"Grindeks"  expects  that  in  2003 revenues from participation in TPP

will  be  twice  as  high  as actual revenues from participation in the

company in 2002. The forecast is based on two assumptions: the expected

increase  of  TPP  net  profit  and  increase  of  "Grindeks" ownership

interest  in  TPP.  It  is expected that the received profit will be in

proportion  to  the ownership interest: 12.34% on the top of the profit

received  if  "Grindeks"  had retained the holding at 64.14% level. The

respective figures for 2002 are presented in the table:



+-------------------------------------------+---------------------------------------+-----------------+

|                                           |2002 (actual)                          |2003 (planned)   |

|TPP net profit                             |4,995,114 EEK                          |7,923,059 EEK    |

|                                           |199,804 LVL                            |316,922 LVL      |

|Grindeks ownership interest %              |54.96% (from the beginning of the year)|76.48%           |

|                                           |up to 64.14% (from 07.11.02)           |(from 11.04.2003)|

|Grindeks revenues from participation at TPP|104,969 LVL                            |6,059,566 EEK    |

|                                           |                                       |242,382 LVL      |

+-------------------------------------------+---------------------------------------+-----------------+





The expected economic effect from the deal

The  rationale  behind  the  deal  is  "Grindeks"  strategy to maximise

profits  via  a  more  efficient  use  of  resources,  at the same time

offering  a wide and competitive range of products. This is achieved by

combining   the   resources  of  both  companies  and  specialising  in

production.  Acquisition  of  TPP  shares  is based on the intention to

integrate  TPP  in  the parent company "Grindeks" , and establishes the

conditions   for   implementing   the  above  business  strategy,  also

emphasising  a  less  complicated  company management. The intent is to

fully  integrate TPP and make it a specialised company. Already now TPP

speciality  is  the  manufacturing of ointments in compliance with Good

Production  Practice. The economic justification for acquisition of TPP

shares  is  based on forecasts about TPP profit dynamics, consequently,

increased "Grindeks" revenues from capital participation.

Long-term  strategy  envisages  synergies  derived  from establishing a

holding  of  Baltic  pharmaceutical  companies  that  would be based on

mutually   advantageous   co-operation  between  Baltic  pharmaceutical

companies.  TPP  integration  is  an evidence of concrete activities to

attain the objective.

The   first   steps  towards  Baltic  pharmaceutical  company  enhanced

co-operation  were  made  in  1998  when  "Grindeks"  acquired  control

interest  in  TPP.  Currently  further  co-operation possibilities with

other Baltic pharmaceutical companies are assessed. A feasibility study

of the potential co-operation will be completed in autumn of this year.

At  that  time  the  development  perspectives of Baltic pharmaceutical

holding would be outlined.