Akciju sabiedriba "VEF"

Annual Report • Apr 27, 2020

Rīgā

(Latvian Unified registration number 40003001328) Joint Stock Company VEF

ANNUAL REPORT

for year ended 31 December 2019 in accordance with the Law of the Republic of Latvia

2020 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	24

Report on the Management Board's responsibility to the audited annual Report of JSC "VEF" for the twelve months of 2019

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, 2019.

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 27 April, 2020

Tamara Kampane Member of the Management Board 27 April, 2020

Martins Cauna Member of the Management Board 27 April, 2020

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, and also electricity distribution services for businesses located in the VEF territory.

Short Summary of Events During Reporting Year

Net turnover of the joint venture at the end of the reporting year is 1 190 963 EUR. Despite the decrease of net turnover by 5%, the management of the company has executed cost saving activities and as the result the company finished the year with a profit amounting 122 296 EUR.

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 preparations 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 from own revenues executing renovation activities in several consecutive steps within following three years.

The Company is preparing to reconstruct premises previously used for production and reprofile to successfully attract tenants. To cover investments required for these activities the Company is planning partly to use its own resources – but mainly bank financing will be attracted.

As of planned works for the next reporting period the Company is planning to invest in improving of roads and energy efficiency that are important for existing and new potential customers.

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 122 296 EUR to cover losses from previous years.

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 27, 2020

PROFIT AND LOSS CALCULATION FOR THE PERIOD, ENDING ON 31.12.2019 (classified by cost function )

	Appendix	2019	2018
		EUR	EUR
Net turnover		1 190 963	1 254 476
from other principial activities	2	1 190 963	1 254 476
Costs of goods sold and services rendered	3	-843 456	-808 380
Gross profit or loss		347 507	446 096
Administrative expenses	4	-106 141	-120 548
Other operating income	5	12 708	24 428
Other operating expenses	6	-2 247	-2 293
Other interest income and similar income:		0	1 374
from other parties		0	1 374
Interest expenses and similar expenses :		-129 531	-112 374
for other parties	7	-129 531	-112 374
Profit or loss after corporate income tax		122 296	236 683
Profit or loss of the financial year		122 296	236 683
	EPS	0.060	0.120

Appendix from 11 till 23 page is an integral part of this financial statement.

Gints Fenuks Chairman of the Management Board	27 April, 2020
Tamara Kampane	27 April, 2020
Member of the Management Board Chief accountant
Martins Cauna Member of the Management Board	27 April, 2020

BALANCE SHEET ON THE 31.12.19

ASSETS	Appendix	2019	2018
		EUR	EUR
Fixed assets
Intangible assets
Concessions, patents, licences,
trademarks and other similar rights		35	42
Intangible assets total	9	35	42
Fixed assets (fixed assets, investment
properties, and biological assets):
Immovable properties:
a) land parcels, buildings and engineering structures		5499911	5472362
Other fixed assets and inventory		92985	93719
Advances for fixed assets		0	5762
Fixed assets, total	10	5592896	5571843
Long-term financial investments
Investments in subsidiares Trade debtors (associated)	25 2	3000	3000
Loans to subsidiaries		60000	60000
Long-term financial investments, total		63000	63000
Non-current assets, total		5655931	5634885
Current assets
Receivables:
Trade receivables	11	23901	8383
Other receivables	12	24799	22372
Deferred expenses	13	4830	5312
Accrued income		37262	38793
Receivables, total		90792	74860
Cash	14	370392	343338
Current Assets total		461184	418198
Total assets		6117115	6053083

BALANCE SHEET ON THE 31.12.19

LIABILITIES	Appendix	2019	2018
		EUR	EUR
Equity
Share capital	15	2722492	2722492
Revaluation reserve for long-term investments	10,16	649285	657470
Reserves
a) other reserves		44477	44477
Retained earnings or accumulated deficit:	17	-81389	-318072
Profit or loss for the year	17	122296	236683
Equity total		3457161	3343050
Creditors
Non-current liabilities:
Loans from credit institutions	18	2150174	2318174
Prepayments received from customers	20	47273	47273
Other loans	19	61594	57117
Long term creditors total		2259041	2422564
Current liabilities
Loans from credit institutions	18	168000	144000
Other loans	19	21221	13445
Prepayments received from customers	20	32930	25658
Trade payables	21	34658	45778
Taxes and the state social security contributions	22	30891	20992
Other payables	23	13699	13139
Accrued liabilities	24	99514	24457
Current liabilities, total		400913	287469
Liabilities, total		2659954	2710033
Equity and liabilities, total		6117115	6053083

Appendix from 11 till 23 page is an integral part of this financial statement.

