2000.05.09, Tallinna Farmaatsiatehas, TLN

TALLINNA FARMAATSIATEHAS

ANNOUNCEMENT



INDEPENDENT AUDITOR'S REPORT 1999



To the shareholders of Tallinna Farmaatsiatehase AS:



We have audited the annual accounts of Tallinna Farmaatsiatehase AS ("the

Company") for the period ended 31 December 1999. These annual accounts are

the responsibility of the Company's Board of management. Our responsibility 

is to express an opinion on these annual accounts based on our audit. 

The annual accounts for the period ended 31 December 1998 were audited by 

other auditors whose report, dated 16 April 1999, expressed a qualified 

going concern opinion on those accounts.



We conducted our audit in accordance with International Standards on Auditing.

Those standards require that we plan and perform the audit to obtain 

reasonable assurance about whether the annual accounts are free of material

misstatement. An audit included examining, on a test basis, evidence 

supporting the amounts and disclosures in the annual accounts. An audit also

included assessing the accounting principles used and significant estimates

made by management, as well as evaluating the overall on the annual accounts

presentation of annual accounts. We believe that our audit provide a 

reasonable basis for our opinion.



We were not able to observe the taking of the physical inventories taken as

of 31 December 1999 because that date was prior to the date we were engaged

as auditors for the Company.  The inventory was stated at 26,940 thousand EEK

as of 31 December 1999.  Due to the nature of the Company's records, we were

unable to satisfy ourselves as to the inventory quantities by means of other

auditing procedures. Furthermore, in our judgement, the amounts of the

inventories at 31 December 1999 materially affect the determination of the

results of operations and the cash flows and earnings per share, for the year

ended 31 December 1999.



Accounts receivable contain receivables from insolvent companies in the 

amount of 1,600 thousand EEK. In our opinion an allowance should be made

against these receivables which should reduce the net assets and net profit

by up to 1,600 thousand EEK and effect the earnings per share.



In our opinion, except for the potential effect on the annual accounts of 

the matters referred to in the preceding paragraphs, based on our audit, 

the annual accounts present fairly, in all material respects, the financial

position of the Company as of 31 December 1999 and its results for the year

then ended, in accordance with International Accounting Standards and 

Estonian Accounting Law.





Deloitte & Touche

Villu Vaino

Auditor

Tallinn,

05 May 2000





Raivo Unt

Financial Director

+372 6 120 201