Exhibit 15.4

TELECOMMUNICATIONS SERVICES OF TRINIDAD AND

TOBAGO LIMITED

SPECIAL PURPOSE FINANCIAL STATEMENTS

31stMarch 2004





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TELECOMMUNICATIONS SERVICES OF TRINIDAD AND TOBAGO LIMITED

SPECIAL PURPOSE FINANCIAL STATEMENTS

TABLE
  OF CONTENTS



|                                             | Page
|-------------------------------------------- | ----
|                                             |     
|Balance sheet                                |     
|                                             |     
|Statement of income                          |     
|                                             |     
|Statement of cash flow                       |     
|                                             |     
|Statement of changes in shareholders equity |     
|                                             |     
|Notes to the financial statements            |     





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

BALANCE SHEET

AS AT 31ST MARCH, 2004



|                                           |  | Notes |   | Unaudited2004TT$000 |           |  | Unaudited2003TT$000 |          
|------------------------------------------ |  | ----- | - | -------------------- | --------- |  | -------------------- | ---------
|                                           |  |       |   |                      |           |  |                      |          
|ASSETS                                     |  |       |   |                      |           |  |                      |          
|                                           |  |       |   |                      |           |  |                      |          
|Non-current assets                         |  |       |   |                      |           |  |                      |          
|                                           |  |       |   |                      |           |  |                      |          
|Property, plant and equipment              |  | 8     |   |                      | 3,072,068 |  |                      | 3,053,993
|Defined benefit plans asset                |  | 13    | a |                      | 304,400   |  |                      | 247,400  
|Deferred tax asset                         |  | 12    | d |                      | 7,612     |  |                      | 6,595    
|Available for sale investment              |  | 2     | f |                      | 8,882     |  |                      | 9,866    
|                                           |  |       |   |                      | 3,392,962 |  |                      | 3,317,854
|                                           |  |       |   |                      |           |  |                      |          
|Current assets                             |  |       |   |                      |           |  |                      |          
|                                           |  |       |   |                      |           |  |                      |          
|Inventories                                |  | 5     |   |                      | 132,012   |  |                      | 142,601  
|Accounts receivable and prepayment         |  | 4     |   |                      | 423,429   |  |                      | 411,884  
|Construction work-in-progress              |  | 14    |   |                      | 34,080    |  |                      |         
|Cash and cash equivalents                  |  | 3     |   |                      | 171,700   |  |                      | 186,194  
|                                           |  |       |   |                      | 761,221   |  |                      | 740,679  
|Total assets                               |  |       |   |                      | 4,154,183 |  |                      | 4,058,533
|                                           |  |       |   |                      |           |  |                      |          
|EQUITY AND LIABILITIES                     |  |       |   |                      |           |  |                      |          
|                                           |  |       |   |                      |           |  |                      |          
|Capital and reserves                       |  |       |   |                      |           |  |                      |          
|Stated capital                             |  | 9     |   |                      | 572,717   |  |                      | 572,717  
|Capital reserves                           |  |       |   |                      | 2,786     |  |                      | 2,786    
|Retained earnings                          |  |       |   |                      | 2,210,469 |  |                      | 1,993,110
|Shareholders equity                       |  |       |   |                      | 2,785,972 |  |                      | 2,568,613
|                                           |  |       |   |                      |           |  |                      |          
|Non-current liabilities                    |  |       |   |                      |           |  |                      |          
|Retirement benefit obligations             |  | 13    | a |                      | 25,372    |  |                      | 21,982   
|Borrowings                                 |  | 10    | a |                      | 364,779   |  |                      | 463,957  
|Deferred tax liability                     |  | 12    | c |                      | 167,275   |  |                      | 127,511  
|                                           |  |       |   |                      | 557,426   |  |                      | 613,450  
|                                           |  |       |   |                      |           |  |                      |          
|Current liabilities                        |  |       |   |                      |           |  |                      |          
|Employee benefits                          |  | 7     |   |                      | 150,073   |  |                      | 241,749  
|Accounts payable and accruals              |  | 6     |   |                      | 399,908   |  |                      | 361,063  
|Deferred revenue                           |  |       |   |                      | 37,411    |  |                      | 35,122   
|Tax payable                                |  |       |   |                      | 124,083   |  |                      | 139,263  
|Borrowings  current portion               |  | 10    | a |                      | 99,310    |  |                      | 99,273   
|                                           |  |       |   |                      | 810,785   |  |                      | 876,470  
|Total shareholders equity and liabilities |  |       |   |                      | 4,154,183 |  |                      | 4,058,533

The notes on pages 6 to 23 form part of these financial statements





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

STATEMENT OF INCOME

FOR THE YEAR ENDED 31ST MARCH, 2004



|                                                  |  | Notes |   | Unaudited2004TT$000 |           |   | Unaudited2003TT$000 |          
|------------------------------------------------- |  | ----- | - | -------------------- | --------- | - | -------------------- | ---------
|                                                  |  |       |   |                      |           |   |                      |          
|Gross operating revenue                           |  |       |   |                      |           |   |                      |          
|                                                  |  |       |   |                      |           |   |                      |          
|Gross revenue                                     |  |       |   |                      | 2,272,503 |   |                      | 2,138,198
|                                                  |  |       |   |                      |           |   |                      |          
|Operating expenses                                |  |       |   |                      |           |   |                      |          
|Cost of Sales                                     |  |       |   |                      | 279,953   |   |                      | 183,159  
|                                                  |  |       |   |                      |           |   |                      |          
|Personnel                                         |  |       |   |                      | 446,348   |   |                      | 449,956  
|                                                  |  |       |   |                      |           |   |                      |          
|Voluntary separation cost                         |  |       |   |                      |          |   |                      | 25,765   
|                                                  |  |       |   |                      |           |   |                      |          
|Depreciation                                      |  |       |   |                      | 461,156   |   |                      | 426,505  
|                                                  |  |       |   |                      |           |   |                      |          
|Maintenance and repairs                           |  |       |   |                      | 93,171    |   |                      | 101,226  
|                                                  |  |       |   |                      |           |   |                      |          
|Other                                             |  |       |   |                      | 321,752   |   |                      | 334,950  
|                                                  |  |       |   |                      | 1,602,380 |   |                      | 1,521,561
|                                                  |  |       |   |                      |           |   |                      |          
|Operating profit                                  |  |       |   |                      | 670,123   |   |                      | 616,637  
|                                                  |  |       |   |                      |           |   |                      |          
|Net finance cost                                  |  |       |   |                      |           |   |                      |          
|Interest income                                   |  |       |   |                      | 5,399     |   |                      | 4,520    
|Interest expense                                  |  |       |   |                      | (32,372   | ) |                      | (26,701  
|                                                  |  |       |   |                      | (26,973   | ) |                      | (22,181  
|                                                  |  |       |   |                      |           |   |                      |          
|Other income                                      |  |       |   |                      |           |   |                      |          
|                                                  |  |       |   |                      |           |   |                      |          
|Gain on disposal of available for sale investment |  |       |   |                      | 1,291     |   |                      |         
|                                                  |  |       |   |                      |           |   |                      |          
|Profit before taxation                            |  | 11    |   |                      | 644,441   |   |                      | 594,456  
|                                                  |  |       |   |                      |           |   |                      |          
|Less: Taxation                                    |  | 12    | a |                      | 194,879   |   |                      | 147,331  
|Profit after taxation                             |  |       |   |                      | 449,562   |   |                      | 447,125  