Gints Fenuks Chairman of the Management Board	27 April, 2020
Tamara Kampane Member of the Management Board Chief accountant	27 April, 2020
Martins Cauna Member of the Management Board	27 April, 2020

CASH FLOW FOR THE PERIOD, WHICH ENDS ON THE 31.12.19 (indirect method)

	Appendix	2019 EUR	2018 EUR
Cash flow from operating activities
Profit or loss before corporate income tax		122 296	236 683
Adjustments:
a) fixed assets depreciation	10	92 578	76 244
b) intangible assets amortisation	9	7	7
c) interest expenses and similar expenses	7	129 531	112 374
Profit or loss before adjustments of changes in current assets and current liabilities		344 412	425 308
Adjustments:
a) accounts receivable increase or decrease		15 932	-11 809
b) accounts payable increase or decrease		45 101	99 856
Net cash flow from operating activities		405 445	513 355
Interest paid Net operating cash flow	7	-129 531 275 914	-112 374 400 981
Cash flow from investing activities
Acquisition of fixed and intangible assets	10	-86 458	-84 236
Investments in related companies, associated companies or other entities		0	-3 000
Loans to subsidiaries		0	-60 000
Net cash flow from investing activities		-86 458	-147 236
Cash flow from financing activities
Borrowings repaid		-144 000	-110 781
Payments for leased fixed assets		-18 402	-11 686
Net cash flow from financing activities		-162 402	-122 467
Net cash flow for the year		27 054	131 278
Cash and its equivalents at the beginning of the period		343 338	212 060
Cash and its equivalents at the end of the period	14	370 392	343 338

Appendix from11 till 23 page is an integral part of this financial statement.

Gints Fenuks		27 April, 2020
Chairman of the Board
	signature
Tamara Kampane		27 April, 2020
Member of the Board	signature
Chief accountant Martins Cauna		27 April, 2020
Member of the Board	signature

REPORT OF CHANGES IN EQUITY CAPITAL for period ending on 31.12.2019

	Appendix	2019 EUR	2018 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		657 470	665 655
Increase/decrease of revaluation reserve for long-term investments		-8 185	-8 185
Closing balance		649 285	657 470
III Reserves
Opening balance		44 477	44 477
Closing balance		44 477	44 477
IV Retained earnings	17
Opening balance		-81 389	-318 072
Increase/decrease of retained earnings		122 296	236 683
Closing balance		40 907	-81 389
V Equity
Opening balance		3 343 050	3 114 552
Closing balance		3 457 161	3 343 050
11 till 23 Appendix from page is an integral part of this financial statement.

Gints Fenuks Chairman of the Board	signature	27 April, 2020
Tamara Kampane		27 April, 2020
Member of the Board Chief accountant	signature
Martins Cauna Member of the Board	signature	27 April, 2020

INFORMATION ABOUT THE COMPANY

Company name	Joint Stock Company "VEF"
Legal status	Joint Stock Company
Registration number, place and date	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	Brivibas str.214, Riga, LV-1039, Latvia Brivibas str.214, Riga, LV-1039, Latvia 68.20; 35.13;
Chairman of the Board	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 - 243 930)
Members of the Council	Guntis Lipins - Chairman of the Council (number of JSC VEF shares - 67 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 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	Tamara Kampane - chief accountant
Financial year	from till 01.01.19 31.12.19
Information about shareholders	The total paid-up and reģistered share capital is EUR 2 722 492 as od 31 December 2019, it consists of 32% bearer shares and 68% of registered
	shares. VEF Komunikaciju Serviss Ltd. - 45,52 %;
	Laila Liduma - 6.31 %;
	Tamara Kampane - 12,54 %
	Gints Fenuks - 24.50 %
	Others shareholders - 11.13 %
Subsidiary company	Ltd. "VEF Projekts ",( 100 %),Brīvibas gatve 214,Rīga.
Auditor:	Certified auditor Gunta Darkevica 165 Certificate No. Certified auditors company Ltd. "BALTIC AUDIT " 176 Licence No.

