JOINT-STOCK COMPANY
“RIGA ELECTRIC MACHINE BUILDING WORKS”
Reg. No. 40003042006
31 Ganību Dambis, Riga, LV-1005
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR SIX MONTHS OF 2007
2
CONTENTS
Page
Information on the Company
3
Consolidated Statement
4
Balance Sheet
5
Profit and Loss Account
7
Cash Flow Statement
11
Statement of Changes of the Shareholders’ Equity
13
Appendices
14
Principles of Drawing up Financial Statements
17
Affirmation of Management
18
3
INFORMATION ON THE COMPANY
Name of the company
JSC “Rigas elektromašīnbūves rūpnīca” (JSC “RER”)
Legal status of the company
Joint-stock company
Registration number in the Register
of Enterprises, place and date
No. 000304200, Riga, 29 November 1991
Unified registration number
in the Commercial Registry, place and date
No. 40003042006, Riga, 29 September 2004
Legal address
31 Ganību Dambis, Riga, LV-1005, the Republic of Latvia
The company is under supervision of:
General meeting of shareholders
Name, last name of chairman of the Board
Grigorijs Uspenskis
Names, last names of members of the Board
Aleksandrs Berezins
Vladimirs Antjufejevs
Anatolijs Ostaščenko
Andrejs Zujevs
Accounting period
1 January 2007 – 30 June 2007
Auditor’s name, last name, identity No.
and address
Jānis Mežiels
Identity No.: 011059-11009
Sworn auditor’s certificate No. 127
11-501 Skolas Street, Riga, LV-1010, Latvia
Information on daughter companies
“Ražošana Enerģētika Zinātne” Ltd., to be liquidated
Reg. No. 40003532962
JSC “RER” contribution is 96%
Information on associated companies
“Lovato - REZ” LTD.
Reg. No. 40003072180
JSC “RER” contribution is 50%
4
JSC “RIGA ELECTRIC MACHINE BUILDING WORKS”
CONSOLIDATED STATEMENT
Companies included in consolidation:
Joint-stock company “Riga Electric Machine Building Works”, core business of which is manufacture of
electric machinery and apparatus;
Limited liability company “Lovato – REZ”, core business of which is sales of low-voltage equipment for
the needs of control of electrical systems.
Companies not included in consolidation:
Limited liability company “Ražošana Enerģētika Zinātne”, core business of which is supply of power
resources. Form September 2006, this company is in a process of liquidation. Liquidation is planned to be
completed in the second half of 2007.
Total operational results of the companies included in consolidation for six months of 2007:
profit before tax amounted to LVL 1929372 and profit after tax amounted to LVL 1825664.
Total net turnover for six months of 2007 amounted to LVL 12560312.
An average number of employees for six months of 2007 were 1137 persons, average salary
was LVL 431.15.
Measures for development of the Concern
In the second half of 2007, there is planned to begin optimization and modernization of some
production units (electroplating production unit, stamping and welding shop).
In the second half of 2007, there is planned to increase expenses related to professional
development of employees.
Chairman of the Board of JSC ”RER”
21 August 2007
G. Uspenskis
5
JSC “RER” CONSOLIDATED BALANCE SHEET FOR SIX MONTHS OF 2007
ASSETS
Line
code
1. LONG-TERM INVESTMENTS
I. Intangible investments
1. Intangible assets
I. Total
II. Fixed assets
1. Land plots, buildings, constructions
2. Long-terms investments in hired fixed assets
3. Equipment and machinery
4. Other fixed assets and inventory
5. Creation of fixed assets
6. Prepayments for fixed assets
II. Total
III. Long-term financial investments
1. Participation in the capital of related
companies
III. Total
I. PART TOTAL AMOUNT
2. CURRENT ASSETS
I. Inventories
1. Raw materials, direct materials and auxiliary
materials
2. Unfinished products
3. Finished products and goods for sale
4. Prepayments for goods
I. Total
II. Debtors
1. Debts of buyers and customers
2. Debts of associated companies
3. Other debtors
4. Deferred expenses
II. Total
III. Securities and participation in capitals
1. Other securities
III. Total
IV. Cash
II. PART TOTAL AMOUNT
BALANCE
Note
30.06.07
LVL
30.06.06
LVL
30.06.07
EUR
30.06.06
EUR
020
050
4429
4429
798
798
6302
6302
1135
1135
060
070
080
090
100
110
120
4062641
1574638
14312
1016529
34461
465047
29784
3134771
5780617
2240508
20364
1446390
49034
661702
42379
4460377
130
448093
220
448093
7227286
3135569
637579
10283502
4461512
230
2751869
1662072
3915557
2364915
240
250
270
290
880677
72645
272675
3977866
985557
112069
462850
3222548
1253090
103365
387982
5659994
1402321
159460
658576
4585272
300
320
330
360
370
5980798
137
179948
813
6161696
213767
18
155215
30560
399560
8509909
195
256042
1157
8767303
304163
26
220851
43483
568523
400
410
420
430
440
1600000
1600000
9394
11748956
18976242
434622
4056730
7192299
2276595
2276595
13366
16717258
27000760
618411
5772206
10233718
1777098
93156
455611
386258
6774764
2528583
132549
648276
549596
9639621
637579
6
7
Appendices to financial statements on pages 14 – 18 are an integral part of the financial statements.
