Prospectus • Jan 24, 2024
Prospectus
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General risk, real estate development risk, risk of inflation and deflation, macroeconomic environment risk, risk of the cyclicality of the real estate sector, risk of dependence on external financing, risk related to lease agreements, risk of reliance on the Company's property administrator, interest rate risk, leverage risk, credit risk, risk of liquidity of the Company's investments, total investment risk, investment diversification risk (further information on the risks related to investments in the Shares is provided in Section V of the Prospectus).
The Prospectus is available on the website of the Company at www.invlbalticrealestate.lt as from 24 of January 2024.
This Prospectus has been prepared in accordance with the Law on Collective Investment Undertakings of the Republic of Lithuania and the Law on Managers of Alternative Collective Investment Undertakings of the Republic of Lithuania as well as the Rules for the Contents and Submission of the Prospectus and Key (Investor) Information Document of the Collective Investment Undertaking approved by Resolution No. 03-150 of 12 July 2012 of the Bank of Lithuania.
UAB INVL Asset Management, which assumed management of the Company and is its Management Company, shall be responsible for the correctness of the contents of the Prospectus. Where necessary, the contents of the Prospectus may be amended or supplemented, and notification thereof shall be provided under the procedure and the terms laid down in the applicable legislation.
This Prospectus shall not constitute an offer to buy or sell the Company's equity securities. While considering and/or evaluating the acquisition, ownership or transfer of the Company's equity securities, investors should consult their selected lawyer or provider of investment and financial services regarding the legal, tax and other consequences of the acquisition of the Company's equity securities.
The Company's equity securities are traded in on the secondary market. Decisions to acquire, hold or transfer the Company's equity securities should be made on the basis of the information provided in this Prospectus, the Company's incorporation documents and in the Key (Investor) Information Document. The information provided in the Prospectus should be interpreted as conforming to the actual circumstances as of the Prospectus announcement date. Neither the submission of this Prospectus nor the acquisition of the Company's equity securities on the secondary market or the redemption of the Company's own shares under any circumstances serve as the basis for assuming that no changes (financial or other) have taken place in the Company's activities since the Prospectus announcement date.
The Prospectus contains forward-looking statements that are based on the opinion, expectations and forecasts of the Management Company concerning future events and financial trends that might influence the Company's activities (these expectations and forecasts do not constitute the publicly non-disclosed information of the Company which is published in the manner prescribed by the legal acts). Forward-looking statements include and/or may include information on the possible or expected results of the Company's activities, investment strategy, contractual relations, borrowing plans, investment terms and conditions, future regulatory impact, and other information. Forward-looking statements are based on the information available as of the Prospectus announcement date. The Management Company shall not be obliged to specify or modify such statements, except as required by applicable legislation.
By acquiring the Shares, the investor confirms that he is aware of and agrees that the Shares held by him would be mandatorily redeemed in the cases and under the procedure laid down in the Articles of Association and/or the Prospectus.
Any disputes, controversies or claims arising in connection with the Company's equity securities or the information provided in this Prospectus shall be resolved at the competent court of the Republic of Lithuania, in accordance with the legislation of the Republic of Lithuania.
All definitions used in this Prospectus shall be interpreted as they are defined in the Company's incorporation document (the Articles of Association) which are enclosed hereto as an Annex to the Prospectus.
| 2.1. | Name | Special closed-end real estate investment company INVL Baltic Real Estate. |
|---|---|---|
| 2.2. | Legal form of activities, type, subfunds |
Special closed-end investment company. |
| 2.3. | Commencement date of the Company's activities |
The date of issue of the licence (permission to approve the Company's incorporation documents and to select the depository) of the closed-end investment company is 22 December 2016. |
| Term of the Company's activities | The Company will operate for 30 years after the date of the permission of the Supervisory Authority to approve the Company's incorporation documents and to select the depository for the first time (i.e. 22 December 2016). The duration of the Company's activities may be extended for a period not exceeding 20 years. |
|
| 2.4. | Name of the Management Company Registered address Telephone Website |
UAB INVL Asset Management Gynėjų St. 14, LT-01109 Vilnius +370 527 90601 [email protected] www.invl.com |
The purpose of the Company is to accumulate and invest the Shareholders' funds in order to earn the largest return from investments into the investment objects specified below. By diversifying investments and managing risks, the Management Company shall seek to reduce the risk and to prevent possible reduction of the Company's investments value and to create value by selecting investment objects and relying on other market participants' experience.
The aim of the Company is to earn a return for the Shareholders' benefit from investments into land, buildings and/or premises that make up individual real estate properties, real estate properties under construction which are planned to be constructed within an acceptable period, securities and money market instruments of real estate companies, if assets of such companies are invested into real estate corresponding to the investment strategy of the Company, investment units or shares of real estate collective investment undertakings established in the European Union Member States, supervision of which is no less strict than in the Republic of Lithuania, movable property and facilities necessary for operating real estate properties in the investment portfolio of the Company, transferrable securities and money market instruments admitted to trading on the multilateral trading facility and other investment objects not prohibited by law. In order to implement the Company's investment strategy, the Company's assets can be invested in any real estate property of any purpose (land, building or any other property that is defined as real estate property by the law of the jurisdiction where the property is located) that is located in any Member State of the European Union.
The Management Company shall invest up to 100 per cent of the Net Asset Value into the investment objects specified above directly or through Real Estate Companies.
When investing directly or using Real Estate Companies, the Management Company shall (acting on behalf of the Company) seek to acquire investment objects indicated above, which generate or can generate regular income.
The Company shall seek to increase return on investments, making efforts that the assets under its management would generate regular long-term income and their value would grow. Therefore, the assets held by the Company shall be managed and acquisition of new assets shall be made taking into account the creation of value for the Shareholders.
The equity securities issued by the Company shall be intended only for investors who are able to tolerate investment-related risk specified in the Articles of Association and in this Prospectus. The Shares should be acquired only by the person who can tolerate a higher-than-average risk. The Shares should be acquired in order to keep them until the expiration of the activities of the Company. Investors should invest in the Shares only in such case if they have accumulated sufficient experience in investing into equity securities issued by public limited liability companies and collective investment undertakings and are able to assume the risk related to the decrease in the value or loss of these investments, i.e. the loss of the partial or whole invested amount is acceptable to them.
This information shall be publicly announced on the website of the Company at www.invlbalticrealestate.lt. The shareholders shall have the right, upon the written request, to arrive in the registered office of the Management Company and receive paper copies of these documents free of charge.
This paragraph of the Prospectus contains only a brief summary of certain tax implications related to the acquisition and transfer of the Shares. It has been prepared in accordance with the legislation applicable as of the Prospectus announcement date which may be amended, including the amendments which are applicable to the circumstances until the entry into force of such legal acts. This summary does not purport to be a detailed description of all tax implications that would be sufficient to adopt decisions regarding the acquisition, ownership and transfer of the Shares. The shareholders and the persons who consider the possibility of acquiring the Shares should seek advice from tax advisors to consider relevant circumstances related to the calculation and payment of taxes.
Taxation on the Company's activities. The Company operates in compliance with all requirements of the applicable legislation; therefore, its activities shall be subject to the regular taxation policy established for investment companies. The Company shall not pay any corporate income tax. The rates of other taxes shall be equal to those established in the legislation of the Republic of Lithuania.
