Akciju sabiedriba "VEF" — Interim / Quarterly Report 2013

May 31, 2013

JOINT STOCK COMPANY VEF (Unified registration number 40003001328)

NON- AUDITED FINACIAL STATEMENTS For the period ended on March 31, 2013

CONTENTS

General information

Report on the Management Board's responsibility

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
	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 phone: 67270618.
Equity capital 1 :	Ls 1 944 637 registered and paid up capital.
Core businesses:
	*Power supply - distribution of power;
	Letting and renting of real-estate property Ferrous and non-ferrous waste and scrap purchase.
Name of the holder of shares
And share capital (% ) 2 :	As on march 31. 2013 ;
	*VEF KOMUNIKĀCIJU SERVISS SIA"	45.52 % ;
	" SIA NĪPA "	23.74 % ;
	*State Social Insurance Agency	4.99 % ;
	* Tamāra Kampāne	9.50 % ;
	* Gints Feņuks	7.01 % ;
	*Other shareholders	9.24 % .
Chief executive officer:	Chairman of the Board of the Company:
	GINTS FEŅUKS
Members of the Board:	TAMĀRA KAMPĀNE
	MĀRTIŅŠ CAUNA
	MODRIS ZOMMERS
Members of the Supervisory Council:	ANDRIS DENIŅŠ
	INTS KALNIŅŠ
	GUNTIS LIPIŅŠ
ARNIS ZEKUNDE
Period of account: 01.01.2013. - 31.03.2013.
Qualified auditor: Aleksejs Ļitvinovs. Certificate Nbr.190

1 Paid-up and registered equity

capital Ls 1 944 137

2 The company`s capital consists of the 623 528 bearer shares and 1 321 109 registered shares Nominal value of a common share is 1 LVL (one Latvian lat).

Report on the Management Board's responsibility to the non-audited financial statement of JSC "VEF" for the three months of 2013

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 March 31, 2013.

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 Feņuks Chairman of the Management Board

ASSETS		Final balance		Beginning balance
	LVL	LVL	EUR	EUR
	31.03.2013	31.03.2012	31.03.2013	31.03.2012
			0.702804	0.702804
LONG-TERM INVESTMENTS
Intangible assets
Concessions,patents,licences	853	1 148	1 214	1 633
Total intangible assets	853	1 148	1 214	1 633
Fixed Assets
Land,buildings and other property	3 973 483	4 008 548	5 653 757	5 703 650
Equipment and machinery
Other fixed assets and inventory	105 090	100 927	149 530	143 606
Advance payments for fived assets
Total fixed assets	4 078 573	4 109 475	5 803 287	5 847 256
Total long-term investments	4 079 426	4 110 623	5 804 501	5 848 889
Current assets
Inventory
Goods for sale
Total inventory	0	0	0	0
Debtors
Customers and client debts	68 906	49 321	98 044	70 177
Other debtors	9 167	9 301	13 043	13 234
Future period
Future period expenses	1 924	1 813	2 737	2 580
Total debtors	79 997	60 435	113 824	85 991
Cash	14 715	27 468	20 938	39 084
Total Current assets	94 712	87 903	134 762	125 075
TOTAL ASSETS	4 174 138	4 198 526	5 939 263	5 793 964

LIABILITIES	Final balance		Beginning balance
	LVL	LVL	EUR	EUR
	31.03.2013	31.03.2012	31.03.2013	31.03.2012
			0.702804	0.702804
Stockholder's Equity
Common stock	1 944 637	1 944 637	2 766 969	2 766 969
Long-term investments revaluation reserve	563 341	563 341	801 562	801 562
Total accumulation
Retained earnings from the previous years	-768 646	-793 982	-1 093 685	-1 129 735
Retained earnings of the financial years	11 572	9 842	16 466	14 004
Total stockholder's equity	1 750 904	1 723 838	2 491 312	2 452 800
PROVISIONS
Other provisions	10 193	9 185	14 503	13 069
Total provisions	10 193	9 185	14 503	13 069
LIABILITIES
Long-term liabilities
Borrowings from credit institutions	2 151 118	2 250 213	3 060 765	3 201 765
Prepayments from buyers	22 563	23 642	32 105	33 639
Other liabilities
Deferred tax liability	41 444	22 491	58 969	32 002
Total long-term liabilities	2 215 125	2 296 346	3 151 839	3 267 406
Current liabilities Borrowings from credit institutions	63 252	44 277	89 999	63 001
Accounts payable	34 387	18 998	48 928	27 032
Taxes and social security payments	18 732	53 337	26 653	75 892
Other liabilities	5 952	4 785	8 469	6 808
Other borrowings	39 404	11 387	56 067	16 202
Prepayments from buyers	36 189	36 373	51 492	51 754
Total current liabilities	197 916	169 157	281 609	240 689
Total liabilities	2 413 041	2 465 503	3 433 448	3 508 095
TOTAL LIABILITIES&STOCKHOLDER'S	4 174 138	4 198 526	5 939 263	5 973 964
EQUITY

