Annual Report • Apr 30, 2010
Annual Report
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Consolidated annual report 2009
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The members of the management bodies, employers, head of administration together with the Company's consultants who are responsible for the preparation of consolidated annual report and audited financial accounts confirms that, according to their knowledge, annual consolidated financial accounts were formed according to applied accounting standards, accurately represent the reality and correctly show Company's and total consolidated group's assets, liabilities, financial state, profit or loss, and that business development and activities' overview, Company's and consolidated groups' situation, together with description of main risks and uncertainties faced are accurately presented in the consolidated annual report.
AB "Snaigė" managing director Gediminas Čeika
AB "Snaigė" finance director Neringa Menčiūnienė
Report prepared: April 20, 2010
Place the report prepared: UAB FMĮ "Orion securities" (A.Tumėno st. 4, B corpus, Vilnius)
Consolidated annual report 2009
AB "Snaigė", as well as majority of other Lithuanian companies, will remember year 2009 as on of the hardest in the history of the Company. Consequences of economic downturn for the household appliance market were exceptionally painful – the market was shrinking by 40- 50 percents, in some countries – even 70%. Naturally, large household appliance is not a good of first necessity, so frequent consumer deferred acquisition to the better times.
We noticed the first indications of upcoming downturn in the end of year 2008. We did not delay necessary actions to be taken, as a result we have adequately prepared for the crisis – Company's operations were restructured, manufacturing was reorganized, number of employees was decreased, strict cost saving measures were implemented. During 2009 we managed to decrease our operating costs by 17 mln. LTL. Not only these measures, but also professionalism and optimism of Company's employees allowed surviving in the recessionary environment.
The largest loss of AB "Snaigė" in 2009 – closure of manufacturing plant in Kaliningrad. This decision was taken in the beginning of the year, when after devaluation of Russian rubble manufacturing in the country became unprofitable. Due to the closure of the Kaliningrad plant AB "Snaigė" has incurred consolidated loss of 9 m. LTL and lost the Russian market.
We did not escape losses in Ukraine, another very important market. Additional import duty of 13% in place in Ukraine form March till September, has significantly decreased Company's sales in this country.
Severance compensations for fired employees totalled 4 m.LTL. Due to negative influence of currency exchange the Company has lost 3.5 m.LTL.
Despite decreased sales volumes and other above mentioned difficulties the Company was working stably in 2009, majority of product markets and product demand was saved. As every year, majority of our products were exported (approx. 95%). After decreased Eastern Europe exports we have developed business relations with our partners in Western Europe. In 2009 largest export markets of the Company were Germany and France.
Though forecasts of large household appliance producers and retailers for year 2010 are not too optimistic, we believe that the hardest period for AB "Snaigė" has already passed. The upcoming year promises to give us interesting challenges and considerable opportunities. One of them is establishment of joint-venture in Kazakhstan and building of new refrigerator manufacturing plant. If the required funds are received, after several years we plan to regain lost positions in Russia and to establish ourselves in Kazakhstan and neighbouring markets.
Already in June we will offer our customers in Lithuania and remaining European markets the most energy efficient refrigerator of the highest energy class "A++". The buyer of this refrigerator will be pleased – this refrigerator model will consume much less energy than any common refrigerator.
I am sure that the hardest times of the Company have already passed. I believe that refrigerators marked with a brand "Snaigė" will further make our clients happy not only in Lithuania, but in many other European and Asian countries.
