Akciju sabiedriba "VEF"

Annual Report • Sep 1, 2021

(Latvian Unified registration number 40003001328) Joint Stock Company VEF

ANNUAL REPORT

for year ended 31 December 2020 in accordance with the Law of the Republic of Latvia

2021 Riga

CONTENTS

	page
Report on the Management Board's responsibility	3
Management report	4
Financial statements:
Profit and loss calculation	6
Balance : Assets Liabilities	7 8
Cash Flow	9
Report of changes in Equity Capital	10
Financial report appendixes:	11
Auditors opinion	25

Report on the Management Board's responsibility to the audited annual Report of JSC "VEF" for the twelve months of 2020

Management Board of JSC "VEF" (hereinafter – the Company) is responsible for preparation of the financial statements of the Company. The financial statements audited.

Financial statements are prepared based on justifying documents and represent true and clear overview on the Company's Assets and Equity and Liabilities, its financial standing and results of activity as well as cash flows within the reporting period ended on December 31, 2020.

Accounting principles used in preparation of the financial statements have not been changed comparing to the previous reporting period. During preparation of the financial statements decisions taken by the Management Board and estimations made have been cautious and well-founded. The information included in the management's report is true.

The Management Board of the Company is responsible for ensuring the corresponding accounting system, securing the assets of the Company, as well as for prevention and exposure of fraud and other violation within the Company.

Gints Fenuks Chairman of the Management Board 29 April, 2021

Tamara Kampane Member of the Management Board 29 April, 2021

Martins Cauna Member of the Management Board 29 April, 2021

Management report

Business Areas

Joint stock venture VEF is a publicly traded company that is doing business by managing its own real estate property, renting business spaces. JSC VEF has stopped providing electricity distribution services to consumers in the territory of VEF, transfers the rights of the license operator to JSC Sadales Tīkls.

Short Summary of Events During Reporting Year

Net turnover of the joint venture at the end of the reporting year is 1 095 956 EUR. Despite the decrease of net turnover by 8%, the management of the company has executed cost saving activities and as the result the company finished the year with a profit amounting 12 953 EUR. JSC VEF continues to operate in compliance with the COVID-19 emergency conditions. JSC VEF does not receive any kind of support from the State or other institutions in an emergency situation.

Events Following Last Day of Reporting Year

From the last day of reporting until the day of signing off the report no major events happened that could have any substantial impact on the evaluation of the financial report.

Future Outlook and Prospects

Currently the Company continues to provide full set of services and is in preparation for planned renovation of its real estate that is required since buildings are in use for more than fifteen years. Renovation plans are in the phase of approval and will require substantial investments which the Company is planning to cover both from its own resources and by increasing the amount of loans by carrying out renovations in several stages over the next three years.

During the current emergency situation caused by the outbreak of COVID19 virus, the Company is actively following recent developments, frequently communicating with own customers and financial institutions, and evaluating possible actions how to support own customers with a significant reduction in customer flow. Regarding decisions that might be taken and might have a considerable impact on Company's activities and results, information will be distributed separately making it public according legal requirements.

Research and Development Activities

Board of JSV VEF holds to the strategic plans of the company according to economic developments in the country and following to the trends of the real estate rent and electricity distribution markets.

Currently the Management Board and Supervisory Board are carefully monitoring market situation both locally and regionally, following to demands and requirements imposed by the Latvian Government that might influence further business prospects of the Company.

Management of Financial Risks

Company operations are influenced by various financial risks including credit risk and interest rate volatility. Company's management tries to minimize potential negative impacts of financial risks. Financial resources that potentially expose the Company towards acknowledged levels of credit risks, are mainly free cash and debtor and creditor debts. Debtor and creditor debts are stated as recoverable amounts. Company's partners in cash transactions are local financial institutions. Company adheres to strict management of liquidity risks ensuring meeting credit obligations within set due dates. Company's management believes that the Company will generate enough cash in order not to jeopardize its liquidity.

Meanwhile Company acknowledges possible decrease in financial results if due to COVID19 spread overall markets both locally and globally will be hit by recession; thus, influencing financial well-being of Company's customers and/or attraction of new customers.

Recommendations to Profit Distribution or Loss Coverage

Board recommends to use the profit of 12 953 EUR to invest in the development of the Company.

