Tallinn, Estonia, 2011-02-22 08:30 CET (GLOBE NEWSWIRE) -- 2010 12 months and IV quarter unaudited interim report
MANAGEMENT REPORT
General information
The company was formed after the demerger from AS Järvevana, as a result of which the complete set of assets related to the business activities of the construction company was separated and transferred to AS Merko Ehitus, including all concluded construction contracts, subcontracts and supply contracts, machinery, equipment and employees, all professional know-how and cash flows from uninterrupted, continuous economic activities, except for liabilities arising from the criminal case no. 05913000055, including compensations for damage, penalties and other payables, legal expenses and liquid assets to cover potential liabilities arising from the criminal proceedings in the amount of EUR 16 million (EEK 250 million). The company does not have ordinary economic activities and the only objective of its activities is to protect the interests of the company and shareholders in the long-lasting criminal proceedings related to the land swap.
Operating activities
The public limited company does not have active business operations. The Company’s only income is generated from finance income earned on the investment of the Company’s liquid funds. Between 01.01.2010 and 31.12.2010, AS Järvevana earned finance income in the amount of EUR 0.21 million (EEK 3.3 million). The most significant cost item was the legal expenses related to the “land swap” criminal case; these expenses constitute 38% of the general administrative costs in 2010 12 months. EUR 13.4 million (EEK 209 million) of the assets constitutes the claim against AS Merko Ehitus from cooperation agreement (http://www.merko.ee/upload/File/Restruktureerimise%20dokumendid/Koost%F6%F6leping%20ENG.pdf). As of 31 December 2010, the sole member of AS Järvevana’s Management Board is Toomas Annus. The company’s operation does not have a seasonal and cyclic nature.
At 3 April 2009, the Public Prosecutor’s Office submitted a statement of charges (dated 31.03.2009) against AS Järvevana and Toomas Annus in criminal case no. 05913000055 concerning the land swap (http://www.nasdaqomxbaltic.com/market/?pg=news&news_id=232810).
The trial over the land swap charges started on 12 November 2009, at the Harju County Court. For an overview of the trial, please visit: http://www.nasdaqomxbaltic.com/market/?pg=details&instrument=EE3100003559&list=3&tab=news&news_id=238437. In the statement of charges, AS Järvevana has been accused of five counts of bribery. The proceedings are conducted at the Harju County Court. The evidence required to substantiate the charges of bribery consists of three elements and the absence of even one element invalidates the charges of criminal offence. The three elements to be proved are: (i) giving, or promising to give, a tangible asset or benefit to a public official; (ii) an illegal act by a public official for the benefit of the bribing party; (iii) a correlation between the first and second elements, i.e. providing a benefit to a public official for a favourable act. In case of AS Järvevana, it also needs to be proved that (i) the offence was committed by a senior official of the legal entity, and that (ii) the offence was committed in the interests of the legal entity. AS Järvevana has not conducted any of the land swap transactions described in the statement of charges. Instead, these transactions were made – and the hypothetical benefits were gained – by the company’s subsidiaries, who are independent legal entities and who are not being prosecuted. AS Järvevana, however, has never swapped any pieces of land, also according to the charges. It is also clearly obvious that the activities cannot have been illegal since they are allowed under section 19 of the Nature Conservation Act – this calls the bribery charges into question.
As of April 8th 2010, the court has heard approximately 80 of the prosecution’s witnesses and none of the witnesses have given any evidence on either promising or giving a bribe or involvement in illegal activities. The Prosecutor’s Office has not questioned any of the prosecution’s witnesses about circumstances, which are construed as a part of subject of proof. Prosecutor’s witnesses have, without an exception, given only negative answers to the relevant questions, asked by the court and defendants. After making a break for summer, the proceedings in a criminal matter continued on October 5th 2010 in Harju County Court. The Court had scheduled 13 days for hearings to take place from October through December; the last of the prosecution’s witnesses was heard during this interval. All the documented evidence, available to the Prosecutor’s Office, has been disclosed. Therefore, the Prosecutor’s Office has finished the presentation of its evidence materials. We have come to a conclusion that none of the evidence, presented by the Prosecutor’s Office, has proven either promising or giving a bribe or unlawfulness of any transactions or the equivalency principle, mentioned above. The schedule of hearings of the trial in 2011 has been planned until June 22nd 2011, dozens of prosecution’s witnesses will be heard during that period and large number documented evidence, presented by the defendant, will be reviewed. According to the assumptions, court of the first instance will make a ruling in 2011. The trial process, however, may turn out to be very long, as there are three instances in Estonian court system and it is also possible to appeal the European Court of Justice.
The company considers the brought charges to be groundless. The Supervisory Board and Management Board of AS Järvevana are convinced that the activities of the company and its governing bodies have been conducted properly and in conformity with the laws of the Republic of Estonia, and are also able to supply relevant proof in the court.