6
JSC “RER” CONSOLIDATED BALANCE SHEET FOR SIX MONTHS OF 2007
LIABILITIES
1. SHAREHOLDERS' EQUITY
1. Share capital (capital stock)
2. Reserve for revaluation of long-term
investments
3. Other provisions
4. Undivided profit:
a) Undivided profit of previous years
b) Undivided profit of the accounting year
1. PART TOTAL AMOUNT
2. PROVISIONS
2. PART TOTAL AMOUNT
3. CREDITORS
I. Long-term creditors
1. Loans from credit institutions
2. Other loans
3. Deferred tax liabilities
I. Total
II. Short-term creditors
1. Loans from credit institutions
2. Other loans
3. Advance payments received from buyers
4. Debts to suppliers and contractors
5. Debts to associated companies
6. Taxes and social security payments
7. Other creditors
8. Unpaid dividends of previous years
II. Total
3. PART TOTAL AMOUNT
4. MINORITY INTEREST
BALANCE
Line
code
450
470
Note
8
9
30.06.07
LVL
30.06.06
LVL
30.06.07
EUR
30.06.06
EUR
5799005
159408
5799005
164749
8251241
226817
8251241
234417
510
192922
192922
274503
274503
530
540
550
580
590
1522945
1825664
9499944
186566
186566
2505
-262741
5896440
302861
302861
2166956
2597686
13517203
265460
265460
3564
-373847
8389878
430932
430932
620
630
731
740
1534736
15107
201584
1751427
517
2183733
21495
286828
2492056
736
770
780
790
800
830
840
850
880
890
900
5605494
125772
10896
1014902
3270
357043
419428
1500
7538305
9289732
910
18976242
10
517
3514
364365
276867
1699
147713
178249
1453
973860
974377
18621
7192299
7975899
178957
15504
1444075
4653
508026
596793
2134
10726041
13218097
27000760
736
5000
518445
393946
2417
210177
253625
2067
1385677
1386413
26495
10233718
7
JSC “RER” CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR SIX MONTHS OF 2007
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Items
Net turnover
Production costs of the goods sold
Gross profit or loss
Selling expenses
Administration expenses
Other operating income
Other operating expenses
Other interest income and similar
income
Other interest payments and similar
expenses
Loss from consolidation
Income from consolidation
Profit or loss before extraordinary
items and taxes
Profit or loss before tax
Other taxes
Minority interest
Consolidated profit or loss of the
accounting period
EPS (earnings per share)
The number of shares is 5799005
Line
code
010
020
030
040
050
060
070
100
30.06.07.
LVL
12560312
-9007832
3552480
-193907
-1230243
131976
-204151
471
30.06.06.
LVL
5727589
-4562469
1165120
-100848
-1108728
58000
-202605
547
30.06.07.
EUR
17871714
-12816990
5054724
-275905
-1750478
187785
-290481
670
30.06.06.