Taxation on dividends. Legal persons. Income received by Lithuanian and foreign legal persons as dividends from the legal persons registered in the Republic of Lithuania is subject to the corporate income tax at the rate of 15 %. This tax shall not be applicable where the recipient of dividends was the owner of at least 10 % of the shares of the legal entity registered in the Republic of Lithuania for 12 consecutive calendar months (including the moment of disbursement of dividends). It is important to note that this exception is not applied if dividends are paid out to the legal persons established in tax haven jurisdictions (as they are defined in the legislation of the Republic of Lithuania). Having regard to the fact that the Company operates as an investment company which has obtained the permission of the Supervisory Authority to approve its incorporation documents and select the depository, the legal persons who received the dividends paid out by it shall not be subject to the corporate income tax. Natural persons. Income received by Lithuanian and foreign natural persons as dividends from the legal persons registered in the Republic of Lithuania is subject to the personal income tax at the rate of 15 %. If dividends are received as income by the residents of foreign countries with which the Republic of Lithuania has concluded a treaty for avoidance of double taxation, the residents and such treaty shall restrict the right of the Republic of Lithuania to impose taxation on dividends – the provisions of such treaty shall apply. When paying dividends to a natural person, the legal person registered in the Republic of Lithuania shall have the duty to calculate and pay the tax.
Taxation on capital gains. Legal persons. Capital gains received from investment units, shares, or stakes of collective investment undertakings (including the Company) shall not be subject to the tax. Capital gains from the sale in the Republic of Lithuania of the shares of the legal persons registered in the Republic of Lithuania shall not be subject to the tax. Natural persons. Capital gains received by the Lithuanian residents from the sale of the shares shall be subject to the personal income tax at the rate of 15 % or 20 %, having regard to the particular resident's actual situation in terms of taxes in a particular year However, if the amount of such gains is below EUR 500 within a single calendar year, the tax shall not be applied. This exemption shall not be applicable if the shares are transferred by the Lithuanian resident to the issuing company. The payable personal income tax shall be calculated and paid by 1 May of each calendar year for the previous full calendar year. Capital gains received by foreign natural persons from the sale in the Republic of Lithuania of the shares of the legal persons registered in the Republic of Lithuania shall not be subject to the tax.
Taxation on gifts and inheritance. If the Shares are given to a natural person as a gift, such acquisition would be subject to the personal income tax at the rate of 15 %. The tax shall not be applicable where the Shares are given as a gift by the beneficiary's spouse, children (adopted children), parents (adoptive parents), brothers, sisters, grandchildren, grand-grandchildren, or grangrandparents, or where the shares are given by a non-Lithuanian resident. In the case of inheritance where the value of the Shares is below EUR 150,000, the 5 % inheritance tax shall be applicable, and if the value of the Shares exceeds this amount, the 10 % inheritance tax shall be imposed. The property shall be exempt from the tax for after the death of one spouse, the inherited property of the other spouse, after the death of other spouse, for inherited property of children (adopted children), parents (adoptive parents), foster parents (guardians), grandparents, guardians, brothers, sisters or the value of the inherited property (the Shares) does not exceed EUR 3,000.
Value-added tax. in the Republic of Lithuania, the acquisition or transfer of the Shares is not subject to value-added tax.
The Shareholders shall have the following property rights:
8.1. The number of the Shares issued by the Company is 8,061,414 units, and the authorised capital of the Company amounts to EUR 11,689,050.30. The Company issues ordinary registered Shares. The Shares are intangible. They are recorded by making entries in the Shareholders' personal securities accounts. These accounts are managed under the procedure laid down in the legal acts regulating the financial instruments market. The par value per Share is EUR 1.45. The par value of all the Shares is the same. The value of the Shares varies according to the Net Asset Value
8.2. –
The Company maintains its financial books and records and prepares financial statements in compliance with the IAS, the Law on Accounting of the Republic of Lithuania, the Law on Collective Investment Undertakings of the Republic of Lithuania, the legal acts adopted by the Board of the Bank of Lithuania defining the keeping of financial accounting and preparation of statements as well as other legal acts regulating financial accounting and statements. The currency in which the Net Asset Value is calculated shall be the euro. The Net Asset Value shall be calculated by subtracting the liabilities from the Company's assets, including the Management Fee liabilities and the Performance Fee liabilities.
The Company's assets and liabilities shall be stated at a fair value, except for the cases established in the IAS. Fair value shall be the value at which the assets would be sold, or the liability would be transferred in an orderly transaction between the market participants as of the measurement date. The calculations of the Net Asset Value shall be performed at least once per 3 months on the basis of the property valuation conducted by an independent property valuator who has the right to engage in such activity.
The property appraiser shall meet the following requirements:
An external property appraiser can be replaced by reason of negative comments of the auditor or the Bank of Lithuania, a material breach or improper performance of the agreement for provision of services, material deterioration of the appraiser's reputation, cancellation of the qualification certificate issued by a competent governmental authority, discontinuation of the appraiser's business and in other cases for important reasons.
Real estate properties making up the assets of the Company shall be deemed as having been valued if their value has been determined no earlier than 6 months before and only in case there have been no material economic changes or material changes in real estate market prices due to which a new valuation must be performed. In case of a material change in the value of a real estate property, the Management Company shall take it into account.
The value of Real Estate Companies shall be determined based on the values established by the independent business valuator entitled to engage in such activities. The business appraiser must comply with the requirements for qualifications, transparency and experience provided for in the Accounting Policy of the Company and the Rules for Calculation of the Net Asset Value and in the applicable legal acts.
The calculation of the Net Asset Value shall be carried out as of the last day of the quarter of the calendar year and the established value shall be announced:
The Company's financial year shall coincide with the calendar year. Annual financial statements for the previous financial year shall be prepared no later than within four calendar months after the end thereof. The decision on profit distribution can be adopted only by the General Meeting; therefore, the profit distribution dates are not known beforehand.
Decisions on the Company's income distribution and use shall be made by the Management Company, having regard to the Company's investment strategy. Income shall be used for the covering of the Company's operating expenses, investment (reinvestment). No income use targets have been expressed as a percentage. No allocation of new Shares has been foreseen.
Dividend shall be a share of profit allocated to the Shareholder of the Company pro rata to the nominal value of the Shares held by the Shareholder. A decision on the payment of dividends shall be adopted by the General Meeting, having regard to the recommendations provided by the Management Company and after considering the recommendations and responses given. Where interim dividends are paid, the set of the Company's financial statements shall be prepared and audited by the auditor no earlier than 30 days prior to the decision to distribute dividends. The Company shall pay out the distributed dividends within one month from the date of the decision of the General Meeting to pay out dividends, except for the cases where the Management Company adopts a decision to postpone the payment of dividends in compliance with the Articles of Association. The Management Company can, by its reasoned decision, postpone the payment of dividends if the payment of dividends:
The Management Company shall adopt the respective decision and renew the payment of dividends in order to ensure that dividends are paid to the Shareholders no later than within one month from the moment where the grounds that have determined the suspension of the payment of dividends have disappeared; however, in any case the payment of dividends cannot be postponed for a period exceeding one year after the date of adoption by the General Meeting of the decision to pay out dividends. The dividends payable to the Shareholders shall be transferred into the accounts indicated by the Shareholders or (if the Shareholder's data are not known) into the deposit account, under the procedure laid down by law. The Company shall pay out dividends in Euros. The right to receive dividends shall be vested in persons who were Shareholders of the Company or had the right to dividends on any other lawful grounds at the end of the record day of the General Meeting.
$$
VM_{kety} = VSK_{kety} * A
$$
where:
VMketv – the amount of the Management Fee.
A – the quarterly amount of the Management Fee in percentage terms, used for the calculation of the quarterly Management Fee.
VSKketv – quarterly weighted average capitalisation of the Company calculated according to the formula:
$$
VSK_{ketv} = \frac{T_{ketv}}{Q_{ketv}} * \sum_{i=1}^{n_{ketv}} \frac{Vnt_i}{n_{ketv}}
$$
where:
Vnti – the number of Shares of the Company at the end of business day. It does not include Company's on shares.
