Tableof ContentsFrom the President .............................................. 4Towards the Stock Exchange .............................. 6Focus on the Customer ....................................... 7Industry ................................................................ 8Agriculture ........................................................... 10Environment ........................................................ 12Research and Development ................................ 14Deposits ............................................................... 15Personnel report .................................................. 16Environmental report ........................................... 17Board of Directors’ report .............................. 18Consolidated income statement ................... 20Consolidated balance sheet .......................... 21Consolidated financial analysis ..................... 22Parent Company income statement ............. 23Parent Company balance sheet..................... 24Parent Company financial analysis ............... 25Accounting principles .................................... 26Notes to the financial statements................. 28Calculation of financial ratios ........................ 38Five-year review ............................................. 39Auditors’ report .............................................. 40Group structure ................................................... 41Board of Directors, Management Group ............. 42Addresses ............................................................ 43

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From thePresidentThe past year was characterised by growth. Sales,on a comparable basis, continued to grow and PartekNordkalk has invested considerably in both capacity andquality. In accordance with its overall strategy Nordkalkhas strengthened its position as market leader inthe Baltic region. The present privatisation of the limeindustry in Poland offers new opportunities to reinforceour position on the Polish market.

Extensive programme of investment

The extensive programme of investment that has beenpursued during the past three years has strengthenedthe company’s competitiveness. The continually risingdemands on quality, the growing pressure on prices andhardening competition have stimulated measures thatnow put Nordkalk in a good position to benefit from theeconomic growth in the Baltic region. The programmeincludes company acquisitions, market investment,replacement investment and investment in theenvironment.

Two new grinding plants in Finland were taken intoproduction during the year. The plant in Kokkola hasbeen built in the immediate neighbourhood of KemiraChemicals Oy’s phosphate factory in order to exploitsynergy effects between user and raw-material supplier.In Pargas capacity for the manufacture of limestoneproducts for the plaster and mortar industry wasexpanded. The construction industry in Finland experi-enced an upswing during the year and as a result thenew capacity could be utilised according to plan.The new lime kiln at Tytyri, which began production atthe end of 1998, made it possible to meet the growingdemands on capacity and quality in the market forpaper pigment raw material.

In Sweden a start was made on renewing the controlsystem in the lime kiln in Luleå and on the island ofGotland a new fuel system has been brought on stream.The new system uses waste oil as a source of energyfor the lime kiln.A considerable land area around the Uddagården plantwas bought in Falköping.

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Geographical expansion

Expansion in Poland continued during the year andwe now have a foothold on the market. In early 1999Nordkalk acquired a limestone plant at Slawno in south-ern Poland. The plant comprises a quarry and a grindingplant for asphalt filler and agricultural lime. A grindingfactory was built in Szczecin and this started operatingat the beginning of 2000. The factory makes limestone-based absorbents for flue-gas cleaning. Nordkalk hasconcluded a long-term agreement to supply the nearbyDolna Otra coal-fired power plant.

The privatisation process in Poland and the restructuringof the lime industry in Europe offers opportunities forfurther expansion in accordance with our Baltic strategy.

Operations focus on limestone

In April Partek Nordkalk sold its 50 per cent interestin SP Minerals to the company’s other owner, SibelcoScandinavia AB, a subsidiary of the Belgian Sibelco Group.SP Minerals supplies industrial minerals such as quartzand feldspar. The sale was a part of Nordkalk’s policyto concentrate on products based on limestone.

Strong equity/assets ratio and opportunitiesfor growth

In October Partek Nordkalk issued a capital loan, GoingPublic Bond, of MEUR 100. The high expectations thatwe had of the loan at the start of subscription were ful-filled many times over - the bond was oversubscribedtwo and a half times. Of the 900 persons taking up thebond more than half were Partek’s shareholders. Formany of them the fact that the bond offered an oppor-tunity to take a stake in Partek’s roots, limestone, wasthe attraction. In addition, the attractive rate of interesttogether with Nordkalk’s stable profitability and goodprospects for growth contributed to raise investors’interest.

With the aid of the capital loan Nordkalk has been ableto improve its equity/assets ratio and now has greater

possibilities of pursuing the strategy that has madethe company the largest producer of limestone-basedproducts in northern Europe. Nordkalk’s intention is tohave the company listed on the stock exchange beforethe capital loan matures.

One hundred years of experience

Nordkalk’s strength lies in the close familiarity with thelime industry that the company enjoys. This is not justa question of geological expertise and access to primeraw materials but also of exploiting logistics and basingproduct development on the customers’ processes anddemands. We have a broad customer base, above all inindustry, and this reduces our vulnerability to cyclicalvariations in the market.

Nordkalk has returned a good result even though itdoes not entirely come up to our own aims and themarket’s expectations. The challenge that faces us isto exploit fully the investments we have made so thatthe stable trend continues.

Continued good prospects

Despite the hardening competition in the Baltic regionsales are expected to rise somewhat in 2000. Total de-mand in the steel, paper and pulp industries is expectedto increase a bit and market trends in the constructionindustry, agriculture and environmental managementare expected to continue favourable.

Partek has shown that it believes in our possibilitiesof growing and evolving our operations further. We havestrengthened our position on the market and we haveeverything needed for an ongoing profitabledevelopment.

Pargas, February 18th, 2000

Christer Sundström

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In October Partek Nordkalk issued a capital loan (GoingPublic Bond) of MEUR 100. The intention is to get thecompany listed on the stock exchange before the loanmatures. The term of the loan is five years and carriesa fixed rate of interest of 6.71 per cent. The conversionrate for the bond to Partek Nordkalk shares will be fixedwhen the company is listed. If the shares are not listed,the interest will be raised by two percentage points.If the loan is not converted to Partek Nordkalk shares,it will be repaid in a single payment on 28.10.2004 pro-vided that the conditions governing repayment of theloan are met. The loan is quoted on the I-list of theHelsinki Stock Exchange.

The subscription period was 8.10. - 22.10.1999.The bond was oversubscribed two and a half times bysome 900 persons, more than half of them Partek’sshareholders. They enjoyed an advantage over othersubscribers in that they were guaranteed the right toreceive at least a proportion corresponding to theirshareholding on 9.9.1999, however at least 5000 euro.

The lead manager of the loan was Mandatum Bank.

Background to the listing

Partek is today an engineering company producingmobile logistical solutions for customers in the trans-portation sector, industry and primary production.

The listing of Nordkalk on the stock exchange will clarifythe true value of the lime operations and strengthen thecompany’s own profile.

During the last ten years Partek has consciouslystriven to develop Nordkalk. During this period thecompany’s sales have increased from MEUR 29 tojust over MEUR 187. Partek is convinced that Nordkalkcontinues to enjoy good prospects for developing itsactivities and so increase the company’s value.

Nordkalk is the largest manufacturer of limestone-based products in northern Europe. The capital loanwill make it possible to pursue a strategy supportingthe company’s aim. It also enables Nordkalk to broadenits ownership base following a possible listing.

Road shows all over Finland

Before the loan was issued, a large number of informa-tion events were arranged to inform both the generalpublic and institutional investors. Even at this stage itwas clear that there existed considerable interestamong both Partek’s shareholders and other investorsin taking a stake directly in the production of lime. Thefavourable rate of interest combined with Nordkalk’sstable profitability and good prospects for growth alsocontributed to the great interest shown.

Towardsthe Stock Exchange

Lime in some form or other is a part of our everyday life. Duringthe road shows listeners were quite surprised to hear of the diverserange of uses to which limestone products are put. Nordkalk´s Presi-dent Christer Sundström, used an ordinary breakfast table to illustratehis message. Ground lime makes for harder eggshells, the liming offields raises the quality of our bread, lime is used in the refining ofsugar. Lime is also used to purify our water and in the manufactureof steel to form slag. Paper and pulp are also dependent on limein their manufacturing processes.

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Partek Nordkalk’s operations during the past fewyears have been characterised by stable profitability.The company’s market position in the Baltic region isstrong and geographical expansion has encompassedthe Baltic countries and, increasingly, also Poland.Nordkalk operates in over thirty places in Finland,Sweden, Estonia, Poland, Russia and Lithuania. Produc-tion is divided between 24 sites, of which 11 are inFinland, 8 in Sweden, 3 in Estonia and 2 in Poland.Limestone is extracted at 19 different sites, of which16 are quarries and 3 underground mines.

The common trademark for all Partek Nordkalk’sproducts is Nordkalk.

Customer-oriented thinking is one of Nordkalk’smost important values. In order to meet the steadily in-creasing demands on quality the company has focussedgreat efforts on developing tailor-made products fordifferent groups of customers.

On the basis of its customer structure Nordkalk’soperations can be divided into three areas or customersegments: industry, agriculture and environmentalmanagement. The most important industrial customersare the steel, paper and pulp, and building materialsindustries. In the manufacture of steel lime is used toform slag and in the paper industry limestone-based

Focus on the customer

products are used as fillers and coating pigments. Inagriculture lime is used primarily for soil improvementand in environmental management for instance forcleaning processes and water purification.

The ability of lime to react with other elements is aproperty that is used to remove impurities from manyprocesses, for example. New uses are being developedall the time to satisfy the customers’ increasingly strictdemands on quality. In most cases there are no otherproducts that can replace lime.

Access to raw materials is a basic necessity for limeoperations. Nordkalk has invested heavily in geologicalcompetence and can supply the qualities required bythe market. Effective logistics are also an importantcondition for delivering raw materials and products,and Nordkalk has access to a good distribution networkfor shipping and transport.

The broad customer base reduces Nordkalk’svulnerability to cyclical variations in demand. Demandfor limestone-based products is affected above allby our industrial customers’ production volumes.Customer-oriented thinking has resulted in operationsbuilt on different forms of partnerships and advancedproduct and process development. In the differentsegments expert teams work to continuously evolvethe processes together with the customer.