EUR
8149626
-6491809
1657817
143494
-1577578
82527
-288281
778
120
-141503
-128
-201341
-182
121
122
130
14249
1929372
-64320
15837
-237125
20275
2745249
-91519
22534
-337398
160
190
200
210
Note
1
2
3
4
5
1929372
-103708
1825664
0.31
-237125
-22985
-2631
-262741
-0.05
2745249
-147563
2597686
0.45
-337398
-32705
-3744
-373847
-0.06
8
JSC “RER” CONSOLIDATION REGISTRY
BALANCE SHEET FOR SIX MONTHS OF 2007, LVL
ASSETS
1. LONG-TERM INVESTMENTS
I. Intangible investments
1. Intangible assets
I. Total
II. Fixed assets
1. Land plots, buildings, constructions
2. Long-terms investments in hired
fixed assets
3. Equipment and machinery
4. Other fixed assets and inventory
5. Creation of fixed assets
6. Prepayments for fixed assets
II. Total
III. Long-term financial investments
1. Participation in the capital of related
companies
2. Participation in the capital of
associated companies
III. Total
I. PART TOTAL AMOUNT
2. CURRENT ASSETS
I. Inventories
1. Raw materials, direct materials and
auxiliary materials
2. Unfinished products
3. Finished products and goods for sale
4. Prepayments for goods
I. Total
II. Debtors
1. Debts of buyers and customers
2. Debts of associated companies
3. Other debtors
4. Deferred expenses
II. Total
III. Securities and participation in
capitals
1. Other securities
III. Total
IV. Cash
II. PART TOTAL AMOUNT
BALANCE
JSC
“RER”
“LovatoREZ” LTD.
Consolidation
Registry:
Debit
Consolidation
Registry:
Credit
4429
4429
Consolidated
Balance
4429
4429
4050987
23307
11653.50
4062640.50
1771427
90554
455611
386258
6754837
11343
5205
5671.50
2602.50
39855
19927.50
1777098.50
93156.50
455611
386258
6774764.50
448093
448093
59927
59927
508020
7267286
39855
59927
79854.50
448093
7227286.50
2750274
3190
1595
2751869
880677
19463
272664
3923078
106364
22
109576
53182
11
54788
880677
72645
272675
3977866
98281
49140.50
979
644
99904
489.50
322
49952
5980797.50
137
179948.50
813
6161696
1329
106069
185923.50
1600000
1600000
9394
11748956
18976242.50
5931657
137
179459
491
6111744
1600000
1600000
8065
11642887
18910173
2658
212138
251993
9
JSC “RER” CONSOLIDATION REGISTRY
BALANCE SHEET FOR SIX MONTHS OF 2007, LVL
LIABILITIES
1. SHAREHOLDERS' EQUITY
1. Share capital (capital stock)
2. Reserve for revaluation of long-term
investments
3. Other provisions
4. Undivided profit:
a) Undivided profit of previous years
b) Undivided profit of the accounting
year
1. PART TOTAL AMOUNT
2. PROVISIONS
2. PART TOTAL AMOUNT
3. CREDITORS
I. Long-term creditors
1. Loans from credit institutions
2. Other loans
3. Deferred tax liabilities
I. Total
II. Short-term creditors
1. Loans from credit institutions
2. Other loans
3. Advance payments received from
buyers
4. Debts to suppliers and contractors
5. Debts to associated companies
6. Taxes and soc. security payments
7. Other creditors
8. Unpaid dividends of previous years
II. Total
3. PART TOTAL AMOUNT
BALANCE
Consolidation adjustments Total
“LovatoREZ” LTD.
Consolidation
Registry:
Debit
5799005
159408
115200
31984
115200
31984
5799005
159408
192922
1168
1168
192922
1522945
1813951
-5071
-2535.50
14249
143281
145816.50
14249
JSC
“RER”
9488231
186566
186566
1534736
15107
200072
1749915
3023
3023
Consolidation
Registry:
Credit
7485461
9235376
18910173
1522945
1825664.50
9499944.50
186566
186566
1534736
15107
201583.50
1751426.50
1511.50
1511.50
5605494
125772
10896
970909
3270
352413
416707
Consolidated
Balance
5605494
125772
10896
87987
43993.50
9260
5442
3000
105689
108712
251993
4630
2721
1500
52844.50
54356
200172.50
200172.50
14249
200172.50
1014902.50
3270
357043
419428
1500
7538305.50
9289732
18976242.50
10
JSC “RER” CONSOLIDATION REGISTRY
PROFIT AND LOSS ACCOUNT FOR SIX MONTHS OF 2007, LVL
No.
