Interim / Quarterly Report • Aug 31, 2015
Interim / Quarterly Report
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Prepared in accordance with The Rules for the Preparation and the Submission of the Periodic and Additional Information. approved by the decision No. 03-48 of the Board of the Bank of Lithuania passed on 28 February 2013.
Approved by the Board of Invalda INVL, AB on 31 August 2015
Translation note:
This version of the Interim Report is a translation from the original, which was prepared in Lithuanian language. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version takes precedence over this translation. CONTENTS
| I. GENERAL INFORMATION 3 | |
|---|---|
| 1. Reporting period for which the report is prepared 3 | |
| 2. General information about the Issuer and other companies comprising the Issuer's group 3 | |
| 2.1. Information about the Issuer 3 | |
| 2.2. Information on company's goals, philosophy and strategy 3 | |
| 2.3. Information about the Issuer's group of companies 3 | |
| 3.Agreements with intermediaries on public trading in securities 4 | |
| 4. Information on Issuer's branches and representative offices 4 | |
| II. INFORMATION ABOUT SECURITIES 4 | |
| 5. The order of amendment of Issuer's Articles of Association 4 | |
| 6. Structure of the authorized capital 5 | |
| 6.1. Information about the Issuer's treasury shares 5 | |
| 7. Trading in Issuer's securities as well as securities, which are deemed to be a significant financial investment to the Issuer on a regulated market 5 |
|
| 8. Shareholders 7 | |
| 8.1. Information about shareholders of the company 7 | |
| III. ISSUER'S MANAGING BODIES 8 | |
| 9. The managing bodies of the Issuer 8 | |
| 10. Information about the Audit Committee of the company 10 | |
| 11. Information on the amounts calculated by the Issuer, other assets transferred and guarantees granted to the Members of the Board, the President and CFO 11 |
|
| IV. INFORMATION ABOUT THE ISSUER'S AND ITS GROUP COMPANIES' ACTIVITY 12 | |
| 12. Overview of the Issuer and its group activity 12 | |
| 12.1. Significant Issuer's and its group events during the reporting period and since the end of it, affect on the financial statements 13 |
|
| Significant events of the Issuer during the reporting period. 13 | |
| Significant events of the Issuer since the end of the reporting period until the release of the report 14 | |
| Significant events of the Issuers group 15 | |
| The asset management business 15 | |
| Other Investments 16 | |
| 12.2. Issuer's and its group companies' performance results 18 | |
| 13. Activity plans and forecast of the Issuer and it's group 19 | |
| 14. A description of the principal risks and uncertainties 19 | |
| 15. Significant investments made during the reporting period 19 | |
| 16. Information on the related parties' transactions 19 |
The report is prepared for 6 months of 2015 (January – June), but material events of the Issuer and its group that took place after the reporting period are disclosed as well. The report is unaudited.
| Name of the Issuer | The public joint-stock company Invalda INVL |
|---|---|
| Code | 121304349 |
| Adress | Seimyniskiu str. 1A. LT-09312 Vilnius, Lithuania |
| Telephone | +370 5 279 0601 |
| Fax | +370 5 279 0530 |
| [email protected] | |
| Website | www.invaldainvl.lt |
| Legal form | The public joint-stock company |
| Date and place of registration | 20 March 1992. Register of Enterprise of Vilnius |
| Register in which data about the Company are accumulated and stored |
Register of Legal Entities |
Invalda INVL, AB is one of the leading asset management groups in the Baltic region, operating since 1991. Invalda INVL group companies operating in Lithuania and Latvia manage pension, investment and real estate funds, provide portfolio management services. Invalda INVL also directly owns private equity investments.
Invalda INVL, AB started the activity in 1991 as the company Invalda, AB. From 1991 until 1997 it operated as an public investment company established during the state property privatization, which was implemented in accordance to the State Property Primary Privatization law of the Republic of Lithuania. From 1997 until 2003 the company operated as a licenced holding investment company (the license was issued by the Securities Commission of Lithuania). Company's equities have been traded on the NASDAQ OMX Vilnius Exchange since 1995. 31 May 2013 the split-off procedure of Invalda, AB was completed and the company continued its activity under the new name of Invalda LT, AB. On May 2015 the company changed its corporate name to the public joint-stock company Invalda INVL.
Invalda INVL, AB concentrates into the asset management business. The company acquired specialised pension funds management company MP Pension Funds Baltic in September 2014. The company completed Finasta Group acquisition deals in Latvia and Lithuania at the beginning of 2015 (acquiring INVL Asset Management companies, situated in Lithuania and Latvia). In July 2015 Invalda INVL transferred owned shares in the bank Finasta and brokerage company Finasta to Siauliu bankas.
Currently, the largest part of Invalda INVL group assets is concentrated in Lithuania and Latvia. At the end of the reporting period the company acted in the field of asset managemet business and managed other private equity investments. Invalda INVL, AB managed companies operating in agricultural, facility management and banking areas.