GlossaryQuick limeLimestone is burnt in a rotary or shaft kiln to form quicklime. The calcium carbonate in the limestone is convertedinto calcium oxide. The chemical reactivity of the calciumoxide is exploited by, for example, the processing industry.

Hydrated limeProduced via a controlled reaction between quick lime andwater (slaking). The process transforms the calcium oxideinto calcium hydroxide.

GCC (Ground calcium carbonate)A paper pigment that is produced from ground, concen-trated calcium carbonate. GCC is used as a filling andsurfacing agent by the paper industry.

PCC (Precipitated calcium carbonate)A synthetic paper pigment produced from quick lime thathas been made to react with carbon dioxide. PCC is usedas a filling and surfacing agent by the paper industry.

LimestoneLimestone is organic or inorganic, sedimentary or crystal-lized carbonate rock in which over 50% of the minerals arecarbonate minerals. Calcite is the dominating mineral andits chemical name is calcium carbonate (CaCO3).

DolomiteDolomite is a carbonate stone in which over 50% of theminerals are dolomite. The dominating chemical compo-nent of the dolomite mineral is magnesium carbonate(MgCO3).

Dolomitic limestoneDolomitic limestone contains both dolomite and calcite.

Carbonate products:crushed and ground limestoneLimestone is crushed, ground and screened into differentsizes. The size varies according to the usage.

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Industry

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Industry accounts for 75 per cent of Partek Nordkalk’stotal sales. During the past year sales to the steel in-dustry were somewhat lower than the previous yearwhile those to the paper and pulp industry reached thesame overall level. Sales of quick lime as raw materialfor the synthetic paper pigment PCC continued to rise.Increasing competition and the pressure on prices ofthe finely ground limestone pigment GCC led to fallingsales. The temporary decline in demand for GCC gaveNordkalk’s subisidiary, Suomen Karbonaatti Oy, Finland,an opportunity to expand its capacity for new productqualities. The construction industry continued at a goodlevel during the year, and this had a favourable impacton sales. Likewise sales of soil-improvement lime in-creased.

Steel

Lime is used in the manufacture of steel to promotethe formation of slag. Product development takes placein cooperation with the customer and special productsthat meet the continually rising demands on quality areevolved. There are many different methods for removingimpurities from the molten steel and in 1999 Nordkalklaunched a new product, Lime Wire, that has alreadybeen well received on the market.

Paper

The paper industry uses limestone-based products forthe manufacture of coating and filling pigments.

GCC Suomen Karbonaatti Oy in Lappeenranta,Finland, makes the paper pigment GCC(Ground Calcium Carbonate) from finely groundlimestone. Nordkalk owns the company togetherwith the Swiss company Plüss-Staufer, which isthe world leader in the manufacture of groundcalcium carbonate. Nordkalk’s deposit inLappeenranta can deliver a high class marble,which meets the demands on whiteness andpurity set by the paper industry. GCC is usedboth as coating and filling pigment.

PCC Another type of paper pigment, PCC(Precipitated Calcium Carbonate), is madefrom quick lime. Nordkalk is able to supply rawmaterials of the highest quality, especially whenit comes to whiteness and reactivity. Over theyears a wide knowledge of the end-user’srequirements has been developed.

The new lime kiln in Tytyri, Lohja, Finland, thatcame on stream at the end of 1998 made itpossible to meet the rising demands on bothquantity and quality. The limestone that is burntfor PCC lime comes largely from Verdalskalk A/Sin Norway, where Nordkalk is a part owner.

Nordkalk is part owner of a pilot plant, CoatingTechnology Center in Raisio, Finland, where differentcoating and filling pigments together with equipmentfor the paper industry are being tested.

Pulp

Cellulose fibres are used as a raw material in the manu-facture of paper. Wood chips are cooked in a solutionof chemicals where caustic soda is the principal compo-nent. The caustic soda is reused with the aid of quicklime in the pulp mill’s caustizising process. This placeshigh demands on the lime and Nordkalk can supplya product that has the reactivity and purity which arean absolute condition for the recycling process.

Building materials

The building materials industry uses limestone, dolomiteand quick lime as raw materials for cement, rockwool,bricks and mortar, to give just a few examples. In June1999 a new grinding plant was started at Parainen,Finland. Primarily it supplies ground limestone forthe production of mortar.

Road building and soil treatment

Quick lime and ground limestone are used in the build-ing of roads and for treating soil. Ground limestone issupplied to the asphalt industry as a filler and clayeysoils can be stabilised with the aid of quick lime.

Other industry

Products based on limestone are also usedby the chemicals industry to make fertiliser and paint,for example. In sugar refining limestone is used topurify beet juice, and in the manufacture of float glassand glass fibre limestone products are used to removeimpurities from the different processes.Wollastonite is extracted at Nordkalk’s deposit atLappeenranta; this is used for the manufacture ofplastics and ceramics, where it contributes to smoothceramic glazes and high class plastic products.

Myllykoski Paper in Anjalankoski, Finland, uses PCC as a filler in the manufacture of uncoated catalog paper. Nordkalk delivers quick lime fromthe Tytyri lime kiln as raw material. Jukka Kejonen (left), Director of the SC Unit at Myllykoski, and Olav Sjövall, Marketing Director at Nordkalk,inspect one of the paper rolls which is going to be used for different kinds of catalogs and magazines.

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Agriculture

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Sales of lime products for agriculture constitute 13 percent of Nordkalk’s total. The weather is the decisivefactor affecting the season for liming and in the springof 1999 conditions were excellent. It was followed,however, by a rainy autumn, which led to a declinein demand for lime.

Most field and garden plants require lime as a nutri-tional element and also to extract maximum benefitfrom other forms of nutrition. In the Nordic region thesoil is naturally acidic, which makes lime indispensablefor soil improvement in both agriculture and horti-culture.

Lime is also important for domestic animals. Lime foranimal feeds is made from the best and purest lime-stone.

Soil improvement

Lime has been used for improving the quality of thesoil for several thousand years. It provides importantnutrients such as calcium and magnesium. Biologicallythe addition of lime helps useful bacteria to thrive inthe soil and reduces harmful bacteria. Liming is oneof the most important factors for profitable farmingthat takes heed of the environment.

Lime for soil improvement can be divided into threemain groups: calcite, lime with a high magnesium

content and dolomite lime. These can then be dividedinto crushed and ground categories. Nordkalk is theleading supplier of lime for agriculture in Sweden,Finland and Estonia. Most of the agricultural lime isquarried in Finland and Sweden - more than half ofthe fields in Finland and Sweden are treated withNordkalk’s products. In Estonia there is a dolomite de-posit, and production of lime for agricultural purposeswas started in Poland in early 1999.

Garden lime

Gardens need lime to offset acidification. Limingimproves the composition of the soil, which providesa good growing medium with good irrigation. If the soilcontains too little lime (too low a pH value), heavymetals are more easily absorbed by the vegetablesgrown. These in their turn are transferred to man viathe food he eats. In Sweden a new garden product,Kalka!, was launched in spring 1999.

Fodder lime

Animals need lime to develop their bone structure andnerve system. Cattle get some of the calcium they needfrom the grass they eat but it is not usually enough.Therefore lime is mixed with feed and feed concentrates.Chickens need lime in order to be able to form egg shell.

The most important characteristics of fodder lime area high calcium content and good solubility. Nordkalkmanufactures fodder lime in Finland and Sweden, andlast year deliveries in Estonia increased markedly.

Tarja and Jari Heinonen from Laitila, Finland, are liming entrepreneursin second generation. Jari is in charge of lime spreading on the fields,while Tarja takes care of transporting agricultural lime from Nordkalkfactories, mainly from Vampula. Sales Manager Juha Pihko fromNordkalk follows carefully as lime is moved from a tank truckto the spreading machine.

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Renova AB, a “waste to energy” plant, is locatedin Gothenburg, Sweden. It offers ecologicallybeneficial waste treatment which utilizes thematerial and energy resources of waste.Nordkalk delivers ground limestone and quicklime to Renova where it is mainly used to cleanflue-gases in a newly installed pipefilter. In thepicture we see Erik Larsen, Production Managerat Renova, between Nordkalk´s Sales ManagersJan Olars (left) and Bertil Lindeblad.

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Sales of products for environmental managementaccount for 12 per cent of Partek Nordkalk’s total sales.The trend has been constant and sales were at thesame level as the previous year.

Sales of lime for flue-gas cleaning have fallen slightlysince some coal-fired power plants have been occa-sionally idle. This was due to the fact that it wascheaper to produce electricity by using water power.

Demand is dependent to a large degree on whatnational and EU subsidies are granted and on currentenvironmental legislation in different countries.

With different kinds of lime-based applications it ispossible to both prevent and cure environmentalproblems. Important uses for lime include flue-gascleaning and water purification. In agriculture and forestmanagement lime is used as an antidote to acidificationand the liming of lakes and water courses plays animportant role in keeping our ecosystems alive.

In research and development Nordkalk cooperates withuniversities, research institutes and environmentalauthorities. Expert teams are continually engaged onfinding new methods and products for environmentalcontrol.

Flue gas cleaning

When fossil fuels are used to generate energy, sulphurdioxide, for example, is released, which contributesto acidification of the environment. Consequently,the cleaning of the flue gases emitted from coal-firedpower stations is an important use for Nordkalk’sproducts.

Poland offers new markets for flue-gas cleaningproducts. The new grinding plant in Szczecin, whichwas started in January 2000, supplies ground lime toa nearby coal-fired power station.

In Sweden refuse incineration plants form an importantcustomer group

Water purification

Clean water is a basic requirement for a well-functioning ecosystem. In order to make drinking waterit needs to be purified and its hardness modified withthe aid of lime products. Waste-water and sludge, too,are cleaned before being returned to the natural cycle.For agriculture Nordkalk has evolved the FOSTOP

method. It involves lime filter dykes which help to re-duce the phosphate content of the run-off before itreaches the water system.

