Wood Measurement Seminar Riga November 13:th 2007

1. Wood Measurement Seminar RigaNovember 13:th 2007 Jānis Buļs Managing Director, VMF Latvia SIA “VMF Latvia today”

2. Fact about VMF Latvia Year when established – 1998 Owners - Latvijas Kokmaterialu Izmerisanas un Uzskaites Vadiba Ltd. / VMF Obera 50% / 50% Personnel – 40 persons Turnover – 2006 – 451 th. Ls Measurement volume – 2006 – 2,9 million m3 Business idea – The Company operates in the sphere of timber measurement and stock-taking and provides services to the parties working in the Baltic round timber market. Services should be qualitative, neutral, based on gained experience and knowledge and results of scientific research.

3. VMF Qbera Association of Latvian Timber Sellers Association of Latvian Timber buyers 50% 50% Management of Latvian wood measuring and accounting, Ltd. 50% 50% SIA VMF Latvia

4. VMF Latvia vision Company have to be the leading (service, volume, technology, people) company in Latvia in the wood measurement market.

5. Mission of VMF Latvia VMF Latvia is an independent company providing services oriented at: Correct and rational evaluation of (mainly) forestry raw materials and development of such evaluation procedure. Development and provision of high-quality services to any market participant.

6. VMF Latvia Structure(2007) Managing director – Jānis Buļs Measurement Manager Ingus Donis Accounting Manager Gunta Ziemele Quality control Manager Aldis Ladusāns Operative scalars 2 persons Wood accoutant 1 person Control scalar 2 persons Talsi “Vika Wood” 9 persons “Latvijas Finieris” 1 person Rīga ,,Rīnūži,, 4 persons Riga ,,Krievu sala,, 3 pesons Rīga ,,Jaunmilgrāvis,, 4 persons Rīga ,,Bolderāja,, 4 persons Ventspils 4 persons Liepāja 2 persons

7. Activity Measurement service Measurement supporting functions Participation in researches and working groups developing measurement rules Sawlogs Audit Pulpwood Pulpwood Control measurement Fuelwood Measurement equipment testing Pulpchips Personal teaching Growing trees Consultations

8. Measurement rules and methods • Rules • VMR 1/99 • LVS 2003 • GOST • Agreement between the parties • Methods • Stacked measurement • Individual measurement • Methods to improve measurement precision • Collective method • Correction of timber volume • Volume correction for supplier

9. Principles for improvement of measurement precision Personnel training Measurement equipment (control system, compliance with international standards on measurement units) Precise description of each operation Selective measurement Volume calculation and stock-taking software (VMF Agent, Logs, VMF Agent warehouse) External measurement control Since August 2003 VRM - Since January 2006 LATAK ISO 17025 according to 82:2003 -T-296

10. What should measurement service receiver take into account? No need to worry about: Personnel High-precision measurement equipment Approval of measurement results elsewhere Correctness of volume calculation Systematic measurement control Sending of measurement data to another party to the transaction Observance of measurement methods and disclosure thereof to another party, if so necessary

11. Opportunities: Consultants on measurement and stock-taking Expert’s opinion on changing measurement methods Professional data collection for research or analysis Seller can participate in measurement procedure on the same conditions as a buyer Measurement and stock-taking fees divided into equal parts Lower measurement and stock-taking costs due to high-intensity procedures and up-to-date software.

12. Should remember about: Precise contract provisions on measurement Issue of instruction in writing and approval thereof by the measurement organization, if measurement provisions were changed Payment of invoice for measurement services

13. Should take into account that: Measurement specialist will use and recommend the latest and best methods in the sphere of measurement and stock-taking It will be impossible to directly instruct a measurement specialist Changed measurement provisions and methods will not be concealed from another party Selective measurement due to additional logistics operations Measurement specialist will not make measurements if the agreed method does not comply with those approved or gives incorrect results It will be impossible to obtain confidential information on business rival through the measurement organisation

14. Measurement control benefits Unique situation in Latvia No financial risk Real timber prices Lower costs : personnel transport provisions development software and stock-taking Quality-based measurement after signing a contract Best measurement practice without additional investments

15. VMF Latvia advantage high competence in the field of activity operating quality system and measurement methods educated and good staff strong quality securing system connection with VMF Qbera and experience in wood measurement developed IT solutions and connection with VIOL flexible and mobile job organization all biggest wood trading companies more or less is our customers