The asset management business is the core of the company's strategic, while other investments may be sold receiving attractive offers. At the moment INVL Asset Management and MP Pension Funds Baltic, the asset management business companies, are being merged into one company and will continue its operations under the name INVL Asset Management, UAB. The completion of the merger is planned in September 2015.
Fig. 2.3.1. The group companies of Invalda INVL, AB from 17 July 2015
(after transfer of owned shares in the bank Finasta and FBC Finasta to Siauliu bankas)
Invalda INVL, AB has signed agreements with these intermediaries:
Invalda INVL, AB has no branches or representative offices.
The Articles of Association of Invalda INVL, AB may be amended by resolution of the General Shareholders' Meeting. passed by more than 2/3 of votes (except in cases provided for by the Law on Companies of the Republic of Lithuania). Actual wording of the Articles of Association is dated as of 11 May 2015. The document has been published on the company's website.
Table 6.1. Structure of Invalda INVL, AB authorised capital as of 30 June 2015
| Type of shares | Number of shares, units |
Total voting rights granted by the issued shares,units |
Nominal value, EUR |
Total nominal Value, EUR |
Portion of the authorised capital, % |
|---|---|---|---|---|---|
| Ordinary registered shares |
11,865,993 | 11,722,348 | 0.29 | 3,441,317.97 | 100 |
All shares are fully paid-up and no restrictions apply on their transfer.
Invalda INVL group manages MP Pension Funds Baltic, a specialised pension funds management company, also the asset management company INVL Asset Management in Lithuania. According to Lithuanian law, a natural or legal person (or persons acting in concert), indirectly willing to acquire or increase their shareholding in an asset management company (more than 20, 30 or 50 percent), have to obtain a decision from the Bank of Lithuania not to object this acquisition. This means that investors, willing to acquire more than 20 percent shareholding in Invalda INVL, AB, can do so only with a prior decision from the Bank of Lithuania.
Invalda INVL also owns asset management company Finasta Asset Management in Latvia, therefore according Latvian Financial and Capital Market Commission restrictions under acquisition of the shareholding in Invalda INVL must be fulfilled as well.
Since the beginning of 2015 until the release of the report, the company implemented own share acquisition process for one time.
11 June 2015 Invalda INVL announced about aquisition of own shares. Share purchase started on 12 June 2015. Share purchase ended on 22 June 2015. Max number of shares to be acquired (units): 262,000. Share purchase price (EUR): 3.82 per share. On 22 June 2015 the company acquired 143,645 units of own shares (1.2 percent), EUR 548.7 thousand (without brokerage fee) were paid for the acquired shares on 25 June 2015.
The authorised capital of Invalda INVL is EUR 3,441,137.97. It is divided into 11,865,993 ordinary registered shares with nominal value EUR 0.29 each. Taking into consideration the fact that the shares own by the company does not give the voting rights, the total amount of shares with voting rights in Invalda INVL, AB (ISIN LT0000102279) equals to 11,722,348 units.
| Shares issued, units | 11,865,993 |
|---|---|
| Shares with voting rights, units | 11,722,348 |
| Nominal value | 0.29 EUR |
| Total nominal value | 3,441,317.97 EUR |
| ISIN code | LT0000102279 |
| Name | IVL1L |
| Exchange | NASDAQ Vilnius |
| List | Baltic Secondary list |
| Baltic Main List (from 1 January 2008 untill 20 July 2015) | |
| Listing date | 19 December 1995 |
| Indrawn into indexes | VILSE (OMX Vilnius Index) |
| OMXBPI (OMX Baltic All Share Price Index) | |
| B40PI (OMX Baltic Financials Price Index) | |
| B8000PI (OMX Baltic Financials PI) | |
| B8700PI (OMX Baltic Finl Svc PI) | |
| B8000GI (OMX Baltic Financials GI) | |
| B8700GI (OMX Baltic Finl Svc GI) |
Table 7.1. Main characteristics of Invalda INVL, AB shares admitted to trading
Company uses no services of liquidity providers.
| 6 months of 2013 | 6 months of 2014 | 6 months of 2015 | |
|---|---|---|---|
| Share price, EUR | |||
| - open | 1.970 | 3.380 | 3.100 |
| - high | 2.830 | 3.490 | 3.700 |
| - low | 1.960 | 2.760 | 2.950 |
| - medium | 2.291 | 3.135 | 3.142 |
| - last | 2.650 | 2.910 | 3.600 |
| Turnover, units | 1,935,755 | 56,183 | 29,476 |
| Turnover, EUR | 4,403,436.39 | 179,688.43 | 98,141.11 |
| Traded volume, units | 3,243 | 314 | 188 |
The Shareholders of Invalda INVL, AB Alvydas Banys, LJB Investments, UAB, Irena Ona Mišeikienė, Indrė Mišeikytė, Darius Šulnis, Lucrum investicija, UAB, have signed the agreement on the implementation of a long-term corporate governance policy, so their votes are countable together .
