According  to  preliminary  data,  the 1997 non-audited profit of Gutta

head  company  in Latvia was about 2.9 million LVL. After consolidation

of  the  1997  figures for the entire Gutta group, the consolidated net

profit  is  expected  to reduce. The adjustments are caused by the high

foundation costs of new companies and by mastering new markets, as well

as  by  extra  expenditures  related  to  launching  of  new production

enterprises in Moscow and in Kijev.

To  ensure  a more advanced and direct management to the Gutta daughter

company  in  Moscow, where the opening of the new production enterprise

is  scheduled  for  August-September  1998,  Mr. Nikolay Lovtsov, Gutta

President,  has  personally  undertaken  the  responsibilities  of  the

general manager of Gutta daughter company in Moscow.