Tallinn, Estonia, 2014-07-31 15:30 CEST (GLOBE NEWSWIRE) --
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 16.0 million. The company does not have ordinary economic activities and the only objective of its activities has been to protect the interests of the company and shareholders in the long-lasting criminal proceedings related to the land swap. As at 30 June 2014, one person was employed by AS Järvevana, its Director Toomas Annus. The company’s activities do not have a seasonal or cyclical nature.
The general meeting of shareholders of AS Järvevana, held on June 11th 2014, decided to extend the terms of office of members of the Supervisory Board Tõnu Toomik, Teet Roopalu and Jaan Mäe until June 11th 2017, i.e. for a period of three years from the moment of deciding the extension and to elect Lauri Mõisja and Mihkel Mugur an additional members of the Supervisory Board, whose term of office endures until June 11th 2017.
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).
The judicial proceedings concerning the statement of charges no. 1-09-4486 commenced at Harju County Court at 12 November 2009.
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 has been incriminated with five episodes of giving a bribe in accordance with § 298 of the Penal Code and the proceedings were conducted at the court of first instance of Harju County Court. At 19 June 2012 Harju County Court fully acquitted AS Järvevana and Toomas Annus in the criminal case no. 1-09-4486 and ruled that the state would have to pay EUR 611,810 to cover the legal aid expenses of AS Järvevana.
The Public Prosecutor’s Office filed an appeal against the judgment of acquittal to the Tallinn Circuit Court, therefore the judgment of the court of first instance has not taken effect. AS Järvevana and Toomas Annus presented comprehensive arguments against the appeal on 374 pages.
The 14 sessions of the Tallinn Circuit Court took place in January and February 2013. At 19 June 2013, Tallinn Circuit Court rendered a judgement, which was strictly contrary to that of the Harju County Court, annulling completely the judgement of acquittal and convicted AS Järvevana pursuant to the Penal Code § 298 (3) punishing it with a pecuniary punishment in the sum of EUR 798,000 (seven hundred and ninety eight thousand) which is additionally subject to taxes imposed by law.
At 19 July 2013, AS Järvevana submitted an appeal in cassation to the judgement of conviction.
At 17 December 2013, the Criminal Chamber of the Supreme Court accepted the lawyers' cassations submitted against the decision of Tallinn Circuit Court in the criminal case of land swap. A three-member composition of Criminal Chamber of the Supreme Court discussed the submitted cassation on 19 March 2014. On 10 April 2014, the three-member composition of the Criminal Chamber of the Supreme Court made a court ruling, which gave the matter to the whole composition of the Criminal Chamber of the Supreme Court to be reviewed. According to the reasoning of the ruling, the three-member court composition had fundamentally different opinions in the adjudication of the criminal matter, which may lead to the need to amend a position regarding application of the law maintained by the Criminal Chamber in an earlier practice.
At 30 June 2014 the Supreme Court made a judgment on the criminal case of land swapping, annulling the judgment made by Tallinn District Court of 19 June 2013, in particular, concerning the conviction of AS Järvevana under Art. 298 (4) of the Penal Code (giving bribe). The Supreme Court came to a conclusion that the land swaps were permitted and legal. Also, the Supreme Court confirmed that no wrong valuations of registered immovables during the land swap proceedings have been identified.
Nevertheless, the Supreme Court found AS Järvevana guilty of a criminal offence in the second degree under Art. 297(3) of the Penal Code (granting a gratuity) instead of a criminal offence in the first degree, and has not changed the punishment imposed by the District Court. Two justices of the Supreme Court wrote a dissenting opinion on this judgment. Thus, a pecuniary punishment of AS Järvevana in the amount of EUR 798,000 (seven hundred and ninety eight thousand) has remained in force. AS Järvevana was ordered to pay a compensation levy to the state in the amount of EUR 532.50 (instead of EUR 800 imposed earlier). At the same time, the Republic of Estonia was ordered to pay EUR 15,000 to AS Järvevana to cover the fees paid to the defence attorney during the cassation proceedings.
The court judgment has come into force and AS Järvevana must pay the pecuniary punishment and compensation levy within 30 days of the judgment's effective date.