		LVL 31.03.2013	LVL 31.03.2012	EUR 31.03.2013 - 0.702804	EUR 31.03.2012 - 0.702804
1	2	4	5	4	5
Net turnover		210 736	240 874	299 850	342 733
Cost of goods sold	1	-143 189	-170 832	-203 740	-243 072
Gross profit		67 547	70 042	96 110	99 661
Selling expenses
Administrative expenses	2	-19 997	-17 183	-28 453	-24 449
Other income from operations	3	300	904	427	1 286
Other expenses from operations	4	-691	-337	-983	-479
Finansial services income	5	0	2	0	3
Finansial services expenses	6	-27 712	-35 277	-39 431	-50 195
Profit before taxes		19 447	18 151	27 671	25 827
Other taxes	7	-2 385	-3 811	-3 394	-5 423
Deferred tax		-5 490	-4 498	-7 811	-6 400
Net profit		11 572	9 842	16 466	14 004

PROFIT AND LOSSES ACCOUNT FOR YEAR, WHICH ENDS ON MARCH 31.2013.

Earnings per share (EPS) on 31.03.2013- 0.00595 LVL - 0.00595 EUR

31.03.2012 -0.00506 LVL -0.00506 EUR

Chairman of the Board

G.Feņuks Member of the Board T.Kampane

CASH FLOW STATEMENT FOR YEAR THAT ENDS ON MARCH 31, 2013

		2013 31.03.	2012 31.03.	2013 31.03. EUR	2012 31.03. EUR
I.	CASH FLOW FROM OERATING ACTIVITIES	LVL	LVL	0.702804	0.702804
	Profit before outstanding items and taxes (+) Adjustments:	19 447	18 151	27 671	25 827
	fixed assets depreciation ( +) intangible assets depreciation (+) increase/decrease in provisions profit or losses from exchange rates fluctuation	19 071 74	23 751 74	27 136 105	33 795 105
	(+/-) finansial service income	196	2	279	3
	finacial services income	27 712	35 277	39 431	50 195
	Profit or losses before adjustments from current assets and liabilities	66 500	77 255	94 621	109 924
	Adjustments: debtors : increase (-); decrease (+) inventory: increase (-); decrease (+)	-19 562	1 900	-27 834	2 704
	liabilities: increase (-); decrease (+)	-10 699	-4 550	-15 223	-6 474
	Gross cash provide by operating activities Payments for financial	36 239 -27 712	74 605 -35 277	51 563 -39 430	106 153 -50 195
	Income tax payments Net cash provided by operating activities before outstanding items: Cash flow from outstanding items (-/+)	8 527	39 328	12 133	55 958
	Net cash provided by operating activities :	8 527	39 328	12 133	55 958
II.	CASH FLOWS FROM INVESTING ACTIVITIES :
	Fixed assets purchase
	Interest received
	Net cash used in investing activities :
III.	CASH FLOWS FROM FINANCING ACTIVITIES:
	Expenses for borrowings repayment	-21 084	-14 759	-30 000	-21 00
	Expenses on the purchase of land. Net cash provided by financing activities :	-21 084	-14 759	-30 000	-21 000
IV.	Exchange rate fluctuation result :	-196		-279
	Net cash flom	-12 753	24 569	-18 145	34 958
	CASH AT BEGINNING OF YEAR	27 468	2 899	39 083	4 125
	CASH AT END OF YEAR	14 715	27 468	20 938	39 083