Company's Financial Situation and Explanation of Business Results as well as Impact of Possible Business Uncertainties

Results of financial activities for the coming years depends from inflation and also from real estate market trends that might be seriously impacted I) by the spread of COVID19 that would decrease financial well-being of Company's customers, and ii) by availability of financial support provided by the State and other financial institutions depending on distribution of fiscal priorities.

Company's Share Capital, Policies of Capital Attraction and Risk Management

Company's share capital is 2 722 492 EUR. Company's share capital consists of 623 528 bearer shares and 1 321 109 registered shares. Nominal value of each share is 1.40 EUR.

Major Factors That Influence Business Results Including Changes in Company's Business Environment, Company's Reaction to These Changes, Policies on Investments and Dividends

Customers renting the Company's real estate are attracted because of location, representative conditions of buildings, and legendary "good fame" of the Company. Company growth depends on real estate market trends within the current emergency situation depending on potential length of the current emergency, financial aid provided by the State available to the Company and to our customers, and bank financing policies.

Gints Fenuks Chairman of the Board Tamara Kampane Member of the Board Martins Cauna Member of the Board April 29, 2021

PROFIT AND LOSS CALCULATION FOR THE PERIOD, ENDING ON 31.12.2020 (classified by cost function )

	Appendix	2020	2019
		EUR	EUR
Net turnover		1 095 956	1 190 963
from other principial activities	2	1 095 956	1 190 963
Costs of goods sold and services rendered	3	-845 021	-843 456
Gross profit or loss		250 935	347 507
Administrative expenses	4	-106 357	-106 141
Other operating income	5	9 603	12 708
Other operating expenses	6	-5 275	-2 247
Interest expenses and similar expenses :		-135 953	-129 531
for other parties	7	-135 953	-129 531
Profit or loss after corporate income tax		12 953	122 296
Profit or loss of the financial year		12 953	122 296
Earnings per	EPS	0.01	0.06

Appendix from 11 till 24 page is an integral part of this financial statement.

Gints Fenuks Chairman of the Management Board	29 April, 2021
Tamara Kampane	29 April, 2021
Member of the Management Board Chief accountant
Martins Cauna
Member of the Management Board	29 April, 2021

BALANCE SHEET ON THE 31.12.20

ASSETS	Appendix	2020	2019
		EUR	EUR
Fixed assets
Intangible assets
Concessions, patents, licences,
trademarks and other similar rights		0	35
Intangible assets total	9	0	35
Fixed assets (fixed assets, investment
properties, and biological assets):
Immovable properties:
a) land parcels, buildings and engineering structures		5440417	5499911
Other fixed assets and inventory		101294	92985
Tangible assets costs Fixed assets, total	10	5542008	5592896
Long-term financial investments
Investments in related companies Trade debtors (associated)	252	3000	3000
Loans to related companies		65000	60000
Long-term financial investments, total		68000	63000
Non-current assets, total		5610008	5655931
Current assets
Receivables:
Trade receivables	11	38036	23901
Other receivables	12	23663	24799
Deferred expenses	13	4859	4830
Accrued income		30824	37262
Receivables, total		97382	90792
Cash	14	305044	370392
Current Assets total		402426	461184
Total assets		6012434	6117115

BALANCE SHEET ON THE 31.12.20

LIABILITIES	Appendix	2020	2019
		EUR	EUR
Equity
Share capital	15	2722492	2722492
Revaluation reserve for long-term investments	10,16	641099	649285
Reserves
a) other reserves		44477	44477
Retained earnings or accumulated deficit:	17	40907	-81389
Profit or loss for the year	17	12953	122296
Equity total		3461928	3457161
Creditors
Non-current liabilities:
Loans from credit institutions	18	2024174	2150174
Prepayments received from customers	20	47273	47273
Other loans	19	77050	61594
Long term creditors total		2148497	2259041
Current liabilities
Loans from credit institutions	18	168000	168000
Other loans	19	31801	21221
Prepayments received from customers	20	22702	32930
Trade payables	21	34050	34658
Taxes and the state social security contributions	22	24613	30891
Other payables	23	13859	13699
Accrued liabilities	24	106984	99514
Current liabilities, total		402009	400913
Liabilities, total		2550506	2659954
Equity and liabilities, total		6012434	6117115

Appendix from 11 till 24 page is an integral part of this financial statement.

