According to the unaudited consolidated report of JSC “Ventspils Nafta” of 2006, consolidated net turnover of JSC “Ventspils Nafta” Group reached LVL 69.2 million in 2006, but net profit - LVL 7.4 million, which is 1.6 million lats more than planned. Turnover level of JSC “Ventspils Nafta” in 2006, which is lower than planned, was influenced by the unstable and practically unpredictable situation in the railway transport sector and in relation to “”Ventspils Nafta”” Terminals” Ltd, the subsidiary of JSC “Ventspils Nafta” and crude oil and petroleum product transshipment company, not only depends on high railway tariffs politically defined by the Russian Federation outside the ports of Russia, but also on the high oil product import duty and situation in the market in general. Although not taking into consideration the negative externals “”Ventspils Nafta” Terminals” Ltd has operated well during the reporting period making profit of more than LVL 0.6 million, we can expect that company's results in 2007 will depend on the difficult situation in the sector of oil product railway transport. At the same time we should stress that the managers of “”Ventspils Nafta” Terminals” Ltd actively participating in introduction of new kinds of services in 2006 have significantly fostered receiving of crude oil and petroleum products from sea. In 2006, “”Ventspils Nafta” Terminals” Ltd transshipped 5.7 million tons of crude oil and petroleum products in total. Crude oil and petroleum products delivered to the terminal by sea reached 1.24 million tons of the total transshipment amounts, which is almost one million tons more than in 2005. The international consortium Vitol, which is the new shareholder of JSC “Ventspils Nafta”, has also approved the opportunity to deliver crude oil and petroleum products by sea on tankers. By the agency of Vitol, the terminal received a substantial amount of oil product cargos from sea already in the autumn of 2006. This cooperation continues also in 2007. Already at the beginning of this year, “”Ventspils Nafta” Terminals” Ltd has successfully started receiving and transshipment of gas oil transported by petroleum product pipelines. It is planned that this kind of service will occupy an important position among terminal's activities in the future. “LatRosTrans” Ltd, another transit company of JSC “Ventspils Nafta” Group and owner and operator of crude oil and petroleum products in the territory of Latvia, operated successfully in 2006 piping more than 14.5 million tons of crude oil and petroleum products and by 6.3% improving results of 2005. At the same time, the reporting period for “LatRosTrans” Ltd became notable with alarming events outside the borders of region respectively influencing the results of JSC “Ventspils Nafta” Group as well. Selling of shares of the Lithuanian company “Mazeikiai Oil” to the Polish company Orlen clearly marked the geopolitical aspects of this sector and continues to influence taking of political and economic decisions in this area for oil pipage from Russia to the Mazeikiai oil refinery in Lithuania which was stopped in July of 2006. In correspondence with explanations provided by Russian institutions, such a situation as if developed because of damage of the oil pipeline Druzhba located in its territory. The managers of the Russian oil pipeline monopoly Transneftj have already announced that oil supply to Lithuania could not be resumed in case of too big repair costs. As oil transport to Lithuania is partly ensured through the pipeline owned by “LatRosTrans” Ltd, the company in the reporting period has reflected single expenditure of LVL 3.6 million related to partial decrease in value of technological assets because of oil pipage to Mazeikiai. This expenditure will not influence results of economic activities of “LatRosTrans” Ltd and JSC “Ventspils Nafta” in the next years. JSC “Preses Nams”, the largest printing concern of the Baltic States and subsidiary of JSC “Ventspils Nafta”, during the reporting period continued introduction of considerable organizational and functional changes started in 2005 in order to reach company's business goals and ensure maximum operational effectiveness. Total production restructuring moving production units from Riga, the capital city of Latvia, to the suburbs unfortunately was impossible in the reporting period for the company had to introduce changes in the technical project of the production unit not only caused by reasonable increase of costs in building industry because of general inflation and the one in particular field, but also by additional requirements in the abovementioned industry, which not always were motivated. During the reporting period, services of JSC “Preses nams” to Latvian customers accounted for 73% of the total amount of services rendered by the company, but export and supply in the European Union reached 27%. Net turnover of JSC “Preses Nams” during the reporting period was negatively influenced by the increasing competition in global printing market - mostly in the segment of book, brochure and image production. However there was a growth in the magazine production segment - amounting to 3% for stapled editions and 8% for magazines with soft cover. Anticipating further development of the company, a strategic development programme of JSC “Preses Nams” until 2011 was worked out in the reporting period and after that planning to double company's operating results in this period. In the next five years, JSC “Preses Nams” is planning to invest several tens of millions of lats in creation of new production units, restoration of the existing technogical equipment and purchase of new technological production equipment. In 2006, the Management Board of JSC “Ventspils Nafta” devoted special attention to issues related to the development of concern's real estate business sphere becoming familiar with opinions of professionals about potential development prospects of real estate owned by the concern at 3, Balasta Dambis in Riga. The abovementioned piece of land is situated in the city centre at a strategically important place in Ķīpsala where administrative and production premises of a printing concern JSC “Preses Nams”, a subsidiary of JSC “Ventspils Nafta”, are located at the moment. These opinions will form a basis, which is planned to be improved in the context of deep city planning analysis of the territory, already making concrete decisions about further prospects of this property and starting all the necessary harmonization works for their implementation in the corresponding institutions in Riga. JSC “Ventspils nafta” For further information, please call Gundega Vārpa (phone number - 7229793) or e-mail to: gundega.varpa@vnafta.lv.