MERKO EHITUS

ANNOUNCEMENT



AGREEMENT SIGNED FOR PURCHASE OF TALLINNA TEEDE AS SHARES



On 31.12.2001 AS Merko Ehitus signed an agreement with the 

City of Tallinn for purchase of one hundred ninety thousand 

(190,000) Tallinna Teede AS (registry code 10344640, address 

Betooni 24, Tallinn) registered shares at EEK 100 par value. 

190,000 registered shares total 100% of the company's share capital.

Merko Ehitus paid EEK 42.6 million for the aforementioned shares.



Tallinna Teede AS primary activities include:

1. Design, construction, and maintenance of road structures;

2. Construction and maintenance of bridges, viaducts, drainage 

systems, hydro and other engineer structures;

3. Design, construction monitoring and general contracting;

4. Research, design and testing of road construction materials.



The above transaction shall not be considered as transaction 

with related parties.



Tallinna Teede AS financial ratios of last 3 years, in thousand EEK.



                           1998          1999          2000



Turnover                 75,857        93,766        79,317



Profit/loss               8,891         8,422         5,231



Dividends per share     0.50 kr         21 kr         18 kr



Earnings per share        47 kr         44 kr         28 kr





No substantial changes have taken place in the company's economic 

activities during the last financial year.



Tallinna Teede AS is not involved in any court cases or arbitral 

court procedures, nor is the company currently involved in any 

loan commitments.



Tallinna Teede AS new Supervisory Board members are:



1. Toomas Annus

2. Tõnu Toomik

3. Ott Kikkas

4. Ülo Metsaots

5. Peep Siitam





Tallinna Teede AS Management Board members are:



1. Tiit Padar

2. Rein Põdra

3. Roland Sumre





Tallinna Teede AS

BALANCE SHEET 1999 AND 2000

Audited, in thousand EEK



                                       31.12.2000 31.12.1999



Cash and bank                              13,614     17,370



Accounts receivable                         3,834      2,237

Allowance for doubtful accounts               -40          0

Total customer receivables                  3,795      2,237



Receivables from subsidiaries

and parent company                          2,382          0

Other current receivables                       1         25

Total other receivables                     2,383         25



Interest receivable                            32         53

Total accrued income                           32         53



Prepaid/refundable tax receivables              0      1,050

Other prepaid expenses                        128        167

Total prepaid expenses                        128      1,217



Raw materials                               1,151        819

Merchandise purchased for resale               22         17

Prepayments to suppliers                       13         82

Total inventories                           1,186        918

TOTAL CURRENT ASSETS                       21,137     21,821



Units in subsidiaries                       3,520      4,720

Other shares, units and bonds                   0          2

Other non-current receivables                 259         14

Total long-term financial assets            3,779      4,736



Land and buildings                          6,126      6,303

Plant and equipment                        47,626     46,698

Other equipment and fixtures                4,371      3,778

Accumulated depreciation                  -22,834    -18,671

Fixed assets under construction               161        189

Total tangible assets                      35,449     38,296



TOTAL NON-CURRENT ASSETS                   39,227     43,033



TOTAL ASSETS                               60,364     64,853





Debentures                                  4,349      5,215

Current period repayments

of long-term bank loans                       529        737

Total debt obligations                      4,878      5,952



Accounts payable                            1,105        740



Tax liabilities                             1,189      1,321



Salary-related accrued expenses             1,419      1,612

Interest payable                               76         76

Other accrued expenses                        221         30

Total accrued expenses                      1,677      1,718



TOTAL CURRENT LIABILITIES                   8,849      9,731



Non-convertible debt                        2,961      7,271

Bank loans                                      0        529



TOTAL NON-CURRENT LIABILITIES               2,961      7,800



TOTAL LIABILITIES                          11,810     17,530



Share capital                              19,000     19,000

Mandatory legal reserve                     1,430      1,009

Other reserves                             14,430     10,429

Retained earnings                           8,463      8,300

Net profit for the year                     5,231      8,585

TOTAL OWNERS' EQUITY                       48,554     47,323



TOTAL LIABILITIES AND OWNERS' EQUITY       60,364     64,853







Tallinna Teede AS

INCOME STATEMENT 1999 and 2000

Audited, in thousand EEK

                                             2000       1999



Net sales                                  79,317     93,766

Other revenue                                 730        548

TOTAL REVENUE                              80,047     94,314



Materials, consumables,

supplies and services                      42,896     54,009

Other operating expenses                    2,563      3,650

Personnel expenses

       wages and salaries                  16,830     16,392

       social security taxes                5,554      5,397

Depreciation                                4,925      4,837

Other expenses                                305        232

TOTAL EXPENSES                             73,072     84,516



OPERATING PROFIT                            6,975      9,798



Financial income from subsidiaries              0        162

Income from other noncurrent

financial investments                          75          1

Other interest and similar income             154        363

TOTAL FINANCIAL INCOME                        229        526



Financial expenses related

with subsidiaries                           1,117          0

Interest expense                              846      1,139

Foreign exchange loss                          10          0

Other financial expenses                        0         12

TOTAL FINANCIAL EXPENSES                    1,973      1,151



PROFIT BEFORE TAXES                         5,231      9,174



Income tax                                      0        589



NET PROFIT FOR THE PERIOD                   5,231      8,585





Marko Pern

Financist

+372 6 105 161