The notes on pages 6 to 23 form part of these financial statements



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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

STATEMENT OF CASH FLOW

FOR THE YEAR ENDED 31ST MARCH, 2004



|                                                            |  | Unaudited2004TT$000 |   |  | Unaudited2003TT$000 |   | 
|----------------------------------------------------------- |  | -------------------- | - |  | -------------------- | - | 
|Cash flows from operating activities                        |  |                      |   |  |                      |   | 
|Profit for the year before taxation                         |  | 644,441              |   |  | 594,456              |   | 
|Adjustments for:                                            |  |                      |   |  |                      |   | 
|Foreign exchange loss                                       |  | 1,458                |   |  | 2,423                |   | 
|Gain on disposal of property, plant and equipment           |  | (3,793               | ) |  | (123                 | ) | 
|Depreciation                                                |  | 461,156              |   |  | 426,505              |   | 
|Finance costs                                               |  | 32,372               |   |  | 26,701               |   | 
|Interest capitalised                                        |  |                     |   |  | 12,923               |   | 
|Interest income                                             |  | (5,399               | ) |  | (4,520               | ) | 
|Interest received                                           |  | 4,801                |   |  | 3,914                |   | 
|Gain on disposal of available for sale investment           |  | (1,291               | ) |  |                     |   | 
|Pension income and contributions paid                       |  | (57,000              | ) |  | (7,600               | ) | 
|Post employment medical costs and premiums paid             |  | 3,390                |   |  | 3,412                |   | 
|Operating profit before working capital changes             |  | 1,080,135            |   |  | 1,058,091            |   | 
|(Increase)/decrease in accounts receivable & prepayments    |  | (11,433              | ) |  | 423                  |   | 
|Decrease/(increase) in inventories                          |  | 10,589               |   |  | (24,845              | ) | 
|Increase in construction work-in-progress                   |  | (34,080              | ) |  |                     |   | 
|(Decrease)/increase in employee benefits                    |  | (91,676              | ) |  | 3,682                |   | 
|Increase in accounts payable, accruals and deferred revenue |  | 42,146               |   |  | 64,340               |   | 
|Cash generated from operations                              |  | 995,681              |   |  | 1,101,691            |   | 
|Finance costs paid                                          |  | (35,263              | ) |  | (38,339              | ) | 
|Taxes paid                                                  |  | (171,309             | ) |  | (154,226             | ) | 
|Net cash generated from operating activities                |  | 789,109              |   |  | 909,126              |   | 
|Cash flows from investing activities                        |  |                      |   |  |                      |   | 
|                                                            |  |                      |   |  |                      |   | 
|Purchase of property, plant and equipment                   |  | (479,439             | ) |  | (673,766             | ) | 
|Proceeds from disposal of property, plant and equipment     |  | 4,091                |   |  | 124                  |   | 
|Proceeds from disposal of available for sale investment     |  | 2,274                |   |  |                     |   | 
|Net cash used in investing activities                       |  | (473,074             | ) |  | (673,642             | ) | 
|Cash flows from financing activities                        |  |                      |   |  |                      |   | 
|Long term loan drawdowns                                    |  |                     |   |  | 202,798              |   | 
|Long term loan repayments                                   |  | (98,326              | ) |  | (81,526              | ) | 
|Dividends paid                                              |  | (232,203             | ) |  | (187,970             | ) | 
|Net cash used in financing activities                       |  | (330,529             | ) |  | (66,698              | ) | 
|Net (decrease)/increase in cash and cash equivalents        |  | (14,494              | ) |  | 168,786              |   | 
|Cash and cash equivalents at beginning of year              |  | 186,194              |   |  | 17,408               |   | 
|Cash and cash equivalents at end of year (note 3)           |  | 171,700              |   |  | 186,194              |   | 

The notes on pages 6 to 23 form part of these financial statements





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY

FOR THE YEAR ENDED 31ST MARCH, 2004



|                                                   |  | UnauditedStatedcapitalTT$000 |  | UnauditedCapitalreservesTT$000 |   | UnauditedRetainedearningsTT$000 |   | UnauditedShareholdersequityTT$000 |  
|-------------------------------------------------- |  | ----------------------------- |  | ------------------------------- | - | -------------------------------- | - | ----------------------------------- | -
|Balance as at 1st April, 2002                      |  | 572,717                       |  | 269,269                         |   | 1,489,116                        |   | 2,331,102                           |  
|- Deferred tax re: revaluation of technical assets |  |                              |  | 4,835                           |   |                                 |   | 4,835                               |  
|- Net profit after taxation                        |  |                              |  |                                |   | 447,125                          |   | 447,125                             |  
|- Dividends paid                                   |  |                              |  |                                |   | (85,825                          | ) | (85,825                             | )
|                                                   |  | 572,717                       |  | 274,104                         |   | 1,850,416                        |   | 2,697,237                           |  
|- Effect of change in accounting policy (note 19)  |  |                              |  | (271,318                        | ) | 142,694                          |   | (128,624                            | )
|Balance as at 31st March, 2003                     |  | 572,717                       |  | 2,786                           |   | 1,993,110                        |   | 2,568,613                           |  
|Balance as at 1st April, 2003                      |  | 572,717                       |  | 2,786                           |   | 1,993,110                        |   | 2,568,613                           |  
|Net profit after taxation                          |  |                              |  |                                |   | 449,562                          |   | 449,562                             |  
|Dividends paid                                     |  |                              |  |                                |   | (232,203                         | ) | (232,203                            | )
|Balance as at 31st March, 2004                     |  | 572,717                       |  | 2,786                           |   | 2,210,469                        |   | 2,785,972                           |  

