Akciju sabiedriba "VEF"

Quarterly Report • Feb 27, 2015

JOINT STOCK COMPANY VEF (Unified registration number 40003001328)

NON- AUDITED FINANCIAL STATEMENTS For the period ended on December 31, 2014

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

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
Taxpayers' Reg. Nbr.	On April 14, 2004 registered in the Commercial Register, Nbr. 40003001328 LV 40003001328
Legal address	Brīvības gatve 214, Rīga, LV-1039, Republic of Latvia Phone: 7270618.
Equity capital 1 :	EUR 2 766 969 paid 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 December 31, 2014:
and share capital (%)	*VEF KOMUNIKĀCIJU SERVISS SIA - 45.52 % ;
	* Laila Līduma	- 6.31 %;
	* Tamāra Kampāne	- 9.70 % ;
	* Gints Feņuks	-24.49 % ;
	*Other shareholders	- 13.98 %.
Chief executive officer:	Chairman of the Board of the Company:
	GINTS FENUKS
Members of the Board:	TAMĀRA KAMPĀNE
	MARTINS CAUNA
	MODRIS ZOMMERS
Members of the Supervisory Council:	ANDRIS DENINŠ
	INTS KALNINŠ
	GUNTIS LIPINŠ
	ARNIS ZEKUNDE
Period of account:	01.01.2014. - 31.12.2014.
Qualified auditor:	Aleksejs Litvinovs. Certificate Nbr.190

1 Paid-up and registered equity capital 2 766 969 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 1.422872.

Report on the Management Board's responsibility to the non-audited financial statement of JSC "VEF" for the twelve months of 2014.

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 December 31, 2014.

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 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 Feņuks Chairman of the Management Board

Management report

The Joint Stock Company "VEF" is a public joint stock company, dealing with management and administration of their real estate, leasing of premises and electrical services to consumers in VEF territory.

According to the balance statement of the Company, the revenue from the economic activity during 12 months of 2014 makes 1 160 451 EUR , which is 2.7% more than previous reporting period, however, in 2014 year closed with a loss 3 491 EUR, which is the result of lease and maintenance decrease, taking into account that one of the largest tenant the "State Revenue Department" vacated JSC VEF premises on Brivibas gateway 214, as well as the growth of production costs, based on the growth of market electricity price over the reporting period.

In the next period is expected relevant decline of sales, and will be necessary significant additional resources in loan format for the building renovation and new tenants involvement.

For the moment Joint Stock Company continues to provide it's volume of services.

The Board of Joint Stock Company "VEF" follows the Company's strategic plans of the previous year, according to the economic situation in the country and situation in the lease market.

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

Gints Feņuks Chairman of the Management Board

ASSETS
	EUR	EUR
	31.12.2014	31.12.2013
LONG-TERM INVESTMENTS
Intangible assets
Concessions,patents,licences	507	899
Total intangible assets	507	899
Fixed Assets
Land,buildings and other property	5 554 307	5 611 135
Other fixed assets and inventory	72 690	137 996
Total fixed assets	5 626 997	5 749 131
Total long-term investments	5 627 504	5 750 030
Current assets
Debtors
Customers and client debts	31 236	39 946
Other debtors	9 684	6 333
Future period expenses	1 796	1 656
Future period income	53 571	49 303
Total debtors	96 287	97 238
Cash	93 765	8 500
Total Current assets	190 052	105 738
TOTAL ASSETS	5 817 556	5 855 768

LIABILITIES
	EUR	EUR
	31.12.2014	31.12.2013
Stockholder's Equity
Common stock	2 766 969	2 766 969
Long-term investments revaluation reserve	801 562	801 562
Total accumulation
Retained earnings from the previous years	-1 092 219	-1 093 685
Retained earnings of the financial years	-3 491	1 466
Total stockholder's equity	2 472 821	2 476 312
PROVISIONS
Other provisions	12 401	12 585
Total provisions	12 401	12 585
LIABILITIES
Long-term liabilities
Borrowings from credit institutions	2 853 641	2 993 984
Prepayments from buyers	38 118	32 106
Other liabilities	43 021	61 977
Deferred tax liability	151 511	111 429
Total long-term liabilities	3 086 291	3 199 497
Current liabilities
Borrowings from credit institutions	140 343	66 781
Accounts payable	54 916	47 736
Taxes and social security payments	15 604	14 825
Other liabilities	10 303	9 762
Prepayments from buyers	5 921	9 695
Other loans	18 956	18 574
Total current liabilities	246 043	167 374
Total liabilities	3 332 334	3 366 870
TOTAL LIABILITIES&STOCKHOLDER'S	5 817 556	5 855 768
EQUITY

PROFIT AND LOSSES ACCOUNT FOR YEAR, WHICH ENDS ON DECEMBER 31.2014.

		EUR 31.12.2014	EUR 31.12.2013
1	2	4	4
Net turnover	1	1 160 451	1 129 393
Cost of goods sold	2	-848 074	-817 400
Gross profit		312 377	311 993
Administrative expenses	3	-102 293	-104 156
Other income from operations	4	11 267	45 446
Other expenses from operations	5	-17 327	-16 359
Finansial services expenses	6	-150 452	-160 645
Profit before taxes		53 572	76 099
Other taxes	7	-16 981	-14 362
Deferred tax	8	-40 082	-60 271
Net profit		-3 491	1 466

