Our daughter companies Apex Investments SIA (Apex) and Neatkarīga Patentu Aģentūra SIA (NPA) have borrowings and issued loans have variable interest rates. Apex and NPA had entered into an interest rate swap with R.B. Management SIA (RBM). This caps the portfolio’s interest rate exposure at 3.97% plus bank margin. The swap agreement was automatically renewable annually, with Apex and NPA allowed a one time a year exit on 15 December 2009. Apex and NPA exercised our right to exit. RBM threatened litigation to settle the negative value of the SWAP. After an extended period of negotiations a settlement was agreed 5 July 2010. The settlement states that Apex and NPA would pay their share of the outstanding negative value. In return RBM agreed to convert the debt into a 25 year long term loan interest only. The result is increased liabilities on the balance sheets of Apex and NPA, but no current impact to cash flow.

 
When reporting the unaudited accounts for 2010 dated 28 February 2011 to the OMX, Acme management had failed to inform the accounting department of the July 2010 settlement, therefore the loss on the unaudited statements was erroneously reported as 189 952 LVL. The true loss after taking into consideration the additional expense resulting from the settelment of the SWAP and other less relevant items is in fact 698 130 LVL.

David DeRousse

Acme Corporation

Alona Kuzmina
office manager
67333504/alena@rbm.lv