The notes on pages 6 to 23 form part of these financial statements





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|1. | Incorporation
        and 
        principal activity |  |    | The Company was incorporated in Trinidad and Tobago on May 1968 and on 15th April, 1999 the Company obtained its Certificate of Continuance under the Companies Act 1995. Its domestic operations are regulated by the Trinidad and Tobago Telephone Act Chapter 47:330  (Act 7 of 1968), subsequently amended in 1976 and 1990.
            The Companys registered office is located at 1 Edward Street, Port of Spain and its principal activity is the provision of both internal and external telecommunications services to the Republic of Trinidad and Tobago.
            Cable & Wireless (West Indies) Limited holds a 49% interest in the Company. The 51% shareholding held by the Government of Trinidad and Tobago was transferred to National Enterprises Limited on 19th September, 2000.
            The number of employees of the Company as at 31st March, 2004 amounted to 3,528 (March 2003: 3,512).
|-- | ----------------------------------------------------- |  | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Statement
        of 
        accounting policies     |  | a) | Basis of accounting
            These financial statements are prepared under the historical cost convention, in accordance with International Financial Reporting Standards. No account is taken of the effects of inflation except for revaluation of the Companys technical assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                       |  | b) | Use of estimates
            The preparation of financial statements, in conformity with International Financial Reporting Standards, requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated.                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                       |  | c) | Foreign currency translation
            These financial statements are stated in Trinidad and Tobago dollars. The exchange rate ruling at the balance sheet date was US$1 = TT$6.2998  (March 2003: US$1 = TT$6.2965).
            Foreign currency transactions during the period are converted at the rates ruling at the date of the transaction or at a rate, which approximates the actual rate. Monetary assets and liabilities in foreign currencies at the balance sheet date are translated at rates ruling at that date. Profits or losses thus arising are dealt with in the statement of income.                                                                                                                                                                                                                                                                                                               





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|2. | Statement
        of 
        accounting policies(continued) |  | d) | Property,
        plant and equipment
      Items
        of property, plant and equipment are stated at historical cost less accumulated
        depreciation and impairment allowances. The cost of self  constructed
        property, plant and equipment includes the cost of materials and direct
        labour.
|-- | ------------------------------------------------------------ |  | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                              |  |    | (i)Plant
        in service
      Depreciation
        on property, plant and equipment is provided on a straight-line basis.
        The estimated useful lives of depreciable plant are as follows:                                                                                                                   
|   |                                                              |  |    | Properties                                                                                                                                                                                                                                                                                                              
|   |                                                              |  |    | Freehold
        building
        Leasehold properties                                                                                                                                                                                                                                                                  
|   |                                                              |  |    | Technical
        assets                                                                                                                                                                                                                                                                                                
|   |                                                              |  |    | Central
        office equipment                                                                                                                                                                                                                                                                                        
|   |                                                              |  |    | External
        cable plant                                                                                                                                                                                                                                                                                            
|   |                                                              |  |    | Plant
        & machinery                                                                                                                                                                                                                                                                                               
|   |                                                              |  |    | Towers                                                                                                                                                                                                                                                                                                                  
|   |                                                              |  |    | Underground
        conduit                                                                                                                                                                                                                                                                                             
|   |                                                              |  |    | Customers
        installations                                                                                                                                                                                                                                                                                        
|   |                                                              |  |    |                                                                                                                                                                                                                                                                                                                         
|   |                                                              |  |    | Other                                                                                                                                                                                                                                                                                                                   
|   |                                                              |  |    | Furniture
        and office equipment including computers                                                                                                                                                                                                                                                              
|   |                                                              |  |    | Indefeasible
        Rights of Use                                                                                                                                                                                                                                                                                      
|   |                                                              |  |    | Tools
        and implements                                                                                                                                                                                                                                                                                            
|   |                                                              |  |    | Vehicles                                                                                                                                                                                                                                                                                                                
|   |                                                              |  |    |                                                                                                                                                                                                                                                                                                                         
|   |                                                              |  |    | Land
        is not depreciated as it is deemed to have an indefinite life.                                                                                                                                                                                                                                             





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|2. | Statement
        of 
        accounting policies(continued) |  |  | (ii)Plant under construction
            Property, plant and equipment under construction are recorded as plant under construction (PUC) until they are ready for their intended use, thereafter they are transferred to the related category of property, plant and equipment and depreciated over their estimated useful lives. The cost of PUC includes allocation of labour and overhead in accordance with IAS #16, Property, Plant and Equipment. The total expenses capitalised for the year amounted to TT$34 million (unaudited). (2003:TT $44 million, unaudited).
            (iii)Impairment
            The carrying amount of property, plant and equipment is reviewed whenever events or changes in circumstances indicate that impairment may have occurred, and where carrying values exceed this estimated recoverable amount, assets are written down to their recoverable amount.
            (iv)Repairs and renovations
            Repairs and renovations are normally expensed as they are incurred. Expenses are reported as assets only if the amounts involved are substantial and one or more of the following conditions are satisfied: the original useful life is prolonged, the production/service capacity is increased, the quality of the products/services is enhanced materially or production/service costs are reduced considerably.
            (v)Borrowing Cost
            Interest cost on borrowings to finance capital expenditure on development projects are capitalised during the period of time that is required to complete the asset for its intended use. The total interest capitalized for the year amounts to nil (2003: TT$12.9 million, unaudited). All other borrowing costs are expensed.
|-- | ------------------------------------------------------------ |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|2.Statement ofaccounting policies(continued) |  | e)Employee benefits
            (i)Retirement benefits plans
            The Company operates three defined benefit plans, namely the Textel Pension Plan, the Telco Staff Pension Fund Plan and the TSTT Pension Plan. The current employees are all covered by either the Telco Staff Pension Fund Plan or the TSTT Pension Fund Plan. The Textel Pension Fund Plan operates only to pay benefits to those pensioners who have opted to remain in that plan. However, the constructive benefit obligation is based on the benefit structure of the TSTT Pension Plan.
            For defined benefit plans, the pension accounting costs are assessed using the projected unit credit method.  Under this method, the cost of providing pensions is charged to the statement of income so as to spread the regular cost over the service lives of employees in accordance with the advice of independent actuaries who carry out a full valuation of the plans every three years. The pension obligation is measured as the present value of the estimated future cash outflows. All actuarial gains and losses to be recognised are spread forward over the average remaining service lives of employees.                                                                                                                                                                                                                                                                                                                                                                                            
|-------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                             |  | (ii)Post employment medical benefits
            The Company operates a post employment medical benefit plan that is insured with Colonial Life Insurance Company (CLICO). Medical benefits are available on retirement to all current retirees and employees. The plan has been in existence since 1st September, 1997 and is run alongside an arrangement to provide in-service medical benefits to employees. CLICO charges the Company one premium based on the number of current employees only. The premiums are met jointly by the Company and current employees only. No specific premiums are paid in respect of the cover provided to current retirees.
            The International Accounting Standards (IAS) #19, Employee Benefits, requires the Company to account for the cost of the post-employment medical plan benefits during the period of employment with the Company so that the cost of these post-employment medical benefits is fully provided by the time the employee retires.
            The IAS #19, Employee Benefits, liability is calculated by an independent actuary by quantifying the margins implicitly contained in the premium paid to CLICO by the Company. This margin is translated into a per-capita cost of medical benefits for 2003/2004 in respect of retirees currently covered by the plan. The data from CLICO for retirees currently covered by the post employment medical plan together with the data used to calculate the IAS #19 pension plan assets figures are then used to estimate the future post employment medical benefit obligation.





