Börsiteade

Pealkiri

Financial results 3M 2010

Teade

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 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 31.03.2010,
AS Järvevana earned finance income in the amount of EEK 1.0 million. The
most significant cost item was the legal expenses related to the “land swap”
criminal case; these expenses constitute 46% of the general administrative
costs in 2010 3 months. 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%F6lepi
ng%20ENG.pdf). 
As of 31 March 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. 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. By 8 April 2010, the court had
heard nearly 80 prosecution witnesses, and none of the witnesses have
testified about a promise to give or the giving of a bribe, or about
illegal activities. The presentation of documentary evidence has now
started at the request of the prosecutor's office. The trial schedule
has been fixed until 14 October 2010. The decision of the court of first
instance is expected in 2011.

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.


STATEMENT OF COMPREHENSIVE INCOME 3M 2010
unaudited, in thousand EEK and EUR

                                           EEK                   EUR
                                   3M 2010     3M 2009    3M 2010    3M 2009

Administrative and general expenses (1 076)       (443)       (69)       (28)

Operating profit                    (1 076)       (443)       (69)       (28)

Financial income and expenses        1 009       2 045         65        131
 incl. other financial income        1 010       2 046         65        131
       other financial expenses         (1)         (1)        (0)        (0)
				
Net profit for current period          (67)      1 602         (4)       103
 incl. equity holders of the parent    (67)      1 602         (4)       103

Comprehensive income                   (67)      1 602         (4)       103
 incl. equity holders of the parent    (67)      1 602         (4)       103

Earnings per share for profit attributable
to the equity holders of the parent
(basic and diluted, in EEK and EUR)  (0,00)       0,09      (0,00)      0,01


STATEMENT OF FINANCIAL POSITION AS OF 31.03.2010
unaudited, in thousand EEK and EUR

                                       EEK                      EUR
                             31.03.2010   31.12.2009  31.03.2010  31.03.2009
ASSETS
Current assets
Cash and cash equivalents        40 423       30 425       2 584       1 944
Short-term deposits                   -       10 000           -         639
Trade and other receivables     209 635      209 890      13 398      13 415
Total current assets            250 058      250 315      15 982      15 998
				
Non-current assets				
Property, plant and equipment        36           40           2           2
Total non-current assets             36           40           2           2
				
TOTAL ASSETS                    250 094      250 355      15 984      16 000
				
LIABILITIES AND OWNERS' EQUITY				
Current liabilities				
Trade and other payables            336          530          22          34
Short-term provisions            17 500       17 500       1 118       1 118
Total current liabilities        17 836       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                37 558       37 625       2 401       2 405
Total equity                    232 258      232 325      14 844      14 848

TOTAL LIABILITIES AND EQUITY    250 094      250 355      15 984      16 000


Toomas Annus
Member of Management Board
+372 6 805 400
[email protected]