Akciju sabiedriba "VEF"

Interim / Quarterly Report • Aug 31, 2016

JOINT STOCK COMPANY VEF (Unified registration number 40003001328)

NON- AUDITED FINACIAL STATEMENTS For the period ended on June 30, 2016

CONTENTS

General information

Report on the Management Board's responsibility

Management report

Balance sheet

Income statement

Cash flow statement

Statement of changes in equity

Notes to the financial statement

1

GENERAL INFORMATION
Title of enterprise	Joint stock company VEF
Legal type of enterprise	Public joint stock company
Registred:	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, Nbr. 40003001328
Taxpayers' Reg. Nbr.	LV 40003001328
Legal address	Brīvības gatve 214, Rīga, LV-1039, Republic of Latvia
Equity capital 1 :	EUR 2 722 492 paīd and registered equity capital.
Core businesses:
	Power supply - distribution of power; Letting and renting of real-estate property
Name of the holder of shares	As on June 30, 2016:
and share capital (%)	*VEF KOMUNIKĀCIJU SERVISS SIA- 45.52 % ;
	Laila Līduma Tamāra Kampāne	– 6.31 % ; -10.16 % ;
	* Gints Feņuks	- 24.50 % ;
	*Other shareholders	- 13.51 %.
Chief executive officer:	Chairman of the Board of the Company:
	GINTS FENUKS
Members of the Board:	TAMĀRA KAMPĀNE
	MĀRTINŠ CAUNA
	MODRIS ZOMMERS
Members of the Supervisory Council:	LAILA LĪDUMA
	ERVINS KAMPĀNS
	GUNTIS LIPIŅŠ
	EGILS ARAJS
Period of account:	01.01.2016. - 30.06.2016.
Qualified auditor:	ALEKSEJS LITVINOVS . Certificate Nbr.190

Paid-up and registred equity capital 2 722 492 EUR common shares

The company's capital consists of the 623 528 bearer shares and 1 321 109 registered shares Nominal value of a common share is EUR 1 .40 .

Report on the Management Board's responsibility to the non-audited financial statement of JSC "VEF" for the six months of 2016

Management Board of JSC "VEF" (hereinafter – the Company) is responsible for preparation of the middle-term financial statements of the Company. The middle-term financial statements are not audited.

Middle-term 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 June 30, 2016.

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

On behalf of the Management Board of JSC "VEF",

Gints Fenuks Chairman of the Management Board

Management report

Joint Stock Company VEF is a publicly traded company that is doing business by managing it own real estate property, renting business spaces, and also electricity distribution services for business located in VEF territory.

Net sales for the reporting period resulted in 616 626 EUR and it is about 13 %. higher than in the previous reporting period.

The Company focuses its activities in a direction to preserve the cash flow/turnover.

Board of JSC 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 markets.

On behalf of the Management Board of JSC "VEF",

Gints Fenuks Chairman of the Management Board

ASSETS
	EUR	EUR	EUR
	30.06.2016	30.06.2015	31.12.2016
LONG-TERM INVESTMENTS
Intangible assets
Concessions,patents,licences	59	339	172
Total intangible assets	59	339	172
Fixed Assets
Land,buildings and other property	5 499 344	5 525 893	5 501 253
Other fixed assets and inventory	18 252	44 872	29 905
Advance payments for fived assets	31 400	0	31 400
Total fixed assets	5 548 996	5 570 765	5 562 558
Total long-term investments	5 549 055	5 571 104	5 562 730
Current assets
Debtors
Customers and client debts	49 830	87 551	12 901
Other debtors	11 346	6 188	31 337
Future period expenses	1 793	1 874	1 806
Future period income	0	0	52 107
Total debtors	62 969	95 613	98 151
Cash	107 226	104 412	83 634
Total Current assets	170 195	200 025	181 785
TOTAL ASSETS	5 719 250	5 771 129	5 744 515