STATEMENT OF CHANGES IN EQUITY FOR YEAR THAT ENDS ON MARCH 31, 2013

	31.03.2013 LVL	31.03.2012 LVL	31.03.2013 EUR 0.702804	31.03.2012 EUR 0.702804
Stockholder's eguity
Balance at the beginning of the
financial year	1 944 637	1 944 637	2 766 969	2 766 969
Increase from
Decrease from
Balance at the end of the financial year	1 944 637	1 944 637	2 766 969	2 766 969
Long-term investments revaluation reserve
Balance at the beginning of the financial year	563 341	563 341	801 562	801 562
Increase from
Decrease from
Balance at the end of the financial year	563 341	563 341	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	-768 646	-793 982	-1 093 685	- 1 129 735
Profit or losses of the finacial year	11 572	9 842	16 466	14 004
Dividendes
Included in accumulations
Balance at the end of the financial year	-757 074	-784 140	-1 077 219	- 1 115 731
Stockholder's eguity (total)
Balance at the beginning of the
financial year	1 723 838	1 713 996	2 452 800	2 438 797
Balance at the end of the financial year	1 750 406	1 723 838	2 491 312	2 452 800

(1) Net turnover

Turnover consists of revenues that the Company gained in the first three months of 2013 from its core business-service provision without VAT

Type of commercial operations	2013.03.31	2012.03.31	2013.03.31	2012.03.31
	LVL	LVL	EUR	EUR
power supply, distribution and servicing	44 106	40 612	62 757	57 786
Rental income	102 542	100 537	145 904	143 051
utility services	64 088	58 314	91 189	82 973
ferrous an non-ferrous waste and scrap
sales revenue	0	41 322	0	58 796
Total	210 736	240 874	299 850	342 733

Distribution of net turnover by geographical markets

	2013.03.31	2012.03.31	2013.03.31	2012.03.31
Country	LVL	LVL	EUR	EUR
Latvia	210 736	240 874	299 850	342 733
Total	210 736	240 874	299 850	342 733

(2) Cost of sales

	2013.03.31	2012.03.31	2013.03.31	2012.03.31
	LVL	LVL	EUR	EUR
labor and social payments	28 200	25 326	40 125	36 036
depreciation	19 145	23 825	27 241	33 900
transport	2 045	2 995	2 910	4 261
residential services (electricity, water)	76 497	68 077	108 845	96 765
personnel training	45	0	64	0
telecommunication service	198	234	283	333
other costs tied to commercial operations	14 833	18 168	21 105	25 851
insurance (buildings)	913	929	1 299	1 322
land rent to LPA	1 313	1 313	1 868	1 868
ferrous an non-ferrous waste and scrap selling cost	0	30 035	0	42 736
Total	143 189	170 832	203 740	243 072

(3)	Costs of administration	2013.03.31 LVL	2012.03.31 LVL	2013.03.31 EUR	2012.03.31 EUR
	labor and social payments	14 270	10 424	20 304	14 832
	telecommunication service	198	234	282	333
	office supplies	298	302	424	430
	cash turnover expenses	55	44	78	63
	transport expenses for administrative needs	2 045	2 995	2 910	4 261
	representative expenses 40%	6	59	9	84
	legal assistance or raid	0	0	0	0
	RFB annual fee	3 125	3 125	4 446	4 446
	Total	19 997	17 183	28 453	24 449

Other revenues from commercial operation

(4)		2013.03.31	2012.03.31	2013.03.31	2012.03.31
		LVL	LVL	EUR	EUR
	fines	300	904	427	1 286
	Total	300	904	427	1 286
	Other costs of commercial operations
		2013.03.31	2012.03.31	2013.03.31	2012.03.31
		LVL	LVL	EUR	EUR
(5)	60% of representative costs	12	108	17	154
	foreign currency loss	196		279
	allowances and bonuses	175	175	249	249
	fines	308	54	438	77
	Total	691	337	983	479

Other revenues from interests or similar sources

		2013.03.31 LVL	2012.03.31 LVL	2013.03.31 EUR	2012.03.31 EUR
	interest from balances of accounts	0	2	0	3
(6)	Total	0	2	0	3
	Payments of interest and similar expenses
		2013.03.31 LVL	2012.03.31 LVL	2013.03.31 EUR	2012.03.31 EUR
(7)	credit interests Interest to Swedbank Līzings interest to SEB Līzings	27 560 150 2	35 161 116	39 214 214 3	50 030 165
	Total	27 712	35 277	39 431	50 195
	Other taxes	2013.03.31 LVL	2012.03.31 LVL	2013.03.31 EUR	2012.03.31 EUR
	real estate tax (buildings ,land)	2 385	3 811	3 394	5 423
(8)	Total	2 385	3 811	3 394	5 423