Table 8.1.1. Shareholders who held title to more than 5% of Invalda INVL, AB authorised capital and/or votes as of 30 June 2015.
| Number of | Share of | Share of the votes, % | ||||
|---|---|---|---|---|---|---|
| Name of the shareholder or company |
shares held by the right of ownership, units |
the authorise d capital held, % |
Share of votes given by the shares held by the right of ownership, % |
Total (together Indirectly held with the votes, % persons acting in concert), % |
||
| LJB Investments. UAB code 300822575, Juozapavičiaus str. 9A, Vilnius |
3,612,330 | 30.44 | 30.82 | 61.04 | ||
| Irena Ona Mišeikienė | 3,369,435 | 28.40 | 28.74 | 63.12 | ||
| Darius Šulnis | 0 | 0.00 | 0.00 | 91.86 | 91.86 | |
| Lucrum Investicija, UAB* code 300806471. Šeimyniškių str. 3, Vilnius |
2,401,442 | 20.24 | 20.49 | 71.37 | ||
| Alvydas Banys | 910,875 | 7.68 | 7.77 | 84.09 | ||
| Indrė Mišeikytė | 236,867 | 2.00 | 2.02 | 89.84 |
*Lucrum Investicija, UAB has additionally 2.02 % of votes granted by the shares sold by the repurchase agreement.
Fig. 8.1.2. Votes as of 30 June 2015
There are no shareholders entitled to special rights of control. In the end of June 2015 the amount of shareholders of the company consisted of about 3,800.
The governing bodies of Invalda INVL, AB are: the General Shareholders' Meeting, sole governing body – the President and a collegial governing body – the Board. The Supervisory Board is not formed. Information about members of the Board, CFO and the Audit Committee of the Company.
The Board of Invalda INVL, AB was elected during the Extraordinary General Shareholders' Meeting on 28 May 2013. The Board was elected for the 4 years term of office. Mr. Banys was elected as the Chairman of the Board. Mr. Šulnis and Ms. Mišeikytė were elected as the Members of the Board. Mr. Šulnis was appointed as the President of the company on 22 May 2013.
Alvydas Banys – Chairman of the Board
| The term of office | From 2013 until 2017 |
|---|---|
| Educational background and qualifications |
Vilnius Gediminas Technical University. Faculty of Civil Engineering. Master in Engineering and Economics. |
| Junior Scientific co-worker. Economic's Institute of Lithuania's Science Academy. | |
| Work experience | Since 1 July 2013 Invalda INVL, AB - Advisor Since 2007 LJB Investments, UAB - Director Since 2007 JLB Property, UAB - Director 1996 – 2006 Invalda, AB - Vice President 1996 – 2007 Nenuorama, UAB - President |
| Owned amount of shares in Invalda INVL, AB |
Personally: 910,875 units of shares. 7.68 % of authorised capital and 7.77 % votes; together with controlled company LJB Investments: 4,523,205 units of shares. 38.12 % of authorized capital and 38.59 % votes. Total votes together with persons acting in concert - 91.86 %. |
| Participation in other companies |
Invalda LT Investments, UAB – Chairman of the Board INVL Baltic Farmland, AB – Chairman of the Board INVL Baltic Real Estate, AB – Chairman of the Board INVL Technology, AB – Member of the Board MP Pension Funds Baltic, UAB – Member of the Board Litagra, UAB – Member of the Board |
Indre Miseikyte – Member of the Board
| The term of office | From 2013 until 2017 |
|---|---|
| Educational background and qualifications |
Vilnius Gedimino Technical University. Faculty of Architecture. Master in Architecture. |
| Work experience | Since May 2012 Invalda INVL, AB - Advisor Since June 2013 Invalda Privatus Kapitalas, AB - Advisor Since 2002 Inreal Valdymas, UAB - Architect 2000 – 2002 Gildeta, UAB - Architect 1997 – 2000 Kremi, UAB - Architect 1996 – 2002 Invalda, AB - Architect 1996 – 1997 Gildeta, UAB - Architect 1994 – 1996 Vilniaus Baldai, AB - Architect |
| Owned amount of shares in Invalda INVL, AB |
Personally: 236,867 units of shares. 2 % of authorised capital and 2.02 % votes. Total votes together with persons acting in concert - 91.86 %. |
| Participation in other companies |
Invalda Privatus Kapitalas, AB – Member of the Board INVL Baltic Real Estate, AB – Member of the Board INVL Baltic Farmland, AB – Member of the Board |
Darius Sulnis – Member of the Board, the President
| The term of office in the Board |
From 2013 until 2017 |
|---|---|
| Educational background and qualifications |
Duke University (USA). Business Administration. Global Executive MBA. Vilnius University. Faculty of Economics. Master in Accounting and Audit. |
| Financial broker's license (general) No. A109. | |
| Work experience | Since the beginning of 2015 – CEO of INVL Asset Management, UAB. |
| 2006 – 2011 Invalda. AB – President. 2011 – 2013 Invalda. AB – Advisor. Since May 2013 Invalda INVL, AB – President. |
|
| 2002 – 2006 Invalda Real Estate, UAB (current name Inreal Valdymas) – Director 1994 – 2002 FBC Finasta, AB – Director |
|
| Owned amount of shares in Invalda INVL, AB |