Managing director, Gediminas Čeika
| 1. GENERAL INFORMATION ABOUT AB "SNAIGĖ" | 5 |
|---|---|
| 1.1 Accounting period of the annual report-prospectus | 5 |
| 1.2 The basic data about the Company | 5 |
| 1.3 The type of the Company's main business activities | 5 |
| 1.4 The Company's group structure | 5 |
| 1.5 Information about the Company's offices and affiliates | 6 |
| 1.6 Short history of the Company's activities | 6 |
| 1.7 Mission. Vission. Values | 6 |
| 1.8 List of the most important events in 2009 | 7 |
| 2. AB "SNAIGĖ" GOVERNANCE AND MANAGEMENT | 7 |
| 2.1 The Company's management bodies | 7 |
| 2.2 Corporate governance bodies | 7 |
| 2.3 The Company's group's management structure | 9 |
| 2.4 Procedures of changing Company's articles of association | 10 |
| 3 AB "SNAIGĖ" AUTHORISED CAPITAL, SHAREHOLDERS, INFROMACION ABOUT SECURITIES | 10 |
| 3.1 Issuers authorized capital | 10 |
| 3.2 Shareholders | 13 |
| 3.3 Information about trading of issuers securities in the regulated securities markets | 14 |
| 3.4 Information about the repurchase of own shares | 15 |
| 3.5 Dividends paid | 16 |
| 3.6 Contracts with public circulation of securities dealers | 16 |
| 3.7 Restrictions on transfer of securities | 16 |
| 4. AB "SNAIGĖ" OPERATING REVIEW | 16 |
| 4.1 General rates, describing the Company's business performance, their behavior | 16 |
| 4.2 Production | 17 |
| 4.3 Sales | 18 |
| 4.4 Supply | 20 |
| 4.5 Employees and human resource policy | 20 |
| 4.6 Investment policy | 21 |
| 4.7 Environment Protection | 23 |
| 4.8 Risk factors related to the business of the Issuer | 23 |
| 4.9 Related party transactions | 25 |
| 4.10 Legal and arbitrary processes | 25 |
| 5. OTHER INFORMATION ABOUT AB "SNAIGĖ" | 25 |
| 5.1 Membership in associated organisations | 25 |
| 5.2 Patents, licences and contracts | 26 |
| 5.3 Recent and the most important events of the Company | 26 |
| 5.4 Operational Policy and Plans | 40 |
| 6. Disclosure form concerning the compliance with the Governance | 41 |
| Code for the companies listed on the regulated market | |
| 7 AB "SNAIGĖ" COSOLIDATED FINANCIAL STATMENTS FOR 2009 |
The annual report-prospectus has been prepared for the year 2009.
The name of the Company – SNAIGĖ PLC (hereinafter referred to as the Company) Authorised capital on 31 December 2009 – 27,827,365 LTL Address - Pramonės str. 6, LT-62175 Alytus Phone - (315) 56 206 Fax – (315) 56 207; (315) 56 269 E-mail - [email protected] Internet web-page - http://www.snaige.lt Legal organisation status – legal entity, public limited Company Registered as an Public Enterprise of RL on December 1, 1992 in the Municipality Administration of Alytus; registration number AB 92-119; enterprise register code 249664610. The latest Statute of AB "Snaigė" was registered on 20 April, 2010 in Alytus Department of Register of Legal Entities of the Republic of Lithuania.
The main business activity of the Company is manufacture of refrigerators and freezers and other activities, permitted by Lithuanian laws, as indicated in the registered Statute.
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The Company's group consist of parent refrigerator manufacturing the "Snaige" based in Alytus and the following subsidiaries:
• OOO "Techprominvest" activities: consumer goods and consuming devices manufacturing and realization, machinery maintenance and repair, consulting services, transportation services and other. The plant in Kaliningrad was registred in Nowember 2002. Adress: Bolshaja Okruzhnaja st.1-a, Kaliningrad, Russia. Since March 2009, the Company has stoped the production, since August 2009, the Company's Board has decided to close the plant.
• OOO "Snaigė Ukraine" activities: sales of refrigeration appliances, sales, consulting and services. The enterprise was registred in November 2002. Adress: Grushevski st. 28-2a/43 Kiew, Ukraine.
• OOO "Moroz Trade" – trade and marketing services. The enterprise was registered in May 2004. Adress: Prospect Mira st. 52 Moscow, Russia.
• OOO "Liga-servis" activities: sales of refrigeration appliances, consulting services, transportation services and other. The enterprise was registered in August 2005; Adress: Prospect Mira st. 52 Moscow, Russia.
• UAB "Almecha" activities: manufacturing of miscellaneous machinery and equipment. The enterprise was registered in November 2006. Adress: Pramones st. 6 Alytus, Lithuania.
1963 - The Company produced it's first 25 refrigerators.
1968 - New plant started its operations.
1975 – Over 1 million refrigerators manufactured by this year;
1983 – The Company started export to foreign countries.