Qketv – the number of Shares transferred on the regulated market during the respective quarter.
nketv – the number of business days per respective quarter, irrespective of the number of trading days (except when the Management Fee is calculated not for a full quarter of a calendar year, in this case the number of business days in a relevant period shall be used for calculation).
Tketv – turnover of the Shares during the respective quarter according to the Shares trading data on the regulated market, calculated according to the following formula:
$$
T_{ketv} = \sum_{j=0}^{k} (P_j * Q_j)
$$
where:
k – the number of transactions on the regulated market during the respective quarter.
Pj – Share price of transaction j on the regulated market.
Qj – the number of Shares traded in transaction j on the regulated market.
If the Management Fee is calculated only for a part of a calendar quarter of the year, the Management Fee in percentage terms shall be recalculated by dividing it by the number of all business days in the calendar quarter and multiplying by the number of business days in the period for which the Management Fee is calculated. If there was no trading in Shares throughout the entire calendar quarter, the Management Fee for a quarter of the calendar year shall be equal to 0.375 per cent of the average Net Asset Value of the Company which is calculated as the arithmetic average of the values at the beginning and at the end of the quarter.
The calculation, accounting and inclusion of the Management Fee in the Net Asset Value is detailed in the Company's Accounting Policy and Net Asset Value Calculation Rules established by the Management Company.
The share of the Company's profit due to the Management Company – the Performance Fee – is subject to the Company's return which is calculated in respect of the entire Company rather than in respect of an individual Shareholder. The return of the Company shall be determined using the Microsoft Excel XIRR formula which estimates the time of positive and negative flows (i.e., due account is taken of periodicity) and their size.
The Company's profit is the amount of positive and negative flows in respect of the Shareholders during the entire period of the Company's activities, where:
Profit of the Company shall be distributed as follows:
The Depository shall check the correctness of the calculation of the Performance Fee.
Until the payment of the Performance Fee, it shall be accrued, entered into financial statements and reflected as a liability to the Management Company, having regard to the requirements of the Company's Accounting Policy established in the IAS and by the Management Company.
The Performance Fee shall be paid to the Management Company every time that funds are disbursed to the Shareholders.
The assignment of the Performance Fee shall be subject to the high-water mark principle, according to which the Performance Fee can be assigned only in case the Net Asset Value or the average weighted capitalisation of the Shares for the last ended quarter on the Nasdaq Vilnius Stock Exchange (whichever is less) exceeds the highest value calculated or recalculated value of these values until then, according to which the Performance Fee was paid. In such a case, in later periods the initial point for calculation of the Performance Fee shall be the value of the highest limit which was reached last (the Net Asset Value or the average weighted capitalisation of the Shares for the last ended quarter on the Nasdaq Vilnius Stock Exchange) (whichever is less) for which the Performance Fee was paid to the Management Company.
The Performance Fee commitment shall be recalculated as of the Net Asset Value calculation date (each quarter), taking into account the Company's return from the specified date of the initial negative flow to the corresponding Net Asset Value calculation date. The recalculation of the Performance Fee is accompanied by a recalculation and, if necessary, determination (based on which of them was the last to be paid the Performance Fee) (a) new capped net asset value or (b) new capped cap the value of the weighted average capitalization on the Nasdaq Vilnius Stock Exchange, taking into account all amounts actually paid to the shareholders or paid by the shareholders to the Company during the period from the end of the reporting period (for which the Performance Fee was last due).
The calculation, accounting, and inclusion of the Performance Fee liability in the Net Asset Value is detailed in the Company's Accounting Policy and Net Asset Value Calculation Rules established by the Management Company.
The assigned Performance Fee shall be paid to the Management Company after the end of a calendar quarter of activities of the Company.
The Performance Fee shall be paid to the Management Company if the following conditions are met:
must be paid out to the Management Company during the nearest reporting period, the calculation rules provided for in the Articles of Association are complied with.
13.1.7.26. expenses related to the development of the Company's business (including expenses related to design, construction, management and sale of its property).
13.1.7.27. expenses related to processing, registration and deregistration of instruments used to secure liabilities.
13.4. The Management Company has concluded agreements with UAB FMĮ INVL Financial Advisors regarding the distribution of the portion of the Management Fee of the Company received by the Management Company. Under these agreements, the Management Company shall pay 12.5 per cent of the received Management Fee of the Company to UAB FMĮ INVL Financial Advisors for the Shares entered into the Shareholders' securities accounts managed by it. This fee shall not create any conflict of interest between the Company and/or the Management Company and/or the Shareholders and/or UAB FMĮ INVL Financial Advisors. In the event that, when applying the conflict-of-interest management procedures, the Management Company would identify a potential conflict of interest, measures would be taken to manage it properly. When managing the Company, no hidden commission shall be received and/or paid.
13.5. –
14.1. Ordinary registered non-material share of the Company with the nominal value of EUR 1.45.
14.2. –
14.3. –
14.6. –
14.7. The nominal value per Share shall be EUR 1.45.
New Shares can be issued by increasing the authorised capital of the Company by a decision of the General Meeting upon a proposal of the Management Company. The proposal of the Management Company regarding the increase in the authorised capital must inter alia discuss in detail the procedure of issue of new Shares and terms of payment for them, as well as the reason why it is proposed to increase the authorised capital of the Company. The current Shareholders shall have the pre-emptive right to acquire the newly issued Shares pro rata to the number of Shares held by them (on the rights record date). Newly issued Shares can be offered not to the Shareholders of the Company provided that the existing Shareholders have not subscribed for all the Shares planned to be issued within the period established by the decision of the Management Company, which may not be shorter than 10 calendar days or longer than 30 calendar days. The Shares from the new issue of Shares shall be paid for within the term laid down in the Share Subscription Agreement which may not exceed 30 Business Days. The Shares may be paid for in cash or in-kind contributions. The procedure of payment for the Shares by in-kind contributions shall be established by the General Meeting, having regard to the requirements of the legal acts. New Shares shall be issued only after having received the money into the Company's account or the non-pecuniary contribution has become the property of the Company. Newly issued Shares can be offered publicly only after the Company has published the Prospectus under the procedure laid down by the laws of the Republic of Lithuania. The Company shall publish the Prospectus publicly under the procedure laid down by law no later than by the start of the public offering of the Shares or their admission to trading on the regulated market.
The Company may repurchase its own shares when the Shareholders have the option to sell or not to sell their Shares to reduce the difference in the price of the Company's Shares on the Nasdaq Vilnius Stock Exchange compared to the value of the Shares calculated according to the Net Asset Value of the Company. The share repurchase price is determined and justified by the proposal of the Management Company. The Company acquires its own Shares in accordance with the requirements of the Law on Companies of the Republic of Lithuania. The Company may acquire Shares itself or through a person acting in its own name but on behalf of the Company.
During the buy-out process of the Company's own Shares, when the aim is to distribute the funds to all Shareholders proportionally, the Company acquires the Shares in accordance with the requirements of the Law on Companies of the Republic of Lithuania. The Company may acquire Shares itself or through a person acting in its own name but on behalf of the Company.
Notwithstanding the above-mentioned exceptions, the redemption of Shares is restricted and in the absence of the abovementioned conditions. During the Company's operation, the Shares will not be redeemed on request by the Shareholder. During the period of the Company's activity, the Shares will be redeemed only in the cases provided for in the Articles of Association
In the event that the General Meeting of the Company adopts a decision regarding material amendments to the Company's incorporation documents that have a negative impact on the Shareholders' interests, or other decisions the adoption of which under the Law on Collective Investment Undertakings of the Republic of Lithuania grans the right to the Shareholders to demand that the Shares held by them are redeemed, the Company shall ensure the proper implementation of the Shareholders' right to demand that the Shares held by them without any deductions.