Gints Fenuks Chairman of the Management Board	29 April, 2021
Tamara Kampane Member of the Management Board Chief accountant	29 April, 2021
Martins Cauna Member of the Management Board	29 April, 2021

CASH FLOW FOR THE PERIOD, WHICH ENDS ON THE 31.12.20 (indirect method)

	Appendix	2020 EUR	2019 EUR
Cash flow from operating activities
Profit or loss before corporate income tax		12 953	122 296
Adjustments:
a) fixed assets depreciation	10	104 669	92 578
b) intangible assets amortisation	9	35	7
c) interest expenses and similar expenses	7	135 953	129 531
Profit or loss before adjustments of changes in current assets and		253 610	344 412
current liabilities
Adjustments:
a) accounts receivable increase or decrease		-6 590	15 932
b) accounts payable increase or decrease		35 331	45 101
Net cash flow from operating activities		282 351	405 445
Interest paid	7	-135 953	-129 531
Net operating cash flow		146 398	275 914
Cash flow from investing activities
Acquisition of fixed and intangible assets	10	-53 780	-86 458
Loans to subsidiaries		-5 000	0
Net cash flow from investing activities		-58 780	-86 458
Cash flow from financing activities
Borrowings repaid		-126 000	-144 000
Payments for leased fixed assets		-26 966	-18 402
Net cash flow from financing activities		-152 966	-162 402
Net cash flow for the year		-65 348	27 054
Cash and its equivalents at the beginning of the period		370 392	343 338
Cash and its equivalents at the end of the period	14	305 044	370 392

Appendix from11 till 24 page is an integral part of this financial statement.

Gints Fenuks		29 April, 2021
Chairman of the Board
	signature
Tamara Kampane		29 April, 2021
Member of the Board	signature
Chief accountant Martins Cauna		29 April, 2021
Member of the Board	signature

REPORT OF CHANGES IN EQUITY CAPITAL for period ending on 31.12.2020

	Appendix	2020 EUR	2019 EUR
I Share capital	15
Opening balance		2 722 492	2 722 492
Closing balance		2 722 492	2 722 492
II Revaluation reserve for long-term investments	16
Opening balance		649 285	657 470
Increase/decrease of revaluation reserve for long-term investments		-8 186	-8 185
Closing balance		641 099	649 285
III Reserves
Opening balance		44 477	44 477
Closing balance		44 477	44 477
IV Retained earnings	17
Opening balance		40 907	-81 389
Increase/decrease of retained earnings		12 953	122 296
Closing balance		53 860	40 907
V Equity
Opening balance		3 457 161	3 343 050
Closing balance		3 461 928	3 457 161
Appendix from 11 till 24 page is an integral part of this financial statement.

Gints Fenuks Chairman of the Board	signature	29 April, 2021
Tamara Kampane		29 April, 2021
Member of the Board Chief accountant	signature
Martins Cauna		29 April, 2021

Member of the Board signature

INFORMATION ABOUT THE COMPANY

Company name Legal status Registration number, place and date	Joint Stock Company "VEF" Joint Stock Company On April 15, 1991 in the Register of Enterprises of the Republic of Latvia, re registred on December 7, 2000 with Nbr. 000300132 On April 14, 2004 registered in the Commercial Register, Nr. 40003001328
Legal address Post address NACE code Chairman of the Board	Brivibas str.214, Riga, LV-1039, Latvia Brivibas str.214, Riga, LV-1039, Latvia 68.20; 35.13; Gints Fenuks (number of JSC VEF shares - 476 343)
Member of the Board	Martins Cauna (number of JSC VEF shares - 0) Tamara Kampane (number of JSC VEF shares - 245 128 )
Members of the Council	Guntis Lipins - Chairman of the Council (number of JSC VEF shares - 67 308) Egils Arajs - Deputy Chairman of the Council (number of JSC VEF shares - 21 907) Laila Liduma - Member of the Council (number of JSC VEF shares - 122 727) Modris Zommers - Member of the Council (number of JSC VEF shares - 0) Ervins Kampans - Member of the Council (number of JSC VEF shares - 0)
Annual report prepared by Financial year Information about shareholders	Tamara Kampane - chief accountant from till 01.01.20 31.12.20 The total paid-up and reģistered share capital is EUR 2 722 492 as od 31 December 2020, it consists of 32% bearer shares and 68% of registered shares. VEF Komunikaciju Serviss Ltd. - 45,52 %; Laila Liduma - 6.31 %;
	Tamara Kampane - 12,61 % Gints Fenuks - 24.50 % Others shareholders - 11.06 %
Subsidiary company	Ltd. "VEF Projekts ",( 100 %), reg.No.40203161994, Brīvibas gatve 214,Rīga.
Auditor:	Certified auditor Gunta Darkevica Certificate No. 165 Certified auditors company Ltd. "BALTIC AUDIT " Licence No. 176