Forest and lake liming

Nordkalk is a pioneer in the field of liming forests andlakes. Operations were started in Sweden, which todayhas the world’s most comprehensive state-financedprogramme for liming. Nordkalk has played an activerole in developing this programme and is the leadingauthority in the world on how to lime lakes.

Last year Nordkalk acquired lime doser equipment forliming of acid water courses.

A century-long liming contract

To celebrate its one-hundredth anniversaryon 26 November 1998 and in honour of itsroots as a supplier of lime Partek and PartekNordkalk concluded a one-hundred-year limingproject with the aim of improving the qualityof the water in the Alinenjärvi lake at Nokiain Finland. The project is carried out in co-operation with the town of Nokia and theFinnish environmental authorities.

The project began by liming two lakesupstream of Alinenjärvi in order to achievea stable and steady liming result. The choiceof site for liming and the time of the year(26.11.1998) made it necessary to carry outliming from a helicopter.

Samples will be taken every spring andautumn to monitor the quality of the water.

Measurements in 1999 show that the targetfor the chemical composition of the waterin the lakes that have been limed has beenattained. At the moment there is no immedi-ate need for further steps.

The result of the liming programme can alsobe clearly seen in the lakes downstream fromthose that have been treated with lime. It hasproved to be a successful strategy to con-centrate the actual liming to the uppercourses of the water system.

Environmentalmanagement

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Researchand Development

Partek Nordkalk makes a point of staking considerableresources in research and development, which in thelong term form the very foundation of the company’soperations. The daily operations take into account themarket’s needs for new products and the tailor-madeproducts that increasing quality demands require.

The operations encompass a broad range of refiningmineral raw materials with the focus firmly on thecustomer’s special needs. The aim is to create addedvalue for the customer by means of product develop-ment and so to increase both Partek Nordkalk’s andthe customer’s competitiveness. Close collaborationbetween the sales, marketing and production functionsas well as with the customer ensure fruitful cooperationin research and development.

The leading research laboratory in northern Europe

Nordkalk’s research work is done by highly trained staffin both Finland and Sweden. Most of the researchpersonnel work in Parainen, in close conjunction withthe leading laboratory in northern Europe for limestone-based products. Over a period of many years the

competence has been built up systematically, and formsa basis for continuous developing of better processesand products. The main focus is on new products andan ongoing improvement of existing products andprocess technology. Within our research work technicalcollaboration with experts at research institutes anduniversities also forms an important condition forproductive development work. Teamwork has markedthe efforts with the aim of coordinating the company’sbest competence for the needs of key customers. In1999 Nordkalk’s net investment in R&D activitiesamounted to MEUR 3,4.

Focus on industry and environment

Research and product development has concentrated inrecent years on industrial and environment-relatedprojects. As part of a partnership in which representa-tives from the steel industry, wire companies and uni-versities have been represented a new patented pro-duct, Lime Wire, intended for use in the steel industryhas been developed and launched on the market. Theproduct is a wire containing a lime mixture which is fedinto the molten steel. It has been found to be a moreefficient means of getting rid of sulphus from the smelt.

Nordkalk is participating in a government-financedproject within a special programme (Vesihuolto -2001)designed to preserve Finland’s water reserves. Nordkalkis responsible for studying how lime products can bestbe used for alkalisation of drinking water. The aim of theproject is to find out how a broader range of rawmaterials can be applied to this method of purifyingdifferent types of ground water.

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RawMaterials

Partek Nordkalk quarries limestone in a total of 16quarries and three underground mines. The depositsrepresent the geological main types of limestone andprovide the different qualities that are at present in de-mand on the market. The limestone varies in agebetween 60 and 2,000 million years and the mining andprocessing methods used by Nordkalk vary accordingto the characteristics of the limestone.

Nordkalk has consciously staked its future on variedand deep knowledge of the limestone deposits. Geo-logical information has been combined with advancedcomputer systems to evaluate the true potential of thedeposits and plan how they should be used. The extrac-tion methods used have been adapted to the geologyin order to give the highest possible selectivity. This isparticularly important in Finland where the crystallinelimestones have a very diverse composition.For sedimentary limestones with a simpler geologicalcomposition these efforts have been rewarded in theform of better products of a more even quality.

Nordkalk’s large deposits in Finland today produce, inaddition to the traditional mass products, also productswith quality requirements that provide the raw materialfor paper pigments, white fillers and fodder products.

The younger sedimentary deposits in Sweden andEstonia provide excellent quick lime.

Nordkalk’s quarry at Storugns on the Swedish island ofGotland is the most important source of raw materialfor quick lime in the Baltic region.

Nordkalk owns all its deposits and extraction rights. In1999 ownership of the quarries and mining rights inParainen and Lappeenranta were transferred from theparent company Partek to Partek Nordkalk. Nordkalktherefore now owns all the quarrying assets and re-sources in the Partek Group.

The estimated reserves vary from deposit to deposit butin the long term Nordkalk can expect to extract boththe quantities and qualities that our operations require.

Nordkalk has drawn up a register of key informationabout quarries that are in use and those where mininghas been discontinued. The safety aspects involved inquarrying are monitored on a continuous basis.

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At the end of the year Partek Nordkalk had 1.029persons in its employ. Of these 629 were in Finland, 249in Sweden, 122 in Estonia and 29 in Poland. The numberin Finland fell, principally as a result of the sale of SPMinerals. The number of employees also decreased inEstonia because of efficiency measures but increased inSweden and Poland. Women represent 21 per cent ofthe personnel in Finland and 24 per cent in Sweden.

Cooperation and personnel representation

In Finland the statutory cooperation between mana-gement and personnel continued. It has been agreedthat representatives of the two groups shall meet threetimes a year at a combined cooperation and personnelrepresentation meeting. At these meetings the compa-ny’s operations, economic success and development arediscussed. This body also takes up questions related tothe size and development of the personnel and person-nel benefits. The questions discussed by the PartekGroup’s cooperation body are addressed at this forumfrom Nordkalk’s viewpoint. The meetings are held at dif-ferent production plants and also provide an opportunityto publicise information about different topical events.

In Sweden the personnel is represented by union repre-sentatives on the boards of both Partek Nordkalk AB andPartek Nordkalk Storugns AB.

Personnel study

A study has been carried out among the personnel at allof Nordkalk’s plants. The results give a picture of howthe personnel view the organisation of the work, in-formation, management and overall working climate. Itmay be noted that Nordkalk’s employees in Sweden are,compared with the average, most content with the con-ditions. It can also be seen from the answers that thepersonnel exhibit considerable loyalty and that the cor-

porate culture is relatively homogeneous. Information,cooperation, organisation of the work and clearlydefined areas of responsibility were all assessed asexcellent in the study. A positive factor was thatNordkalk is felt to be a secure employer. Areas in whichimprovements could be made include the pay systemand the readiness to accept change. The results of thestudy were examined by all units in 1999 and localplans for improvements are now being put into practice.

Development of competence

Within the framework of an annual Key ResourcesManagement process the company’s core competen-cies are defined. One of these is the geological andtechnological exploitation of raw-material resources.Over the years diverse expertise has been assembledby the company, and this is used by the product-development teams serving different customersegments.

At the annual Management Review of the Partek Groupdifferent needs regarding the further training andrecruitment of managerial staff are charted. Nordkalk’spersonnel also take part in the Partek Group’s differentmanagement and competence programmes.

The theme of Nordkalk’s annual management con-ference was this year the international environment inwhich we work. A total of 130 key persons from theentire company took part in this conference.

Within the different units special training courses havebeen organised on topics such as computer science,sales and marketing and information.

Manuals covering procedures for supervising and intro-ducing new workers have been updated and a contactnetwork created for support persons.

Personnel

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Partek Nordkalk’s operations are directed primarilytoward the extraction and refining of limestone inthe Baltic region. Refining involves the manufactureof crushed and ground limestone and the burning andhydrating of lime. The environmental impact of theseactivities is monitored and evaluated continuously. Thehandling of environmental questions is guided by anenvironmental policy common to the whole of Nordkalk.

Environmental policy

Nordkalk aims at a sustainable development with thefocus firmly on man. The environmental aspects ofthe company’s activities are identified and taken intoaccount in the targets set for corporate operations.Information about measures and results are distributedcontinuously to all involved.

Products and manufacturing processes are developedwith the aid of the best available technology so that theenvironmental impacts of a product throughout its life-cycle can be taken into consideration. All Nordkalk unitsdraw up environmental plans as apart of their strategicannual planning and environmental work is monitoredby means of regular checks.

The environmental plans take account of environmentalaspects, targets and measures related to investment inorder to bring about continuous improvements.Nordkalk’s investment plans must contain an assess-ment of the environmental impacts of the investmentproposed.

Responsibility for environmental questions lies un-equivocally with the operative management, which isalso responsible for informing the personnel and thepublic at large about the environmental implications ofthe company’s operations. Each unit has a special per-son responsible for environmental questions. Nordkalkalso has an environmental manager with overall respon-sibility for ensuring that the company’s environmentalpolicy is followed.

Important environmental aspects

Most of Nordkalk’s production plants lie in towns orbuilt-up areas, which means that the surroundingsmake demands on reducing noise and vibration andpreventing dust. Nordkalk has to apply for environ-mental permissions for its production plants. At themoment most of these permits in Finland and Swedenare being renewed. An application for a renewed waterpermit for process water from the refining plants inLappeenranta was made at the end of the year.

Measures to reduce enviromental stress

Implementation of the environmental protection systemin accordance with ISO 14001 certification has con-tinued. All plants of Partek Nordkalk AB (Sweden) haveadopted their environmental manual. The factory atKöping has applied for certification. In Finland theParainen quarry has been awarded a certificate for itsenvironmental programme, and the production line forcarbonate products in Finland has also applied forcertification.

An internal environmental audit has been carried out atthe plants in Estonia.

To reduce releases of dust the outdoor storage area forlimestone filler at Köping in Sweden has been coveredwith asphalt and loading routines improved.