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|2.Statement ofaccounting policies(continued) |  | e)Employee benefits (continued)
            (iii)Short term employee benefits
            The Company recognises the expected cost of vacation earned not yet taken by its employees as an expense.
            f)Available for sale investment
            This represents the Companys share of the accumulated capital cost and working capital prepayment with the International Telecommunications Satellite (INTELSAT) Organisation.
            In the financial year 2002/2003, the available for sale investment comprised of INTELSAT and New Skies Satellites N.V.
            This investment is being held for an undefined period. However, if there are changes in market conditions that significantly affect this investment, the Company will consider its sale.
            The fair value of the Companys investment is estimated based on the net asset valuation using the most recent management accounts of INTELSAT. All recognised gains and losses arising from a change in fair value are recognised in the revaluation reserve and reported in the statement of changes in sharholders equity.
            g)Taxation
            The liability approach for accounting for corporation taxes is used whereby under this method, deferred taxes are provided for the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities using current corporation tax rates.
            Deferred tax liabilities are recognised for temporary differences that will result in taxable amounts in future years. Deferred tax assets are recognised for temporary differences that will result in deductible amounts in future years.
            h)Provisions
            Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past transaction or event and it is possible that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
|-------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES
  TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR
  THE YEAR ENDED 31ST MARCH, 2004



|2.       Statement
        ofaccounting policies (continued) |  | i)        Leases
            Leases where the lessor effectively retains substantially all the risk and benefits of the ownership of the leased term are classified as operating leases. Operating lease payments are recognised as an expense in the statement of income on a straight line basis over the lease term.
            The Company has no finance leases.

      j)        Trade
        and other receivables
            Trade receivables, excluding government balances which generally have 30-90 days terms are recognised and carried at the original billed amounts less allowances for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable.
            Receivables from related parties are recognised and carried at cost.

      k)       Trade
        and other payables
            Liabilities for trade and other accounts payable which are normally settled on 30-90 day terms are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the Company.

      l)        Inventories
            Inventories held for use in the maintenance and expansion of the Companys telecommunications systems are stated at landed cost, less provision for deterioration and obsolescence. Inventory held for resale are stated at the lower of cost and net realisable value.

      m)      Cash
        and cash equivalents
            Cash and cash equivalents are short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

      n)       Revenue
        recognition
            Revenue from telecommunications services mainly represents telephone and cellular services. Telephone and post paid cellular service revenues are recorded based on call units and minutes of traffic respectively, plus basic fees on a monthly billing cycle basis. Revenues from prepaid cellular airtime are recognised based upon usage of prepaid cards by customers.
|------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|2. | Statement
        of 
        accounting policies(continued) |  | n)Revenue recognition(continued)
            Other telecommunication services revenues, including leased circuit are recorded when the services are rendered to customers.
            Other revenues earned by the Company are recognised on the following basis:
            Business services  This represents amounts billed on contracts in progress. On completion of the contracts, the deferred income is offset against the deferred charges related to the contract and the resulting profit/loss is recognised in the statement of income.
            Directory advertising  This represents amounts billed to customers in the current year for directory publication in the following year. Revenue is recognised when the directory is published, in equal monthly installments.
            Mobile equipment  revenues are recognised upon delivery of equipment to customers.
            o)Comparative figures
            Certain changes in presentation have been made during the year and the comparative figures have been restated. This include the effect of the change in accounting policy as set out in note 19.
|-- | ------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|   |                                            |  |                          |  | Unaudited2004TT$000 |  | Unaudited2003TT$000
|-- | ------------------------------------------ |  | ------------------------ |  | -------------------- |  | --------------------
|3. | Cash
        and cash 
        equivalents |  | Cash at bank and in hand |  | 171,700              |  | 186,194             



| |  | The Company has unsecured bank overdraft facilities up to a maximum of TT$50 million.
| |  | -------------------------------------------------------------------------------------



|   |                                                         |                                        |                                         |         | Unaudited2004TT$000 |   | Unaudited2003TT$000
|-- | ------------------------------------------------------- | -------------------------------------- | --------------------------------------- | ------- | -------------------- | - | --------------------
|4. | Accounts
      receivable
        and
      prepayments |                                        | Foreign
        telecom administrations |         | 47,960               |   |                     
|   |                                                         | Amounts
        due from customers     |                                         | 454,870 |                      |   | 420,481             
|   |                                                         | Sundry
        debtors and prepayments |                                         | 131,450 |                      |   | 153,618             
|   |                                                         |                                        | Provision
        for doubtful debts    |         | (210,851             | ) |                     
|   |                                                         |                                        |                                         |         | 423,429              |   |                     





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  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|   |             |  |                            |  | Unaudited2004TT$000 |   | Unaudited2003TT$000
|-- | ----------- |  | -------------------------- |  | -------------------- | - | --------------------
|5. | Inventories |  | Cable                      |  | 20,560               |   |                     
|   |             |  | Cellular                   |  | 63,137               |   |                     
|   |             |  | Business systems           |  | 16,550               |   |                     
|   |             |  | Materials and supplies     |  | 48,865               |   |                     
|   |             |  | Provision for obsolescence |  | (17,100              | ) |                     
|   |             |  |                            |  | 132,012              |   |                     



|   |                                                  |  |                                         |  | Unaudited2004TT$000 |  | Unaudited2003TT$000
|-- | ------------------------------------------------ |  | --------------------------------------- |  | -------------------- |  | --------------------
|6. | Accounts
        payable and 
        accruals   |  | Foreign
        telecom administrations |  | 4,534                |  | 6,640               
|   | Cable
        and Wireless (West Indies) Limited |  | 2,577                                   |  | 17,270              
|   |                                                  |  | Trade
        payable                   |  | 307,005              |  | 272,968             
|   |                                                  |  | Other
        payables                  |  | 85,792               |  | 64,185              
|   |                                                  |  |                                         |  | 399,908              |  | 361,063             



|7. | Employee benefits |  |                                                                                                                                             |  | Unaudited2004TT$000 |  | Unaudited2003TT$000
|-- | ----------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------- |  | --------------------
|   |                   |  | Liabilities arising from Human Resources including accrued vacation leave and provisions for retroactive salaries and termination benefits. |  | 150,073              |  | 241,749             