Items
JSC
“RER”
1
2
Net turnover
Production costs of
the goods sold
Gross profit or loss
Selling expenses
Administration
expenses
Other operating
income
Other operating
expenses
Other interest
income and similar
income
Other interest
payments and
similar expenses
Income from
consolidation
Profit or loss
before
extraordinary items
and taxes
Profit or loss
before tax
Other taxes
Consolidated profit
or loss of the
accounting period
12455950
-8903445
“LovatoREZ”
LTD.
208725
-208774
3552505
-192126
-1229037
-49
-3562
-2413
104362.50
131392
1169
584.50
-204036
-231
464
15
3
4
5
6
7
8
9
10
11
12
13
14
Consolidation
adjustments
Consolidation
Registry:
Debit
104362.50
Consolidation
Registry:
Credit
Consolidated
P&L Account
104387
12560312.50
-9007832
104387
1781
1206.50
3552480.50
-193907
-1230243.50
131976.50
115.50
7.50
-204151.50
471.50
-141503
-141503
14249
14249
1917659
-5071
14249
104954.50
107490
1929372.50
1917659
-5071
14249
104954.50
107490
1929372.50
-103708
1813951
-5071
14249
104954.50
107490
-103708
1825664.50
11
Appendix 2 to the Latvian Accounting
Standard No.2 of 5 February 2004
“Cash Flow Statement”
JSC “RER” CONSOLIDATED CASH FLOW STATEMENT
FOR SIX MONTHS OF 2007 (prepared by indirect method)
I. Cash flow from operating activities
Items
1
2
3
4
5
I
Profit or loss before extraordinary items and taxes
ADJUSTMENTS
Depreciation of fixed assets
Amortization of investment value
Amortization of intangible investment value
Gain from sales of fixed assets
Profit or loss from fluctuations of currency exchange
rates
Loss from consolidation
Consolidation adjustments
Reserve for revaluation of long-term investments
Profit or loss before adjustments influenced by changes
of balance of current assets and short-term liabilities
ADJUSTMENTS
Increase or decrease of balance of receivables
Increase or decrease of balance of inventories
Increase or decrease of deferred expenses
Increase or decrease of balance of debts to be paid to
suppliers, contractors and other creditors
Expenses for tax payments
Gross cash flow from operating activities
Expenses for corporate income tax payments
Cash flow before extraordinary items
NET CASH FLOW FROM OPERATING ACTIVITIES
30.06.07
LVL
1929372
30.06.06
LVL
-237125
30.06.07
EUR
2745249
30.06.06
EUR
-337398
118433
-1147
274
168515
-1632
390
42608
78275
1208
469
-3339
82253
60626
111375
1719
667
-4751
117035
-14249
-1864
2073427
48483
-9945
-1160
-40881
-20277
-2652
2950219
68985
-14150
-1651
-58169
-4902307
-367908
24025
5525142
160762
-601212
54158
170924
-6975354
-523486
34184
7861569
228744
-855448
77060
243203
-100951
2251428
-95048
2156380
2156380
-23034
-279283
-218877
-498160
-498160
-143640
3203492
-135241
3068251
3068251
-32774
-397384
-311434
-708818
-708818
II. Cash flow form investing activities
Items
1
2
3
II
Purchase of stock or shares of related or associated
companies
Purchase of fixed assets and intangible investments
Income from sales of fixed assets and intangible
investments
NET CASH FLOW FROM INVESTING ACTIVITIES
30.06.07
LVL
30.06.06
LVL
-4695
30.06.07
EUR
30.06.06
EUR
-6680
-498833
1165
-532290
3339
-709775
1658
-757380
4750
-497668
-533646
-708117
-759310
III. Cash flow from financing activities
Items
1
2
3
4
5
6
III
Paid in capital stock
Income and expenses from long-terms loans
Expenses for repayment of loans
Expenses for repurchase of leased fixed assets
Dividends paid out
Expenses for purchase of short-term securities (bill of