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 2019 to 31st December 2019, 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 2019 from its core business-service provision without VAT

Activity	2019	2018
	EUR	EUR
Office rent	750 258	690 196
Facilities management and utilities	304 552	311 833
Electricity distribution and servicing	136 153	251 456
Ferrous and non-ferrous metal trading income	0	991
Total	1 190 963	1 254 476

Allocation of salesmarkets

State	2019	2018
	EUR	EUR
Latvia	1 190 963	1 254 476
Total	1 190 963	1 254 476

(3) Costs of goods sold and services rendered

	2019	2018
	EUR	EUR
Utility services expenses (energy and other services)	264 852	376 939
Personnel costs and social tax	312 831	192 457
Depreciation	92 578	76 244
Other operating costs	131 508	120 063
Transport expenses	14 713	14 075
Charges for land rent	4 619	6 035
Insurance costs (building)	4 878	5 072
Expenses for telecommunication	970	1 309
Depreciation of license	7	7
Bank service	619	406
Real estate tax (buildings, land)	8 179	9 938
Business travel expenses	7 596	5 783
Personnel training	106	52
Total	843 456	808 380

(4) Administrative expenses

	2019	2018
	EUR	EUR
Salaries and social tax for administration	70 608	83 661
Transportation expenses for administration	14 712	14 075
Annual fee NASDAQ RIGA,NASDAQ CSD SE	8 494	7 436
Expenses for telecommunication	969	1 309
Office expenses	761	1 527
Lawyers' service fees	3 295	6 774
Audit costs	4 300	3 140
Representation ,personal costs	3 002	2 626
Total	106 141	120 548

(5) Other operating income

	2019 EUR	2018 EUR
Fines	518	904
Long-term investments revaluation reserve decrease	8 185	8 185
Other income	4 005	420
Paid real estate tax refund received	0	14 919
Total	12 708	24 428

(6) Other operating expenses

	2018	2018
	EUR	EUR
Fines payment of income tax	664	816
Insurance compensation	1 583	1 477
Total	2 247	2 293

(7) Interest expenses and similar expenses :

	2018	2018
	EUR	EUR
Bank interest	127 946	111 671
Leasing interest	1 585	703
Total	129 531	112 374

(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
31.12.18	2 207	2 207
31.12.19	2 207	2 207
Depreciation
31.12.18	2 165	2 165
Calculated depreciation	7	7
31.12.19	2 172	2 172
Balance sheet on 31.12.18	42	42
Balance sheet on 31.12.19	35	35

(10) Tangible (fixed) assets

	Land and buildings	Other fixed assets and inventory	Advances for fixed assets	Fixed assets total
	EUR	EUR	EUR	EUR
Acquisition cost
31.12.18	6 274 606	344 529	5 762	6 624 897
Acquisitions	86 458	32 935	-5 762	113 631
31.12.19	6 361 064	377 464	0	6 738 528
Depreciation
31.12.18	802 244	250 810	0	1 053 054
Calculated depreciation	58 909	33 669		92 578
31.12.19	861 153	284 479	0	1 145 632
31.12.18 Balance sheet on	5 472 362	93 719	5 762	5 571 843
31.12.19 Balance sheet on	5 499 911	92 985	0	5 592 896

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	657 470	649 285	4 983 573	-8 185	4 189 101	4 983 573
(properties)

Information on profits or losses from the expropriation of long-term investment facilities

Non-current object (or group of objects)	Book value at the time of exclusion	Profit from expropriation	Eexpanses from expropriation	Gross profit or loss	Profit or loss from object expropriation
transport	0	4000	-	4000	4000

(11) Trade receivables

	31.12.19	31.12.18
	EUR	EUR
Trade debtors	23 901	8 383
Balance value	23901	8383

Allocation of currency:	31.12.19	31.12.18
	EUR	EUR
EUR	23 901	8 383
Total	23901	8383

(12) Other receivables

	31.12.19	31.12.18
	EUR	EUR
VAT on advances	11 975	10 707
Advance purchase of fuel	1406	403
Advance services provider	216	0
Other debtors	11 200	11 200
Tax overpaid	2	62
Total	24 799	22 372

(13) Deferred expenses

	31.12.19	31.12.18 EUR
	EUR
Ground rent for the 1st quarter in 2019	0	1 826
Insurance payments	3 853	2 808
Subscriptions	977	678
Total	4 830	5 312

(14) Cash

	31.12.19	31.12.18
	EUR	EUR
Cash at bank	356 224	331 815
Cash on hand	14 168	11 523
Total	370392	343338

