Market announcement

Title

Financial results 3M 2009

Message

MANAGEMENT REPORT

General information

The Company was formed after 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 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 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 01.01.2009 and 31.03.2009,
AS Järvevana earned finance income in the amount of EEK 2.0 million. As at
31 March 2009, the sole member of AS Järvevana's Management Board is Toomas
Annus. The company's operation does not have a seasonal and cyclic nature. 

On 3 April 2009, the Public Prosecutor's Office presented the statement of
charges (dated 31 March 2009) against AS Järvevana and Toomas Annus in the
criminal matter No 05913000055 concerning the land-swap
(http://www.nasdaqomxbaltic.com/market/?pg=news&news_id=232810). In the
statement of charges, the Public Prosecutor's Office has withdrawn the
initially included criminal episodes (http://www.nasdaqomxbaltic.com/
market/?pg=news&news_id=218499) whereby Toomas Annus abused the trust in
the company, by not purchasing the property under protection, and the
suspicion that the property received as a result of the swap deal was
transferred to the person chosen by Villu Reiljan. The Prosecutor's Office
has added a criminal episode to the charges stating that AS Järvevana
allegedly brokered the swap of two properties with the state at the request
of Kalev Kangur. Based on the statement of charges, five episodes in total
will be presented at the court hearing. The contents of the statement of
charges have been included in the 2008 annual report of AS Järvevana.
The first hearing in the land-swap case has been scheduled for 12 November
2009.

At 3 April 2009, the Prosecutor's Office declared AS Järvevana a suspect
in the criminal case on a bribery related to Ivo Parbus. According to the
suspicion, a representative of the Company gave Ivo Parbus a gift coupon
of EEK 15 thousand for accelerated proceedings with two detailed plans and
one construction project. The suspicion was submitted against AS Järvevana
because the Company owns properties in the interests of which the bribe
suspected was allegedly given. 

The Company considers the submitted suspicion to be groundless.
The Supervisory Board and Management Board of AS Järvevana are convinced
that the activities of the Company and its directing bodies have been
correct and in compliance with the laws of the Republic of Estonia and
are able to provide relevant evidence in court.


STATEMENT OF COMPREHENSIVE INCOME 3M 2009
consolidated, in thousand EEK and EUR
                                           EEK                   EUR
                                   3M 2009     3M 2008    3M 2009    3M 2008

Revenue                                  -   1 119 572          -     71 554
Cost of goods sold                       -    (884 377)         -    (56 522)

GROSS PROFIT                             -     235 195          -     15 032

Marketing expenses                       -      (7 888)         -       (504)
Administrative and general expenses   (443)     49 373        (28)    (3 156)
Other operating income                   -       1 704          -        109
Other operating expenses                 -      (1 738)         -       (111)

OPERATING PROFIT                      (443)    177 900        (28)    11 370

financial income from investments in
associate companies and joint ventures   -       2 280          -        145
Interest expense                         -      (5 584)         -       (357)
Foreign exchange gain                    -      (1 692)         -       (108)
Other financial income and expenses  2 045       3 234        131        207
Total financial income and expenses  2 045      (1 762)       131       (113)

PROFIT BEFORE TAX                    1 602     176 138        103     11 257

Corporate income tax expense             -     (20 138)         -     (1 287)

NET PROFIT FOR FINANCIAL YEAR        1 602     156 000        103      9 970
  incl. net profit attributable to equity
        holders of the parent        1 602     154 881        103      9 898
        minority interest                -       1 119          -         72

Other comprehensive income					
Exchange differences on
translating foreign subsidiaries         -        (891)         -        (57)

Comprehensive income                     -     155 109          -      9 913
  incl. equity holders of the parent 1 602     153 990        103      9 841
        minority interest                -       1 119          -         72

Earnings per share for profit attributable
to the equity holders of the parent
(basic and diluted, in EEK and EUR)   0,09        8,75       0,01       0,56


STATEMENT OF FINANCIAL POSITION AS OF 31.03.2009
consolidated, in thousand EEK and EUR
                                       EEK                      EUR
                             31.03.2009   31.12.2008  31.03.2009  31.12.2008
ASSETS
Current assets
Cash and cash equivalents        27 865       26 242       1 781       1 677
Trade and other receivables     225 958      225 927      14 441      14 439
Total current assets            253 823      252 169      16 222      16 116

Non-current assets
Property, plant and equipment        30            -           2           -
Total non-current assets             30            -           2           -

TOTAL ASSETS                    253 853      252 169      16 224      16 116

LIABILITIES AND OWNERS' EQUITY
Current liabilities
Trade and other payables            324          242          21          16
Short-term provisions            17 500       17 500       1 118       1 118
Total current liabilities        17 824       17 742       1 139       1 134

Total liabilities                17 824       17 742       1 139       1 134

Equity
Equity attributable to equity holders of the parent company
Share capital                   177 000      177 000      11 312      11 312
Statutory reserve capital        17 700       17 700       1 131       1 131
Retained earnings                41 329       39 727       2 642       2 539
Total equity attributable to equity
holders of the parent company   236 029      234 427      15 085      14 982
Total equity                    236 029      234 427      15 085      14 982

TOTAL LIABILITIES AND EQUITY    253 853      252 169      16 224      16 116


Toomas Annus
Member of Board
+372 6 805 400
toomas.annus@merko.ee