1990 – The Company has come under the control of the Republic of Lithuania;
1992 – The Company has been privatised and registered as a public limited liability the Company;
1995 – The Company was retooled. Use of Freon in the manufacture of refrigerators is discontinued. All the Company's products are manufactured only from ecologically clean materials;
1997 – The Company has achieved ISO 9001 certification for implementing international quality management standards; 2000 –The Company's quality management system was successfully re-certified for ISO 9001;
2001 – The Company has achieved ISO 14001 certification for implementing an environmental management system; 2002 – The Company started to produce a refrigerator with R600a environmentally friendly refrigerant. Started A + energy efficiency refrigerator production. Snaige become EU project "Energy +" participant;
2003 - A + Grade energy efficiency fridge Snaigė RF310 won the LCI contest "Product of the Year" Gold Medal; 2004 – The Company opened its new plant in Kaliningrad;
2006 – The Company acquired 100% of the capital of the Russian wholesale and retail Company Liga Service; "Snaigė" has made its 10 millionth refrigerator;
The Company exported its producs to more than 40 countries around the world;
2007 – "Snaigė" Alytus plant started serial production of new line models "Snaigė ICE LOGIC" production;
2007 - "Snaigė" recognised as the most innovative Lithuanian Company;
This new line has won a national competition "Innovation Prize 2007" award. Refrigerators assess "Innovative product" category;
The Company's environmental management system ISO 14001 successfully certificated;
Refrigerator "Snaigė ICE LOGIC" RF34SH awarded "Product of the Year" gold medal;
During the following years Snaige sold a record number - 653 thousands refrigerators;
2008 - "Snaigė ICE LOGIC" RF31SM was assesed as the "Product of the Year" and awarded a gold medal; Snaige awarded for "Innovation Award";
2009 - The loss of production and devaluation of the ruble conditioned to close the Company's factory in Kaliningrad.
To create value for the shareholders by implementing most up-to-date and advanced technologies, raising employees' qualification and conserving environment, to provide the consumer with high quality, functional and stylish refrigerating equipment for affordable price.
To become appreciated and recognized refrigerating equipment expert in Europe and Asia.
While living today we continuously think about tomorrow, because we know that success will belong to the one who was the best in projecting future needs of the consumers.
To complete clients orders faster than others can, to complete order which can not be completed by others.
While communicating with clients, partners, suppliers and colleagues it is important not only to listen, but also to hear.
Our products do not have any component that would endanger environment and people's health. Our modern manufacturing operations do not pollute the environment. We strive that thoughts and conscience of our employees would also be clean.
In 2009, the Company was signed an agreement for financing a multifunctional RF36 refrigerator compartment with a "No-Frost" refrigeration system from EU structural funds allocation.
In autum 2009, the Company started to produce exclusive black and red colored refrigerators for West market. In 2009, the Company started to work with affiliated French Company "Conforama" .
In March 2009 Ukraine has been the imposition of customs duties to EU producers, which significantly reduced the Company's competitiveness in the Ukrainian market, and reduced a significant proportion of the sales season. In September 2009, Ukraine customs duties has been canceled.
In August 12, 2009, the Company's Board decided to close refrigerator plant in to Kaliningrad. Production in this plant was stoped since March 2, 2009.
In 2009, the Company started to project the line of refrigerators with higest A++ energy class.
The calling of general shareholder meeting, the competence of the meeting has no differences from procedures and competences indicated in the Public Company law of Republic of Lithuania.
The management board is elected and resigned by ordering shareholder meeting according to the procedures indicated by the Public Company law.
The management board has a right to take decision to issue bonds. The competence of the management board has no other differences from competences indicated in the Public Company law. The work procedures of the management board are set by boards work rules of procedure.
The competence of the head of the Company, his nomination and resignation procedures are not different from ones indicated in the Public companies law.
AB "Snaigė" uses the Company's articles of association, Public companies law of Republic of Lithuania, other legal acts issued by Republic of Lithuania and European Union as legal guidelines for operations.
2.2.1 Information about the members of management bodies with regard to the share of the Company authorized capital
| NAME | Position | The available number of shares, units | The share capital, per cent | Votes, per cent | |
|---|---|---|---|---|---|
| BOARD | |||||
| Nerijus Dagilis | AB "Snaigė" Chairman of the board | - | - | - | |
| Kęstutis Pilipuitis | AB "Snaigė" member of the board | - | - | - | |
| Martynas Česnavičius | AB "Snaigė" member of the board | 15 | 0,00 | 0,00 | |
| Marius Binkevičius | AB "Snaigė" member of the board | - | - | - | |
| Robertas Beržinskas | AB "Snaigė" member of the board | - | - | - | |
| ADMINISTRATION (Managing Director and Chief Accountant) | |||||
| Gediminas Čeika | AB "Snaigė" managing director | - | - | - | |
| Neringa Menčiūnienė | AB "Snaigė" finance director | - | - | - | |
18 March, 2009 informed the NASDA QOMX Vilnius stock exchange information system that the member of the board Domininkas Kašys presented a report on his resignation as a member of the Board since 1 April, 2009. 22 April, 2009 at the ordinary general shareholders meeting, Kestutis Pilipuitis was elected to the board member for the remainder of the term of office.