exchange)
NET CASH FLOW FROM FINANCING ACTIVITIES
30.06.07
LVL
-438495
-9482
-1500
-1600000
-2049477
30.06.06
LVL
10000
-848
-408646
-399494
30.06.07
EUR
-623922
-13492
-2134
-2276595
-2916143
30.06.06
EUR
14229
-1207
-581451
-568429
12
IV. Summary of cash inflow and outflow
Items
I
II
III
Net cash flow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities
Result of fluctuations of currency exchange rates
Net cash flow of the accounting period
Cash and its equivalents in the beginning of the
accounting period
Cash and its equivalents at the end of the accounting
period
30.06.07
LVL
2156380
-497668
-2049477
-40452
-431217
440611
30.06.06
LVL
-498160
-533646
-399494
-75608
-1506908
1941530
30.06.07
EUR
3068251
-708117
-2916143
-57558
-613567
626933
30.06.06
EUR
-708818
-759310
-568429
-107580
-2144137
2762548
9394
434622
13366
618411
13
JSC “RER” STATEMENT OF CHANGES OF CONSOLIDATED SHAREHOLDERS’ EQUITY
FOR SIX MONTHS OF 2007, LVL
Kind of changes
1. Balance as of 31.12.2005
2. Income or loss of the accounting period
that is not included in the profit and loss
account:
a) decrease of fixed asset value
3. Adjustments
4. Income or loss of the accounting period in
accordance with the profit and loss account
5. Balance as of 30.06.2006
6. Balance as of 31.12.2006
7. Income or loss of the accounting period
that is not included in the profit and loss
account:
a) decrease of fixed asset value
8. Adjustments
9. Income or loss of the accounting period in
accordance with the profit and loss account
10.Balance as of 30.06.2007
Share
capital
5799005
Reserve for
revaluation
of long-term
investments
165909
Other
provisions
Undivided
profit
192922
408145
-1160
5799005
5799005
164749
161271
159408
6565981
-1160
192922
192922
-405640
-262741
-405640
-262741
-260236
1604724
5896440
7757922
-1863
5799005
Total
-1863
192922
-81779
1825664
-81779
1825664
3348609
9499944
JSC “RER” STATEMENT OF CHANGES OF CONSOLIDATED SHAREHOLDERS’ EQUITY
FOR SIX MONTHS OF 2007, EUR
Kind of changes
1. Balance as of 31.12.2005
2. Income or loss of the accounting period
that is not included in the profit and loss
account:
a) decrease of fixed asset value
3. Adjustments
4. Income or loss of the accounting period in
accordance with the profit and loss account
5. Balance as of 30.06.2006
6. Balance as of 31.12.2006
7. Income or loss of the accounting period
that is not included in the profit and loss
account:
a) decrease of fixed asset value
8. Adjustments
9. Income or loss of the accounting period in
accordance with the profit and loss account
10.Balance as of 30.06.2007
Share
capital
8251241
Reserve for
revaluation
of long-term
investments
236067
Other
provisions
Undivided
profit
274503
580738
-1650
8251241
8251241
234417
229468
226817
9342549
-1650
274503
274503
-577174
-373847
-577174
-373847
-370283
2283316
8389878
11038528
-2651
8251241
Total
-2651
274503
-116360
2597686
-116360
2597686
4764642
13517203
14
APPENDICES
APPENDICES TO THE CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR SIX MONTHS 2007
Note No. 1 - Net turnover
Country
Latvia
Estonia
Russia
Lithuania
Germany
Great Britain
Ukraine
Sweden
Kazakhstan
Byelorussia
Total
30.06.07,
LVL
5572971
3010
1240423
4614
424
4509656
1176868
31960
30.06.07,
EUR
7929624
4283
1764963
6565
603
6416662
1674532
45475
30.06.06,
LVL
2430654
1101275
706446
2206
30.06.06,
EUR
3458509
1566973
1005182
3140
1438949
39892
8167
2047440
