OREANDA-NEWS. November 30, 2010. JSC Ventspils nafta (VN) has issued an unaudited financial report for nine months of 2010. The financial results of VN associated company JSC Latvijas Kugnieciba (LK) in the 9 months of 2010 is not available for VN as of the date of preparing this these financial statements, therefore the result from investment in the associate for the 9 months of 2010 is presented on the basis of the published unaudited financial statements of LK for the first half-year period of 2010. The consolidated turnover of VN in the first 9 months of 2010 reached LVL 40.1 million and net profit reached LVL 3.3 million before non controlling interest. However due to the losses reported by LK for the first months of 2010 the result attributable to the equity holders of the parent company is a loss of LVL 6 hundred thousand. Despite this the Ventspils nafta group achieved a net increase in cash resources of LVL 10 million.

In the reporting period, the Management Board has succeeded in substantially reducing the administrative cost on the holding company. Administrative expenses in the holding company have decreased from LVL 1.67 million in the first 9 months of 2009 to LVL 0.9 million in the corresponding period of 2010.

After the end of this accounting period, LK convened an extraordinary shareholders’ meeting on October 8, 2010 included in the agenda was the election of a new Supervisory Council. The planned extraordinary shareholders’ meeting was not held and was postponed to December 17, 2010. In the course of the third quarter of 2010, the management of VN has had growing concerns over LK using its financial resources uneconomically and selling assets to third parties, thus causing substantial losses to LK. In order to limit the potential losses of VN as much as possible in relation to investment into LK shares, VN has pursued a claim in court against SAGEWOOD TRADING INC, NILARDA HOLDINGS LIMITED and LK for the annulment of transactions in the shares of “NAFTA INVEST” Ltd and the annulment of the respective resolutions of the Management Board and Supervisory Council of LK. Also the law office “Liepa, Skopiтa /BORENIUS” has been authorized to initiate proceedings against members of the Management Board and Supervisory Council of LK for recovery of losses. The management of VN has also turned to law enforcement bodies, asking them to evaluate the actions taken by officials of LK in relation to the recently concluded transactions and management of LK.

After the end of this accounting period, a general shareholders’ meeting of VN was held on November 11, 2010. In this meeting, the annual report of VN for 2009 which had been prepared in accordance with the Law on Annual Accounts of the Republic of Latvia was approved, the profit of 2009 was transferred to other reserves, the auditing company “Ernst & Young Baltic” Ltd was elected for audit of the annual reports for 2010, and an audit committee of 3 people was elected.