ACCOUNTING POLICIES

Information about the Company

VEF AS (hereinafter – "Company") is public joint stock company company. The Company is registered with the Republic of Latvia Enterprise Register, registration No 000300132 on 15 April 1991 Riga, with the Commercial Register, registration No 40003001328 on 14 April 2014 Riga, The legal address of the Company is at Brivibas gatve 214, Riga. Company's Chairman of the Board is Gints Feņuks. Members of the Board Mārtiņš Cauna, Tamāra Kampāne. Chairman of the Council is Guntis Lipiņš, deputy of the Chairman of the Council is Egīls Arājs. Members of the Council Laila Līduma, Modris Zommers, Ervīns Kampāns. The Company's auditor is company of certified auditors Baltic Audit SIA and certified auditor in charge Gunta Darkevica.

The Company's financial statements are prepared for the period from 1st January 2020 to 31st December 2020 and it was prepared by Chief Accountant Tamāra Kampāne.

General principles

The financial statements are prepared in accordance with the law of the Republic of Latvia "On Accounting", and "Annual Reports and Consolidated Annual Reports Law", as well in accordance with Cabinet of Ministers Regulations No. 775 " Regulations on Application of Annual Reports and Consolidated Annual Reports Law" and Cabinet of Ministers Regulations No. 399 " Regulations on Electronic Copy of Prepared Financial Statements or Consolidated Financial Statements" and other regulatory legislative acts on accounting and annual reports.

The annual report is drawn up on the basis of the company's accounting records, in accordance with the company's approved accounting plan, detailed according to the specific nature of the company's economic activities. Synthetic Accounting Register is general ledger that records transactions in monetary form but fixed asset accounting units - also in kind. Annual Report's Balance sheet item balance inventory has been carried out in accordance with Cabinet of Ministers Regulations No. 585 "Regulation Regarding the Conduct and Organisation of Accounting" and the Company's internal legal requirements.

The cash flow statement prepared on the operating cash flow as measured by indirect method. Profit or loss statement is classified by function of expense.

The annual review key points is assessed accounting to principles:

• - The assumption is that the company will operate in the future.
• - Used the same methods as used in the previous year.
• - Assessment carried out with the proper precautions:
  • report includes only the profit on the balance sheet date;
  • is taken into account all the expected risks and the losses incurred in the reporting year or previous years, even if they become known during the period between the annual reports ending date and the date of making the annual report;
  • calculated and taken into consideration any reduction in value and depreciation amounts, regardless of whether the reporting year is closed with profit or losses.
• -

Taken into consideration with the current year revenues and related expenses, regardless of the date of payment and receipt of an invoice or the date of the statement. Cost-ordinated with revenues during the reporting period.

• - Active and passive components of items valued separately.
• - Beginning balance for the year coincides with the previous year's closing balance sheet.
• - Listing all items that materially affect the annual general users of the assessment or decision-making, minor items are combined and the detail provided in the annex.

- Economic transactions in the annual report presented in the light of their economic substance and nature, rather than legal form.

Revenue recognition and net sales

Net turnover is the total value of the sold production (services) during the year without discounts and value added tax.

Other revenues are recognized as follows:

revenue from rents - as they were incurred; revenue from penalties and default fees - at the time of receipt.

Fixed assets

Fixed assets are presented in the acquisition or revaluation cost less depreciation. Depreciation is calculated on a straightline method over the asset's useful period of usage. The following rates of depreciation is set by management, to write down fixed asset value to its estimated residual value at the useful end of period:

	(the year)
Buildings and structures	58-100
Other fixed assets and inventory	4

When carrying value of the fixed asset is lower than its estimated recoverable amount, and it is expected to be sustainable, the impairment provision is created and the asset is written down to its recoverable amount.

The increase in value due to the revaluation is reflected in the equity item "Revaluation reserve for long-term investments". If increase in value fully or partially compensates the decrease in the value of the same fixed asset, which in previous reporting years had been included in the profit or loss account as costs, such an amount of increase in value, which does not exceed the referred to costs, is included in the profit or loss statement as income in the reporting year. Revaluation reserve of long-term investments is reduced, if the revalued object of fixed assets is disposed, liquidated or there is no basis for increase in the value thereof anymore or if calculation of annual depreciation of the object of revalued fixed asset is carried out. Reduction of revaluation reserve is included in the profit or loss account as revenue in the financial year in which such reduction is carried out.