Earnings per share (EPS) on 31.12.2013-0.0045 EUR

Chairman of the Board G.Feņuks Member of the Board T.Kampane

CASH FLOW STATEMENT FOR YEAR THAT ENDS ON DECEMBER 31, 2014

		2014 31.12.	2013 31.12.
	CASH FLOW FROM OERATING	EUR	EUR
I.	ACTIVITIES
	Profit before outstanding items and taxes (+) Adjustments:	53 572	76 099
	fixed assets depreciation ( +)	119 518	119 927
	intangible assets depreciation (+)	392	420
	increase/decrease in provisions profit or losses from exchange rates fluctuation	-184	-1 918
	(+/-)	0	962
	finacial services income Profit or losses before adjustments from current	150 452	160 645
	assets and liabilities Adjustments:	323 750	356 135
	debtors : increase (-); decrease (+)	949	2 546
	liabilities: increase (-); decrease (+)	-3 755	-56 367
	Gross cash provide by operating activities	320 944	302 313
	Payments for financial	-150 452	-160 645
	Net cash provided by operating activities before outstanding items:	170 492	141 668
	Cash flow from outstanding items (-/+)
	Net cash provided by operating activities :	170 492	141 668
II.	CASH FLOWS FROM INVESTING ACTIVITIES :
	Fixed assets purchase	0	-1 175
	Interest received	128	1 773
	Net cash used in investing activities :	128	598
III.	CASH FLOWS FROM FINANCING ACTIVITIES:
	Expenses for borrowings repayment	-66 781	-119 999
	Payment SEB Līzings,Swedlīzings	-18 574	-18 645
	Net cash provided by financing activities :	-85 355	-147 401
IV.	Exchange rate fluctuation result :	0	-962
	Net cash flom	85 265	-6 097
	CASH AT BEGINNING OF YEAR	8 500	14 597
	CASH AT END OF YEAR	93 765	8 500

STATEMENT OF CHANGES IN EQUITY FOR YEAR THAT ENDS ON DECEMBER 31, 2014

	31.12.2014 EUR	31.12.2013 EUR
Stockholder's eguity
Balance at the beginning of the
financial year	2 766 969	2 766 969
Increase from
Decrease from
Balance at the end of the financial year	2 766 969	2 766 969
Long-term investments revaluation reserve
Balance at the beginning of the
financial year	801 562	801 562
Increase from
Decrease from
Balance at the end of the financial year	801 562	801 562
Accumulations
Balance at the beginning of the financial year
Increase from
Decrease from
Balance at the end of the financial year
Retained earnings
Balance at the beginning of the
financial year	-1 092 219	-1 093 685
Profit or losses of the finacial year	-3 491	1 466
Dividendes
Included in accumulations
Balance at the end of the financial year	-1 095 710	-1 092 219
Stockholder's eguity (total)
Balance at the beginning of the
financial year	2 476 312	2 474 846
Balance at the end of the financial year	2 472 821	2 476 312

(1) Net turnover

Turnover consists of revenues that the Company gained in the first twelve months of 2014 from its core business-service provision without VAT

Type of commercial operations	2014.12.31	2013.12.31
	EUR	EUR
Electricity distribution and servicing	314 400	250 495
office renting service	619 801	610 973
ferrous and non-ferrous metal trading
income	0	21
Facilities management and utilities	226 250	267 904
Total	1 160 451	1 129 393

Distribution of net turnover by geographical markets

	2014.12.31	2013.12.31
Country	EUR	EUR
Latvia	1 160 451	1 129 393
Total	1 160 451	1 129 393

(2) Cost of sales

	2014.12.31	2013.12.31
	EUR	EUR
Personnel costs and social tax	173 550	175 922
depreciation	119 518	119 927
transport	10 073	13 446
residential services ( electricity, water )	426 016	392 841
personnel training	549	283
telecommunication service	1 594	1 413
other costs tied to commercial operations	102 593	101 596
insurance costs (buildings)	5 605	5 233
land rent to LPA	6 027	6 027
bank charges	249	273
scrap metal buying expenses	0	19
depreciation of license	392	420
travel expenses	1 908	0
Total	848 074	817 400

Costs of administration	2014.12.31	2013.12.31
	EUR	EUR
Salaries and social tax for administration	77 731	76 077
telecommunication service	1 594	1 414
office supplies	1 417	1 884
transport expenses for administrative needs	10 073	13 446
representative expenses	33	41
audit cost	1 281	1 281
legal assistance or raid	3 410	2 899
RFB annual fee	7 114	7 114
Total	102 293	104 156

Other revenues from commercial

(4) operation

	2014.12.31 EUR	2013.12.31
		EUR
fines	2 441	2 481
profit from sale of fixed assets
( 10283-2617)	7 666	0
Proceeds from creditor write-off	528	39 274
Income from savings for vacations
reduction	184	1 918
Other income	320	0
insurance recompense	128	1 773
Total	11 267	45 446

Other costs of commercial operations

		2014.12.31	2013.12.31
(5)		EUR	EUR
	60% of representative costs	59	75
	donations to Latvian orphans fund	1 103	360
	other expenses	3 254	3 280
	Bad debts write-off costs	12 911	11 682
	fines
	exchange losses	0	962
	Total	17 327	16 359

Payments of interest and similar expenses

		2014.12.31	2013.12.31
(6)		EUR	EUR
	credit interests	148 233	158 478
	Swedbank līzings	584	773
	SEB Līzings	1 635	1 394
	Total	150 452	16 645
(7)	Deferred tax	2014.12.31	2013.12.31
		EUR	EUR
	Deferred tax at beginning of period	111 429	51 158
	Deferred tax at end of period	151 511	111 429
	Total	-40 0 82	-60 271
(8)	Other taxes	2014.12.31 EUR	2013.12.31 EUR
real estate tax (buildings,land)		16 981	14 362
Total		16 981	14 362