2.2.2 Information on the management bodies involvement of other companies, institutions and organizations
Participating in other companies activities and interests (1 March, 2010):
| Name | Name of organisation, position Share of the capital and votes available in other companies, in percentage |
|
|---|---|---|
| Nerijus Dagilis | - | |
| KITRON ASA Chairman of the board | - | |
| UAB "Ežerų pasaulis" | 25,00 | |
| UAB "Hermis fondų valdymas" Director | - | |
| UAB "Gulbinų turizmas" | 17,12 | |
| UAB "Meditus" member of the board | ||
| Kaunas sports club "Oktanas" Director | - | |
| AB "Geonafta" member of the board | - | |
| UAB "Genčių nafta" member of the board | - | |
| UAB "Minijos nafta" member of the board | - | |
| UAB "Diena media news" Chairman of the board | ||
| UAB "Deitona" Director | 100,00 | |
| UAB "Focus investments" Director | 33,33 | |
| Kęstutis Pilipuitis | - | - |
| Martynas Česnavičius | UAB "LNK" member of the board | - |
| UAB "Profinance" | 50,00 | |
| UAB "Malsena-Plius" Chairman of the board | - | |
| UAB "Litaga" member of the board | - | |
| UAB "Meditus" member of the board | - | |
| AB "Sanitas" member of the board | - | |
| UAB "Atradimų studija" member of the board | 31,00 | |
| AB "Kauno Pieno Centras" member of the board | - | |
| Marius Binkevičius | UAB "Vienybės Investicija" Director | 6,19 |
| UAB "FIS Investicija" | 50,00 | |
| Robertas Beržinskas | AB" Utenos Trikotažas" member of the board | - |
| UAB "Meditus" member of the board | - | |
| Gediminas Čeika | OOO "Techprominvest" member of the board | - |
| Neringa Menčiūnienė | AB "Vilniaus Vingis" Liquidator | - |
| OOO "Techprominvest" member of the board | - | |
| UAB "Almecha" Chairman of the board | - |
| Name | Education, qualification | Workplaces and positions during the recent 10 years |
|---|---|---|
| Nerijus Dagilis | Vytautas Magnus University, | From July 1997 to June 1998 worked as an |
| Bachelor in Business | banks analyst in AB Hermis bank. | |
| administration; | June 1998 – February 2000 – UAB IVKĮ Hermis Finansai, | |
| Central Europe University, | investments analyst, later clients' asset manager. | |
| Master in Economics | From February 2000 works as a chairman of | |
| the board of UAB "Hermis Capital". | ||
| Gediminas Čeika | Vilnius University, | From January 2008 – AB "Snaige" managing director |
| Bachelor in Economics. | 2005 12 – 2008 01 – AB "Snaigė" sales director | |
| 2001 05 – 2005 12 - "Kraft Foods Lietuva" VIP business clients | ||
| relationships director for the Baltic states. | ||
| 2000 11 – 2001 05 – Internship at "Kraft Foods" Company | ||
| in Czech Republic. | ||
| 1997 – 2000 11 - "Kraft Foods Lietuva" sales director | ||
| for Latvia and Estonia. | ||
| 1994 – 1997 - "Kraft Foods Lietuva" sales manager for Vilnius region. | ||
| Neringa | Vilnius University, | From 2008 06 02 AB "Snaigė" finance director. |
| Menčiūnienė | Analysis of economic | From 2008 05 – AB "Vilniaus Vingis" liquidator. |
| activities and accounting, | 2006 05 – 2008 05 – AB "Vilniaus Vingis" managing director. | |
| Accountant - economist | 2005 08 – 2006 04 – airline AB "Lietuvos avialinijos" | |
| qualification | finance and purchase director. | |
| 2003 03 – 2005 08 – AB "Vilniaus Vingis" a chief accountant. | ||
| 2001 01 – 2003 03 – AB "Vilniaus Vingis" a chief accountant | ||
| assistant. | ||
| 1996 08- 2003 03 – AB "Vilniaus Vingis" accountant. |
2.2.4 Information about start date and end date of the office term of each member of the management body
| Name | Start date of the office term | End date of the office term |
|---|---|---|
| BOARD | ||
| Nerijus Dagilis | 2006 05 02 | 2010 04 29 |
| Domininkas Kašys | 2006 05 02 | 2009 04 01 |
| Kęstutis Pilipuitis | 2009 04 01 | 2010 04 29 |
| Martynas Česnavičius | 2006 05 02 | 2010 04 29 |
| Marius Binkevičius | 2006 05 02 | 2010 04 29 |
| Robertas Beržinskas | 2008 04 23 | 2010 04 29 |
| ADMINISTRATION (Managing Director and Chief Accountant) | ||
| Gediminas Čeika | 2008 01 03 | Term less agreement |
| Neringa Menčiūninė | 2008 06 02 | Term less agreement |
18 March, 2009 informed NASDAQ OMX Vilnius stock sxchange information system that the member of the board Domininkas Kašys presented a report on his resignation as a member of the Board since 2009 April 1.
