AS HARJU ELEKTER                   PRESS RELEASE              2005-03-04



ESTABLISHMENT OF SUBSIDIARY



For the purpose of streamlining the management structure of the group,

specifying the rights and liability as well as better organisation of

accounting and analysis, at its meeting of 3 March 2005, the supervisory board

of the company decided to establish a 100% subsidiary of Harju Elekter on the

basis of the Electrical Equipment Plant of Harju Elekter. The business name of

the company will be AS Harju Elekter Elektrotehnika and it will commence

independent economic activities from 1 April. The financial year of the

company will last from 1 January to 31 December.



The share capital of AS Harju Elekter Elektrotehnika will be MEEK 16, divided

into 1.6 million shares with a nominal value of EEK 10. Shares will be paid

for by monetary contributions into the bank account of the company to be

established. The supervisory board of the company will consist of four members

- chairman Endel Palla and members Andres Allikmäe, Karin Padjus and Lembit

Libe. The management board of the company has one member. The former director

of the Electrical Equipment Plant Ülo Merisalu was appointed as the manager;

he will be removed from the management board of the parent company of Harju

Elekter in relation to his transfer to the position of the manager of AS Harju

Elekter Elektrotehnika since 1 April 2005. All the present employees of the

Electrical Equipment Plant will be transferred to the established subsidiary

under the currently valid employment contracts. At the moment, the Electrical

Equipment Plant employs 149 people.



AS Harju Elekter Elektrotehnika will continue in its present area of activity

which is design, manufacturing and marketing of electrical equipment for

energy distribution, industrial and construction sector. At the same time, the

company will remain liable for the manufacturing of electrical equipment and

product development in the entire group, including in Finland and Lithuania.



The parent company of AS Harju Elekter will focus on the further strategic

development of the group, provision of management, financial and support

services to subsidiary and affiliated undertakings, property management and

commerce.



After the foundation of the new subsidiary, the Harju Elekter Group will

comprise the following manufacturers of electrical equipment in Estonia,

Finland and Lithuania: AS Harju Elekter Elektrotehnika (100%), Satmatic Oy

(100%), UAB Rifas (51%). The group also comprises AS Eltek (100%, Estonia), AS

Keila Kaabel (34%, Estonia) and AS Saajos Balti (33.3%, Estonia) as well as a

holding in the Finnish publicly traded company PKC Group Oy (10.6%).





Andres Allikmäe

Chairman of management board

+372 6 747 400