The Company reduces the revaluation reserve attributable to a revalued property, plant and equipment as it calculates the annual depreciation of that property, plant and equipment, and recognizes it gradually to profit or loss over its remaining useful life.

Repairs and maintenance are charged to the profit and loss statement during the period in which they are incurred. Profit or loss from disposal of fixed assets are calculated as difference between balance sheet value and proceeds from sales, and income from write-off of revaluation reserve of the respective fixed asset, and it is recognized in the period when occurred.

Long-term financial investments

Investments in subsidiaries and associated companies are accounted for by applying the cost method. After initial recognition, investments in subsidiaries and associated companies are accounted at their cost, less impairment losses. If any events or changes in circumstances indicate that the carrying value of investment in subsidiary or associate may not be recoverable, the carrying value is revised to identify amount of impairment.

Debtors

Accounts receivable in balance sheet are stated in net worth from the initial value minus reserves for doubtful and bad debts. Specific provision for doubtful and bad debts are created when management believes that the recovery of these specialy segregated receivables are doubtful.

Receivables are measured at the end of the reporting period, in accordance with the accounting data and the statement on comparative settlements.

The actual amounts of the receivables correspond to the invoices and other amounts shown in the original accounting documents.

Use of estimtes

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expense, and disclosure of contingencies. Actual results may differ from these estimates.

Estimates and related assumptions are reviewed regularly. Changes in accounting estimates are recognized in the period in which the estimates are reviewed and in subsequent periods. The most important reasons for inaccuracy in estimates are:

Impairment

An impairment loss is recognized when the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in the income statement.

The residual values and useful lives of assets are reviewed and, if necessary, adjusted at each balance sheet

Estimated time of using fixed assets

Fixed assets are presented in the acquisition or revaluation cost less depreciation. Depreciation is calculated on a straightline method over the asset's useful period of usage. The following rates of depreciation is set by management, to write down fixed asset value to its estimated residual value at the useful end of period.

Cash and cash equivalents

Cash and cash equivalents in cash flow statement consists of cash in hand, current account balances.

Long-term investments

• - Evaluated according to their initial value, that is the purchase cost or production cost.
• - Acquisition or production costs of the investment object is gradually written off (depreciated) for intended use period, if administration period of object is limited. A plot of land acquisition costs are not subject to write-off (amortization).

Current assets

• - Asset evaluation based on the purchase or production cost.
• suitable for the evaluation of the balance sheet date are evaluated according to the lowest market price or production cost
• - Debt balances on the balance sheet is shown accordingly to appropriate supporting documents and accounting records, and they are coordinated with their own accounts receivable records at the date of making balance sheet. In dispute cases balances in balance sheet is shown according to the records. The accruals is made for a questionable amount of doubtful debts.

Long-term and short-term positions

Long-term liabilities is recognized if receipt, payment, or retirement shall be the later of one year after the year end. Amounts receivable, payable or depreciable during the year is presented as a short-term positions.

Trade payables

The balances of trade payables are shown in the balance sheet in accordance with the source documents and records in the accounting registers, and are consistent with the creditors' own records. These trade payables are divided into short-term or long-term debt (liabilities), respectively, incurred during the ordinary course of business and settled within 12 months after the balance sheet date. Long-term liabilities that the company will have to pay no earlier than one year after the end of the reporting year. Loan or leasing liabilities are divided into short and long term respective.

Loans

The amounts of loans received from credit institutions at the end of the reporting year are comparable to those of the credit institution concerned.

(2) Net turnover

Turnover consists of revenues that the Company gained in 2020 from its core business-service provision without VAT

Activity	2020	2019
	EUR	EUR
Office rent	610 182	750 258
Facilities management and utilities	367 988	304 552
Electricity distribution and servicing	116 254	136 153
Electrical transformers sold as scrap metal	1 532	0
Total	1 095 956	1 190 963

Allocation of salesmarkets

State	2020	2019
	EUR	EUR
Latvia	1 095 956	1 190 963
Total	1 095 956	1 190 963

(3) Costs of goods sold and services rendered

	2020	2019
	EUR	EUR
Utility services expenses (energy and other services)	209 296	264 852
Personnel costs and social tax	246 736	312 831
Depreciation	104 669	92 578
Other operating costs	240 868	131 508
Transport expenses	16 364	14 713
Charges for land rent	4 620	4 619
Insurance costs (building)	4 908	4 878
Expenses for telecommunication	907	970
Depreciation of license	35	7
Bank service	252	619
Real estate tax (buildings, land)	16 366	8 179
Business travel expenses	0	7 596
Personnel training	0	106
Total	845 021	843 456