The Management Company shall inform each Shareholder about these decisions of the General Meeting by sending the respective notice no later than 1 month prior to the entry into force of the amendment to the respective documents. The Management Company shall inform each Shareholder in writing about amendments to the key documents related to the change of the Company's investment strategy by sending the respective notice no later than 2 months prior to the entry into force of the amendments to the respective documents.
The Management Company shall inform the Shareholders about its decision to merge the Company with another collective investment undertaking after the Supervisory Authority has granted the permit to merge the collective investment undertakings but no later than 30 days prior to the last day of the term during which the Shareholders are entitled to demand that their Shares be redeemed without any deductions. The Shareholder's right to exercise the right indicated in this paragraph shall expire 5 Business Days prior to the planned merger completion date. The shareholder notice shall contain the information that must be provided under the applicable legal acts and other information that is relevant to the Shareholders at the discretion of the Management Company.
The Shareholders shall have the right to voice an objection and demand that their Shares be redeemed within 1 month until the entry into force of the amendments to the respective documents, except for the cases where the Company's investment strategy is modified. Where the Company's investment strategy is modified, the Shareholders can voice an objection and demand to redeem their Shares within 2 months prior to the entry into force of the amendments to the respective documents. The Management Company may determine longer terms than those specified in this paragraph during which the Shareholders can exercise their right to redeem the Shares.
Material amendments to the Company's incorporation documents and/or the Prospectus shall be made provided that there are no objections from any Shareholder. It shall be considered that not a single Shareholder had objected if, in compliance
with the requirements of the legal acts, the Shareholders who objected to material amendments to the documents and demanded that their Shares be redeemed without any deductions have been granted this right.
After the General Meeting has adopted the decision regarding material amendments to the Company's incorporation documents and/or Prospectus that would have an impact on the Shareholders' interests or another decision the adoption of which, in accordance with the Law on Collective Investment Undertakings of the Republic of Lithuania, grants the right to the Shareholders to demand that the Shares held by them are redeemed, the Management Company shall take a decision that would specify the conditions under which material amendments to the Company's documents are made, including but not limited to the decision regarding the number of Shares that can be redeemed, in case of exceeding of which the Company shall not perform the mandatory redemption of Shares from the Shareholders who demanded it and, accordingly, essential amendments to the Company's documents shall not be made should they might have negative effect on activities of the Company.
Amendments shall be deemed material if:
Having regard to the content, nature, scope, and impact of the amendments to the incorporation documents and/or the Prospectus on the Shareholders' interests, the Board of the Management Company shall decide on a case-by-case basis whether such amendments to the incorporation documents and/or the Prospectus are deemed material.
Information on whether initiated amendments to the incorporation documents and/or the Prospectus are deemed material shall be provided in the agenda of the General Meeting.
The Management Company shall ensure that the draft resolutions of the organised General Meeting would separately outline the terms and conditions of the redemption of Shares. A notification on the redemption of Shares carried out by the Company shall be published publicly under the procedure established by the legal acts of the Republic of Lithuania. The Management Company shall not notify the Shareholders of material amendments to the documents if these amendments are made due to the changed provisions of the legislation of the Republic of Lithuania.
–
17.7. –
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19. TERMS AND PROCEDURE OF THE SUSPENSION OF THE REDEMPTION OF INVESTMENT UNITS OR SHARES
At the decision of the Management Company, settlement with the Shareholders of the Company being liquidated can be suspended, or accounts can be settled only in part until the Company has obtained the tax administrator's confirmation regarding the full settlement with the state and/or municipal budgets and state monetary funds.
19.2. Information on the suspension of the redemption of Shares and/or settlement with the Shareholders of the Company being liquidated shall be provided through the Nasdaq Vilnius Stock Exchange and on the website of the Company at: www.invlbalticrealestate.lt.
20.1. The price of the redeemed Shares shall be calculated according to latest published the Net Asset Value if there were no material changes in economic circumstances or real estate market that might make establishment of the Net Asset Value inevitable, considering all amounts actually paid to the shareholders since the publication of the respective Net Asset Value.
20.2.
The value per Share shall be announced through the Nasdaq Vilnius Stock Exchange or on the website of the Company at: www.invlbalticrealestate.lt at the frequency of announcement of the Net Asset Value set in paragraph 9 of the Prospectus.
The purpose of the Company shall be to accumulate and invest the Shareholders' funds in order to achieve the maximum return by investing into the investment objects indicated below. By diversifying investments and managing the risks, the Management Company shall seek to reduce the risks and to prevent possible reduction of the investment value and to create value by selecting investment objects and making use of other market participants' experience.
The aim of the Company is to earn a return for the Shareholders' benefit from investments into land, buildings and/or premises that make up individual real estate properties, real estate properties under construction which are planned to be constructed within an acceptable period, securities and money market instruments of real estate companies, if assets of such companies are invested into real estate corresponding to the investment strategy of the Company, investment units or shares of real estate collective investment undertakings established in the European Union Member States, supervision of which is no less strict than in the Republic of Lithuania, movable property and facilities necessary for operating real estate properties in the investment portfolio of the Company, transferrable securities and money market instruments admitted to trading on the multilateral trading facility and other investment objects not prohibited by law.
The Management Company shall invest up to 100 per cent of the Net Asset Value directly or through Real Estate Companies into the investment objects specified above.
By investing directly or using Real Estate Companies, the Management Company (on behalf of the Company) shall seek to acquire commercial and/or mixed purpose investment objects that generate or are capable of generating regular income.
The Company will seek to increase a return on investment by making every effort to ensure that the properties managed by it would bring regular income and their value would continue to grow. Therefore, the assets held by the Company shall be managed and the acquisitions of new properties shall be made, having regard to the creation of value for the Shareholders.
The Management Company shall manage the Company's portfolio of investment objects in compliance with the following main principles of diversification principles (the compliance of the Company's portfolio of investment objects with the principles set forth below will be achieved within four years from the date on which the Supervisory Authority issued a permit to approve the incorporation documents of the Company and to choose the Depository (the day on which the Supervisory Authority issued a permit to engage in the activities of a closed-end investment company)).
No more than 20 per cent of the value of Net Assets making up the assets of the Company can be invested in:
No more than 30 per cent of the Net Asset Value making up the assets of the Company may be invested in one real estate property and/or Real Estate Company. This investment restriction shall not apply to investments in Controlled Companies if these companies invest the received funds into real estate properties provided that:
The total amount of investments in real estate properties being constructed may not exceed 20 per cent of the value of Net Assets comprising the Company's assets.
The total amount of investments in a real estate property and movable assets and/or equipment necessary for its maintenance cannot exceed 40 per cent of the value of net assets that make up the Company's assets.
The total amount of investments in securities, money market instruments issued by the same Real Estate Company and liabilities of the Company due to financial derivatives transactions with the Company cannot exceed 30 per cent of the value of net assets making up the Company's assets.
The total amount of investments in the investment instruments and investment objects referred to in the last two paragraphs in which such Real Estate Company and the Company have invested cannot exceed 30 per cent of the net assets making up the Company's assets.
For the sake of efficiency of the Company's activities and control over its investments, an Investment Committee shall be formed by the decision of the Board of the Management Company. The Investment Committee shall consist of not more than 3 members, who will be the persons having the right to adopt investment decisions. Members of the Investment Committee shall be appointed and dismissed by the Board of the Management Company. An approval of the Investment Committee shall be obtained for all investments of the Company and their sale.