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|   |                               |  | UnauditedBalance at31/03/2003TT$000 |  | UnauditedAdditions/(Transfers)TT$000 |   | UnauditedDisposalsTT$000 |   | UnauditedBalance at31/03/2004TT$000 | 
|-- | ----------------------------- |  | ------------------------------------ |  | ------------------------------------- | - | ------------------------- | - | ------------------------------------ | 
|   |                               |  |                                      |  |                                       |   |                           |   |                                      | 
|   |                               |  |                                      |  |                                       |   |                           |   |                                      | 
|8. | Property, plant and equipment |  |                                      |  |                                       |   |                           |   |                                      | 
|   |                               |  |                                      |  |                                       |   |                           |   |                                      | 
|   | At cost:                      |  |                                      |  |                                       |   |                           |   |                                      | 
|   |                               |  |                                      |  |                                       |   |                           |   |                                      | 
|   | Properties                    |  |                                      |  |                                       |   |                           |   |                                      | 
|   |                               |  |                                      |  |                                       |   |                           |   |                                      | 
|   | Freehold properties           |  | 329,350                              |  | 26,252                                |   | (208                      | ) | 355,394                              | 
|   | Leasehold properties          |  | 114,786                              |  | 11,681                                |   |                          |   | 126,467                              | 
|   |                               |  | 444,136                              |  | 37,933                                |   | (208                      | ) | 481,861                              | 
|   | Technical assets              |  |                                      |  |                                       |   |                           |   |                                      | 
|   |                               |  |                                      |  |                                       |   |                           |   |                                      | 
|   | Central office equipment      |  | 1,824,141                            |  | 210,366                               |   |                          |   | 2,034,507                            | 
|   | Customer installation         |  | 1,125,113                            |  | 34,920                                |   |                          |   | 1,160,033                            | 
|   | External cable plant          |  | 882,437                              |  | 187,432                               |   | (10,754                   | ) | 1,059,115                            | 
|   | Plant & machinery             |  | 9,075                                |  | 311                                   |   |                          |   | 9,386                                | 
|   | Towers                        |  | 58,841                               |  | 5,585                                 |   |                          |   | 64,426                               | 
|   | Underground conduit           |  | 490,882                              |  | 25,758                                |   |                          |   | 516,640                              | 
|   | Shares of Americas 1          |  | 89,187                               |  | (2,732                                | ) |                          |   | 86,455                               | 
|   |                               |  | 4,479,676                            |  | 461,640                               |   | (10,754                   | ) | 4,930,562                            | 
|   | Other                         |  |                                      |  |                                       |   |                           |   |                                      | 
|   |                               |  |                                      |  |                                       |   |                           |   |                                      | 
|   | Furniture & fittings          |  | 48,553                               |  | 927                                   |   | (476                      | ) | 49,004                               | 
|   | Indefeasible Rights of Use    |  | 26,431                               |  |                                      |   |                          |   | 26,431                               | 
|   | Air conditioning              |  | 14,789                               |  | 1,145                                 |   |                          |   | 15,934                               | 
|   | Tools & implements            |  | 29,630                               |  | 1,368                                 |   |                          |   | 30,998                               | 
|   | Vehicles                      |  | 95,738                               |  | 6,767                                 |   |                          |   | 102,505                              | 
|   | Computer equipment            |  | 241,850                              |  | 158,052                               |   |                          |   | 399,902                              | 
|   | Plant under construction      |  | 706,630                              |  | (188,393                              | ) |                          |   | 518,237                              | 
|   |                               |  | 1,163,621                            |  | (20,134                               | ) | (476                      | ) | 1,143,011                            | 
|   | Total                         |  | 6,087,433                            |  | 479,439                               |   | (11,438                   | ) | 6,555,434                            | 





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  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|   |                                          |  | UnauditedBalance at31/03/2003TT$000 |  | UnauditedDepreciationchargesTT$000 |  | UnauditedDisposalsTT$000 |  | UnauditedBalance at31/03/2004TT$000 | 
|-- | ---------------------------------------- |  | ------------------------------------ |  | ----------------------------------- |  | ------------------------- |  | ------------------------------------ | 
|8. | Property, plant and equipment(continued) |  |                                      |  |                                     |  |                           |  |                                      | 
|   | Accumulated depreciation:                |  |                                      |  |                                     |  |                           |  |                                      | 
|   | Properties                               |  |                                      |  |                                     |  |                           |  |                                      | 
|   | Freehold properties                      |  | 59,462                               |  | 6,345                               |  |                          |  | 65,807                               | 
|   | Leasehold properties                     |  | 22,284                               |  | 1,696                               |  |                          |  | 23,980                               | 
|   | Technical assets                         |  | 81,746                               |  | 8,041                               |  |                          |  | 89,787                               | 
|   |                                          |  |                                      |  |                                     |  |                           |  |                                      | 
|   | Central office equipment                 |  | 824,266                              |  | 248,862                             |  |                          |  | 1,073,128                            | 
|   | Customer installation                    |  | 916,790                              |  | 49,958                              |  |                          |  | 966,748                              | 
|   | External cable plant                     |  | 596,019                              |  | 61,398                              |  | (10,754)                  |  | 646,663                              | 
|   | Plant & machinery                        |  | 7,979                                |  | 358                                 |  |                          |  | 8,337                                | 
|   | Towers                                   |  | 33,149                               |  | 2,032                               |  |                          |  | 35,181                               | 
|   | Underground conduit                      |  | 186,257                              |  | 12,642                              |  |                          |  | 198,899                              | 
|   | Shares of America 1                      |  | 39,457                               |  | 5,996                               |  |                          |  | 45,453                               | 
|   |                                          |  | 2,603,917                            |  | 381,246                             |  | (10,754)                  |  | 2,974,409                            | 
|   | Other                                    |  |                                      |  |                                     |  |                           |  |                                      | 
|   |                                          |  |                                      |  |                                     |  |                           |  |                                      | 
|   | Furniture & fittings                     |  | 36,690                               |  | 2,424                               |  | (476)                     |  | 38,638                               | 
|   | Indefeasible Rights of Use               |  | 24,955                               |  | 414                                 |  |                          |  | 25,369                               | 
|   | Air conditioning                         |  | 4,356                                |  | 965                                 |  |                          |  | 5,321                                | 
|   | Tools & implements                       |  | 15,717                               |  | 1,468                               |  |                          |  | 17,185                               | 
|   | Vehicles                                 |  | 76,480                               |  | 10,400                              |  |                          |  | 86,880                               | 
|   | Computer equipment                       |  | 189,579                              |  | 56,198                              |  |                          |  | 245,777                              | 
|   |                                          |  | 347,777                              |  | 71,869                              |  | (476)                     |  | 419,170                              | 
|   | Total                                    |  | 3,033,440                            |  | 461,156                             |  | (11,230)                  |  | 3,483,366                            | 
|   | Net carrying amount                      |  | 3,053,993                            |  |                                     |  |                           |  | 3,072,068                            | 





