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2014 6 months and II quarter unaudited interim report

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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           % of          Number of       % of   
                     shareholders      shareholders       shares        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 –                   7           0.87%       1,311,657       7.41%
       1,000,000                                                                
   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      2013
                                                6 months  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        2013
                                                II quarter  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
[email protected]