The procedure of formation, responsibilities and functions of the Investment Committee as well as its decision-making procedure and other procedures shall be established in the Regulations of the Investment Committee.
For the sake of efficiency of activities of the Company and in order to ensure effective handling of potential conflicts of interest, an Advisory Committee may be formed by a decision of the Board of the Management Company.
The procedure of formation, responsibilities, functions of the Advisory Committee, decision-making procedure and other procedures of the Advisory Committee shall be set in the regulations of the Advisory Committee.
The investment strategy for the Company's property entrenched in the Articles of Association may be changed respectively by amending the Articles of Association by the decision of the General Meeting.
The investment object(s) of the Company may be transferred only after having obtained a prior consent of the Depository.
The direct ownership of the Company's investment objects and the ownership of securities of Real Estate Companies shall be possible. Where investments are made through Real Estate Companies, documents related to investments into Real Estate Companies shall be submitted to the Depository so that the Depository could perform its functions established in the applicable legal acts.
Where necessary, funds may be borrowed on behalf of the Company in order to ensure a higher investment return (by additionally financing the investment objects acquired by the Company (or using Controlled or Real Estate Companies) or to finance the activities of the Company. The Management Company can adopt a decision to borrow on behalf of the Company up to 80 per cent of the real estate value for a period not exceeding the term of the Company's activities.
The maximum possible leverage ratio under the general approach (as defined in the Regulation (EU) 231/2013) shall be 300 and 300 for the calculation of the maximum possible leverage ratio under the liability method (as defined in the Regulation (EU) 231/2013).
The Company's assets shall not be lent or used as a guarantee or a warranty to secure the liabilities of other persons, except for Controlled Companies or Real Estate Companies into which the Company invests if the property of such company is invested into the property conforming to the Company's investment strategy and the following two conditions are met:
The Company shall not use any benchmark.
Upon the establishment of the Company, its investment portfolio may not meet the set diversification requirements for 4 years after the date on which the Supervisory Authority issued a permit to approve its incorporation documents and to choose the Depository. In all cases, the right not to comply with the established diversification requirements shall not abolish the obligation of the Management Company to invest the Company's assets pursuant to its investment strategy.
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If, upon the expiration of the set term, the investment requirements shall be violated due to the reasons beyond the control of the Management Company, such situation must be eliminated as soon as possible but no later than within 1 year from the date on which the Management Company became aware of this situation. This term may be longer only in exceptional cases where the Management Company is unable to rectify the situation due to the reasons beyond its control. In this case, upon the expiration of the 1-year term, the Management Company shall immediately notify in writing the Supervisory Authority of the existing situation and its reasons. The notice shall also specify the planned term for the fulfilment of the requirement.
The history of the Company's activities shall be set forth in the Company's business and financial reports available on its website at: www.invlbalticrealestate.lt.
Any kind of investment is inherently related to risk, and investment into Shares is additionally related to specific and higher-thanaverage long-term risk. Such type of investment is suitable only for persons who are capable of assuming this risk and understand that, by acquiring the Shares, they can lose the entire invested amount.
In addition to the risk factors listed below, there can be further risk factors that are not specified herein because, when preparing this Prospectus, the Management Company has no information about such factors or considers them to be insignificant. However, such risks can affect the Company's financial results and have an impact on the value of the Shares. Therefore, the information on risk factors provided herein should not be deemed a detailed and final description of risk factors encompassing all risk factors. Having regard to the aforesaid, the decision to acquire Shares must be adopted having considered the risk factors specified below.
The net asset value of the Company can increase or decrease; for this reason, the Shareholder may not recover the amount invested into the Company. There are no guarantees and no guarantees may be granted regarding the Company's activities and investment return or a specific investment of the Company, and the investment results of the previous period do not guarantee that they will be the same in the future as well.
The sequence of presentation (disclosure) of the risk factors is not based on the analysis of the probability of the occurrence and impact of the respective factors on the Share value and the comparison of factors because due to the specifics of the activities of the Company (activities in the particularly cyclical economic sector) such analysis and comparison could not be sufficiently grounded and could mislead the Shareholders.
The tools for the management of risk factors are not and cannot be considered as ensuring the elimination of respective risk factors.
the price levels, which might be followed by overheating of the market and downward pressure on the prices, thus, starting the next real estate cycle.
The Group seeks to use both types of agreements, depending on the market situation and the properties in question. Lease agreements entered for an unspecified term involve nevertheless a risk that many such agreements may be terminated within a short period of time. The Group aims at renewing the fixed term lease agreements flexibly in cooperation with its tenants. There are, however, no guarantees that the Group will be successful in this. To prevent tenants from terminating the lease agreements, the Group may also be forced to agree on the reduction of rent fees. The reduction of rent fees payable to the Group under a large number of lease agreements and/or concurrent termination of a large number of lease agreements could have a material adverse effect on the Group's business, results of operations and financial condition.
Rising interest rates will increase the Group's debt service costs, which will reduce the return on investment. If considered necessary, the Group will manage interest rate risk by entering financial derivatives' contracts.
in case of deterioration of the Company's financial situation, demand for the Shares of the Company and, at the same time, their price may decrease.
for the desired price. The usual monitoring of the geopolitical situation carried out by the Management Company should contribute to the management of this risk.
25.3. –
25.4. –
25.4.1. Sustainability risk. Sustainability risk means an environmental, social or governance (ESG) event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment. The materialisation of this risk could have a negative impact on the value of the Company's net assets and the assets of the Company's shareholders. In order to mitigate this risk, the Management Company also assesses the sustainability factors and associated sustainability risks relevant to the specific investment being analysed and applies its Policy on Responsible Investment and Integration of Sustainability Risks.
25.4.2. Waste risk. There is a risk that Operating Companies will not properly manage computer waste or other electronic waste. This waste contains hazardous metals that, if not handled properly, can pose a risk to the environment and health. In order to avoid this risk, the Company will encourage the Operating Companies to recycle computer waste and other electronic waste (if possible).
25.4.3. Risk of illegal work. There is a risk that due to a shortage of skilled labour, the Company's service providers and/or contractors may employ persons: (i) who are not citizens of the European Union or who enjoy freedom of movement under European Union law without recruiting , or (ii) will not be contracted in writing. This risk may affect the Company's reputation.
25.4.4. Management and human resources risks. The success of the Company's investment will largely depend on the decisions made by the managers of the companies controlled (directly or indirectly) by the Company, as well as the decisions made by the people responsible for the management of the Company, and the experience and abilities of the said people. There is no guarantee that the same persons will manage the companies controlled (directly or indirectly) by the Company, as well as the Management Company for the entire term of the Company' activities. The Management Company will seek to
implement a promotion policy that ensures that key personnel motivation to participate in the Company's and its investment activities until the end of the term of the Company's activities.
Assessment of the likely impact of sustainability risk on return on the Fund's investments. Taking due account of the Company's investment strategy in respect of sustainability factors, the Management Company is of the opinion that the impact of sustainability risk on the potential return on the Company's investments corresponds with the impact of general investment risks, including market risk, credit risk and liquidity risk.
The Shareholders can find additional information about the risks related to the Shares in the Articles of Association and historical Prospectuses which were announced in order to admit the Shares to trading on a regulated market. In addition, such information will be made available subject to request to the Management Company.
| VI.INFORMATION | ON | FINANCING | AND | FINANCED | COLLECTIVE | INVESTMENT |
|---|---|---|---|---|---|---|
| UNDERTAKINGS | ||||||
In carrying out its activities, the Company's Investment Committee shall evaluate the investment decisions, which consists of: (i) financial, market and/or product analysis; (ii) due diligence of the investment object; and (iii) setting the requirements of compliance of the investment decision with ESG (environmental, social and governance) or sustainability requirements (hereinafter – the ESG requirements).