(4) Administrative expenses

	2020	2019
	EUR	EUR
Salaries and social tax for administration	67 098	70 608
Transportation expenses for administration	16 364	14 712
Annual fee NASDAQ RIGA,NASDAQ CSD SE	8 628	8 494
Expenses for telecommunication	907	969
Office expenses	1 016	761
Lawyers' service fees	4 350	3 295
Audit costs	6 200	4 300
Representation ,personal costs	1 794	3 002
Total	106 357	106 141

(5) Other operating income

	2020	2019
	EUR	EUR
Fines	0	518
Long-term investments revaluation reserve decrease	8 185	8 185
Other income	45	4 005
Paid real estate tax and social insurance contributions refund received	1 373	0
Total	9 603	12 708

(6) Other operating expenses

	2020	2019 EUR
	EUR
Late payment for taxes	666	664
Damages compensation	1 723	1 583
Liquidated debtors	2 886	0
Total	5 275	2 247

(7) Interest expenses and similar expenses :

	2020	2019
	EUR	EUR
Bank interest	133 579	127 946
Leasing interest	2 374	1 585
Total	135 953	129 531

(8) Corporate income tax

The corporate income tax for the reporting year is calculated in accordance with the requirements of the Law on Corporate Income Tax and applying a tax rate of 20% to the taxable base. When determining the taxable base, the value of the taxable object shall be divided by a factor of 0,8. The tax base includes the following taxable items: distributed profits and conditionally distributed profits.

In previous years, corporate income tax expense was included in the financial statements based on calculated taxable income by applying a tax rate of 15%. Accrued tax losses as at 31.12.2017. can be used within 5 years but not more than 50% of the calculated tax amount on dividends distributed.

(9) Intangible assets

	Concessions,	Intangible
	patents,	assets total
	licences, brand
	names and
	other rights
	EUR	EUR
Aquisition cost
31.12.19	2 207	2 207
31.12.20	2 207	2 207
Depreciation
31.12.19	2 172	2 172
Calculated depreciation	7	7
Switched off	28	28
Pārvietoto uz citu posteni nolietojums Pārvērtēto nolietojums 31.12.20	2 207	2 207
Balance sheet on 31.12.19	35	35
Balance sheet on 31.12.20	0	0

(10) Tangible (fixed) assets

	Land and buildings	Other fixed assets and inventory	Fixed assets total
	EUR	EUR	EUR
Acquisition cost
31.12.19	6 361 064	377 464	6 738 528
Acquisitions	0	53 780	53 780
Switched off	0	-82 262	-82 262
31.12.20	6 361 064	348 982	6 710 046
Depreciation
31.12.19	861 153	284 479	1 145 632
Calculated depreciation	59 197	45 472	104 669
Switched off	0	-82 263	-82 263
31.12.20	920 350	247 688	1 168 038
Balance sheet on 31.12.19	5 499 911	92 985	5 592 896
Balance sheet on 31.12.20	5 440 714	101 294	5 542 008

Fixed asset item	Revaluation	Revaluation reserve	Fixed asset value at	Revaluation reserve	Fixed asset	Fixed asset value at
	reserve for long	for long-term	the beginning of the	for fixed assets	value at the end	the end of the
	term	investments closing	period	reduction	of the period if	period after
	investments	balance			no revaluation	revaluation
Real estate	opening balance 649 285	641 099	5 499 911	-8 186	5 002 935	5 440 714
(buildings and
constructions)

** īpašuma kadastrālā vērtība paņemta no paziņojuma par nekustamā īpašuma nodokli 2013.gadu.

(11) Trade receivables

	31.12.20	31.12.19
	EUR	EUR
Trade debtors	38 036	23 901
Balance value	38036	23901

(12) Other receivables

	31.12.20	31.12.19
	EUR	EUR
VAT on advances	11 232	11 975
Advance purchase of fuel	1231	1406
Advance services provider	0	216
Other debtors	11 200	11 200
Tax overpaid	0	2
Total	23 663	24 799

(13) Deferred expenses

	31.12.20	31.12.19
	EUR	EUR
Insurance payments	3 910	3 853
Subscriptions	949	977
Total	4 859	4 830

