Ernst and Young LLC has presented to the Board of Directors of OJSC North-West Telecom a report on the results of an audit of the financial accounts of North-West Telecom for 2005 prepared in compliance with the international financial reporting standards, which has been considered at a meeting of the Audit Committee of the Board of Directors .   The auditor s have issued to OJSC N.W.Telecom a positive conclusion according to IFRS for 2005.

According to specialists of Ernst and Young, North-West Telecom has made significant steps and achieved positive results in improving the system of internal control over the process of preparing consolidated financial reports according to IFRS and the procedure s used in its framework .

In the accounts of OJSC North-West Telecom for 2005 according to IFRS, an audit was carried out and the re-evaluation of OJSC N.W.Telecom 's fixed assets prepared by the independent appraiser American Appraisal (AAR) Inc. was confirmed in respect of telecommunications equipment and communication networks . Besides, reservations in connection with the reporting on merged companies have been lifted.   For the second year on end, an appraisal of pension obligations has been carried out with the participation of an independent actuary, and for the first time a fair evaluation of OJSC N.W.Telecom 's financial investment in shares of the Telecominvest holding has been carried out.

In connection with the stricter requirement s of the international standards on audit and preparation of financial reports from regulating authorities both to auditor s and to companies, North-West Telecom is planning to improve and formalize the control procedure s, to carry out additional training of employees and to continue implementing an information system that will make it possible to ensure the necessary quality and promptness level in preparing the IFRS reporting.

According to Chief Accountant of OJSC North-West Telecom Maya Semchenko, "the fact that a positive auditor 's opinion according to IFRS has been obtained is a sufficient achievement for the Company in the field of reporting.   This proves once again the success of North-West Telecom's actions aimed at implementing the principle of transparency of the financial policy and bringing the procedure s of Company's reports preparation to the requirement s of the international community."