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|    |                |  |     |                                                                          |  | Unaudited2004TT$000 |  |  | Unaudited2003TT$000 | 
|--- | -------------- |  | --- | ------------------------------------------------------------------------ |  | -------------------- |  |  | -------------------- | 
|9.  | Stated capital |  |     | Authorised                                                               |  |                      |  |  |                      | 
|    |                |  |     | 1,300,000,000 ordinary shares of no par value                            |  |                      |  |  |                      | 
|    |                |  |     | Issued                                                                   |  |                      |  |  |                      | 
|    |                |  |     | 282,820,361 ordinary shares of no par value                              |  | 572,717              |  |  | 572,717              | 
|    |                |  |     |                                                                          |  |                      |  |  |                      | 
|10. | Borrowings     |  | (a) | Long term loans                                                          |  | Unaudited2004TT$000 |  |  | Unaudited2003TT$000 | 
|    |                |  |     |                                                                          |  |                      |  |  |                      | 
|    |                |  |     | Balance brought forward                                                  |  | 563,230              |  |  | 438,886              | 
|    |                |  |     | Drawdowns                                                                |  |                     |  |  | 202,798              | 
|    |                |  |     | Foreign exchange gain arising from currency translations during the year |  | 138                  |  |  | 3,072                | 
|    |                |  |     |                                                                          |  | 563,368              |  |  | 644,756              | 
|    |                |  |     | Repayments                                                               |  | (99,279)             |  |  | (81,526)             | 
|    |                |  |     | Balance carried forward                                                  |  | 464,089              |  |  | 563,230              | 
|    |                |  |     |                                                                          |  |                      |  |  |                      | 
|    |                |  |     | Amounts due within one year                                              |  | 99,310               |  |  | 99,273               | 
|    |                |  |     | Amounts due within 2 to 5 years                                          |  | 344,227              |  |  | 443,405              | 
|    |                |  |     | Amounts due after 5 years                                                |  | 20,552               |  |  | 20,552               | 
|    |                |  |     |                                                                          |  | 464,089              |  |  | 563,230              | 
|    |                |  |     |                                                                          |  |                      |  |  |                      | 



| |  | (b)
        Interest rates
            The Republic Bank Limited loan is tied to the average of the Trinidad and Tobago dollar prime rates of Republic Bank Limited, RBTT, and Scotiabank Limited at 30th November each year minus 4.40%. The loans from Royal Bank, Export Import Bank of the United States and Export Development Corporation are all at fixed rates.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  |  | Floating interest rates |  | 5.10%         | 
| |  |  |  | ----------------------- |  | ------------- | 
| |  |  |  | Fixed interest rates    |  | 4.72% - 8.25% | 





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|10. | Borrowings(continued) |  | (c) | Long term loan facilities |  | Unaudited2004TT$000 |  |  | Unaudited2003TT$000 | 
|--- | --------------------- |  | --- | ------------------------- |  | -------------------- |  |  | -------------------- | 
|    |                       |  |     |                           |  |                      |  |  |                      | 
|    |                       |  |     | -     at fixed rates      |  | 321,089              |  |  | 391,730              | 
|    |                       |  |     | -     at floating rates   |  | 143,000              |  |  | 171,500              | 
|    |                       |  |     |                           |  | 464,089              |  |  | 563,230              | 



| |  | (d)Security
            These long-term loans are held with various local and foreign financial institutions and are unsecured.                                                                                                            
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (e)Repayments
            The Companys loans are being repaid within varying periods ranging between January 2006 and October 2009.                                                                                                       
| |  | (f)Fair value of fixed rate loans
            The fair value of the fixed rate long-term loan is based on estimated future cash flows discounted using the current market rates for debt of the same remaining maturities and credit risks.



| |  |  |  |                       |  | Carrying amounts     |  |                      | Fair values | 
| |  |  |  | --------------------- |  | -------------------- |  | -------------------- | ----------- | 
| |  |  |  |                       |  | Unaudited2004TT$000 |  | Unaudited2003TT$000 |             | 
| |  |  |  |                       |  |                      |  |                      |             | 
| |  |  |  | Balance at 31st March |  | 321,089              |  | 391,730              |             | 





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|11. | Profit
        before 
        taxation |  |  | This is arrived at after charging the following items: |  |  | Unaudited2004TT$000 |  |  | Unaudited2003TT$000 | 
|--- | --------------------------------------- |  |  | ------------------------------------------------------ |  |  | -------------------- |  |  | -------------------- | 
|    |                                         |  |  |                                                        |  |  |                      |  |  |                      | 
|    |                                         |  |  | Exchange loss                                          |  |  | 1,458                |  |  | 2,423                | 
|    |                                         |  |  | Provision for doubtful debts                           |  |  | 60,095               |  |  | 77,396               | 
|    |                                         |  |  | Stock write-off/provision for obsolescence             |  |  | 2,576                |  |  | 8,013                | 



|12. | Taxation |  | (a) | Components of the tax expense          |  |  | Unaudited2004TT$000 |  |  | Unaudited2003TT$000 | 
|--- | -------- |  | --- | -------------------------------------- |  |  | -------------------- |  |  | -------------------- | 
|    |          |  |     | Deferred tax expense/(income)          |  |  | 38,749               |  |  | (39,426)             | 
|    |          |  |     | Current tax  current year tax expense |  |  | 154,758              |  |  | 186,757              | 
|    |          |  |     |  prior year tax expense               |  |  | 1,372                |  |  |                     | 
|    |          |  |     |                                        |  |  | 194,879              |  |  | 147,331              | 