56761
11621
20386
12560312
29007
17871714
5727589
8149626
30.06.07,
LVL
2846857
645690
4916087
313483
89866
30.06.07,
EUR
4050713
918734
6994962
446046
127868
30.06.06,
LVL
1124788
264313
2430885
207119
65578
30.06.06,
EUR
1600429
376084
3458838
294704
93309
29065
45409
121375
9007832
41356
64611
172700
12816990
41547
340231
88008
4562469
59116
484105
125224
6491809
30.06.07,
LVL
116541
243
30.06.07,
EUR
165823
346
12704
18076
1864
624
131976
2652
888
187785
30.06.06,
LVL
37415
124
3339
72
12550
34
13
1160
3293
58000
30.06.06,
EUR
53237
176
4751
102
17857
48
19
1651
4686
82527
30.06.07,
LVL
9818
47963
72195
30.06.07,
EUR
13970
68245
102724
30.06.06,
LVL
158
33380
81302
30.06.06,
EUR
225
47495
115682
3048
39560
4337
56289
17813
64445
5305
25346
91697
7548
28507
2945
40562
4190
103
147
Note No. 2 - Production costs of the goods sold
Items
Wages and salaries of personnel
Social security contributions
Costs of materials
Energy resources
Depreciation and amortization of fixed assets and
intangible investments
Travelling expenses
Repair expenses
Other expenses
Total
Note No. 3 – Other income from business activities
Items
Profit from other disposal (materials, lease)
Fixed asset liquidation residuals, materials
Disposal of fixed assets
Deposited wages and salaries
Income connected with maintaining social sphere
Income from fluctuations of currency exchange rates
Income from currency conversion
Decrease of revaluation of fixed asset reserve
Other income
Total
Note No. 4 - Other expenses of business activities
Items
Penalty and contractual penalties
Expenses connected with maintaining social sphere
Expenses not connected with business activities of the
company
Loss from fluctuations of currency exchange rates
Loss from currency conversion
Fixed asset liquidation
Tax surcharge
Write-off of bad debts
Loss of the previous year
15
Other expenses
Total
115
204151
164
290481
99
202605
141
288281
30.06.07,
LVL
95090
8618
103708
30.06.07,
EUR
135301
12262
147563
30.06.06,
LVL
12847
10138
22985
30.06.06,
EUR
18280
14425
32705
Note No. 5 – Other taxes
Items
Real estate tax for buildings (constructions)
Real estate tax for buildings for land
Total
APPENDICES TO THE CONSOLIDATED BALANCE SHEET FOR SIX MONTHS OF 2007
Note No. 6 - Debtors
Items
1. Debts of buyers and customers (line code 300)
2. Debts of associated companies (line code 320)
3. Other debtors (line code 330), including
- personnel accounts receivable
- taxes paid in advance
- overpaid taxes
- advance payments for services
- VAT of outstanding invoices
- others
4. Deferred expenses
Total
30.06.07,
LVL
5980798
137
179948
16819
47120
68652
44263
30.06.07,
EUR
8509909
195
256042
23931
67046
97683
62981
4401
1157
8767303
30.06.06,
LVL
213767
18
155215
3773
5411
91767
45321
5063
3880
30560
399560
30.06.06,
EUR
304163
26
220851
5368
7699
130573
64486
7204
5521
43483
568523
3094
813
6161696
30.06.07,
LVL
85
9309
9394
30.06.07,
EUR
121
13245
13366
30.06.06,
LVL
24652
409970
434622
30.06.06,
EUR
35077
583334
618411
Note No. 7 – Cash
Items
Cash office
Settlement account
Total
Note No. 8 – Shareholders’ equity
See “Statement of changes of consolidated shareholders equity for six months of 2007”, page 13.
Note No. 9 – Share capital (Capital stock)
The total number of JSC “RER” shares – 5799005 pieces of par value LVL 1.00.
Capital stock amounts to LVL 5799005, which is divided into 5799005 ordinary shares with voting right.
