JSC Latvijas kuģniecība                       25.05.2005



LASCO RECEIVES AUDITORS’ REPORTS



On 24 May 2005 JSC Latvijas kuģniecība (Latvian Shipping Company - 

LASCO)received Auditors’ Reports on Consolidated Financial Statements 

for the year ended 31 December 2004 of LASCO and its subsidiaries 

signed by SIA Moore Stephens Riga Ltd and Moore Stephens 

(Great Britain). 



The information included in the financial statements for 2004 

indicates that during 2003 and 2004 several LASCO subsidiaries 

entered into a significant number of time charters with charterers 

on unusual terms and below market value. Although the management 

and the auditors were not able to determine the ownership of 

these charterers, the nature of the transactions may indicate 

that they were with related parties. 



In accordance with the report issued by Moore Stephens (Great Britain), 

had the transactions been entered into at market values the LASCO 

profit for 2003 and 2004 would have increased by U.S.$ 5 million and 

U.S.$ 30 million respectively.



Also the dry-docking and repairs transactions entered into during 2003 

and 2004 by several LASCO subsidiaries through an intermediary company 

may also indicate that they were with related parties. During the period 

mentioned the ships repairs in amount of U.S.$ 22 millions were carried 

out. As no original documentation in respect of these transactions were 

available to both the management and the auditors it was not possible 

to determine whether they have been entered into at market values. 



"Despite the fact that the financial position of LASCO improved during 

2004, the Auditors’ Reports acknowledges once again that the preceding 

Management Board was not acting as a reasonably prudent and careful manager 

as it is provided for by the Commercial Law. Therefore there is no doubt 

that the decision made on 14 February 2005 by the Supervisory Council on 

the dismissal of the members of the Management Board Mr. Valērijs Godunovs, 

Mr. Aivars Enkuzens and Mr. Alvis Akmens was grounded," believes 

Mr. Uldis Pumpurs, Chairman of LASCO Supervisory Council.  



LASCO Board of Directors is determined to continue the activities commenced 

to increase the efficiencies of the chartering and vessels technical 

management by reducing the volumes of services supplied by intermediary 

companies, which will not only enable LASCO to ensure a complete 

supervision of the transactions carried out, but also influence positively 

the use of the Group’s financial resources.





For detailed information:

Marita Ozolina-Tumanovska

Head of PR Departament

Phone: +371 7020120, 9287169

E-mail : ozolina@lsc.riga.lv