Personally: 0 units of shares. 0.00 % of authorised capital and votes; together with controlled company Lucrum Investicija: 2,401,442 units of shares. 20.24 % of authorised capital. 22.51 % of votes (including votes granted by the shares transferred by the repurchase agreement). |
| Total votes together with persons acting in concert - 91.86 %. |
continued of the next page
| Participation in other companies |
INVL Asset Management, UAB – CEO, Chairman of the Board Finasta Asset Management, IPAS (Latvia) - Member of the Supervisory Board Finasta atklātajs pensiju fonds, AS (Latvia) – Member of the Supervisory Board Bank Finasta, AB – Member of the Supervisory Board MP Pension Funds Baltic, UAB - Chairman of the Board Litagra, UAB – Member of the Board Invalda LT Investments, UAB – director, Member of the Board INVL Baltic Farmland, AB – Member of the Board |
|---|---|
| Raimondas Rajeckas – CFO | |
| Educational background and qualifications |
Vilnius University, Faculty of Economics. |
| Work experience | Since 2006 Invalda LT, AB – CFO 2001 – 2006 Valmeda, AB – CFO 2000 – 2001 Galincius, AB – CFO 2000 – 2001 Invaldos Marketingas, UAB (current name Inreal Valdymas. UAB) – CFO 2000 – 2002 Gildeta, AB – Accountant 1998 – 2000 Invalda, AB – Accountant |
| Owned amount of shares in Invalda INVL, AB |
- |
| Participation in othercompanies |
Invalda LT Investments, UAB – Member of the Board Proprietas, UAB – Director Inventio, UAB – Director Aktyvo, UAB – Director Aktyvus Valdymas, UAB – Director Iniciatyvos Fondas, VSI – Director MBGK, UAB – Director MGK Invest, UAB – Director RPNG, UAB – Director Regenus, UAB – Director Cedus Invest, UAB – Director Cedus, UAB – Director Group of companies Inservis, UAB – Member of the Board |
The Audit Committee consists of 2 members. one of which is independent. The members of the Audit Committee are elected by the General Shareholders' Meeting of Invalda INVL, AB. The main functions of the Audit Committee should be the following:
On 30 August 2013 the General Shareholders meeting removed the Audit Committee in corpore and elected new Committee members: Danutė Kadanaitė, a lawyer at Legisperitus. UAB and Tomas Bubinas, a Chief Operating Officer at Biotechpharma, UAB (independent member).
| Danutė Kadanaitė – Member of the Audit Committee | |
|---|---|
| The term of office | Since 2013 until 2017 |
| Educational background and qualifications |
2004 – 2006 Mykolas Romeris University. Faculty of Law. Master in Financial Law 2000 – 2004 m. Faculty of Law, BA in Law 1997 International School of Management |
| Work experience | Since 2009 Lawyer. Legisperitus, UAB 2008 – 2009 Lawyer, Finasta FBC 2008 – Lawyer, Invalda, AB 1999 – 2002 Administrator, Office of Attorney of Law Arturas Sukevicius 1994 – 1999 Legal Consultant, Financial brokerage company Apyvarta, UAB |
| Owned amount of shares in Invalda INVL, AB |
- |
| Tomas Bubinas – Independent Member of the Audit Committee | |
| The term of office | Since 2013 until 2017 |
| Educational background and qualifications |
2004 – 2005 Baltic Management Institute (BMI), Executive MBA 1997 – 2000 Association of Chartered Certified Accountants. ACCA. Fellow Member 1997 Lithuanian Sworn Registered Auditor 1988 – 1993 Vilnius University, Msc. in Economics |
| Work experience | Since 2013 Chief Operating Officer at Biotechpharma, UAB 2010 – 2012 Senior Director, Operations. TEVA Biopharmaceuticals (USA) 1999 – 2001 Senior Manager, PricewaterhouseCoopers 1994 – 1999 Senior Auditor, Manager, Coopers & Lybrand. |
| Owned amount of shares in Invalda INVL, AB |
- |
Within six months period of 2015 the calculated remuneration for the Board members of Invalda INVL, AB (as employees of the Company and including wages from the subsidiaries) amounted to EUR 108.6 thousand, that is on the average EUR 6.0 thousand per month for each member.
The calculated remuneration to the president of the Company (including wages from the subsidiarines) and CFO totalled to EUR 70.9 thousand, on the average EUR 5.9 thousand per month for each.
During the reporting period the Issuer transferred no assets, granted no guarantees, paid no bonuses or dividends and made no special payouts for the Company's managers and CFO.
The growth of Lithuanian economy according to Statistics Lithuania in the second quarter of 2015 has slowed down to 1.3 percent year-on-year. Quarter-on-quarter growth was 0.6 percent. Positive result indicates that despite geopolitical tension and export sanctions Lithuania was able to avoid recession. However taking into account the economic growth slowdown the Bank of Lithuania revised its GDP forecasts for 2015 to 2.0 percent from the previous 2.7 percent, as stated in the economic overview published by the Bank of Lithuania Lithuanian economy overview: June 2015.