In Finland the dust resulting from the transport of stoneand refining in the quarry at Parainen has been moni-tored and de-dusting equipment using ionisation tech-nology installed. At the Tytyri plant asphalting of thefactory area has continued. The lime plant at Raahe hasupdated its equipment for removing dust from theprocess, and the Parfill plant at Parainen has installedthree new dust filters in its silos.

Waste handling has been improved as part of theenvironmental systems. Intensive work has also beendone on to increase the use of the waste stone thataccumulates during quarrying. In Lappeenranta it hasbeen possible to use all the waste stone produced inthis way for building purposes.

Suomen Karbonaatti has introduced a new thickener forthe calcite process in order to reduce waste.A start has been made on rehabilitating the old indus-trial refuse site in the quarry area in Lappeenranta.

Inharmonywith theenvironment

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Net sales Operating profit

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Meuro

Partek Nordkalk Group

Demand for limestone-based products in the paper andpulp industries remained at the same level as the pre-vious year, while it decreased slightly in the steelindustry. Building activity in Finland was at a good levelduring the year, which led to increased demand. In agri-culture the good liming conditions in the spring werefollowed by a rainy autumn, which led to decreaseddemand for agricultural lime. In environmental manage-ment, the trend remained steady.

Partek Nordkalk continued to strengthen its position inPoland by acquiring a lime business in Slawno, south ofWarsaw, which produces asphalt filler and agriculturallime. In Szczecin, Poland, the construction of a grindingplant was completed. It supplies ground limestone forflue gas cleaning in coal-fired power plants. The plantwas taken into production at the beginning of year 2000.

In April 1999 Partek Nordkalk sold its 50 per centshareholding in SP Minerals, which supplies industrialminerals, to the company’s other owner SibelcoScandinavia AB, a subsidiary of the Belgian Sibelco. Theconsolidated net sales of SP Minerals amounted toabout MEUR 13 in 1998. The transaction had a positiveimpact of almost MEUR 3 on Partek Nordkalk’s profit.

Consolidated net sales and operating profit

Consolidated net sales of Partek Nordkalk amounted toMEUR 187.4 (1998: 191.2) .

Consolidated operating profit totalled MEUR 25.5 (30.3),which is 13.6 (15.8) per cent of net sales. The operatingprofit includes about MEUR +3 in net capital gains andother non-recurring items in 1998 and 1999. Deprecia-tion according to plan amounted to MEUR 16.9 (14.2).

Net financial expenses increased by MEUR 2.3 from1998 and were MEUR 6.5. The amount includes expen-ses of MEUR 2.9 due to the capital loan. Profit afterfinancial items amounted to MEUR 19.0 (26.2), repre-senting 10.2 (13.7) per cent of net sales.Total assets amounted to MEUR 277.5 (31.12.1998:212.5) and thereby increased 31 per cent from the pre-vious year. The equity to total assets ratio rose to 74(27) per cent including the capital loan.Return on capital employed was 14 (19) per cent.Profitability decreased because the capacity of the in-vestments made within the last two years has not beenin full use, and because of a sharpening price competi-tion. For full details reference is made to the Consoli-dated Income Statement and Balance Sheet and the

AnnualReportof the Board of Directors

parent company’s financial statements together withnotes, additional details and financial analyses.

Investments

The total investments of Partek Nordkalk amounted toMEUR 31.6 (39.8). Capacity was raised for ground pro-ducts for the building material and chemical industriesin Finland. Land acquisitions were made for theUddagården plant in Sweden.

Structural changes

Partek Nordkalk Hold Oy Ab merged with PartekNordkalk Oy Ab on August 31, 1999. The mergerstrengthened the equity, solvency, financial position andbalance sheet of Partek Nordkalk. Partek Corporationconveyed, as a group internal asset transfer, its miningrights and mining activities to its fully owned subsidiaryPartek Nordkalk. As a consideration for the transaction,Partek attained shares in Partek Nordkalk. The opera-tions of the parent company and subsidiary are nowclearly separated and the assets concerned have beendivided between the two respectively. After the groupinternal transfer Partek Nordkalk possesses the assetsand resources related to mining activities within PartekCorporation.

During the financial year Uddagårdskalk AB merged withIgnaberga Kalksten AB. In addition, a decision was madeto merge All-Kalk AB with Ignaberga Kalksten AB inSweden and Rakke Lubjatehase AS with PartekNordkalk Eesti AS in Estonia. The mergers are plannedto be carried out during the spring 2000.

Convertible Capital Loan

Partek Nordkalk issued a convertible capital loan (GoingPublic Bond) of MEUR 100 last fall. The maturity of thebond is five years. The aim is to list Partek Nordkalkbefore the capital loan matures, and at the time of thelisting the bonds can be converted into shares ofPartek Nordkalk. The bonds will pay an annual fixedinterest of 6.71 per cent.About 900 investors in total subscribed the bonds. Morethan half of them were shareholders of the PartekCorporation and they subscribed for over 60 per cent ofthe loan capital. The capital loan strengthens thesolvency of Partek Nordkalk thus enabling the companyto expand and develop its operations according to itsBaltic Sea strategy and thereby increase the value ofthe company.At the time of the issuance of the capital loan PartekNordkalk was changed into a public company. The loan islisted on the I-List of HEX Ltd., Helsinki Stock Exchange.

19

Increase in share capital (parent company)

Fim EuroShare capital in the beginning of the year 200.000.000Partek Nordkalk Hold merges with Partek Nordkalk on Aug. 31, 1999 168.000.000Capital loan converted into share capital on Aug. 31, 1999 10.800.000Share capital converted into euros on Sep. 1, 1999 378.800.000 63.709.587Adjustement increase 90.413Share capital on Sep. 1, 1999 63.800.000Increase in connection with asset transfer 1.876.194Share capital on Dec. 31, 1999 65.676.194

Profit afterfinancial items

Capital employedand ROC

Equity and ROE(including capital loan)

Equity and totalassets ratio

(including capital loan)

Sales byproduct group

Capital employed ROC Equity ROE Other Crushed and groundlimestone

Paper pigments

Quick lime and hydrated lime

0

5

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95 96 97 98 99

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020406080

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95 96 97 98 99

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150

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250

95 96 97 98 99

Meuro %

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95 96 97 98 99

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020406080

100120140160180200

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Meuro

Research and Development

Development costs cover both product and customer-oriented process development. During 1999 the re-search and development activities have concentratedon projects related to industry and environment. Thenumber of employees in this department is 46 (44) andthe total expenditure on development is MEUR 3.4 (3.0),which represents 1.8 (1.6) per cent of net sales.

Other issues

The development of quality and environmental systemscontinued during the year. The Parainen quarry in Finlandwas awarded ISO 14001 environmental certification.

Preparations for the year 2000 were carried out accord-ing to the plan. There were no Y2K-related disturbancesin the IT-systems or ordinary activities of the company.

Board of Directors, auditors and management

Members of the Board of Directors :

Christoffer Taxell chairmanCarl-Gustav Bergström memberPatrick Enckell memberKari Heinistö memberChrister Sundström member

President of the company is Christer Sundström.

KPMG Wideri Oy Ab, an APA company has acted as audi-tor, with Solveig Törnroos-Huhtamäki, APA, as legallyresponsible auditor, until the extraordinary generalmeeting on November 30, 1999.After that Thor Nyroos, APA, and Solveig Törnroos-

Huhtamäki, APA, have been auditors, and deputy auditorhas been KPMG Wideri Oy Ab, an APA company.

Shares

Partek Corporation owns 100 per cent of PartekNordkalk Corporation’s shares.

Board’s proposal for the distribution of profits

Profit available for distribution for the Partek Nordkalkparent company is EUR 27.7 million and EUR 17.6 mil-lion for the Partek Nordkalk Group. The board proposesthat a total of EUR 11.604.967 be used for dividends.

Prospects for year 2000

Total demand in the steel, paper and pulp industries isexpected to increase slightly. Market trends in thebuilding industry, agriculture and environmental mana-gement are forecast to continue favourably. Despitesharpening competition in the Baltic region the salesare expected to increase slightly during the year 2000.

Pargas, February 17th, 2000

Christoffer TaxellCarl-Gustav BergströmPatrick EnckellKari HeinistöChrister Sundström

Limestone

20

Consolidated Income StatementPartek Nordkalk 1.1. - 31.12.1999

Note 1999 19981000 euro % 1000 euro %

Net sales 1 187 449 100,0 191 245 100,0

Cost of goods sold 144 494 142 394

Gross profit 42 955 22,9 48 850 25,5

Selling and marketing expenses 8 508 7 737Research and development expenses 1 891 2 070Administration expenses 13 834 16 191Other operating income 8 563 8 451Other operating expenses 1 751 1 052

17 420 9,3 18 599 9,7

Operating profit 2,3,4 25 535 13,6 30 251 15,8

Share of results of associated companies 5 1 122Financial income and expenses 6,7 -6 493 -4 223

Profit before extraordinary items 19 043 10,2 26 150 13,7

Extraordinary items 8 8 139 4,3 -17 108 -8,9

Profit before taxes and minority interest 27 182 14,5 9 041 4,7

Direct taxes 9 7 695 2 656Minority interests 1 305 2 647

-9 001 -4,8 -5 303 -2,8

Net profit/loss for the period 18 182 9,7 3 738 2,0

21

Consolidated Balance SheetPartek Nordkalk 31.12.1999

Note 31.12.1999 31.12.1998 1000 euro % 1000 euro %

Assets

Fixed assets and long-term investments 10

Intangible assets - Goodwill 2 541 2 939 - Other intangible assets 5 172 3 183Tangible assets - Mineral deposits and land 29 002 25 089 - Buildings and constructions 29 043 26 885 - Machinery and equipment 94 189 89 199 - Other tangible assets 2 592 2 170 - Advance payments and construction in progress 13 256 4 152Investments 11 - Other shares and participations 2 074 1 792 - Shares in associated companies 551 1 669

