Estonia, Tallinn, 2013-02-27 15:00 CET (GLOBE NEWSWIRE) --
MANAGEMENT REPORT
General information
The company was formed after the demerger from AS Järvevana (former AS Merko Ehitus), as a result of which the complete set of assets related to the business activities of the construction company was separated and transferred to the new 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 16.0 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. As at 31 December 2012, one person was employed by AS Järvevana, its Director Toomas Annus. The company’s activities do not have a seasonal or cyclical nature.
Operating activities
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).
At 12 November 2009, the judicial proceedings concerning the land swap case commenced at Harju County Court.
An overview of the proceedings:
http://www.nasdaqomxbaltic.com/market/?pg=details&instrument=EE3100003559&list=3&tab=news&news_id=238437. In the statement of charges AS Järvevana was charged with five counts of giving a bribe pursuant to § 298 of the Penitentiary Code, and the proceedings in the case were conducted by the Harju County Court, being the court of the first instance. The subject of proof concerning a bribery charge comprises three elements, while the absence of even one of divests the charge of the necessary elements of a criminal offence, namely: (i) promising or giving an official a material reward; (ii) unlawful act committed by an official for the benefit of the person giving the bribe; (iii) equivalence relation between the first and the second elements, i.e. a reward is offered for a beneficial act. Moreover, with regard to AS Järvevana it is necessary to prove that (i) the act was committed by a senior executive of a legal entity, and (ii) that the act was committed in the interest of the legal entity. AS Järvevana has participated in no land swap transactions described in the statement of charges. Such transactions were concluded, and hypothetical benefits might have been received by independent subsidiaries being legal entities, which have not been charged. AS Järvevana, however, has never swapped any land, even in accordance with the statement of charges. Furthermore, it is obvious, that such acts could not have been unlawful, inasmuch as they were permissible under § 19 of the Nature Conservation Act, which rules out the qualification of such act as a bribery. It has been proven (and ascertained by the judgement of the court of the first instance), that more than 180 similar legitimate transactions have been concluded on the same grounds and applying the same procedure by a number of various persons. The statement of charges and the judgement established the absence of damages and the [cause for] a civil action.
On 19 June 2012 was the last court session in the land exchange criminal case at the Harju County Court acquitting Järvevana AS and Toomas Annus in the land exchange criminal case No 1-09-4486, and declaring that the legal aid expenses of AS Järvevana in the sum of EUR 611,810 would have to be paid by the state.
The court resolutely ascertained that AS Järvevana and Toomas Annus have not committed any crimes, all relevant land exchange transactions were legal, and that the Security Police Board and State Prosecutor’s Office have significantly violated the law, the constitution and the European Convention for the Protection of Human Rights and Fundamental Freedoms. The judgement was achieved as a result of a three-year long thorough and immediate proceeding among other things hearing about 120 witnesses. The judgement of acquittal was unanimous with also the tribunal voting for it.
The State Prosecutor’s Office has appealed the judgement of acquittal in land exchange case made in the court of first instance asking for annulment of the acquittal of the Harju County Court and taking a new criminal conviction or, as an alternative, asking for annulment of the decision and sending the case to the court of first instance to reopen the case. Tallinn Circuit Court discussed the appeal of the State Prosecutor’s Office and the response of the defenders in the period from 14 January 2013 to 5 February 2013. The criminal defence counsel of AS Järvevana submitted the court comprehensive propositions of the pleading for the defence emphasising above all the fact that crimes have not been committed referring to secondarily significant procedural violations in the activities of the body conducting pre-trial proceedings and of the State Prosecutor’s Office asking to keep the judgement of acquittal in force. Tallinn Circuit Court will render its judgement in the land exchange court case on 19 June 2013. The judgement of the court of appeal can be appealed to the Supreme Court. Considering the extraordinary volume and complexity of the case, it is not certain whether the effective decision would be taken within the year 2013.
In case of conviction, entry into force of the court judgement and entry in the Punishment Register, the legal risk would be a pecuniary punishment, which pursuant to the Income Tax Act is subject to income tax. The entry into force of the judgement of conviction would also concur with impediments for Järvevana AS in participation in public procurements.