According to the comment by SEB published on July 2015, Lithuanian economy growth in the second quarter of 2015 was still relatively low due to unsolved issues such as trade sanctions and plummeting purchasing power of Russia. Export during the first five months of 2015 compared to the same period last year decreased by 4 percent, while import grew by 1.3 percent.
On the other hand economic growth was saved by internal consumption. The main driving forces of it are moderately improving unemployment rate, which has decreased by 0,6 percentage point compared to the first quarter of 2015 (10 percent) and reached 9.4 percent in the end of the second quarter and drop in consumer price index (CPI) which compared to the respective period last year was down by 0.7 percent. The biggest negative impact on prices due to high assigned weights in the CPI had plummeting prices of natural resources. On the other hand, prices of some products and especially services have increased after the adoption of euro, as stated in the SEB overview", however these carry low weights in the CPI and therefore in the overall index we see a decline in consumer prices.
According to the forecasts prepared by the Bank of Lithuania, Lithuanian economy development should be impacted by contrary factors. As stated in the forecasts in 2015 economy should grow by 2.0 percent and in 2016 by 3.4 percent. The main positive driving factors possibly will be sustainable recovery of Eurozone countries, growth of sectors oriented in internal consumption, decreasing unemployment, growing average wage and due to before mentioned reasons stable prices. However, there will possibly be plenty of negative factors too. Some of these are geopolitical tension with Russia might persist which means continued sanctions on export and weakening purchasing power in Russia and the second one is world economy growth forecasts being revised to the lower growth rates.
Despite the slowing down in economic growth rate, the Lithuanian stock market showed solid results:
| Index/Shares | 01-01-2015 | 30-06-2015 | +/-% |
|---|---|---|---|
| OMX Tallinn | 755.05 | 844.70 | 11.87 |
| OMX Riga | 408,03 | 439.44 | 7.70 |
| OMX Vilnius | 452.42 | 497.46 | 9.96 |
Source: NASDAQ OMX
12.1. Table. Key economics indicators of Lithuania:
| Indicator | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|---|---|---|---|---|---|---|---|---|
| Real GDP, annual change (exluding seasonal and labour days, %) |
11.1 | 2.8 | (14.9) | 1.7 | 6.1 | 3.9 | 3.2 | 3.0 | 1.3 |
| Nominal GDP (EUR billion) |
29.041 | 32.696 | 26.935 | 28.001 | 31.247 | 33.314 | 34.956 | 36.309 | 9.275 (II Q) |
| Retail trade turnover (at constant prices. excluding vehicle trade) annual change ( %) |
16.1 | 2.2 | (21.3) | (6.7) | 6.1 | 3.9 | 4.5 | 5.6 | 4.8 (January June) |
| CPI, annual change ( %) According to the last month of the year |
8.1 | 8.5 | 1.3 | 3.8 | 3.4 | 2.8 | 0.4 | (0.3) | (0.5) (July) |
| HICP, annual average change ( %) |
5.8 | 11.1 | 4.2 | 1.2 | 4.1 | 3.2 | 1.2 | 0.2 | (0.3) (June) |
| Average monthly wage (4th quarter, EUR) |
594.3 | 671.7 | 613.5 | 614.4 | 629.9 | 646.4 | 677.8 | 714.5 | 699.8 (I Q) |
| Annual change of average monthly wage (4th quarter, percent) |
18.5 | 13.0 | (8.7) | 0.2 | 2.5 | 2.6 | 4.8 | 5.4 | 4.3 (I Q) |
Source: SEB bank.
| Annual change, % | 2013 | 2014 | 2015 | 2016 | |||
|---|---|---|---|---|---|---|---|
| USA | 2.2 | 2.4 | 2.7 | 3.2 | |||
| Japan | 1.6 | 0.0 | 1.1 | 1.3 | |||
| Germany | 0.1 | 1.6 | 2.2 | 2.3 | |||
| China | 7.7 | 7.4 | 6.8 | 6.5 | |||
| Great Britain | 1.7 | 2.8 | 2.5 | 2.4 | |||
| Euro zone | (0.4) | 0.9 | 1.7 | 2.1 | |||
| Nordic countries | 0.3 | 1.6 | 1.8 | 2.1 | |||
| Baltic coutries | 3.2 | 2.6 | 2.5 | 3.1 | |||
| Lithuania | 3.2 | 3.0 | 2.6 | 3.5 | |||
| Latvia | 4.2 | 2.4 | 2.4 | 2.7 | |||
| Estonia | 1.6 | 2.1 | 2.2 | 2.7 | |||
| Emerging markets | 4.8 | 4.7 | 4.3 | 4.9 | |||
| The World, PPP | 3.2 | 3.4 | 3.4 | 3.9 | |||
| Source – SEB Nordic Outlook. May 2015. OECD |
On 30 April 2015 Invalda LT, AB announced the annual information of Invalda LT, AB for the year 2014 comprising consolidated and Company's financial statements, consolidated annual report and the confirmation of responsible persons.