(14) Cash

	31.12.20	31.12.19
	EUR	EUR
Cash at bank	298 200	356 224
Cash on hand	6 844	14 168
Total	305044	370392

(15) Share capital

Company capital is divided on shares	1 944 637 shares
per value each EUR	1.40 Eur
	2 722 492

All the shares are paid. Detailed information see in note 26

(16) Revaluation reserve for long-term investments

	31.12.20	31.12.19
	EUR	EUR
Long term investment revaluation reserve	641 099	649 285
Total	641099	649285

(17) Retained earnings or accumulated deficit:

Losses of previous years (31.12.2019)	40 907 EUR
Retained earnings	12 953 EUR
Profit of financial year 31.12.2020	53 860 EUR

(18) Loans from credit institutions

31.12.20	31.12.19
EUR	EUR
2 024 174	2 150 174
168 000	168 000
2 192 174	2 318 174

Main points of agreement
Company name	Principal amount, EUR	% rate	% amount	Term
SEB Banka	4 466 086	1.847%	133 579	18.05.2021.
In 2021, SEB Bank received agreements on the Loan Agreement (changes in the repayment term) and repayment

schedule. The repayment term of the agreement is 31.08.2023.

(19) Other loans		31.12.20	31.12.19
SEB leasing long term, including loans under 5 years		EUR	EUR 61 594
		77 050
SEB leasing		77 050 61 594
short term		31 801	21 221
		31 801	21 221
Main points of agreement
Company name	% rate	Term
SEB leasing	1.9%+3 month EURIBOR	25.05.24
SEB leasing	1.8%+3 month EURIBOR	25.07.23
SEB leasing	2.25%+3 month EURIBOR	25.06.23
SEB leasing	3%+3 month EURIBOR	25.05.25
Carrying value of Fixed assets acquired under finance lease at 31.12.2020 - 99 222 EUR ( 31.12.2019 is 82 578 EUR )
Leased assets serve as security for respective lease liabilities.

(20) Prepayments received from customers

31.12.20 31.12.19 EUR EUR Long term (security deposits of rents agreements) 47 273 47 273 22 702 32 930 69 975 80 203 Short term (security deposits of rents agreements and debts overpayment)

Prepayment received from customers repayable in more than 5 years - 47 273 EUR.

(21) Trade payables

	31.12.20	31.12.19
	EUR	EUR
EUR	34 050	34 658
	34 050	34 658

(22) Taxes and the state social security contributions

Type of tax	Residual	Calculated	Paid	Residual
	31.12.19			31.12.20
	EUR	EUR	EUR	EUR
Value added tax	13 583	146 877	149 945	10 515
Social security contributions	8 699	82 073	84 174	6 598
Personal income tax	8 606	47 346	48 457	7 495
Real estate tax (buildings,land)	-2	16 366	16 364	0
Company car tax	0	3 770	3 770	0
State duties	5	65	65	5
Total	#VALUE! 30 891	296 497	302 775	#VALUE! 24 613

During the financial year has been calculated and paid payment penalty: VAT, PIT- 666 EUR.

Including	31.12.20		31.12.19
	EUR		EUR
Tax overpayment	24 613		30 891
Tax debt	0		-2
(23) Other payables
		31.12.20	31.12.19
		EUR	EUR
Salaries for December		13 859	13 699
Total		13 859	13 699
(24) Accrued liabilities
		31.12.20	31.12.19
		EUR	EUR
Accrued liabilities for unused vacation		103 263	96 934
Accrued liabilities for services received		3 721	2 580
Total		106 984	99 514

(25) Related parties, transactions with related parties

Information about subsidiary: Ltd. "VEF Projekts ", reg.no. 40203161994, legal adsress: Brīvibas gatve 214,Riga, LV-1039. Percentage of participation - 100% In the reporting year, a loan in the amount of EUR 5,000 was issued to the subsidiary.

Long-term financial investments

	Investments in subsidiaries, EUR
Acquisition cost:
at the beginning of the year	3000
at the end of the year	3000
Balance value:
at the beginning of the year	3000
at the end of the year	3000

(26) Additional information about the Comapny

The share capital of the Company consists of 623 528 bearer shares and 1 321 109 registered shares. 623 528 bearer shares are publicly traded and listed on the regulated market (Nasdaq Riga Baltic Second List). All shares give equal rights to dividends, receipt of liquidation quota and voting rights at the shareholders' meeting. All shares are dematerialized.