LIABILITIES

	EUR	EUR	EUR
	30.06.2016	30.06.2015	31.12.2016
Stockholder's Equity
Common stock	2 722 492	2 722 492	2 722 492
Rezerve	44 477	44 477	44 477
Long-term investments revaluation reserve	805 396	801 562	8005 396
Total accumulation
Retained earnings from the previous years	-1 069 412	- 1 104 359	-1 104 359
Retained earnings of the financial years	24 448	-4 108	34 947
Total stockholder's equity	2 527 401	2 460 064	2 502 953
PROVISIONS
Other provisions	13 056	12 401	13 056
Total provisions	13 056	12 401	13 056
LIABILITIES
Long-term liabilities
Borrowings from credit institutions	2 713 298	2 853 641	2 713 298
Prepayments from buyers	39 608	53 149	39 608
Other liabilities	24 823	43 021	24 823
Deferred tax liability	231 309	187 833	193 783
Total long-term liabilities	3 009 038	3 137 644	2 971 512
Current liabilities
Borrowings from credit institutions	70 172	70 172	140 343
Accounts payable	38 883	36 661	52 026
Taxes and social security payments	27 269	27 747	22 102
Other liabilities	11 398	10 616	10 331
Prepayments from buyers	12 836	6 298	13 995
Other loans	9 197	9 526	18 197
Total current liabilities	169 755	161 020	256 994
Total liabilities	3 178 793	3 298 664	3 228 506
TOTAL LIABILITIES&STOCKHOLDER'S	5 719 250	5 771 129	5 744 515
EQUITY

PROFIT AND LOSSES ACCOUNT FOR YEAR, WHICH ENDS ON JUNE 30.2016.

		EUR 30.06.2016 -	EUR 30.06.2015 -	EUR 31.12.2015 -
Net turnover	1	616 626	538 314	1 135 245
Cost of goods sold	2	-427 328	-389 166	-799 676
Gross profit		189 298	149 148	335 569
Administrative expenses	3	-57 315	-47 956	-100 752
Other income from operations	4	1 239	5 615	6 095
Other expenses from operations	5	-1 349	-1 574	-25 712
Finansial services income
Finansial services expenses	6	-61 881	-70 289	-124 246
Profit before taxes		69 992	34 944	90 954
Other taxes	7	-8 018	-10 917	-34 085
Deferred tax		-37 526	-28 135	-21 922
Net profit		24 448	-4 108	34 947
Earnings per share (EPS)		0.001	0.002	0.013
Chairman of the Board		G.Feņuks	Member of the Board	T.Kampane

CASH FLOW STATEMENT FOR YEAR THAT ENDS ON JUNE 30, 2016

		2016 30.06.	2015 30.06.	2015 31.12.
I.	CASH FLOW FROM OERATING ACTIVITIES	EUR	EUR	EUR
	Profit before outstanding items and taxes (+) Adjustments:	69 992	34 944	90 954
	fixed assets depreciation ( +) intangible assets depreciation (+) increase/decrease in provisions profit or losses from exchange rates fluctuation (+/-)	40 938 113	56 232 168	99 673 335
	finansial service income finacial services income Profit or losses before adjustments from current	61 881	70 289	124 246
	assets and liabilities Adjustments:	172 924	161 633	315 863
	debtors : increase (-); decrease (+) liabilities: increase (-); decrease (+)	35 182 -27 322	19 606 15 009	-1 863 12 882
	Gross cash provide by operating activities Payments for financial Income tax payments	180 784 -61 881 -8 018	196 248 -70 289	326 882 -124 246 -21 922
	Net cash provided by operating activities before outstanding items: Cash flow from outstanding items (-/+)	110 885	125 959	180 714
	Net cash provided by operating activities :	110 885	125 959	180 714
II.	CASH FLOWS FROM INVESTING ACTIVITIES :
	Fixed assets purchase Interest received	-7 496 0 -7 496	0 0	-31 400 0 -31 400
III.	Net cash used in investing activities : CASH FLOWS FROM FINANCING ACTIVITIES:		0
	Expenses for borrowings repayment	-70 172	-70 172	-140 343
	Expenses on leasing liabilities	-9 625	-9 431	-18 956
	Net cash provided by financing activities :	-79 797	-79 603	-159 299
	Net cash flom	23 592	46 356	-9 985
	CASH AT BEGINNING OF YEAR CASH AT END OF YEAR	83 634 107 226	58 056 104 412	93 619 83 634