(15) Share capital

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

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

(16) Revaluation reserve for long-term investments

	31.12.19	31.12.18
	EUR	EUR
Long term investment revaluation reserve	649 285	657 470
Total	649285	657470

(17) Retained earnings or accumulated deficit:

Losses of previous years (31.12.2018)	-81 389 EUR
Retained earnings	122 296 EUR
Profit of financial year	40 907 EUR

(18) Loans from credit institutions

Allocation of currency:	31.12.19	31.12.18
	EUR	EUR
EUR (long term)	2 150 174	2 318 174
EUR (short-term)	168 000	144 000
Total	2 318 174	2 462 174

Main points of agreement
Company name	Principal amount, EUR	% rate	% amount	Term
SEB Banka	4 466 086	1.847%	127 946	18.05.2021.
(19) Other loans
			31.12.19	31.12.18
SEB leasing			EUR	EUR
long term, including loans under 5 years			61 594	57 117
SEB leasing			61 594	57 117
short term			21 221	13 445
			21 221	13 445
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

Carrying value of Fixed assets acquired under finance lease at 31.12.2019 is 82 578 EUR (31.12.2018 - 74 819 EUR)

Leased assets serve as security for respective lease liabilities.

(20) Prepayments received from customers

	31.12.19	31.12.18
	EUR	EUR
Long term (security deposits of rents agreements) Short term (security deposits of rents agreements and debts	47 273	47 273
overpayment)	32 930	25 658
	80 203	72 931

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

(21) Trade payables

	31.12.19	31.12.18
	EUR	EUR
EUR	34 658	45 778
	34 658	45 778

(22) Taxes and the state social security contributions

Type of tax	Residual	Calculated	Paid	Residual
	31.12.18			31.12.19
	EUR	EUR	EUR	EUR
Value added tax	7 506	166 791	160 714	13 583
Social security contributions	6 267	82 395	79 963	8 699
Personal income tax	7 003	46 815	45 212	8 606
Real estate tax (buildings,land)	210	8 179	8 391	-2
Company car tax	-62	3 280	3 218	0
State duties	6	70	71	5
Total	20 930	307 530	297 569	30 891

During the financial year has been calculated and paid payment penalty: VAT, PIT- 617 EUR.

Including	31.12.19	31.12.18
	EUR	EUR
Tax overpayment	30 891	20 992
Tax debt	-2	-62

(23) Other payables

	31.12.19	31.12.18
	EUR	EUR
Salaries for December	13 699	13 139
Total	13 699	13 139
(24) Accrued liabilities	31.12.19	31.12.18
	EUR	EUR
Accrued liabilities for unused vacation	96 934	22 573
Accrued liabilities for services received	2 580	1 884
Total	99 514	24 457

(25) Related parties, transactions with related parties

There were no related party transactions during the reporting year .

Information about subsidiary:

Ltd. "VEF Projekts ", reg.no. 40203161994, legal adsress: Brīvibas gatve 214,Riga, LV-1039. Percentage of participation - 100%

Long-term financial investments

	Investments in subsidiaries, EUR
Acquisition cost:
at the beginning of the year	3000
at the end of the year	3000
Value increase, including improvements	0
Balance sheet 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	2019	2018
Average amount of company's emploees during year	17	15

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

The remuneration of Member of the Board during year 2019 was 19 528 EUR, social security contributions - 4 340 EUR. The remuneration of Chairman of the Board during year 2019 was 61 603 EUR, social security contributions - 14 840 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 off- balance liabilities and pledged assets

The Company has no off-balance sheet liabilities. 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 Joint Stock Company "VEF" is a publicly traded company, dealing with management and administration of its real estate, rendering space rental and electrical services to consumers on the VEF territory.

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 JSC "Privatizācijas aģentūra" .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 31.12.2019 The Company has losses of EUR 82 503 from this contract.

(32) Subsequent events

After the end of the fiscal year, in March 2020, 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 122 296 remains undistributed to cover the losses of the previous years.

(34) Going concern

As at 31 December 2019, the Company's current assets exceeded its current liabilities by EUR 60 271. Profit of the financial year is 122 296 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 2020, 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		27 April, 2020
Chairman of the Board	signature
Tamara Kampane		27 April, 2020
Member of the Board Chief accountant	signature
Martins Cauna		27 April, 2020
Member of the Board	signature