On 30 April 2015 the General Shareholders Meeting of Invalda LT, AB was held. The Shareholders of Invalda LT were presented with the consolidated annual report of Invalda LT for 2014, the independent auditor's report on the financial statements of Invalda LT and audit's committee report for 2014. The Shareholders approved the consolidated and companies financial statements for 2014 and the New Wording of the public joint-stock company Invalda LT Articles of Association. The General Shareholders Meeting made a decisions to change the corporate name of the public joint stock company Invalda LT from the public joint stock company Invalda LT to the public joint stock company Invalda INVL, to change the par value of one Invalda LT share from LTL 1 to EUR 0.29 cents, accordingly changing the share capital from LTL 11,865,993 to EUR 3,441,137.97. The Shareholders has formed the reserve for the purchase of own shares which is equal to EUR 11.1 million and made a decision to use it for the purchase of own shares and to purchase shares in Invalda LT. The announcement of General Shareholders Meeting was published on 8 April 2015.
• On 9 July 2015 Invalda INVL, AB acquired INVL Technology, AB shares for EUR 2.3 million and will hold 15.7 percent of stake. During public offering of the shares Invalda INVL, AB invested EUR 1.4 million and additional EUR 0.9 million worth of shares was acquired from INVL Technology managers and founders. In all deals price per share amounted to EUR 1.65.
• On 20 July 2015 Invalda INVL, AB announced that on 17 July 2015 the company completed the deal and transferred owned shares in Bank Finasta and financial brokerage company Finasta to Šiaulių Bankas. Šiaulių Bankas issued a new share emission in order to complete settlement of the deal for the amount of EUR 6.19 million. Invalda INVL, AB subscribed for 21.35 million of new issued shares in Šiaulių Bankas for a price EUR 0.29 per share. Šiaulių Bankas still needs to receive a permit from Bank of Lithuania to increase share capital. After completion of the share capital increase, Invalda INVL, AB received 6.79 percent of shares in Šiaulių Bankas listed in NASDAQ Vilnius stock exchange. In the deal 100 percent of shares in Bank Finasta and FBC Finasta are valued EUR 6.19 million. Invalda INVL in the second quarter of 2015 will book EUR 1.12 million in profits from Finasta shares revaluation.
At the end of the reporting period the company owned licensed asset management companies in Lithuania and Latvia also a specialised pension funds management company MP Pension Funds Baltic, UAB.
MP Pension Funds Baltic, a specialised pension funds management company, provides pension accumulation and long-term savings solutions. The company manages three 2nd pillar and two 3rd pillar pension funds.
The asset management company INVL Asset Management operating in Lithuania, manages 2nd pillar and voluntary accumulation pension funds, clients' portfolios and investment funds. The company also advises on the issues of investment in financial instruments. Latvian Finasta Asset Management manages 2nd pillar pension funds, investment funds, clients' portfolio and real estate funds.
Šiaulių Bankas, after acquiring shares in Finasta bank, is committed to sell Latvian voluntary pension company Finasta atklātais pensiju fonds to Invalda INVL group, once necessary permissions from the Latvian supervisory authorities are received.
On May 2015 was announced that INVL Asset Management will be merged with MP Pension Funds Baltic, UAB and its shareholder INVL fondai, UAB. The merger will create an asset management company in Lithuania, which will have more than 100 thousand clients and has almost EUR 250 milion assets under management. The company will continue to operate under the name INVL Asset Management, UAB
| EUR million | 2014 | 6 months of 2015 | ||
|---|---|---|---|---|
| (if not stated otherwise) | Lithuania | Latvia | Lithuania | Latvia |
| Number of clients, thousand | 113.7 | 48.0 | 115.9 | 46.6 |
| Asset under management | 230.2 | 45.1 | 248.8 | 56.2 |
| 2nd pillar funds | 155.2 | 40.5 | 171.9 | 41.7 |
| 3rd pillar fonds | 8.3 | 1.2 | 8.3 | 1.2 |
| Investment fonds | 38.4 | 2.2 | 38.0 | 12.0 |
| Clients portfolio | 28.3 | 1.2 | 30.6 | 1.3 |
| Revenues | 2.4 | 0.6 | 1.4 | 0.4 |
| Profit before tax, EUR thousand | (10) | 150 | (48) | 118 |
12.1.1. Table of the total results of the asset management sector
During the first half of 2015, INVL Farmland Management, a company administrating agricultural land, were established. The company signed a basic property administration agreement with INVL Baltic Farmland group, the agreement took into force from 1 July 2015. INVL Baltic Farmland is a company listed in NASDAQ Vilnius Stock Exchange. Group companies owns more than 3 thousand hectares of agricultural land in Lithuania.
The land administration management fee amounted to 0.5 percent of INVL Baltic Farmland market capitalization, which was equal to EUR 10.3 million and 7 percent of revenues at the end of June 2015.