STATEMENT OF CHANGES IN EQUITY FOR YEAR THAT ENDS ON JUNE 30, 2016

	30.06.2016 EUR	30.06.2015 EUR	31.12.2015 EUR
Stockholder's eguity
Balance at the beginning of the
financial year	2 766 969	2 766 969	2 766 969
Increase from
Decrease from denomination of	44 477	44 477	44 477
shares from lats to euro
Balance at the end of the financial year	2 722 492	2 722 492	2 722 492
Long-term investments revaluation
reserve
Balance at the beginning of the
financial year	805 396	801 562	801 562
Increase from			3 834
Decrease from
Balance at the end of the financial year	805 396	801 562	805 396
Accumulations
Balance at the beginning of the	0	0	0
financial year
Increase from denomination of shares	44 477	44 477	44 477
from lats to euro
Decrease from
Balance at the end of the financial year	44 477	44 477	44 477
Retained earnings
Balance at the beginning of the
financial year	-1 069 412	-1 104 359	-1 104 359
Profit or losses of the finacial year	24 448	-4 108	34 947
Dividendes
Included in accumulations
Balance at the end of the financial year	-1 044 964	-1 108 467	-1 069 412
Stockholder's eguity (total)
Balance at the beginning of the
financial year	2 502 953	2 482 162	2 464 172
Balance at the end of the financial year	2 527 401	2 460 064	2 502 953

(1) Net turnover

Turnover consists of revenues that the Company gained in the first six months of 2016 from its core business-service provision without VAT

Type of commercial operations	2016.06.30	2015.06.30
	EUR	EUR
power supply, distribution and servicing	150 999	154 818
office renting service	326 123	283 088
utility services	139 504	100 408
Total	616 626	538 314

Distribution of net turnover by geographical markets

	2016.06.30	2015.06.30
Country	EUR	EUR
Latvia	616 626	538 314
Total	616 626	538 314

(2) Cost of sales

	2016.06.30 EUR	2015.06.30
		EUR
personnel	82 768	75 328
depreciation	40 938	56 232
transport	5 476	4 037
other outstanding costs	219 337	195 759
personnel training	105	229
telecommunication service	693	634
other costs tied to commercial operations	71 488	50 991
insurance (buildings)	2 824	2 775
land rent to LPA	3 586	3 013
depreciation of license	113	168
Total	427 328	434 816

(3) Costs of administration	2016.06.30	2015.06.30
	EUR	EUR
personnel	42 006	35 527
telecommunication service	692	634
office supplies	1 066	454
cash turnover expenses	154	157
transport expenses for administrative needs	5 476	4 037
representative expenses	14	72
legal assistance or raid	4 347	1 739
NASDAQ OMX Riga annual fee	3 560	5 336
Total	57 315	47 956

Other revenues from commercial

(4) operation

	2016.06.30	2015.06.30
	EUR	EUR
fines	435	1 221
other revenues	804	4 394
Total	1 239	5 615

(5) Other costs of commercial operations

	2016.06.30 EUR	2015.06.30
		EUR
60% of representative costs	25	130
donations to Latvian orphans fund	200	0
allowances and bonuses	687	891
fines	437	553
Total	1 349	1 574

Payments of interest and similar

(6) expenses

		2016.06.30	2015.06.30
		EUR	EUR
	credit interests	61 360	69 453
	līzing	521	836
	Total	61 881	70 289
	Other taxes	2016.06.30	2015.06.30
(7)		EUR	EUR
	real estate tax (buildings,land)	8 018	10 917
	Total	8 018	10 917