AS Järvevana cites that the principle of the direct procedure is valid in full only in the court of first instance. As a result of a lengthy, thorough and immediate proceeding, the court of first instance came to a unanimous conviction that AS Järvevana and Toomas Annus were not guilty, thereby calling the accusation as a whole into question. The Supervisory Board and the Management Board of Järvevana AS are convinced that the activities of the company and its directing bodies have been correct and in compliance with the legislation of the Republic of Estonia.
Share and shareholders
The main shareholders of AS Järvevana as at 31.12.2012
| Number of shares | % of shares | |
| AS Riverito | 12 742 686 | 71,99% |
| ING Luxembourg S.A., clients | 963 376 | 5,44% |
| Tenlion OÜ | 237 674 | 1,34% |
| Andersson Investeeringud OÜ | 206 442 | 1,17% |
| Ridge Capital AS | 195 599 | 1,11% |
From 15.09.2009, the shares of AS Järvevana are included in the secondary list of NASDAQ OMX Tallinn Stock Exchange. During the demerger of AS Merko Ehitus, the company’s business name was changed to AS Järvevana and from 04.08.2008, the shares of AS Järvevana are traded under the symbol of JRV1T. In 2012 12 months, 455 transactions were performed with the shares of AS Järvevana in the course of which 1,014,291 shares were traded and the total monetary value of transactions was EUR 457,875. The lowest transaction price was EUR 0.35 and the highest transaction price was EUR 0.59 per share. The closing price of the shares as at 31.12.2012 was EUR 0.59.
Structure of shareholders as at 31.12.2012
| Number of shares | Number of shareholders | % of shareholders | Number of shares | % of shares |
| 1-100 | 247 | 31,63% | 11 869 | 0,07% |
| 101-1000 | 278 | 35,59% | 122 104 | 0,69% |
| 1001-10 000 | 177 | 22,66% | 680 490 | 3,84% |
| 10 001 – 100 000 | 71 | 9,09% | 2 192 568 | 12,39% |
| 100 001 – 1 000 000 | 7 | 0,90% | 1 950 283 | 11,02% |
| 1 000 001 - … | 1 | 0,13% | 12 742 686 | 71,99% |
| Total | 781 | 100% | 17 700 000 | 100% |
STATEMENT OF COMPREHENSIVE INCOME
unaudited, in thousand euros
|
2012 12 months |
2011 12 months |
|
| General and administrative expenses | (213) | (220) |
| Operating profit (loss) | (213) | (220) |
| Finance income and costs | 192 | 213 |
| incl. interest income | 192 | 213 |
| Net profit (loss) for the period | (21) | (7) |
| Comprehensive profit (loss) for the period | (21) | (7) |
| Earnings per share (basic and diluted, in EUR) | (0.00) | (0.00) |
STATEMENT OF COMPREHENSIVE INCOME
unaudited, in thousand euros
|
2012 IV quarter |
2011 IV quarter |
|
| General and administrative expenses | (37) | (54) |
| Operating profit (loss) | (37) | (54) |
| Finance income and costs | 36 | 59 |
| incl. interest income | 36 | 59 |
| Net profit (loss) for the period | (1) | 5 |
| Comprehensive profit (loss) for the period | (1) | 5 |
| Earnings per share (basic and diluted, in EUR) | (0.00) | 0.00 |
STATEMENT OF FINANCIAL POSITION
unaudited, in thousand euros
| 31.12.2012 | 31.12.2011 | |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 2 532 | 2 531 |
| Trade and other receivables | 13 584 | 13 403 |
| Total current assets | 16 116 | 15 934 |
| Non-current assets | ||
| Property, plant and equipment | 24 | 35 |
| Total non-current assets | 24 | 35 |
| TOTAL ASSETS | 16 140 | 15 969 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Trade and other payables | 221 | 29 |
| Short-term provisions | 1 118 | 1 118 |
| Total current liabilities | 1 339 | 1 147 |
| Total liabilities | 1 339 | 1 147 |
| Equity | ||
| Share capital | 12 000 | 12 000 |
| Statutory reserve capital | 1 200 | 1 131 |
| Retained earnings | 1 601 | 1 691 |
| Total equity | 14 801 | 14 822 |
| TOTAL LIABILITIES AND EQUITY | 16 140 | 15 969 |
Toomas Annus
Member of Management Board
+372 6 805 400
toomas.annus@merko.ee