During the reporting period in the agricultural sector Invalda INVL, AB owned 36.9 percent of Litagra, UAB (one of the largest groups of agriculture companies in the Baltic states) shares through the company Cedus Invest.
At the end of the first half of 2015, Litagra shares were valued at EUR 16.2 million or 9 percent more than at the end of the year 2014.
Since the 7 January 2015 Aidas Mackevicius holds position as a CEO of Litagra, UAB. The founder of Litagra, UAB Gintaras Kateiva holds position as a Chairman of the Board of the company.
On May 2015 was announced that Litagra is reaching to simplify the group structure and work more efficiently, therefore merges together companies, which are servicing farmers and managing elevators. The grain processing companies Litagros Grudai UAB and Litagros Prekybos Centras UAB were merged with Litagros Prekyba UAB, which is trading seeds, fertilizers and products of the plant protection. Also, three companies - Kėdainių grūdai, Marijampolės grūdai and Tauragės grūdai will be merged together and will continue working by a name of Kėdainių grūdai. The company will be managing the network of grain elevators (storage capacity 182 thousand tons). These companies with a similar activities are merging on a purpose to work more efficiently and make better use of administrative resources.
During the first half of 2015 revenues fell by 5 percent. to EUR 47.8 million, earnings before interest, taxes, depreciation and amortization (EBITDA) inceased by 30 percent to EUR 2.6 million, profit of the company is EUR 0.8 million. The negative effect of the results were influenced in the decrease of milk prices. Historically, Litagra group the most of the profits earns during the second half of the year.
Litagra group engages in supply of plant protection products, grain trading as well as grain processing and farming activities – growing various crops, breeding cattle and dairying. Company is active both in the Baltic market (Lithuania, Latvia and Estonia) and its export markets (Russia and Belorussia, Central Asia. Middle East and others).
Consolidated turnover of Litagra Group at the end the year of 2014 amounted EUR 134 million.
| EUR million | 6 months of 2013 | 6 months of 2014 | 6 months of 2015 |
|---|---|---|---|
| Sales | 53.8 | 50.3 | 47.8 |
| EBITDA | 4.1 | 2.0 | 2.6 |
| Net result, according to the data provided by the company |
2.1 | 0.02 | 0.8 |
More information on the services and activity of the Litagra is provided on http://www.litagragroup.lt
On the 1 of December, 2014 the Company acquired 78.28 percent of the bank Finasta shares and the same part of Financial Brokerage Company (FBC) Finasta shares. In January of 2015 block of shares of the Bank increased to 99.99 percent, while FBC – to 100 percent. D
uring the first quarter of 2015, 5.35 percent of the Bank Finasta shares were transfered to the managers of the Bank, so the block of shares of Invalda INVL, AB decreased to 94.64 percent.
In June 2015 Invalda INVL transferred owned shares in the bank Finasta and brokerage company Finasta to Šiaulių bankas. In the transaction 100 percent of shares in Finasta bank and financial brokerage company Finasta were valued EUR 6.19 million and for assets of Bank Finasta will acquire 6.79 percent of Siauliu Bankas shares, listed in NASDAQ Vilnius Stock Exchange.
Invalda INVL in the second quarter will book EUR 1.12 million in profits from Finasta shares revaluation.
INVL Technology, AB - a company, investing in information and communication technologies, listed on NASDAQ Vilnius Stock Exchange.
The largest INVL Technology investments currently are companies in Lithuania, Norway, Tanzania and Uganda: Norway Registers Development AS with subsidiaries NRD UAB, NRD East Africa Ltd and Infobank Uganda Ltd, BAIP UAB, Acena UAB and NRD CS UAB.
At the moment of the release of the report Invalda INVL owned 15.65 percent of shares in INVL Technology. In the beginning of July 2015 Invalda INVL invested EUR 2.3 million to the shares in INVL Technology: EUR 1.4 million were invested to the newly issued shares in INVL Technology, while other shares were acquired from executives of INVL Technology.
INVL Technology completed the EUR 10 million share placement in June 2015. The funds from the placement will be used for acquisitions.
In the end of July 2015 Invalda INVL investments to the shares and loans granted for INVL Technology amounted to EUR 3.2 million.
More information on the services and activity of the the company is provided on companies web site: http://www.invltechnology.lt/
Invalda INVL, AB owns facility management companies – Inservis Priemiestis, Jurita and Naujosios Vilnios Turgaviete and Advima.
The companies of facility management sector are providing facility management, engineering systems oversight, audit and incidents management, indoor air quality testing, multiapartment house management, installation, repair, cleaning and other services.
During the first quarter of 2015, companies of facility management sector were steadily increasing. The agreement with Lietuvos pastas, AB and Siauliu bank, AB of engineering systems oversight, agreement of the stores management of Rimi in Vilnius, Kainas and Panevezys cities and agreement of the shopping centre Rozynas management were signed.