AS Järvevana has decided to appeal to the European Court of Human Rights (ECHR), because AS Järvevana is convinced of its innocence and because it believes that several provisions of the Convention for the Protection of Human Rights and Fundamental Freedoms and several fundamental rights identified in the ECHR's judgments that are binding for Estonia have been violated with regard to AS Järvevana. An appeal that shall be submitted by 30.12.2014 is being currently prepared.
Share and shareholders
The main shareholders of AS Järvevana as at 30.06.2014
| Number of shares | % of shares | |
| AS Riverito | 12,742,686 | 71.99% |
| OÜ Seitse Samuraid | 357,000 | 2.02% |
| Compensa Life Vienna Insurance Group SE | 263,806 | 1.49% |
| Clearstream Banking Luxembourg S.A. clients | 157,138 | 0.89% |
| OÜ Watermelon | 150,000 | 0.85% |
| AS LHV Pank | 143,000 | 0.81% |
| JS Capital OÜ | 140,000 | 0.79% |
| Harri Oodes | 100,713 | 0.57% |
| Haak OÜ | 100,000 | 0.56% |
From 15 September 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 4 August 2008, the shares of AS Järvevana are traded under the symbol of JRV1T. In 2014 6 months, 281 transactions were performed with the shares of AS Järvevana in the course of which 643,787 shares were traded and the total monetary value of transactions was EUR 445,900. The lowest transaction price was EUR 0.60 and the highest transaction price was EUR 0.74 per share. The closing price of the shares as at 30.06.2014 was EUR 0.74.
Structure of shareholders as at 30.06.2014
| Number of shares | Number of shareholders | % of shareholders | Number of shares | % of shares |
| 1-100 | 233 | 29.09% | 11,132 | 0.06% |
| 101-1,000 | 259 | 32.33% | 113,292 | 0.64% |
| 1,001-10,000 | 209 | 26.09% | 843,658 | 4.77% |
| 10,001 – 100,000 | 92 | 11.49% | 2,677,575 | 15.13% |
| 100,001 – 1,000,000 | 7 | 0.87% | 1,311,657 | 7.41% |
| 1,000,001 - … | 1 | 0.13% | 12,742,686 | 71.99% |
| Total | 801 | 100% | 17,700,000 | 100% |
STATEMENT OF COMPREHENSIVE INCOME
in thousand euros, unaudited
|
2014 6 months |
2013 6 months |
|
| General and administrative expenses | (83) | (105) |
| Other operating income | 122 | - |
| Operating profit (loss) | 39 | (105) |
| Finance income and costs | 63 | 80 |
| incl. interest income | 63 | 80 |
| Net profit (loss) for the period | 102 | (25) |
| Comprehensive profit (loss) for the period | 102 | (25) |
| Earnings per share (basic and diluted, in EUR) | 0.01 | (0.00) |
STATEMENT OF COMPREHENSIVE INCOME
in thousand euros, unaudited
|
2014 II quarter |
2013 II quarter |
|
| General and administrative expenses | (34) | (46) |
| Other operating income | 122 | - |
| Operating profit (loss) | 88 | (46) |
| Finance income and costs | 32 | 40 |
| incl. interest income | 32 | 40 |
| Net profit (loss) for the period | 120 | (6) |
| Comprehensive profit (loss) for the period | 120 | (6) |
| Earnings per share (basic and diluted, in EUR) | 0.01 | (0.00) |
STATEMENT OF FINANCIAL POSITION
in thousand euros, unaudited
| 30.06.2014 | 31.12.2013 | |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 3,905 | 2,392 |
| Trade and other receivables | 12,247 | 13,490 |
| Total current assets | 16,152 | 15,882 |
| Non-current assets | ||
| Property, plant and equipment | 9 | 14 |
| Total non-current assets | 9 | 14 |
| TOTAL ASSETS | 16,161 | 15,896 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Trade and other payables | 291 | 21 |
| Short-term provisions | 1,011 | 1,118 |
| Total current liabilities | 1,302 | 1,139 |
| Total liabilities | 1,302 | 1,139 |
| Equity | ||
| Share capital | 12,000 | 12,000 |
| Statutory reserve capital | 1,200 | 1,200 |
| Retained earnings | 1,659 | 1,557 |
| Total equity | 14,859 | 14,757 |
| TOTAL LIABILITIES AND EQUITY | 16,161 | 15,896 |
Toomas Annus
Member of Management Board
+372 6 805 400
toomas.annus@merko.ee
