUBN, KUBNP), the largest telecom operator in the Southern federal district of the Russian Federation, offering a large range of telecom solutions (local, long-distance and international telephone services, Internet access, data transmission, channel leasing, etc.) has released its first financial statement done to International Accounting Standards (IAS).  Until 2002, STC prepared accounting reports in accordance with US GAAP.  The statement was drafted with the participation of Ernst & Young Vneshaudit accounting firm. 

The consolidated financial statement of South Telecommunications was drafted taking into account the recent restructuring of the company and presents the unified key performance indicators of the merged regional entities which formed STC, and its subsidiaries, as listed below:

- revenue from primary activity in 2002 stood at Rub 11,885,370,000*

- EBITDA ** for 2002 reached Rub 4,710,460,000

- profit from primary activity was Rub 891,966,000

- net profit stood at Rub 1,046,116

- EBITDA margin ratio was 39.6%

- Revenue per share was Rub 0.30

- The balance sheet value of all assets at January 31, 2002 was Rub 19,591,653,000

- The company’s equity given the impact of inflation on charter capital was Rub 1,741,475,000 and stood at Rub 12,404,397,000 at December 31, 2002

- Retained profit and other provisions are assets calculated by deducting liabilities and charter capital and show a value of Rub 9,365,143,000 as part of shareholders’ equity.

*All financial indicators as listed taking into account the purchasing power of the Russian ruble as of December 31, 2002.

** At STC the EBITDA indicator is calculated as the amount of profit earnings before taxation, depreciation and interest payable.  Those interested in a full description of STC’s 2002 IAS financial statement and the company’s 1997 – 2001 financial statements can view these documents, which are posted on STC’s corporate website atwww.stcompany.ruinthesectionentitled “For Shareholders”