The disposal of bearer shares is not difficult and the shareholder has the right to freely dispose of bearer shares. Holders of registered shares have pre-emptive rights in the case of alienation of registered shares.

There is no restriction on the right to vote, the right to a share of the distributed profit is proportional to the number of shares.

JSC VEF is not aware of any agreements that would restrict the exercise of shareholders' voting rights. The powers of JSC VEF Board are determined by JSC VEF Statutes and Commercial Law norms. Board members have the right to represent the company only with at least one board member. The Board does not have any other special rights to the shares.

JSC VEF shares no special control rights.

JSC VEF is not aware of any other agreements and agreements referred to in the Financial Instruments Market Roundtable 561Article.

(27) Amount of company's emploees during year	2020	2019
Average amount of company's emploees during year	15	17

(28) Information about remuneration to Members of the Board and executives

The remuneration of Members of the Board during year 2020 was 59394 EUR, social security contributions - 12 944EUR.

The remuneration of Chairman of the Board during year 2020 was 66 000 EUR, social security contributions - 15 899 EUR. Members of the Council perform their duties free of charge.

(29) Financial risk management

The significant financial tools of Company are cash, trade and other receivables, financial leasing, bank borrowings, trade and other payables.The main task of these financial tools is to provide Company's economic activity with funding.

Interest rate risk

The Company has interest rate risk mainly because of its borrowings.

Credit risk

The Company has credit risk due to its trade debtors and money and its equivalents. Company controls its credit risk by evaluating constantly debt repayment history of clients and by setting individual terms for each client. Moreover the Company follows non-stop the rest of debtors debts to diminish the possibility of irrecoverable debt emergence. The Company has no significant concentration of credit risk for a counterparty or group of counterparties with similar characteristics.

Liquidity risk

Company controls its liquidity risk by keeping appropriate amount of money or money equivalents.

(30) Information about pledged assets

According to the pledge agreement, all physical assets are pledged to the JSC SEB Bank, the maximum amount of the secured claim is EUR 5,386,000.

(31) Details of the lease or rent agreements, mortgages, guarantees and other contracts that have an important role for the Company

The company is engaged in the management and administration of its real estate, rental of premises.

There were signed with the major customers long-term rental agreement.

As well as the Company has rent:

land in the Brivibas str. 214, rental agreement with "POSSESSOR" .The Agreement enters into force upon its signing and the ownership of the land on the land is valid until the lessee.

Pledge agreement No.KD03702/2 AS SEB banka, registered No.100093834 on 07.07.2015 - the claim secured in amount of EUR 5 386 000.

The Company signed financial instruments transaction agreement with SEB bank. Till 31.12.2020 The Company has losses of EUR 90 999 from this contract.

(32) Subsequent events

Restrictions related to the spread of coronavirus came into effect in the Republic of Latvia and other countries, significantly reducing economic development in the country and globally. It is unpredictable how the situation may develop in the future, and hence there is economic uncertainty. The management of the Company continuously evaluates the situation. The management of the Company believes that the Company will be able to overcome the emergency situation. However, this conclusion is based on information available at the date of signing these financial statements and the effect of future events on the future activities of the Company may differ from management's judgment.

As of the last day of the reporting year until the date of signing these financial statements there have been no other events requiring adjustment of or disclosure in the financial statements.

(33) Proposals or information on distribution of profit

The profit in amount of EUR 12 953 remains undistributed to invest in the development of the Company.

(34) Going concern

Profit of the financial year is 12 953 EUR and according to the management believes 2020 year revenues will exceed expenses, as a result positive operating cash flow will be able to provide sufficient financing to continue operating as a going concern. Results of financial activities for the coming years depends from inflation and also from real estate market trends that might be seriously impacted i) by the spread of COVID19 that would decrease financial well-being of Company's customers, and ii) by availability of financial support provided by the State and other financial institutions depending on distribution of fiscal priorities.

(35) Future development

In 2021, the Company's management plans to continue optimizing cash flow. In the next period, the management of the company plans to renovate the building at 214S Brivibas gatve in order to attract tenants. The Management Board of the Company stops its strategic plans in accordance with the economic situation in the country and the situation in the rental market. The Company will continue to provide its full range of services.

Gints Fenuks		29 April, 2021
Chairman of the Board	signature
Tamara Kampane		29 April, 2021
Member of the Board	signature
Chief accountant
Martins Cauna		29 April, 2021
Member of the Board	signature