HÜVITUSFOND

ANNOUNCEMENT

08.01.99

 

 

1998 I HALF YEAR AUDITED FINANCIAL RESULTS OF HÜVITUSFOND

 

The 1998 I half year interim reports are audited by 

PriceWaterhouseCoopers. Among the rest, the audit also comprised 

the critical analysis of the accounting principles managerial 

accounting evaluations used on compilation of the accounting 

interim reports. 

 

In course of the audit, an information concerning the annulment 

of the stock forward transactions made between Hüvitusfond and 

Eesti Ühispank in 1997 was disclosed, about the circumstances of 

which the parties have different opinions. The above-mentioned 

fact and change in the Management Board prolonged the procedure 

of auditing the interim reports. The new Management Board started 

to fulfill their obligations after the date of the interim 

report, due to which the balance confirmation letters were sent 

to all parties known to have conducted significant business 

transactions with the fund during the last year and a half, in 

order to confirm the correspondence of the financial results 

reflected in the interim reports with reality. Although not 

everyone replied to the letters of balance confirmation, in the 

Management Board’s respective opinion, the 1998 I half year 

interim financial statements of Hüvitusfond give a true and fair 

view of the fund’s financial position and results of its 

operations in accordance with the International Accounting 

Standards. 

 

As of the I half year of 1998, the balance sheet volume of 

Hüvitusfond was 1,572 billion EEK. During the first half year, 

the balance sheet volume decreased by 210 million EEK (11.7 % 

decrease).

 

On the assets side of the balance sheet, the shares and other 

securities decreased the most (by 135.3 million EEK), being at 

the level of 378.4 million EEK at the end of the period. 

Investments in shares and units traded are reflected on the 

balance sheet in the acquisition or market value, depending on 

which one is lower. On the liabilities and owners’ equity side of 

the balance sheet, current debt obligations decreased by 98.9 

million EEK, when compared with the year 1997. As of the first 

half year of 1998, the fund has received 1,139 billion EEK from 

the privatization transactions. One Hüvitusfond bond issuance in 

the total volume of 42.9 million EEK took place during the 

period. The total amount of the bonds issued was 418 million EEK. 

The net worth of the fund decreased by 155.2 million EEK during 

the period and was 771.7 million EEK by the end of the period.

 

The 1998 I half year total revenues of the fund amounted to 100,2 

million EEK, of which the interest income amounted to 75.9 

million EEK (75.7%). The income from investments totaled 23.1 

million EEK (23 %) and other operating income gave a revenue of 

1,2 million EEK. The total expenses of the same period amounted 

to 284.6 million EEK. the interest expenses amounted to 32.3 

million EEK (13,1%). During the first half year, the fund earned 

a profit from the interests of 43.5 million EEK. Compared with 

the same period last year, the interest income increased by 35.8 

million EEK (increase of 22.2 %). The investment expenses 

amounted to 239.2 million EEK (84,0 %). The largest item in the 

investment expenses account was the discount on the current 

investments (incl. shares traded) in the amount of 187.9 million 

EEK. The investment expenses account reflects completely the 

potential loss from the forward transactions made with Eesti 

Ühispank in 1997 (the shares as the objects of the transaction 

are reflected in the market prices). The administrative expenses 

were 9.5 million EEK (3,3%), increasing by 5 % compared with the 

first half year of 1997.

 

The 1998 I half year loss from the operations was 184.4 million 

EEK. The value of the fund decreased by 3.5 million EEK. The net 

worth of the fund in the amount of 771.7 million EEK is comprised 

of the difference between share capital and nominal value of the 

bonds issued, plus the accumulated result from the operations. 

 

 

Andres Laisk

Tel. +372 665 1812