In accordance with the regulations of the Company's Investment Committee and Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector, the Company's Investment Committee shall assess the compliance of the investment decision with the following ESG requirements prior to adopting an investment decision:
Assessment of negative impact on sustainability. Although the Management Company has integrated an assessment of sustainability risks into its investment decision-making procedures and applies some other ESG practices, but no account is currently taken of principal adverse impacts of investment decisions on the sustainability factors, as defined in Regulation (EU) 2019/2088 of 27 November 2019 of the European Parliament and of the Council on sustainability-related disclosures in the financial services sector. In the opinion of the Management Company, currently, the possibilities of collecting necessary information are limited.
The Company's objective is not sustainable investment as defined in Regulation (EU) 2019/2088 of 27 November 2019 of the European Parliament and of the Council on sustainability-related disclosures in the financial services sector, nor is it intended to promote environmental or social performance or any combination thereof. The investments related to this financial product do not take into account the EU criteria for environmentally sustainable economic activity.
The competence of the General Meeting and its convening and decision-making procedures shall not differ from the competence and procedure established by the Law on Companies of the Republic of Lithuania to the extent the Articles of Association or the Law on Collective Investment Undertakings of the Republic of Lithuania do not indicate otherwise. The right of initiative to convene the meeting shall be vested in the Management Company and the Shareholders whose Shares confer at least 1/10 of all the votes at the General Meeting. The convening of the General Meeting shall be organised by the Management Company.
All decisions of the General Meeting shall be adopted by a 3/4 majority of votes conferred by the Shares held by the Shareholders present at the Meeting, except for the decisions specified below which are taken by a 2/3 majority of votes carried by the Shares held by the Shareholders participating at the Meeting, i.e., decisions:
The decisions of the General Meeting specified below can be adopted only after considering the recommendations provided by the Board of the Management Company and/or the Investment Committee of the Company and with regard to consequences of the respective decision, namely, decisions regarding:
The Management Company must present its recommendations on draft decisions on issues indicated above together with the announced draft decisions proposed by the Management Company. The Board of the Management Company shall determine the issues on which recommendations will be provided by the Investment Committee of the Company.
In case draft decisions are proposed not by the Management Company but by the Shareholders, the Management Company must, no later than within 5 (five) business days after presentation of such a draft decision to the Company, prepare a relevant recommendation and announce it in the way draft decisions are announced. In any case recommendations of the Management Company regarding all draft decisions on relevant issues of the agenda must be announced no later than 3 (three) business days until the date of the General Meeting.
If the General Meeting adopts a decision not following the recommendations provided by the Management Company, the Management Company shall not be responsible if such decisions violate the requirements for management of the Company, or there are other negative consequences.
An ordinary General Meeting shall take place no later than by 30 April of the current year.
Representatives of the Management Company shall have the right to participate in the General Meetings.
An extraordinary General Meeting shall be convened if:
the auditor or audit firm terminates its agreement with the Company and/or the Management Company or for any other reasons cannot audit the set of the Company's annual financial statements.
the Management Company seeks to terminate the management agreement with the Company, or there are reasons why the agreement between the Company and the Management Company cannot be performed.
The General Meeting can take decisions and shall be deemed to have taken place irrespective of the number of votes conferred by the Shares held by the Shareholders present at the meeting.
The General Meeting shall have no right to adopt decisions which are assigned to the competence of the Management Company by the Articles of Association, or which are management decisions in their essence.
Management bodies of the Company shall not be formed. Management of the Company shall be transferred to the Management Company; therefore, in accordance with the Law on Collective Investment Undertakings of the Republic of Lithuania, the rights and obligations of the Board and the Manager of the Company established in the Law on Companies of the Republic of Lithuania shall be transferred to the Management Company.
The Company management fee provided for in paragraph 13.1.1 of the Prospectus shall be paid to the Management Company for the management of the Company. The Management Company shall also have the right to the share of the Company's profit established according to the provisions of paragraph 13.1.1 of the Prospectus.
Paulius Žurauskas – General Manager of the Management company Main workplace – INVL Asset Management, UAB (code 126263073, Gynėjų str. 14, Vilnius) General manager
| Educational background and qualifications |
Vilnius University, Master's degree in Banking (Economist qualification), Faculty of Economics |
|---|---|
| Work experience | 2019 – 2023 Luminor Bank AS Lithuanian branch – Head of Markets in the Baltics 2012 – 2014 AB SEB Banka – Head of Markets 2005 – 2019 SEB Bankas, AB – dealer, Head of sales department of financial instruments, Head of the capital markets department in the Baltics 2004 – 2005 FMI Finasta, AB – Financial broker |
| Participation in other companies |
IPAS INVL Asset Management (code 40003605043, Elizabetes iela 10B-1, Riga, Latvia) – Member of the Supervisory Board AS INVL atklātajs pensiju fonds (code 40003377918, Elizabetes iela 10B-1, Riga, Latvia) – Member of the Supervisory Board FMI INVL Financial Advisors, UAB (code 304049332, Gynėjų str. 14, Vilnius) – Member of the Board |
Vytenis Lazauskas – Head of Finance of the Management Company Main workplace – INVL Asset Management, UAB (code 126263073, Gynėjų str. 14, Vilnius) Head of Finance of INVL Group.
Educational background and qualifications 1999 – 2005. Vilnius University. Master's degree in Finance. Bachelor's degree in Accounting and Audit.
Work experience Since 2018. UAB INVL Asset Management. Head of Finance group. 2003 – 2018. PricewaterhouseCoopers, UAB. Senior project manager.