| |  |  | (b) | Reconciliation of accounting to tax profit:                                    |  |  | Unaudited2004TT$000 |  |  | Unaudited2003TT$000 | 
| |  |  | --- | ------------------------------------------------------------------------------ |  |  | -------------------- |  |  | -------------------- | 
| |  |  |     |                                                                                |  |  |                      |  |  |                      | 
| |  |  |     | Accounting profit                                                              |  |  | 644,441              |  |  | 594,456              | 
| |  |  |     | Tax at 30%                                                                     |  |  | 193,332              |  |  | 178,337              | 
| |  |  |     | Effect of change in tax rate                                                   |  |  |                     |  |  | (26,947)             | 
| |  |  |     | Effect of tax rate reduction on deferred tax on revaluation of technical asset |  |  |                     |  |  | (4,835)              | 
| |  |  |     | Tax effect of income treated differently in determining taxable profits        |  |  | (2,043)              |  |  | (1,288)              | 
| |  |  |     | Green fund levy                                                                |  |  | 2,218                |  |  | 2,064                | 
| |  |  |     | Prior years under provision                                                   |  |  | 1,372                |  |  |                     | 
| |  |  |     | Tax expense (note 12a)                                                         |  |  | 194,879              |  |  | 147,331              | 



| |  |  | (c) | Components of deferred tax liability |  |  | Unaudited2004TT$000 |  |  | Unaudited2003TT$000 | 
| |  |  | --- | ------------------------------------ |  |  | -------------------- |  |  | -------------------- | 
| |  |  |     |                                      |  |  |                      |  |  |                      | 
| |  |  |     | Property, plant and equipment        |  |  | (75,955)             |  |  | (53,291)             | 
| |  |  |     | Defined benefit plans asset          |  |  | (91,320)             |  |  | (74,220)             | 
| |  |  |     |                                      |  |  | (167,275)            |  |  | (127,511)            | 



| |  |  | (d) | Components of deferred tax asset |  |  | Unaudited2004TT$000 |  |  | Unaudited2003TT$000 | 
| |  |  | --- | -------------------------------- |  |  | -------------------- |  |  | -------------------- | 
| |  |  |     |                                  |  |  |                      |  |  |                      | 
| |  |  |     | Post employment medical benefit  |  |  | 7,612                |  |  | 6,595                | 





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|13. | Pension
        & 
        other post 
        employment 
        benefits |  | (a) | Amounts
        recognised in 
        the balance sheet |  | Pension
        plans |   | Post
        employmentmedical benefit |  
|--- | --------------------------------------------------------------------------- |  | --- | -------------------------------------------------------- |  | --------------------- | - | -------------------------------------- | -
|    |                                                                             |  |     |                                                          |  |                       |   |                                        |  
|    |                                                                             |  |     |                                                          |  | Unaudited2004TT$000  |   | Unaudited2003TT$000                   |  
|    |                                                                             |  |     |                                                          |  |                       |   |                                        |  
|    |                                                                             |  |     | Benefits
        obligations                             |  | (1,843,700            | ) | (1,353,200                             | )
|    |                                                                             |  |     | Plans
        assets                                     |  | 2,626,500             |   | 1,974,400                              |  
|    |                                                                             |  |     |                                                          |  | 782,800               |   | 621,200                                |  
|    |                                                                             |  |     | Unrecognised
        actuarial (gain)/losses             |  | (320,800              | ) | (234,800                               | )
|    |                                                                             |  |     | Un-utilisable
        asset                              |  | (157,600              | ) | (139,000                               | )
|    |                                                                             |  |     | Benefits
        asset/(liability)                       |  | 304,400               |   | 247,400                                |  



| |  |  | (b) | Amounts recognised in the statement of income |  |          |   |          |  
| |  |  | --- | --------------------------------------------- |  | -------- | - | -------- | -
| |  |  |     | Current service cost                          |  | 44,900   |   | 35,700   |  
| |  |  |     | Interest costs                                |  | 106,200  |   | 104,700  |  
| |  |  |     | Expected return on plans assets               |  | (196,100 | ) | (169,000 | )
| |  |  |     | Curtailment and settlements                   |  | (3,600   | ) | 26,300   |  
| |  |  |     | Termination Cost                              |  |         |   |         |  
| |  |  |     | Net amortised gain                            |  | (3,500   | ) | (2,400   | )
| |  |  |     | Un-utilisable asset adjustment                |  | 18,700   |   | 14,600   |  
| |  |  |     | Net benefit (income)/cost                     |  | (33,400  | ) | 9,900    |  
| |  |  |     | Actual return on plans assets                 |  | 663,900  |   | 311,700  |  





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|    |                                                                                        |  |     |                                                                                                    |  | Pension plans        |  | Post employmentmedical benefit |  
|--- | -------------------------------------------------------------------------------------- |  | --- | -------------------------------------------------------------------------------------------------- |  | -------------------- |  | ------------------------------ | -
|13. | Pension
        & 
        other post 
        employment 
        benefits(continued) |  | (c) | Movement
        on the
        asset /(liability)
        recognised in the
        balance sheet |  | Unaudited2004TT$000 |  | Unaudited 2003TT$000          |  
|    |                                                                                        |  |     | At the beginning of year                                                                           |  |                      |  |                                |  
|    |                                                                                        |  |     | - as previously stated                                                                             |  | 247,400              |  | 239,800                        |  
|    |                                                                                        |  |     | - effect of adopting IAS 19                                                                        |  |                     |  |                               |  
|    |                                                                                        |  |     | As restated                                                                                        |  | 247,400              |  | 239,800                        |  
|    |                                                                                        |  |     | Net benefit income/ (cost)                                                                         |  | 33,400               |  | (9,900                         | )
|    |                                                                                        |  |     | Contributions                                                                                      |  | 23,600               |  | 17,500                         |  
|    |                                                                                        |  |     | At end of year                                                                                     |  | 304,400              |  | 247,400                        |  
|    |                                                                                        |  | (d) | Principal actuarial assumptions used for accounting purposes were:                                



| |  |  |  |                                        |  | Unaudited2004 |  | Unaudited2003
| |  |  |  | -------------------------------------- |  | ------------- |  | -------------
| |  |  |  | Discount rate                          |  | 6.5%          |  | 8.0%         
| |  |  |  | Expected rate of return on plan assets |  | 8.0%          |  | 10.0%        
| |  |  |  | Future salary increases                |  | 5.5%          |  | 6.0%         
| |  |  |  | Future pension increases               |  | 3.0%          |  | 3.0%         
| |  |  |  | Medical expense increases              |  | 6.0%          |  | 6.0%         