Items
Residents, including
- natural personas
- legal persons
Non-residents, including
- Russia
- Canada
- USA
- British Virgin Islands
Total
30.06.07,
LVL
199525
174322
25203
5599480
2454978
5119
1046461
2092922
5799005
30.06.07,
EUR
283899
248038
35861
7967342
3493118
7284
1488980
2977960
8251241
30.06.06,
LVL
199525
174322
25203
5599480
1011027
5119
1527778
3055556
5799005
30.06.06,
EUR
283899
248038
35861
7967342
1438562
7284
2173832
4347664
8251241
16
Note No. 10 - Creditors
Items
1. Long-term creditors (line code 740).
(Loan, credit line, leasing contracts; deferred tax
liabilities)
2. Loans from credit institutions (line code 770)
(Loan contract, credit line contract)
3. Other loans (line code 780)
(Leasing contracts)
4. Advance payments received from buyers (line code
790)
5. Debts to suppliers and contractors (line code 800)
6. Debts to associated companies (line code 830)
7. Tax payable (line code 840)
8. Other creditors (line code 850), including
- wages and salaries payable
- alimony
- settlements with personnel for debts
- others
Unpaid dividends of previous years (line code 880)
Total
30.06.07,
LVL
1751427
30.06.07,
EUR
2492056
30.06.06,
LVL
517
30.06.06,
EUR
736
5605494
7975899
125772
178957
3514
5000
10896
15504
364365
518445
1014902
3270
357043
419428
416151
1290
1967
20
1500
9289732
1444075
4653
508026
596793
592130
1836
2799
28
2134
13218097
276867
1699
147713
178249
175970
980
1193
106
1453
974377
393946
2417
210177
253625
250383
1394
1697
151
2067
1386413
17
PRINCIPLES OF DRAWING UP OF CONSOLIDATED FINANCIAL STATEMENTS
FOR SIX MONTHS OF 2007
Substantiation for preparation of financial statements
Financial statements are prepared in accordance with the Republic of Latvia Law on Accounting and
Law on Consolidated Annual Accounts, as well as in accordance with basic requirements of the International
Accounting Standard 27. Financial statements provide a true and clear idea of assets, liabilities and financial
status of the companies involved in consolidation.
Financial statements are prepared on the grounds of a concept of continuation of activities.
Profit and Loss account is drawn up by cost-of-sales accounting.
Cash flow statement is prepared by indirect method.
In comparison with 2006, a method of evaluation of materials and raw materials was changed at JSC
“RER”. From 01 January 2007, materials and raw materials are evaluated using FIFO method.
Monetary unit and revaluation of foreign currencies
In the financial statements, as a monetary unit and measure of value, there is used the Republic of
Latvia monetary unit – lats. Profit or loss received as result of fluctuations of currency exchange rates is
presented in the profit and loss account for the respective period.
Data of financial statements, which are presented in euro, are recalculated using the exchange rate
stated by the Bank of Latvia on 30.06.2007: 1 EUR – 0.702804.
Fixed assets and intangible investments
Fixed assets and intangible investments are presented in the balance sheet by depreciated cost.
Depreciation and amortisation of fixed assets and intangible investments is calculated by straight-line
method.
For calculation of depreciation of fixed assets, there are used the following rates:
Buildings, constructions
1.1 – 1.9 %
Equipment and machinery
2 – 20 %
Other fixed assets and inventory
10 – 50 %
Depreciation of land is not calculated.
Inventories
Remaining balance of raw materials and materials is evaluated by purchase cost value using FIFO
method.
Inventory of law value is entered by purchase cost value and is written off 100% as expenses after
putting into operation.
Remaining balance of finished products and unfinished products are evaluated by cost of production.
Determination of companies to be involved in consolidation
“Ražošana Enerģētika Zinātne” LTD. is not included in consolidation, because on 30.06.2007, JSC
“RER” has no decisive influence in accordance with liquidation of “Ražošana Enerģētika Zinātne” LTD.
“Lovato - REZ” LTD. is the company governed jointly. There is possibility to include this company in
consolidation by performing proportional consolidation or applying equity method.
“Lovato – REZ” LTD. equity consolidation
There is added up only a proportional concern part 50% of assets, liabilities, income, and expenses.
Capital stock
Reserve for revaluation of longterm investments
Other provisions
Profit of the accounting period
115200 * 0.50 = 57600
31984 * 0.50 = 15992
1168 * 0.50 = 584
- 5071 * 0.50 = - 2535.50
Debit of
account,
LVL
3110
3130
Amount,
LVL
3360
584
Credit of
account,
LVL
Amount,
LVL
57600
15992
1330
59927
Shareholders’ equity
143281 * 0.50 = 71640.50
74176
59927
Negative consolidation
74176 – 59927 = 14249
3900
14249
difference
Negative consolidation difference was included in the profit and loss account according to part 3 of clause 18 of the Law
on Consolidated Annual Accounts.
JSC “RER” Chairman of the Board
G. Uspenskis
18
21 August 2007
19
STATEMENT OF MANAGEMENT RESPONSIBILITY
We recognize that unaudited consolidated financial statements for six months of 2007 were prepared
true. Information presented in the financial statements is true and does not give a misleading idea of the
concern assets and liabilities.
JSC ”RER” Chairman of the Board
21 August 2007
G. Uspenskis