Total fixed assets and long-term investments 178 420 64,3 157 079 73,9

Current assets

Inventories 12 24 411 24 213Short-term receivables 12 33 779 25 744Cash and bank balances 40 869 5 489

Total current assets 99 060 35,7 55 447 26,1

Total assets 277 480 100,0 212 526 100,0

Shareholders’ equity and liabilities

Shareholders’ equity 13Share capital 65 676 28 256Other reserves 526 459Net profit for previous years 12 455 18 250Net profit/loss for the period 18 182 3 738Capital loan 100 000 0

Total shareholders’ equity 196 839 70,9 50 704 23,9

Minority interest 7 364 2,7 7 140 3,4

Reserves 14 824 0,3 0

Liabilities 0

Deferred tax liability 9,15 13 513 15 125Long-term liabilities 15 11 589 54 755Short-term liabilities 16 47 351 84 802

Total liabilities 72 453 26,1 154 682 72,8

Total shareholders’ equity and liabilities 277 480 100,0 212 526 100,0

22

Financial AnalysisGroup / Partek Nordkalk

1.1.-31.12.99 1.1.-31.12.981000 euro 1000 euro

Operating activitiesOperating profit 25 535 30 251Depreciation 16 882 14 158Profit/loss on sale of fixed assets -3 442 -3 608Corrections 0 -5 745

Cash flow before changes in working employed 38 975 35 057

Change in working capitalChange in inventories (- = increase) -198 1 422Short -term receivables (- = increase) -8 035 -2 697Non interest-bearing liabilities (- = decrease) -3 161 -5 713

-11 394 -6 988

Financing, taxes and extraordinary itemsFinancial income and expenses -6 493 -4 223Taxes -3 144 -1 046Extraordinary income and expenses 8 139 -16 801

-1 498 -22 070

Net funds from operating activities 26 083 6 000

Cash flow from investmentsGross investments -31 617 -39 159Sale of fixed assets 20 383 7 055

-11 234 -32 103

Net fund before financing 14 849 -26 104

FinancingShare issue 107 0Convertible capital loan 100 000 0Change in interest-bearing liabilities (- = decrease) -76 632 26 263Dividend paid -11 605 0Translation differences and other changes 8 661 -115

20 531 26 149

Change in liquid funds 35 380 45

Liquid funds 1.1. 5 489 5 444Liquid funds 31.12. 40 869 5 489

23

Income StatementParent Company 1.1. - 31.12.1999

Note 1999 19981000 euro % 1000 euro %

Net sales 1 106 587 100,0 2 946 100,0

Cost of goods sold 75 676 3 261

Gross profit 30 911 29,0 -315 -10,7

Selling and marketing expenses 3 130 0Research and development expenses 1 608 0Administration expenses 14 251 75Other operating income 4 770 200Other operating expenses 1 003 1 612

15 223 14,3 1 486 50,4

Operating profit 2,3,4 15 688 14,7 -1 801 -61,1

Financial income and expenses 6,7 1 293 766

Profit before extraordinary items 16 981 15,9 -1 035 -35,1

Extraordinary items 8 14 139 13,3 1 463 49,7

Profit before appropriations and taxes 31 119 29,2 429 14,5

Appropriations - Depreciation in excess of plan -2 266 0Direct taxes 9 252 -519

2 015 1,9 519 17,6

Net profit for the period 33 134 31,1 948 32,2

24

Balance SheetParent Company 31.12.1999

Note 31.12.1999 31.12.19981000 euro % 1000 euro %

Assets

Fixed assets 10

Intangible assests 3 233 400Tangible assets 0 - Mineral deposits and land 2 958 358 - Buildings and constructions 16 673 3 748 - Machinery and equipment 51 338 204 - Other tangible assets 1 435 29 - Advanced payments & construction in progress 308 0Investments 11 - Shares in subsidiaries 45 454 0 - Long-term receivables from subsidiaries 40 862 0 - Shares in associated companies 385 0 - Other shares and participations 2 068 2

Total fixed assets 164 714 68,6 4 741 15,7

Current assets

Inventories 12 14 120 99Short-term receivables 12 24 942 1 741Cash and bank balances 36 323 23 695

Total current assets 75 385 31,4 25 535 84,3

Total assets 240 099 100,0 30 276 100,0

Liabilities and equity

Shareholders’ equity 13Share capital 65 676 33 638Share premium account 16 0Net profit for previous years -17 051 -6 394Net profit for the financial year 33 134 948Convertible capital loan 100 000Capital loan 1 816

Total shareholders’ equity 181 775 75,7 30 008 99,1

Accumulated excess depreciation 29 183 12,2 0

Provisions 14 824 0,3 0

Liabilities

Long-term liabilities 15 266 0Short-term liabilities 16 28 050 268

Total liabilities 28 316 11,8 268 0,9

Total liabilities and equity 240 099 100,0 30 276 100,0

25

Financial AnalysisParent Company

1.1.-31.12.99 1.1.-31.12.991000 euro 1000 euro

Operating activitiesOperating profit 15 688 -1 801Depreciation 3 221 438Profit/loss on sale of fixed assets -45 -200

Cash flow before changes in working employed 18 864 -1 563

Change in working capitalChange in inventories (- = increase) -14 021 -9Short -term receivables (- = increse) -33 608 17 235Non interest-bearing liabilities (+ = increase) 27 342 51

-20 286 17 277

Financing, taxes and extraordinary itemsFinancial income and expenses 2 074 766Direct taxes 34 519Extraordinary income and expenses 1 043 1 463

3 151 2 749

Net funds from operating activities 1 728 18 462

Cash flow from investmentsGross investments -12 926 0Sale of fixed assets 4 019 365

-8 908 365

Net fund before financing -7 179 18 827

FinancingShare issue 107 0Convertible subordinate loan 100 000 0Change in interest-bearing liabilities (- = decrease) -27 833 -173Change in long-term receivable (- = increase) -40 862 0Dividend paid -11 605 0

19 807 -173

Change in liquid funds 12 628 18 654

Liquid funds 1.1. 23 695 5 042Liquid funds 31.12. 36 324 23 695

26

The Consolidated Financial Statements of PartekNordkalk Corporation have been drawn up in accord-ance with current regulations in Finland. Majordeviations affecting the result of the year comparedwith international accounting standards issued by theInternational Accounting Standards Committee (IASC)are specified below. The year reviewed covers themonths January-December and the financial statementsare presented in euros. The preparation of the financialstatements in conformity with applicable regulationsand generally accepted accounting principles requiresmanagement to make estimates and assumptions thataffect the valuation and allocation of the reportedfigures. Actual results may differ from such estimates.

Consolidation principles

The Consolidated Financial Statements cover the parentcompany Partek Nordkalk Oyj Abp and all companies inwhich the parent company controlled, directly or in-directly, more than fifty percent of the voting rights atthe end of the financial year. Companies acquired duringthe year have been included in the Group Income State-ment from the date of the acquisition and divestedcompanies up to the date of disposal. In drawing up theConsolidated Financial Statements internal transactionsand margins have been eliminated. The ConsolidatedBalance Sheet has been drawn up in accordance withthe purchase method according to which the share-holders’ equity of the subsidiary is deducted from thepurchase price of that subsidiary’s shares, includinguntaxed reserves net of tax.

Goodwill, i.e. the difference between the purchase priceof the shares and the current value of the net assets inthe acquired company, is entered as a separate item inthe consolidated balance sheet and amortized over theuseful life of the asset. That portion of surplus valueassigned to a deposit is written off linearly over a periodof 30 years. Associated companies have been conso-lidated using the equity method. Minorities’ shares ofresults and equity are presented as separate items bothin the income statement and in the balance sheet.

In 1995 and 1996 Partek’s mineral business consisted oftwo divisions, Nordkalk Oy Ab and Partek IndustrialMinerals Oy, which were 100 percent owned by Partek.In 1997 these companies were merged to form PartekNordkalk Oy Ab. The financial figures for 1995 and 1996presented are the sum of the figures of these two di-visions after the elimination of internal transactionswithin the mineral business.

Transactions in foreign currencies

Transactions in foreign currencies are recorded at ratesof exchange prevailing on the day of the transaction. Re-

ceivables and debts in foreign currencies have beentranslated into the reporting currency at the exchangerates at the end of the financial period.

Foreign subsidiaries’ income statements and bal-ance sheets

In the preparation of the Consolidated FinancialStatements foreign subsidiaries’ income statements aretranslated into euro by using the average exchangerates for the financial period and balance sheets byusing the exchange rates at the end of the financialperiod. Differences arising from this translation areentered in the consolidated equity.The equities of foreign subsidiaries have mainly beenhedged using the equity hedging method throughforward contracts or by taking loans in the corres-ponding currencies. Exchange rate differences resultingfrom the hedging transactions are in the ConsolidatedFinancial Statements netted against the translationdifferences resulting from the translation of the foreignsubsidiaries’ balance sheets.

Inventories

Inventories are stated at the lower of cost or net re-alizable value. Cost is determined on a first in first out(FIFO) basis. An appropriate proportion of overheadcosts from indirect purchases and production has beenincluded in the value of semi-finished and finishedgoods.

Tangible assets

Land, mineral deposits, buildings, machinery and otherequipment are entered in the balance sheet accordingto their historic acquisition cost less depreciation. Thevalue of certain land and buildings in Finland includerevaluations.The amount of depreciation is based on the followingeconomic lives of the assets:

• Goodwill 10 years• Other capitalized expenditure 3-10 years• Buildings and constructions 10-40 years• Machinery and equipment 3-25 years• Other tangible assets 5-10 years

Investments

Investments classified as fixed assets have been en-tered at their acquisition value less possible deprecia-tion to take into account the actual decrease in worth.When an investment has been disposed of, the diffe-rence between the net sales price and the book value isentered in the Income Statement either as other opera-ting income and expenses.