| |  |  | (e) | As a consequence of the High Court Action  LOPEZ vs. TSTT and RBTT Trust Co. Ltd., in 2001/2002 it was determined that the unallocated surplus of the Textel Pension Plan could not be transferred to TSTTs pension plan. The amount of the surplus recognised in respect of the Textel Plan was accordingly limited under IAS 19 giving rise to the un-utilisable asset adjustment of TT$ 18.7M (unaudited) in 2004 (2003:TT$ 14.6M  unaudited).
| |  |  | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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TELECOMMUNICATIONS SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|14. | Construction
        work - 
        in -progress |  |  | This
        represents the excess of the costs incurred over progress billings to
        date on a communication solution to enhance the functioning and delivery
        of electronic services for a third party. Completion testing had not yet
        been completed as at 31st March 2004 hence no revenue has been
        recognised to date.
|--- | ------------------------------------------------- |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|15. | Related
        party 
        transactions       |  |  | The transactions with the Companys related party Cable & Wireless (West Indies) Limited are as follows:                                                                                                                                                                                                                                               



| |  |  |  |                                               |  | Unaudited2004TT$000 |  | Unaudited2003TT$000
| |  |  |  | --------------------------------------------- |  | -------------------- |  | --------------------
| |  |  |  | Technical and professional fees and purchases |  | 9,386                |  | 37,211              
| |  |  |  | Traffic settlements (net)                     |  | 6,286                |  | 11,215              
| |  |  |  | Directors fees and allowances                |  | 105                  |  | 132                 



|16. | Financial
        instruments |  |     | Exposure to various types of financial risks arises in the ordinary course of the companys business. Derivatives financial instruments are not currently used to reduce exposure to fluctuations in interest and foreign exchange rates.                                                                                                                                     
|--- | ----------------------------- |  | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                               |  |     | Financial instruments carried on the balance sheet include cash and cash equivalents, accounts receivables and prepayments, investments, accounts payable and accruals and borrowings. Transactions in financial instruments have resulted in the Company assuming the financial risks described below:                                                                       
|    |                               |  | (a) | Interest rate risk                                                                                                                                                                                                                                                                                                                                                            
|    |                               |  |     | The changes in market interest rates on the Companys loans cause exposure to interest rate risk. Included in note 10 is information on the maturity dates as well as effective interest rates.                                                                                                                                                                               
|    |                               |  | (b) | Credit risk                                                                                                                                                                                                                                                                                                                                                                   
|    |                               |  |     | Financial instruments that potentially subject the Company to credit risk include trade receivable and loans to employees.  Provisions have been set up against the receivable balances for potential credit losses. There is no concentration of credit risk in a particular customer or employee.                                                                           
|    |                               |  | (c) | Fair value                                                                                                                                                                                                                                                                                                                                                                    
|    |                               |  |     | The carrying amounts of the Companys cash and cash  equivalents, short term borrowings, accounts receivable, and accounts payable approximate to their fair value because of the short term maturities of these instruments.                                                                                                                                                 
|    |                               |  |     | The Companys investments with the International Telecommunications Satellite Organisation are stated at fair value.                                                                                                                                                                                                                                                          
|    |                               |  |     | The fair value of the Companys floating rate long-term loans approximates its carrying amount given the floating rate nature of the loan at prevailing market rates. The fair value of the fixed rates long-term loans is based on estimated future cash flows discounted using the current market rates of debt of the same remaining maturities and credit risk (note 10g).





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|17. | Commitments and contingencies |  | (a)Capital expenditure commitments
            At 31stMarch 2004 the Company has commitments of TT$103 million (unaudited) (2003: TT$24 million, unaudited) for the acquisition of property, plant and equipment incidental to the ordinary course of business.                                                                        
|--- | ----------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                               |  | (b)Operating lease commitments
            Operating lease expense was TT$58.9 million (unaudited) and TT$75.3 million (unaudited) for the years ended 31st March 2004 and 2003 respectively.
            Future minimum rentals under non-cancelable leases of motor vehicles and leasehold buildings are as follows as of 31st March:



| |  |  |  |                                             |  | Unaudited2004TT$000 |  |  | Unaudited2003TT$000 | 
| |  |  |  | ------------------------------------------- |  | -------------------- |  |  | -------------------- | 
| |  |  |  |                                             |  |                      |  |  |                      | 
| |  |  |  | Within one year                             |  | 10,604               |  |  | 7,983                | 
| |  |  |  | After one year but not more than five years |  | 31,694               |  |  | 40,181               | 
| |  |  |  | More than five years                        |  | 16,585               |  |  | 27,189               | 
| |  |  |  | Total                                       |  | 58,883               |  |  | 75,353               | 

| |  | (c)Contingent liabilities
            The Company has guarantee facilities for contract performance and customs clearance certificates with its bankers amounting to TT$15.5 million. Based on information currently available, the Company does not expect liabilities to arise from these guarantees.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|18. | Dividends paid |  |  |                                                        |  | Unaudited2004TT$000 |  |  | Unaudited2003TT$000 | 
|--- | -------------- |  |  | ------------------------------------------------------ |  | -------------------- |  |  | -------------------- | 
|    |                |  |  |                                                        |  |                      |  |  |                      | 
|    |                |  |  | Dividend on ordinary shares:                           |  |                      |  |  |                      | 
|    |                |  |  |                                                        |  |                      |  |  |                      | 
|    |                |  |  | Interim dividend for 2003/04 of $0.35 (2002/03: $0.31) |  | 98,462               |  |  | 85,825               | 
|    |                |  |  | Final dividend for 2002/03 of $0.31 (2001/02: $0.66)   |  | 133,741              |  |  | 102,145              | 
|    |                |  |  |                                                        |  | 232,204              |  |  | 187,970              | 





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TELECOMMUNICATIONS
  SERVICES OF TRINIDAD AND TOBAGO LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH, 2004



|19. | Effect of change in accounting policy |  | The Company has discontinued revaluing its technical assets every four (4) years as at 1st April 2003 and has reverted to historical cost basis, which is the benchmark treatment in accordance with IAS 16 Property, Plant & Equipment (revised 1998).
            Management has changed the accounting policy relating to the companys technical assets for the following main reasons:
            Cost is the benchmark treatment under IAS 16 used by several companies in the telecom industry, and
            Due to the nature of the industry in which the company operates the company undertakes annual impairment reviews and annual useful life reviews of its technical assets. This exercise has resulted in impairment provisions and/or accelerated depreciation on its technical assets. In this regard, management believes that this provides a better reflection of the recoverable value of its technical assets without incurring costly technical asset revaluations.
            The change in accounting policy was done retrospectively in accordance with IAS 8 and the effects of the change in accounting policy as at 31st March, 2002 and prior are detailed below:
            Increase in retained earnings of TT$142.7M;
            Decrease in deferred tax liability of TT$51.7M;
            Decrease in the net book value of property, plant & equipment-PPE of TT$180.2M;
            Decrease in the capital reserve of TT$271.3M;
|--- | ------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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