Darius Šulnis – Chairman of the Board of the Management company Main workplace – Invalda INVL, AB (code 121304349, Gynėjų str. 14, Vilnius) - CEO
| Participation in other companies |
Invalda INVL, AB (code 121304349, Gynėjų str. 14, Vilnius) – CEO Šiaulių bankas, AB (code 112025254, Tilžės str. 149, Šiauliai) – Member of the Supervisory Board Litagra, UAB (code 304564478, Savanorių ave. 173, Vilnius) – Member of the Board INVL Asset Management, UAB (code 126263073, Gynėjų str. 14, Vilnius) managed fund INVL Baltic Sea Growth Fund – Investment Committee Member, Managing partner FERN Group, UAB (code 306110392, Granito str. 3-101, Vilnius) – Chairman of the Supervisory Board |
|---|---|
| ------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
Nerijus Drobavičius – Member of the Board of the Management company Main workplace – INVL Asset Management, UAB (code 126263073, Gynėjų str. 14, Vilnius) Private Equity Partner
| INVL Technology, CEF (code 300893533, Gynėjų str. 14, Vilnius) – Member of the Investment | |
|---|---|
| Committee | |
| BSGF Sanus, UAB (code 304924481, Gynėjų str. 14, Vilnius) – Director | |
| InMedica, UAB (code 300011170, L. Asanavičiūtės str. 20-201, Vilnius) – The Chairman of the | |
| Board | |
| INVL Asset Management, UAB (code 126263073, Gynėjų str. 14, Vilnius) managed fund INVL Baltic | |
| Sea Growth Fund – Investment Committee Member, Partner | |
| MBL A/S (CVR-no 12825242) – Member of the Board | |
| Participation in |
other MBL Poland Sp. z.o.o. (ul. Sulejowskiej 45d, 97-300 Piotrków Trybunalski, Polska, KRS |
| companies | 0000065219) – Member of the Supervisory Board |
| Reneso, UAB (code 302941941, Gynėjų str. 14, Vilnius) – Director | |
| Sugrasta, MB (code 305287386, Pranapolio str. 11, Vilnius) – Director | |
| "Eglės" sanatorium, UAB (code 152038626, Eglės str. Ą, Druskininkai) – Chairman of the Board | |
| BSGF Salt Invest, CEF (code 306193648, Gynėjų g. 14, Vilnius) – Manager | |
| BSGF Salt, UAB (code 306193153, Gynėjų str. 14, Vilnius) – Director | |
| MiniVetHolding, UAB (code 306127331, Gynėjų g. 14, Vilnius) – Member of the Board | |
| Bališkių individualių gyvenamųjų namų statybos bendrija (code 300027032, Pranapolio str. 11, Vilnius) – Chairman |
Vytautas Plunksnis – Member of the Board of the Management company Main workplace – INVL Asset Management, UAB (code 126263073, Gynėjų str. 14, Vilnius) Head of Private Equity
Participation in other companies
INVL Asset Management, UAB (code 126263073, Gynėjų str. 14, Vilnius) managed fund INVL Baltic Sea Growth Fund – Investment Committee Member, Partner Eco Baltia AS (code 40103446506, Maskavas str. 240-3, Rīga, Latvia) – Chairman of the Supervisory Board Ecoservice, UAB (code 123044722, Dunojaus str. 29, Vilnius) – Chairman of the Board B2Y, SIA (code 40103243404, Maskavas iela 322A, Rīga) – Chairman of the Board
INVL Technology (code 300893533, Gynėjų str. 14, Vilnius) – Member of the Investment Committee Norway Registers Development AS (code 985 221 405 MVA, Lokketangen 20 B, 1337 Sandvika, Norway) – Member of the Board NRD Systems, UAB (code 111647812, Gynėjų str. 14, Vilnius) – Member of the Board NRD CS, UAB (code 303115085, Gynėjų str. 14, Vilnius) – Member of the Board Novian Systems, UAB (code 125774645, Gynėjų str. 14, Vilnius) – Chairman of the Board NRD Companies AS (code 921 985 290 MVA, Lokketangen 20 B, 1337 Sandvika, Norway) – Member of the Board BC Moldova-Agroindbank SA (MAIB) (code 1002600003778, Constantin Tănase str. 9/1, Chisinau, Moldova) – Chairman of the Supervisory Board Investuotoju Asociacija, association (code 302351517, Konstitucijos av. 23, Vilnius) – Chairman of the Board Metal-Plast Spółka z o.o. (code 0001007622, 58-160 Świebodzice, ul. Ciernie 157B, Poland) – Member of the Supervisory Board Homecourt Spółka z o.o. (code 5252958248, Grzybowska 2/29, 00-131 Warszawa, Poland) – Member of the Board
With a view to ensure the effectiveness of the Company's activities and investment control, the Investment Committee shall be formed by the decision of the Board of the Management Company. An approval of the Investment Committee must be obtained for all investments of the Company and their sale.
The procedure of formation, responsibility and functions of the Investment Committee as well as its decision-making and other procedures shall be established in the Regulations of the Investment Committee.
As of the Prospectus announcement date, the Investment Committee consists of:
Participation in other
companies
Vytautas Bakšinskas – Chairman of the Investment Committee
Main workplace – INVL Asset Management, UAB (code 126263073, Gynėjų str. 14, Vilnius) Real estate fund manager
Proprietas, UAB (code 303252098, Gynėjų str. 14, Vilnius) – DirectorRovelija, UAB (code 302575846, Gynėjų str. 14, Vilnius) – Director
Pramogų bankas, UAB (code 30044665, A. Stulginskio str. 8, Vilnius) – Director
Andrius Daukšas – Member of the Investment Committee
Main workplace – INVL Asset Management, UAB (code 126263073, Gynėjų str. 14, Vilnius) Investment manager
| Participation in other | IPPG, UAB (code 301673796, Gynėjų str. 14, Vilnius) - Director |
|---|---|
| companies | Vernitas, AB (code 193052526, Stoties str. 16, Marijampolė) - Member of the Supervisory Board |
As of the Prospectus date, the Management Company has no information on any significant conflicts of interest between the members of the Investment Committee of the Company and the Company or its Shareholders.
37.3. On 11 November 2016, the Management Company and the Company concluded the Investment Company Management Agreement in which it as agreed that the Management Company will receive the management fee and acquire the right to the share of the Company's profit (as defined in paragraph 13.1.1 of the Prospectus) for the management of the Company, i.e. the Company's investment management, administration, marketing and other related activities as defined in the Law on Collective Investment Undertakings of the Republic of Lithuania. The Company Management Agreement between the Company and the Management Company was amended on 29 December 2017 after the approval of the General Meeting (hereinafter the Agreements dated 11 November 2016 and 29 December 2017 collectively referred to as the Agreements).
Under the above Agreement, the Management Company acquired the right:
The Agreement shall be valid until the full discharge of the obligations of the Parties or until the termination or other expiration of the Agreement on the grounds established in the Agreement, the Articles of Association or in the applicable legislation.
The Agreement may be terminated on the initiative of the Company after the General Meeting has decided under the procedure established by the Company in the Articles of Association to replace the Management Company of the Company and hand over the management of the Company to another management company when:
The Agreement may be terminated on the initiative of the Management Company only due to important reasons. In such a case the Management Company shall convene the General Meeting which would resolve the issues related to the termination of the Agreement, replacement of the Management Company, handover of the management of the Company to another company and the approval of such actions by the Supervisory Authority. In any case the Management Company shall notify the Company and the Shareholders of its intention to terminate the Agreement and inform the Supervisory Authority about such notification no later than 6 months in advance.
In the event that the Agreement is terminated due to reasons for which the Management Company is not responsible (irrespective of which Party initiates the termination of the Agreement), the Management Company shall receive compensation amounting to the sum of management fees for the last 4 full quarters. In addition, the Management Company shall receive the full Performance Fee due until the Agreement termination date (accrued and not paid).
The new wording of the Agreement was approved on 29 December 2017.
37.4. Other collective investment undertakings managed by the Management Company:
SUTPKIB INVL Technology is an investment company in information technology listed on AB Nasdaq Vilnius. Since 2016 July 14 the company operates as a closed-end investment company (CEF). According to the company's Articles of Association, INVL Technology, CEF will operate until 2026 july 14 with the provided possibility of extending this deadline for another two years. The company is managed by INVL Asset Management, the leading alternative asset manager in the Baltics.
INVL Technology consists of three corporate groups: NRD Cyber Security, Novian and NRD Companies.
NRD Companies is a group of companies operating in the GovTech and FinTech fields, specializes in electronic registries and government electronic field of design, development and operation. NRD Companies has offices in Norway and Lithuania, employs more than 100 employees and the geography of implemented project reaches more than 50 countries.
The Novian group operates in the field of information technology, IT infrastructure and digitization services. Novian has offices in six countries and headquarters in Vilnius, it employs more than 250 employees, the geography of implemented projects reaches over 50 countries.
The company NRD Cyber Security works in the field of cyber security. The company has and office in Bangladesh and a central headquarters in Vilnius, it employs more than 40 employees, and the geography of implemented projects reaches more than 40 countries.
INVL Technology, while developing businesses, aims to create value for shareholders, so by 2026 the businesses managed by the company will be sold.
The open-end investment fund for informed investors INVL Partner Global Real Estate Fund I shall seek a long-term appreciation of the capital invested in the fund by the investors while receiving a steady return on the fund's assets. INVL Partner Global Real Estate Fund I intends to achieve this investment objective by acquiring, holding and disposing of units of the portfolio collective investment undertakings investing in high-quality real estate (office, retail, apartment buildings, etc.), or in other funds managed by other managers in Europe and the US.