Accounting principles

27

Exchange rates Year-end rates Average rates December 31,

Country Currency 1999 1998 1999 1998

Finland FIM 5,94573 5,94573 5,94573 5,94573Sweden SEK 8,56250 9,48736 8,80718 8,84110Estonia EEK 15,64662 15,64666 15,64666 15,65613Poland PLN 4,15870 4,08950 4,22354 3,88229

EUR 1,00000 1,00000 1,00000 1,00000

Leasing

Fixed assets are to a limited extent leased. Both opera-ting and financial leasing fees are charged to income asrental expenses. Yearly leasing charges on the basis ofexisting leasing agreements are shown in the notes.For financial leasing the differences between Finnishand international accounting standards are demon-strated in the notes.

Income recognition

Income from sales of products and services is re-cognized on delivery, net of sales taxes and discounts.Income from sales of products and services is recog-nized on delivery.

Research and development

The costs of research and development are expensed inthe financial period in which they are incurred, whichdiffers from the recommendation of the IASC. The diffe-rence in accounting practice does not have any signifi-cant impact on the result. The research and develop-ment costs and their proportion of net sales are pre-sented in the Five-year review.

Pension liabilities

The Group companies’ pension obligations are arrangedaccording to local regulations and practice. In the ParentCompany and in Finnish subsidiaries pension liabilitiesare covered by insurance. Costs of pensions are re-corded as they are earned. Pension liability according toIAS has not been calculated.

Taxes

Income taxes in the income statement include taxes ofthe group companies for the financial period, calculatedin accordance with local regulations, as well as adjust-ments to prior year taxes and deferred taxes. Deferredtax liabilities or assets are calculated on temporary dif-ferences between the tax and financial periods usingthe tax rate for subsequent years confirmed on thebalance sheet date. The balance sheet includes alldeferred tax liabilities and the probable realizableamount of deferred tax assets. No deferred tax liabilityhas been recognized for undistributed earnings ofsubsidiaries and revaluations.

Financial ratios

Partek Nordkalk Oyj Abp has one convertible capitalloan. In the calculation of financial ratios Solvency andGearing these have been treated as equity according tothe Partek Group targets for these ratios.

Structural changes

In December 1998 Partek Betonila Oy Ab and PartekNordkalk Oy Ab drew up a merger plan. The name ofPartek Betonila was changed into Partek Nordkalk OyAb on January 1, 1999 and the former Partek Nordkalkbecame Partek Nordkalk Hold Oy Ab. Partek NordkalkHold Oy Ab merged with Partek Nordkalk Oy Ab onAugust 31, 1999. As comparable figures for the parentcompany Partek Nordkalk Oyj Abp in 1998 are enteredthe figures of Partek Betonila Oy Ab.

28

Note 1 Net sales by geographical area and product line1000 euro

Geographical area Group Parent company1999 1998 1999 1998

Finland 126 934 127 755 103 939 2 946Sweden 49 553 48 728 236Other EU 4 767 7 480 1 760Estonia + Poland 2 507 2 302 23Other Europe 3 511 4 155 450Others 177 825 179

Total 187 449 191 245 106 587 2 946

Product groups Group1999 1998

Limestone & paper pigments 130 000 129 505Quick and hydrated lime 75 200 73 330Other minerals 12 614Internal sales -17 751 -24 204

Total 187 449 191 245

Note 2 Personnel expenses1000 euro

Group Parent company1999 1998 1999 1998

Wages and salaries Wages, salaries and fringe benefits - Salaries and payments to Board Members and Managing Directors 588 697 117 - To others 25 447 25 625 15 845 413 Bonus to Board Members and Managing Directors 26 41 9

Total 26 061 26 363 15 970 413

Other personnel expenses

Pensions and pension premiums 4 557 3 157 3 363 54Other payroll costs 4 034 5 219 1 741 209

Total 8 591 8 376 5 104 263

TOTAL 34 652 34 739 21 074 676

Personnel

As an average during the year 1 060 1 075 617 24At year end 1 029 1 082 576 24

The President of Partek Nordkalk Corporation is entitled to retire at the age of 62.

29

Note 3 Depreciations1000 euro

Group Parent company1999 1998 1999 1998

Depreciation by functionProduction 15 423 13 203 2 758 438Distribution and marketing 86 61 5Research and development 33 38 11Administration 800 456 447Other operating expenses, Goodwill 541 400

Total 16 882 14 158 3 221 438

Depreciation according to plan 82 66Goodwill 541 400Intangible assets 598 574 177 28Mineral deposits and land 711 750Buildings and constructions 2 566 2 056 740 310Machinery and equipment 12 006 9 934 2 191 88Other tangible assets 378 378 113 13

Total 16 882 14 158 3 221 438

Note 4 Other operating incomes and expenses1000 euro

Group Parent company1999 1998 1999 1998

IncomeRents 937 816 937Profit on sale of fixed assets 3 447 3 608 49 200Other income 4 179 4 028 3 784

Total 8 563 8 451 4 770 200

ExpensesDepreciation on goodwill 541 400Decrease in fixed asset value 2Loss on sale of fixed assets 4 4Taxes on real estate 81 52 9 8Other expenses 1 125 599 990 1 601

Total 1 751 1 052 1 003 1 612

Note 5 Share of result and equity in associated companies1000 euro

Land Shareholding Share of result Share of equity% 1999 1998 1999 1998

Rakke Lubjatehase AS (- 31.8.1998) Estonia 40,0 122Pargas Vatten Ab Finland 50,0 -1 478Lohjan Energiahuolto Oy Loher Finland 23,1 2 74 66SP Minerals Oy Ab (- 30.4.1999) Finland 50,0 4 570

Total 1 122 552 4 637

30

Note 6 Other financial items1000 euro

Group Parent company1999 1998 1999 1998

Exchange rate differences -32 -103 -297

Other financial income external 32 33

Other financial expenses external 2 890 128 2 817

Total -2 890 -198 -3 115

Note 7 Dividends, interest income and expenses1000 euro

Group Parent company1999 1998 1999 1998

Dividend from Partek Nordkalk companies 5 045Other dividends 33 73

581Interest income from Partek Nordkalk companies 256 48 217 605Interest income from Partek companiesOther interest income 273 124 147 162

Interest expenses from Partek companies 2 226 3 644 395Other interest expenses 1 939 626 1 189

Note 8 Extraordinary items1000 euro

Group Parent company1999 1998 1999 1998

IncomeGroup contribution received 8 139 1 043 1 463Profit due to change in group structure 13 721

ExpensesChange in accounting principles -308Loss on sale of fixed assets notbelonging to lime business -625Group contribution paid -16 801

Total 8 139 -17 108 14 139 1 463

Note 9 Direct taxes1000 euro

Group Parent company1999 1998 1999 1998

Taxes in income statement

Taxes for extraordinary items 2 279 -4 704 117 410Direct taxes for the year 865 5 750 135 -929Change in deferred tax asset/liability 4 551 1 610

Total 7 695 2 656 252 -519

Deferred tax liabilities

From untaxed reserves 12 498 11 977From consolidation entries 4 023 2 777From valuation and matching differences -3 009 372

Total 13 513 15 125

31

Note 10 Fixed assets1000 euro

Group

Goodwill Intangible Mineral deposits Buildings and Machinery Other Const-assets and land constructions and equipment tangible ruction

assets in progressAcquisition cost 1.1.1999 4 097 5 829 30 073 39 991 156 370 5 011 4 152

+ Exchange rate differences 361 132 2 559 748 4 379 26 69+ Investments 64 1 858 1 198 2 405 12 948 680 12 107+ Other increases 1 334 2 166 9 525 4 845 181- Decreases -561 -750 -7 813 -3 047 -77 -3 395+ Advanced payments 322

Acquisition cost 31.12.1999 4 523 8 591 35 246 44 856 175 495 5 821 13 256

Accumulated depreciation 1.1.1999 -1 158 -2 645 -4 984 -13 106 -67 171 -2 841- Exchange rate differences -273 -106 -528 -336 -2 071 -13- Depreciation during the year -551 -686 -732 -2 575 -12 098 -378- Accumulated depreciation for decreases 19 204 34 3

Accumulated depreciation 31.12.1999 -1 982 -3 420 -6 243 -15 813 -81 306 -3 229

Residual value 31.12.1999 2 541 5 172 29 002 29 043 94 189 2 592 13 256

IN FINLAND: - Taxation value 3 656 14 235

Parent Company

Goodwill Intangible Mineral deposits Buildings and Machinery Other Const-assets and land constructions and equipment tangible ruction

assets in progressAcquisition cost 1.1.1999 561 358 7 880 3 305 77 0

+ Investments 495 36 2 023 5 557 393 20+ Other increases 4 485 2 994 22 363 85 761 2 548- Decreases -561 -358 -7 880 -3 414 -77+ Advanced payments 288

Acquisition cost 31.12.1999 4 980 3 030 24 387 91 209 2 941 308

Accumulated depreciation 1.1.1999 -161 -4 132 -3 101 -48- Depreciation during the year -177 -740 -2 191 -113- Accumulated depreciation for increases -1 588 -72 -7 178 -37 703 -1 396- Accumulated depreciation for decreases 180 4 336 3 124 51

Accumulated depreciation 31.12.1999 -1 747 -72 -7 714 -39 871 -1 505

Residual value 31.12.1999 3 233 2 958 16 673 51 338 1 435 308

IN FINLAND: - Taxation value 2 853 10 867

Group Parent Company

Shares and participations Share and Share and Share and Share and Share andparticipations, participations, participations, participations, participations,

associated others subsidiaries associated otherscompanies companies

Acquisition cost 1.1.1999 1 669 1 792 0 0 3+ Exchange rate differences 1+ Investments 311+ Other increases 385 26 45 454 385 2 065- Decreases -1 502 -56

Residual value 31.12.1999 551 2 074 45 454 385 2 068

IN FINLAND: - Taxation value 379 2 127 45 038 379 2 126

32

Note 11 Investments 31.12.1999

Group holding Nominal value Book value euroNumber of shares % Currency Parent Company Group