Also, new customer service units were opened in Marijampole, Alytus, Jurbarkas. Proceedings of mobile order management software implementation project were completed.
Inservis, UAB received the rating Gazele from the magazine Verslo Zinios, as successfully developing company.
At the end of the first half of 2015, companies of facilities management were valued EUR 3.6 milion or 9 percent more than at the end of 2014.
The facility management companies allocated EUR 0.5 million of dividends for 2015.
| EUR million | 6 months of 2013 | 6 months of 2014 | 6 months of 2015 |
|---|---|---|---|
| Sales | 2.0 | 2.7 | 3.5 |
| EBITDA | 0.02 | 0.4 | 0.4 |
| Net profit | 0.02 | 0.3 | 0.3 |
Invalda INVL is invested into INVL Baltic Real Estate, a company operating in Lithuania's and Latvia's real estate markets. Invalda INVL owns 12.7 percent of shares in the company.
The companies of INVL Baltic Real Estate have invested in an office, warehouse, manufacturing real estate objects in Lithuania and Latvia. Group companies have about 51,700 sq. m of the real estate space.
In the end of June 2015 Invalda INVL investments to the shares and loans granted for the group companies to INVL Baltic Real Estate amounted to EUR 7.1 million.
Table 12.2.1. Main items of financial statements, thousand EUR
| Company's | Group's | |||||
|---|---|---|---|---|---|---|
| 6 months of 2013 |
6 months of 2013 |
6 months of 2015 |
6 months of 2013 |
6 months of 2014 |
6 months of 2015 |
|
| Non current assets | 41,121 | 28,416 | 40,246 | 88,148 | 28,013 | 38,080 |
| Current assets | 15,406 | 18,268 | 8,390 | 22,146 | 18,397 | 11,003 |
| Equity | 49,017 | 45,910 | 47,805 | 65,153 | 45,906 | 48,074 |
| Equity attributable to equity holders of the parent Company |
49,017 | 45,910 | 47,805 | 64,991 | 45,906 | 48,074 |
| Minority interest | - | - | - | 162 | - | - |
| Non-current liabilities | - | - | - | 33,121 | - | 84 |
| Current liabilities | 7,510 | 774 | 831 | 12,020 | 504 | 925 |
| Result before taxes | 20,222 | 22,072 | 3,853 | 1,301 | 2,709 | 4,196 |
| Net result | 20,128 | 21,866 | 3,813 | 26,995 | 5,431 | 4,139 |
| Net result attributable to holders of the parent Company |
- | - | - | 26,697 | 5,448 | 4,139 |
Table 12.2.2. Calculation of the net asset value of Invalda INVL, AB
| 30 June 2015 | Evaluation criteria | EUR thousand |
|---|---|---|
| Investment into asset management | Acquisition cost price | 6,955 |
| Cash and cash equivalents | Book value | 1,088 |
| Deferred income tax asset | Book value | 362 |
| Investments into INVL Baltic Real Estate, AB | Market price | 1,688 |
| Investments into INVL Technology, AB | Market price | 933 |
| Other listed shares and investments funds' units | Market price, value of funds unit |
1,294 |
| Investments into Litagra, UAB (including loans granted) | Comparative method of multipliers |
16,196 |
| Investments into bank Finasta and FBC Finasta* | Last transaction deal | 5,884 |
| Investments into Inservis, UAB (including loans granted) | Comparative method of multipliers |
4,112 |
| Investments into other subsidiary companies (including loans granted) |
Fair value of net assets | 1,297 |
| Loans to group companies of INVL Baltic Real Estate, AB | Book value | 5,434 |
| Loans to group companies and shareholders of INVL Technology, AB ** |
Book value | 2,311 |
| Other assets, other investments | Book value | 1,082 |
| Total assets | Book value | 48,636 |
| Liabilities | Book value | (831) |
| Net asset value | Book value | 47,805 |
* Invalda INVL, AB completed the deal and transferred owned shares in Bank Finasta and financial brokerage company Finasta to Šiaulių Bankas in the middle of June 2015.
**In early July 2015 the company acquired shares in Technology INVL, AB of both company executives and through the official tender offer by offsetting all the loans granted. Therefore, the company during the release of the report is no longer granting loans, but increased its managed stake in INVL technology share capital.
During the year of 2015 lnvalda INVL is planning to continue is redesigning the model of struclureaccording to classical asset management principles. lnvalda INVL seeks to to become one of the leading asset management, investment and pension fund management companies in the region.
During the first half of this year there were no material changes from the information about the principal rinks and uncertainties disciosed in the latest annual report.
lnvalda INVL, AB completed the deal and transferred owned shares in Bank Finasta and financial brokerage company Finasta to Siauliq Bankas on 17 July 2015. Siauliq Bankas issued a new share emission in order to complete settlement ofthe deal for the amount of EUR 6.19 million.
lnformalion aboul minor investrnents are described in the section 5 of the financial statements.
lnformation on the related parties' transaclions is disclosed in consolidated and Company's financial statements explanatory notes.
The president Darius Sulnis
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