Share
The shares of AS Järvevana have been quoted in the Baltic Secondary List of the NASDAQ OMX Tallinn Stock Exchange since September 15th 2009. In the course of the division of AS Merko Ehitus the name of the company was changed to AS Järvevana and since 04.08.2008, the shares of AS Järvevana are bought and sold under the name JRV1T. In 2010 716 transactions with the shares of Järvevana was performed in the course of which 1.1 million shares were traded and the total monetary value of transactions was EUR 0.4 million (EEK 6.4 million). The lowest share price was EUR 0.28 (EEK 4.38) and the highest price was EUR 0.41 (EEK 6.42) per share. The closing price of the shares as of 30.12.2010 was EUR 0.36 (EEK 5.63).
STATEMENT OF COMPREHENSIVE INCOME 12M 2010
unaudited, in thousand EEK and EUR
| EEK | EUR | |||
|
2010 12 months |
2009 12 months |
2010 12 months |
2009 12 months |
|
| Administrative and general expenses | (3 561) | (9 273) | (228) | (593) |
| Other operating expenses | (3) | -- | (0) | -- |
| Operating profit (loss) | (3 564) | (9 273) | (228) | (593) |
| Financial income and expenses | 3 270 | 7 171 | 209 | 459 |
| incl. other financial income | 3 272 | 7 174 | 209 | 459 |
| other financial expenses | (2) | (3) | (0) | (0) |
| Net profit (loss) for current period | (294) | (2 102) | (19) | (134) |
| incl. equity holders of the parent | (294) | (2 102) | (19) | (134) |
| Comprehensive income | (294) | (2 102) | (19) | (134) |
| incl. equity holders of the parent | (294) | (2 102) | (19) | (134) |
|
Earnings per share for profit attributable to the equity holders of the parent (basic and diluted, in EEK and EUR) |
(0,02) | (0,12) | (0,00) | (0,01) |
STATEMENT OF COMPREHENSIVE INCOME Q4 2010
consolidated, unaudited, in thousand EEK and EUR
| EEK | EUR | |||
|
2010 IV quarter |
2009 IV quarter |
2010 IV quarter |
2009 IV quarter |
|
| Administrative and general expenses | (844) | (1 284) | (54) | (82) |
| Other operating expenses | -- | -- | -- | -- |
| Operating profit (loss) | (844) | (1 284) | (54) | (82) |
| Financial income and expenses | 881 | 1 237 | 56 | 79 |
| incl. other financial income | 881 | 1 237 | 56 | 79 |
| other financial expenses | -- | -- | -- | -- |
| Net profit (loss) for current period | 37 | (47) | 2 | (3) |
| incl. equity holders of the parent | 37 | (47) | 2 | (3) |
| Comprehensive income | 37 | (47) | 2 | (3) |
| incl. equity holders of the parent | 37 | (47) | 2 | (3) |
|
Earnings per share for profit attributable to the equity holders of the parent (basic and diluted, in EEK and EUR) |
0,00 | (0,00) | 0,00 | (0,00) |
STATEMENT OF FINANCIAL POSITION AS OF 31.12.2010
unaudited, in thousand EEK and EUR
| EEK | EUR | |||
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| ASSETS | ||||
| Current assets | ||||
| Cash and cash equivalents | 19 809 | 30 425 | 1 266 | 1 944 |
| Short-term deposits | 20 341 | 10 000 | 1 300 | 639 |
| Trade and other receivables | 209 696 | 209 890 | 13 402 | 13 415 |
| Total current assets | 249 846 | 250 315 | 15 968 | 15 998 |
| Non-current assets | ||||
| Property, plant and equipment | 23 | 40 | 1 | 2 |
| Total non-current assets | 23 | 40 | 1 | 2 |
| TOTAL ASSETS | 249 869 | 250 355 | 15 969 | 16 000 |
| LIABILITIES AND EQUITY | ||||
| Current liabilities | ||||
| Trade and other payables | 338 | 530 | 22 | 34 |
| Short-term provisions | 17 500 | 17 500 | 1 118 | 1 118 |
| Total current liabilities | 17 838 | 18 030 | 1 140 | 1 152 |
| Total liabilities | 17 838 | 18 030 | 1 140 | 1 152 |
| Equity | ||||
| Share capital | 177 000 | 177 000 | 11 312 | 11 312 |
| Statutory reserve capital | 17 700 | 17 700 | 1 131 | 1 131 |
| Retained earnings | 37 331 | 37 625 | 2 386 | 2 405 |
| Total equity | 232 031 | 232 325 | 14 829 | 14 848 |
| TOTAL LIABILITIES AND EQUITY | 249 869 | 250 355 | 15 969 | 16 000 |
Toomas Annus
Member of Management Board
+372 6 805 400
toomas.annus@merko.ee