Subsidiaries

All-Kalk i Östergötland AB 20 000 100,0 SEK 2 000 000 120 526AB Ignaberga Kalksten 7 500 100,0 SEK 750 000 1 504 000Inkoo Shipping Oy Ab 3 000 60,0 FIM 3 000 000 506 582 506 582Kalkproduktion Storugns AB 30 000 66,7 SEK 300 000 385 869Partek Nordkalk AB 120 000 100,0 SEK 12 000 000 15 371 858 15 371 858Partek Nordkalk Eesti AS 15 000 100,0 EEK 15 000 000 1 470 987 1 470 987Partek Nordkalk i Luleå AB 2 500 100,0 SEK 250 000 29 431Partek Nordkalk Lease AB 100 000 100,0 SEK 10 000 000 1 751 825Partek Nordkalk Polska Sp.z o.o. 40 000 100,0 PLN 4 000 000 2 280 560 2 280 560Partek Nordkalk Storugns AB 250 000 100,0 SEK 25 000 000 18 866 430 18 866 430Rakke Lubjatehase AS 14 000 100,0 EEK 14 000 000 3 378 845 3 378 845Suomen Karbonaatti Oy 12 495 51,0 FIM 12 495 000 3 578 740 3 578 740

Total subsidiaries 45 454 002 49 245 653

Associated companies

Lohjan Energiahuolto Oy Loher 6 23,1 FIM 300 000 171 74 005Pargas Vatten Ab 22 500 50,0 FIM 2 250 000 384 576 477 584

Total associated companies 384 747 551 590

Other companies

Flenvike Fastighets AB 80 0,1 SEK 44 000 5 045Kamennyi Lev o.o.o. 100 100,0 RUR 2 500 000Köpings Företagarforum AB 1 0,1 SEK 5 000 584Lappeenrannan Kerho Oy 15 - FIM 138 138Lappeenrannan Urheilutalo 34 - FIMLohjan Puhelin Oy 5 - FIM 500 135Päijät-Hämeen puhelinyhdistys 17 - FIM 1 293 1 293Pargas Idrotts-och ungdomsgård Ab 1 500 - FIM 75 000 12 816 12 816Pargas Telefon Ab 4 100 - FIM 16 400 10 061 10 061Saimaan Loma Oy 2 - FIM 84 84Savonlinnan Puhelinyhdistys 9 - FIM 18 000 3 252 3 252Specialty Minerals Nordic Oy Ab 9 830 15,8 FIM 9 830 000 1 478 944 1 478 944Suur-Savon Sähkö Oy 250 - FIM 2 500 86 86Vaasan Läänin Puhelin Oy 2 - FIM 160 342 342Vakka-Suomen Puhelin Oy 9 - FIM 900 1 170 1 170Vasa Telefon Ab 2 - FIM 160 740 740Verdalskalk A/S 30 10,0 NOK 4 500 000 456 983 456 983Viljavuuspalvelu Oy 6 490 13,0 FIM 649 000 101 779 101 779

Total other companies 2 067 687 2 073 451

33

Note 12 Currents assets1000 euro

Inventories Group Parent Company31.12.1999 31.12.1998 31.12.1999 31.12.1998

Materials and supplies 11 544 12 395 7 974 99Finished goods and work in progress 12 867 11 817 6 146Advance payments 1 2

Total 24 411 24 213 14 120 99

Short-term receivables Group Parent Company31.12.1999 31.12.1998 31.12.1999 31.12.1998

ACCOUNT RECEIVABLEPartek Nordkalk group 1 809Partek group 70 336Partek associated companies 384 336Other 18 714 17 174 9 035 258

Total 19 168 17 510 11 180 258

LOAN RECEIVABLEPartek Nordkalk group 5 490Partek groupOther 24 335 24 5

Total 24 335 5 514 5

PREPAID EXPENSES AND ACCRUED INCOMEPartek Nordkalk group 512Partek group 97 3Partek associated companies 179 179Other 3 134 4 090 1 304 1 478

Total 3 411 4 093 1 995 1 478

OTHER RECEIVABLEPartek Nordkalk group 5 045Partek group 8 342 10 1 043Partek associated companies 43 470 43Other 2 793 3 326 123

Total 11 177 3 806 6 254

SUMMARYPartek Nordkalk group 12 857Partek group 8 510 350 1 043Partek associated companies 605 470 558Other 24 664 24 925 10 485 1 741

Total 33 779 25 744 24 942 1 741

SPECIFICATION OF PREPAID EXPENSES AND ACCRUED INCOME, EXTERNALFinancial 7 1 100 6Receivable tax 160 183Other 3 147 2 806 1 477 1 478

Total 3 313 4 090 1 483 1 478

34

Note 13 Change in shareholders’ equity1000 euro Group Parent Company

1999 1998 1999 1998

Share capital 1.1. 28 256 28 256 33 638 33 638Share issue 3 783 3 783Other changes 33 638 28 256

Share capital 31.12. 65 676 28 256 65 676 33 638

Share premium account 1.1. 459 503Share issue 16 16Translation differences 50 -44

Share premium account 31.12. 526 459 16

Capital loan 1.1. 1 816 1 816Decrease -1 816Increase 100 000 100 000

Capital loan 31.12. 100 000 100 000 1 816

Net profit for previous years 1.1. 21 989 19 202 -5 446 -6 394Advanced dividend -11 605 -11 605Translation differences 2 590 -927Other changes -519 -25

Net profit for previous years 31.12. 12 455 18 250 -17 051 -6 394

Net profit for the period 31.12. 18 182 3 738 33 134 948

Total shareholders’ equity 196 839 50 704 181 775 30 008

Distributable equity

Net profit for previous years 12 455 18 250 -17 051 -6 394Advanced dividend 11 605 11 605Net profit for the period 18 182 3 738 33 134 948Equity share of untaxed reserves -24 960 -25 230Translation differences 342 4 533

Total distributable equity 17 624 1 292 27 688 -5 446

Note 14 Provisions1000 euro Group Parent Company

31.12.1999 31.12.1998 31.12.1999 31.12.1998

Provision made for future enviromental responsibilties 824 824

Note 15 Long-term liabilities1000 euro Group Parent Company

31.12.1999 31.12.1998 31.12.1999 31.12.1998

Loans from financial institutions 6 803 8 923Pension fund loans 2 459 2 245Deferred tax liability (Note 9) 13 513 15 125Other interest-bearing liabilities Partek group 40 053 External 1 939 3 534

Other non interest-bearing liabilities 389 266

Total 25 102 69 880 266 0

Long-term interest-bearing liabilities 11 200 54 755 0 0

Repayments of long-term liabilitiesYear 2-5 Over 5 Year 2-5 Over 5

Loans from financial institutions 6 803Pension fund loans 1 903 555Deferred tax liability (Note 9) 13 513Other interest-bearing liabilities 1 939Other non interest-bearing liabilities 389 266

Total 10 645 14 457 0 266

35

Note 16 Short-term liabilities1000 euro

SHORT-TERM NON INTEREST-BEARING LIABILITIES Group Parent Company31.12.1999 31.12.1998 31.12.1999 31.12.1998

ACCOUNT PAYABLEPartek Nordkalk group 1 285Partek group 293 220 270Partek associated companies 65 400 61Others 13 807 15 933 6 316 53

Total 14 164 16 553 7 932 53

ADVANCED RECEIVEDOthers 3 5

Total 3 5

ACCRUED EXPENSES AND DEFERRED INCOMEPartek Nordkalk groupPartek group 869 786 781Partek associated companies 76 17 76Others 11 616 9 714 5 270 180

Total 12 561 10 516 6 127 180

OTHER NON INTEREST-BEARING LIABILITIESPartek Nordkalk groupPartek group (inc. Group contribution) 11 612 16 654 11 605Others 2 929 1 915 2 385 34

Total 14 540 18 570 13 990 34

SUMMARYPartek Nordkalk group 1 285Partek group 12 773 17 660 12 656Partek associated companies 141 417 137Others 28 354 27 566 13 971 268

Total short-term non interest-bearing liabilities 41 269 45 644 28 050 268

SHORT-TERM INTEREST-BEARING LIABILITIES

REPAYMENT OF LONG-TERM LIABILITIESPartek group 1 615Others 4 132 1 572

OTHER INTEREST-BEARING LIABILITIESPartek group 1 052 35 149Others 897 823

Total short-term interest-bearing liabilities 6 082 39 159

Total short-term liabilities 47 351 84 802 28 050 268

SPECIFICATION OF ACCRUED EXPENSES AND DEFERRED INCOME, EXTERNALPurchases 109 599Personnel costs 5 284 3 858 2 919Guarantee liabilities 226 3 50Tax liabilities 2 082 882 1 176Financial items 1 623 3 533 295Others 2 368 856 906 180

Total 11 692 9 731 5 346 180

36

Note 17 Pledged assets, contingent liabilities and leasing contracts1000 euro

Group Parent Company31.12.1999 31.12.1998 31.12.1999 31.12.1998

PLEDGED ASSETS

Real estate mortgagesas security for own debts

Pension fund loansMortgages 757

Loans from financial institutions 3 031 3 704Mortgages 6 097 5 596

Other mortgages

Other short-term debts 515 445Mortgages 584 527

Total mortgages 6 681 6 880

Other pledged assets

Long-term interest-bearing liabilities 172 522Short-term interest-bearing liabilities 65Other pledges 959 959

Total other pledged assets 959 959

Pledged assets for others’ debtsReal estate mortgages 992 992 34

Total 8 632 8 831 34 0

CONTINGENT LIABILITIES

Securities for others’ debt

Guarantees 4 29Pension fund liability 49 45Other contingent liabilities 987 967 925 500

Total 1 041 1 041 925 500

LEASING CONTRACTS

In accordance with current leasing contracts leasing fees during the next years will amount to:

2000 5 769 4 0192001 5 022 3 8452002 4 884 3 7162003 4 739 3 5712004 or later 27 713 26 545

Total 48 126 41 696

37

Note 18. Adjustment for financial leasing

The effects of recording leasing contracts in the balance sheet as assets and liabilities and leasing chargesas depreciations, repayments and interest expenses.