The closed-end umbrella investment fund intended for informed investors INVL Alternative Assets Umbrella Fund, which consists of the following 7 subfunds:
this investment objective indirectly through the acquisition, holding and transfer of Authorised Investments related to Distressed Entities. Directly Authorised Investments will be acquired, held and transferred by the master CIU and/or another collective investment undertaking in which the master CIU will invest. In exceptional cases (e.g., after the master CIU has exercised the right to distribute the unrealised assets of the master CIU to the participants of the master CIU (including the Subfund) at the end of the term of the master CIU activities), the Subfund may temporarily acquire the Authorised Investments directly, however, take prior economically reasonable measures to prevent the Subfund from acquiring ownership of the Authorised Investments directly (e.g., shall exercise the right for the Manager of the master CIU to find a purchaser for such Authorised Investments before their ownership passes to the Subfund), given that the Subfund does not intend to acquire the Authorised Investments directly.
The closed-end umbrella investment fund intended for informed investors INVL Alternative Assets Umbrella Fund II, which consists of a one subfund:
INVL Baltic Sea Growth Fund will invest in medium-sized companies with an attractive risk-return ratio, providing them with capital for further growth. The Fund will seek to form a diversified portfolio of Baltic Sea region companies and will focus on growth capital, buyout, and "buy and build" investments.
Usually, the extra pay is paid in cash. Acting in compliance with the principle of proportionality, the Management Company shall not apply the requirement to mandatorily pay the extra pay in financial instruments. However, if the Management Company provides such possibility, the extra pay may, at the employee's choice, be paid in financial instruments or equivalent instruments (share options, contributions to the pension fund, insurance instalments). An extra pay, including its carry-forward portion, may be assigned and/or paid out to the employee provided that the Management Company is in a sustainable financial position, having regard to the operating results of the Management Company and/or its division and only in the case that the results of the employee's annual individual evaluation are positive. Having regard to the size and organisational structure of the Management Company, no remuneration committee shall be formed. Remuneration of the General Manager, Internal Auditor and other employees of the Management Company whose subordination (responsibility) is assigned to the Board according to the management structure approved by the Board of the Management Company (both the official monthly salary and annual extra pays) shall be determined (allocated) by the Board of the Management Board. The remuneration of all other employees shall be determined by the General Manager of the Management Company. The list of these persons is provided in subparagraph 37.2 of the Prospectus.
The Management Company must follow the Management Company's remuneration policy for employees making decisions on risk assumption.
The Management Company has concluded the distribution services agreement for the Company with UAB FMĮ INVL Financial Advisors. This agreement nominally encompasses the actions related to the distribution of Shares; however, under this services agreement only the services excluding the distribution of Shares are provided de facto (the provided services encompass the liaising with the Shareholders who are clients of UAB FMĮ INVL Financial Advisors and who keep their Shares in the securities accounts managed by UAB FMĮ INVL Financial Advisors). After the Management Company together with the Shareholders have adopted the decision regarding the issue and distribution of new Shares, a new respective agreement between the Management Company and UAB FMĮ INVL Financial Advisors will be concluded by respectively providing mandatory notifications to the Supervisory Authority under the applicable legal acts.
The Management Company can delegate functions to third parties entitled to provide respective services in compliance with the requirements of the applicable legal acts.
The Management Company shall have no right to delegate so many of its management functions to another company that it would have practically no management functions left.
The delegation of some of the functions to another company shall not exempt the Management Company from its liability.
See the note in paragraph 38 of the Prospectus.
40.1. AB SEB Bankas, Gedimino Ave. 12, LT-01103 Vilnius, (8 5) 268 2800, (8 5) 268 2333, [email protected], www.seb.lt.
During the preparation of the Prospectus, the Management Company has not received any information about any potential conflicts of interest related to the Depository; however, there is a probability that the Depository can provide services to other collective investment undertakings which have similar investment objectives, investment strategy and investment policy as the Company. Thus, there might be situations when the Depository will have a potential conflict of interest in respect of the Company during the provision of its services to the Company. In such situations, the Depository will have to take into account the provisions of the agreements concluded by the Company and/or the Management Company with the Depository for the benefit of the Company. Moreover, the Depository will have to ensure that the Management Company, the Company and the Shareholders are treated fairly and in their best interests, as this is practically feasible in a particular situation.
In 2023, the audit of the Company was performed by an independent audit company UAB PricewaterhouseCoopers, J. Jasinskio St. 16B, LT-03163 Vilnius, +370 5 239 2300, No. 001273, 20 December 2005.
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The valuation of the Company's investment portfolio is performed by OBER-HAUS nekilnojamasis turtas, UAB (+370 5 2109 700, Geležinio Vilko str. 18a, Vilnius 08104), OBER-HAUS Vertešanas serviss, SIA (+371 67 28 45 44, Ieriku street 5, Riga, 1084), Merhels Revidenti Konsultanti, SIA (Republikas laukums street 3-124, Riga, 1010). Further information is available in the consolidated annual reports and in the Company's consolidated financial statements (announced on the website: www.invlbalticrealestate.lt).
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The Company can be liquidated:
Upon decision to liquidate the Company, the Management Company shall automatically become the liquidator of the Company which shall perform all the liquidator's functions.
The Company shall operate for 30 years after the date of the permission of the Supervisory Authority to approve the incorporation documents of the Company and to choose the depository for the first time (i.e., 22 December 2016). The term of the Company's activities can be additionally extended for a period not exceeding 20 years. The decision regarding the extension of the term of the Company's activities can be adopted by the General Meeting no later than 6 months prior to the expiration of the term of the Company's activities or the extended term of the Company's activities (provided that the term of the Company's activities has been extended for a period shorter than 20 years). At least 3 months prior to the expiration of the term of the Company's activities, the General Meeting shall adopt a decision regarding the liquidation of the Company. In case of liquidation of the Company, accounts with the Shareholders shall be settled in accordance with the procedure laid down by the Articles of Association.
After the decision to liquidate the Company has entered into force, the liquidator shall immediately submit to the Supervisory Authority a set of financial statements of such Company prepared on the basis of the data as of the adoption of the decision to liquidate the Company, the audit opinion on this set and the audit report. Assets of the Company being liquidated shall be sold while acting under the best conditions and in the best interests of the Shareholders. The General Meeting shall have no right to adopt decisions that would oblige the liquidator to act otherwise than under the best conditions and in the best interests of the Shareholders, including but not limited to the setting of deadlines for the completion of the liquidation procedure as well as the procedure and terms for the sale of the Company's assets. Accounts with the Shareholders shall be settled in cash.
Upon liquidation of the Company, the assets of the Company shall be sold and the cash remaining after the performance of the debt obligations shall be divided among the Shareholders pro rata to the number of shares held by them. In the case of the Company's liquidation, accounts with the Shareholders shall be settled by transferring the amounts payable to the Shareholders into the bank accounts indicated by the Shareholders or (if the Shareholder's data are not known) to the depository account under the procedure established by the legal acts. Accounts with the Shareholders shall be settled in Euro. Settlement with the Shareholders of the Company can be suspended or effected only in part by the decision of the Management Company until the Company has received the tax administrator's confirmation regarding the settlement with the state and/or municipal budgets and state money funds.
45.2. No advisor services have been sought for the preparation of the Prospectus.
I, Paulius Žurauskas, General Manager of UAB INVL Asset Management, hereby confirm that the information provided in the Prospectus is true and correct and that it contains no concealed facts that could have a material impact on investor decisions
I, Vytenis Lazauskas, Head of the Financial Division of UAB INVL Asset Management, hereby confirm that the information provided in the Prospectus is true and correct and that it contains no concealed facts that could have a material impact on investor decisions
(Signature)
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