Tilgin appeals new customs duty decision

Tilgin appeals new customs duty decision

As previously reported, the Swedish Customs imposed customs duties on Tilgin in
March 2007. Tilgin appealed the decision to the County Administrative Court,
which still has not delivered its judgment. The Swedish Customs has now imposed
customs duties on additional imports of the same product and Tilgin will appeal
also this decision. If Tilgin would ultimately incur any custom duties, the
company intends to claim compensation from relevant customers.

The new claim applies to twelve imports of Tilgin's IPTV set-top boxes during
2005 and amounts to approximately SEK 6.6 million whereof approximately SEK 1.3
million is VAT. The Swedish Customs has also initiated an audit regarding 17
additional imports of the same product in 2005 and 2006. Should the Swedish
Customs reach the same conclusion regarding these imports, the company might
receive additional claims of approximately SEK 10 million whereof approximately
SEK 120 thousand is VAT. 

The claim from March 2007 applied to three imports of the same product during
2005 and 2006 and amounted to approximately SEK 4.8 million whereof
approximately SEK 370 thousand in VAT.

Tilgin's position is that the Swedish Customs has no basis for its claims and
that the customs duty imposed is incorrect. Therefore, Tilgin appealed the first
claim to the County Administrative Court in March 2007. Tilgin was granted
postponement of payment until the Court delivers its final judgment, which still
has not occurred. Tilgin will appeal also this new claim and require deferred
enforcement of payment until the Court delivers its final judgment in the
matter.

”The Swedish Customs claims customs duties based on a different classification
of the products than Tilgin. When, as it seems, these additional 29 imports will
be tried as well by the County Administrative Court (Länsrätten), we judge that
all custom claims from the Swedish Customs regarding imports of these products,
will be finally tried and settled. We contest their claims and it is now up to
the County Administrative Court to try the matter. We feel confident that they
will share our view on the classification and we hope for a fast process” says
Ola Berglund, CEO of Tilgin. 

Tilgin estimates for a trial in the County Administrative Court to take place
during this year. 

Custom duty is excluded from the price in the customer agreement that applies to
the relevant imports. If Tilgin should ultimately incur any custom duties, the
company intends to claim compensation from relevant customer with respect to
amounts that the company may have to pay. 

The products in question are now being manufactured within the European Union
and deliveries from the relevant manufacturer to customers within the EU
originate within the duty free area of the European Union.

― End ―

This press release has been reported to the Swedish Financial Supervisory
Authority subject to FFFS 2007:11. In its capacity as issuer, Tilgin AB is
releasing the information in this press release in accordance with the Swedish
Securities Exchange Act. The information was distributed to the media for
publication at 11.15 a.m. on July 1st 2008.

For more information:
Ola Berglund, CEO Tilgin 
Telephone: +46 736-9618603 
E-mail: ola.berglund@tilgin.com

About Tilgin 
Tilgin designs and delivers premier IP customer premises equipment (CPE) for
advanced Triple Play and IMS-based services. Supporting the full convergence of
voice, video and data, Tilgin takes a network systems approach to CPE that
enables service providers to offer a broad range portfolio of innovative and
competitive broadband services. Tilgin's comprehensive product portfolio of IP
residential gateways, set-top boxes and related management applications, offers
service providers unprecedented return on investment - delivering new service
revenues and impressive cost savings over the lifetime of the product. Tilgin
was founded in 1997 under the name i3 micro technology and listed on the
Stockholm Stock Exchange on the Nordic List as of December 2006. It is
headquartered in Kista, Sweden, with European sales representation in France and
Germany. www.tilgin.com