MEUR Operating Financial Profit after profit items financial items

Income statement 1999 1998 1999 1998 1999 1998

As shown in the income statement 25,5 30,2 - 6,5 - 4,1 19,0 26,1Adjustment for interest expensesincluded in leasing charges 1,2 1,5 - 1,2 - 1,5

Adjusted Income Statement (IAS) 26,7 31,7 - 7,7 - 5,6 19,0 26,1

Fixed Liabilities Balance Sheet assets total

Balance Sheet 1999 1998 1999 1998 1999 1998

Balance Sheet value as shown 178,4 157,1 72,5 154,7 277,5 212,5Residual value ofleased assets 36,9 39,6 36,9 39,6 36,9 39,6

Adjusted Balance Sheet 215,3 196,6 109,4 194,3 314,4 252,1

Solvency ( % )

According to the Financial Statements 73,6 27,2After adjustments in the IncomeStatement and in the Balance Sheet 65,0 23,0

Note 19 Main Terms and Conditions of the Capital Loan

The parent company has a capital loan (Going Public Bond) of 100 MEUR.

Main terms and conditions are the following:

1. The loan is a capital loan as specified in the Finnish Companies Act, and the terms and conditions covering the repayment of principal,payment of interest and priority differ from those of the most commonly issued loans.

Repayment of the principal and payment of interest require that certain conditions are met. Should the Company be placed in liquidation or bankruptcy, the principal, interest and other yield shall be payable only at a priority inferior to that of all other creditors.

2. The maturity of the loan shall be from 28 October 1999 through 28 October 2004. The loan shall be repaid in a single installment on 28 October 2004 in case the shares of the company have not been listed for public trading.

3. The loan shall pay annual fixed interest of 6,71%.

4. The loan is listed on the I-List of HEX Ltd, Helsinki Stock Exchange.

Complete terms and conditions of the loan are available on www.nordkalk.com.

38

Return on capital employed (ROC), %Profit after financial items + financial expenses x 100Balance sheet total - non interest-bearing liabilities, average over the year

Return on equity (ROE), %Profit after financial items - taxes in the income statement x 100Shareholders’ equity *) + minority interest, average over the year

Interest coverageOperating profit + financial incomeInterest expenses

Value addedOperating profit + personnel costs + depreciationPersonnel on average

Gearing, %Interest bearing liabilities - cash and bank balances - other interest-bearing receivables x 100Shareholders’ equity + minority interest

Solvency ratio, %Shareholders’ equity + minority interest x 100Balance sheet total - advances received

Solvency ratio 2, %Shareholders’ equity*) + minority interest x 100Balance sheet total - advances received

Earnings per share (EPS), euroProfit after financial items - taxes in the income statement - minority interestNumber of shares over the financial year

Equity per share, euroShareholders’ equity *)Number of shares at the end of the financial year

*) Shareholders’ equity excluding capital loans

Calculationof financial ratios

39

Five-yearreview

1999 1998 1997 1996* 1995*From Income statement

Net sales % Meuro 187,4 191,2 193,5 164,2 145,8change-% % -2,0 -1,1 17,8 12,6 -5,5foreign sales % 32,3 33,2 30,9 35,7 32,8

Operating profit Meuro 25,5 30,3 27,7 24,8 23,2% of net sales % 13,6 15,8 14,3 15,1 15,9

Profit after financial items Meuro 19,0 26,1 24,9 20,0 16,9% of net sales % 10,2 13,7 12,9 12,2 11,6

Profit before taxes and minority Meuro 27,2 9,0 5,5 5,9 9,4% of net sales % 14,5 4,7 2,9 3,6 6,5

Net profit/loss for the period Meuro 18,2 3,7 -0,3 2,8 5,1

From balance sheetFixed assets Meuro 178,4 157,1 133,5 123,2 116,8Inventories Meuro 24,4 24,2 25,6 19,7 19,6Other current assets Meuro 74,6 31,2 28,5 28,6 23,9Minority interest Meuro 7,4 7,1 11,1 5,5 5,1Equity Meuro 196,8 50,7 48,0 48,2 46,2Interest-bearing liabilities Meuro 17,3 93,9 67,7 68,6 70,6Non interest-bearing liabilities Meuro 56,0 60,8 61,0 49,1 38,5Balance sheet total Meuro 277,5 212,5 187,7 171,5 160,3

Financial ratiosGross capital expenditure Meuro 31,6 39,8 23,8 19,2 15,2

% of net sales % 16,9 20,8 12,3 11,7 10,4Depreciation Meuro 16,9 14,2 14,2 13,4 12,1Research and Development costs Meuro 3,4 3,0 3,0 2,4 2,0

% of net sales % 1,8 1,6 1,6 1,4 1,4Capital employed Meuro 221,5 151,8 126,7 122,3 121,8Return on capital employed % 14,0 19,1 20,2 19,0 17,9Return on equity % 16,8 32,2 28,6 26,9 28,2Gearing % -11,6 152,3 104,4 119,1 132,4Interest coverage times 6,3 7,1 7,9 5,0 3,6Solvency ratio incl capital loan % 73,6 27,2 31,5 31,3 32,0Solvency ratio excl capital loan % 37,6 27,2 31,5 31,3 32,0

Share key ratiosEarnings per share (EPS) euro 0,39 0,51 0,43 0,41 0,33Equity per share euro 2,95 1,54 1,46 1,47 1,41

Number of shares usedin calculation of key ratios 1000 kpl 32 838 32 838 32 838 32 838 32 838Nominal value euro 2 2 2 2 2

Per employeeNet sales 1000 euro 177 178 182 167 156Value added 73 74 70 70 69Wages and salaries 33 32 31 31 31Profit after financial items 18 24 23 20 18

Personnel on averageTotal 1 060 1 075 1 062 982 934

* Nordkalk and Industrial Minerals consolidated

40

To the shareholders of Partek Nordkalk Oyj Abp

We have audited the accounting records and thefinancial statements, as well as the administrationby the Board of Directors and the President of PartekNordkalk Oyj Abp for the year ended 31 December1999. The financial statements prepared by the Boardof Directors and the President include the report of theBoard of Directors, consolidated and parent companyincome statements, balance sheets, cash flow state-ments and notes to the financial statements. Basedon our audit we express an opinion on these financialstatements and the company’s administration.

We have conducted our audit in accordance withFinnish Generally Accepted Auditing Standards. Thosestandards require that we plan and perform the auditin order to obtain reasonable assurance about whetherthe financial statements are free of material misstate-ment. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures inthe financial statements, assessing the accountingprinciples used and significant estimates made by themanagement, as well as evaluating the overall financialstatement presentation. The purpose of our audit ofthe administration has been to examine that the Boardof Directors and the President have complied with therules of the Finnish Companies Act.

In our opinion, the financial statements, showinga profit of 18.182.000 euro in the consolidated incomestatement and a profit of 33.134.000 euro in the parentcompany income statement, have been prepared inaccordance with the Finnish Accounting Act and otherrules and regulations governing the preparation offinancial statements in Finland. The financial statementsgive a true and fair view, as defined in the AccountingAct, of both the consolidated and parent company resultof operations, as well as the financial position. The finan-cial statements can be adopted and the members ofthe Board of Directors and the President of the parentcompany can be discharged from liability for the periodaudited by us. The proposal made by the Board ofDirectors on how to deal with the distributable owncapital is in compliance with the Finnish CompaniesAct.

Pargas, February 21st, 2000

Solveig Törnroos-Huhtamäki Thor NyroosAuthorized Public Accountant Authorized Public

Accountant

Auditors’Report

41

GroupStructure

Partek Nordkalk Corp.Finland, Pargas

Partek Nordkalk Storugns ABSweden, Gotland 100%

Partek Nordkalk ABSweden, Malmö 100%

AB Ignaberga KalkstenHässleholm 100%

All-Kalk i Östergötland ABNorrköping 100%

Partek Nordkalk i Luleå ABLuleå 100%

Kalkproduktion Storugns AB(KPAB), Gotland 67%

Partek Nordkalk Lease ABGotland 100%

Partek Nordkalk Eesti ASEstonia, Vasalemma 100%

Rakke Lubjatehase ASEstonia, Rakke 100%

OOO Kamennyi LevRussia, St. Petersburg 100%

Inkoo Shipping Oy AbFinland, Inkoo 60%

Suomen Karbonaatti OyFinland, Lappeenranta 51%

Lohjan Energiahuolto OyLOHER, Finland, Lohja 23%

Verdalskalk A/SNorway, Verdal 10%

Partek Nordkalk Polska Sp. z o.o.Poland, Gdansk 100%

Specialty Minerals Nordic Oy AbFinland, Helsinki 15,8%

42

Boards of Directors: Year of birth

Christoffer Taxell 1948 President and C.E.O., PartekCarl-Gustaf Bergström 1945 Senior Executive Vice President, PartekKari Heinistö 1958 Chief Financial Officer, PartekPatrick Enckell 1937Christer Sundström 1943 President of Partek Nordkalk

Management Group: Employed since

Christer Sundström 1943 President 1974Kjell Bärtzner 1943 Director 1971Kjell Dahlberg 1952 R&D Director 1980Torbjörn Engman 1942 Environmental Director 1969Eelis Eskelinen 1953 Director 1980Paavo Nikkari 1947 Director 1981Kim Nordell 1959 Administrative Director 1983Tauno Paalumäki 1947 Quarry Manager 1975Esa Tikka 1953 Business Dev. Director 1980Mats Törnqvist 1946 Managing Director 1998Kari Vainio 1955 HR Director 1993Alf Wikander 1943 Director 1990

Christoffer Taxell

Patrick Enckell

Christer Sundström

Kari Heinistö

Carl-GustafBergström

Board of Directors,Management Group