2.2.5 Information regarding valid conviction of the members of the management bodies for the offences against property, farming procedure and finance
There is no such information.
2.2.6 Information about benefits and loans granted to governing bodies
No benefits and loans were granted to governing bodies.
2.2.7 Information about the total amounts and average amounts of the salaries, tandems and other profit benefits paid by the Company during the reporting period per person. As well as salaries received by managing director and finance director
During 2009 no salaries were paid to the members of the management bodies.
2.2.8 Information about the salaries, tandems and other profit benefits paid to the members of the Company's Board of observers, Board and Administration sourced from the enterprises where the share of the authorized capital owned by the Company amounts to more than 20 percent
No such payments were made during 2009.
2.2.9 Information about the loans, warranties and securities of the performance of liabilities granted to the members of the management body during the accounting period.
No loans, guarantees there issued for the members of managements bodies during the accounting period.
2.2.10 Important agreements, the party of which is the Company and which would take effect, change, or would stop being valid in case the control of the Company changes, also the effect of such agreements, except from the cases when the disclosure of such agreements would result in large damage to the Company
As far as it is known to the Company, there are no such agreements.
2.2.11 The Company's and its management bodies members or employees agreements, describing compensation in case the members or employees resign, or are fired without grounded reason, or if their employment would end because of change of control of the Company;
As far as it is known to the Company, there are no such agreements.
2.3 The Company's group's management structure
Gediminas Čeika – Managing Director. Neringa Menčiūnienė - Financial Director. Rūta Petrauskaitė – Marketing Director. Kęstutis Urbonavičius – Technical Director. Giedrius Mikulskas – Human Resource Director (till 2009-03-31). Jurgita Nacevičienė – Purchasing and Logistics Director (till 2009-06-19).
The articles of the Company can be modified by the decision of general shareholders meeting, with the qualified majority of 2/3, except from the cases described in the law of public companies.
After general meeting of the shareholders takes a decision to modify the articles, the list of all the modified text in the articles is made and signed by the attorney of the general meeting.
Modified articles and documents confirming the decisions to modify the articles have to be submitted to the register of the enterprises during the period specified by the law.
In other cases, not described by the Company's articles of association the Company follows Public Company law and other legal acts of the Republic of Lithuania.
3.1.1 The authorized capital registered in the enterprise register
| Name of the securities | Amount of | Nominal value, LTL | Total nominal value, LTL | Share of the authorized capital, |
|---|---|---|---|---|
| the securities | in percentage | |||
| Ordinary registered shares | 27 827 365 | 1 | 27 827 365 | 100 |
3.1.2 Changes in authorized capital during the last 3 years
| Registration of | The size of the | Change | Reason for change | The size of the |
|---|---|---|---|---|
| changed | authorized capital | authorized capital | ||
| authorized capital | before the change | after the changed | ||
| 2007.01.18 | 23 070 405 | + 756 960 Lt | Acquisition of additional funds in order | 23 827 365 Lt |
| to acquire additional shares of | ||||
| OOO "Techprominvest" | ||||
| 2008.09.11 | 23 827 365 | +4 000 000 Lt | Increase of authorized capital by issuing | 27 827 365 Lt |
| 4 000 000 units of ordinary shares |
3.1.3 Information with regard to prospective increase of the authorized capital by converting or trading the issued loan or secondary securities for the shares
On 7 April, 2009 the Company has issued 75 000 units of convertible bonds. On the redemption day the owners of the convertible bonds can convert each bond into 345 ordinary shares of AB "Snaigė", with nominal value of one share equal to 1 LTL. In case all the owners of the bonds converted the securities, the subscribed capital of the Company would increase by 25 875 000 LTL. Currently the bond issue is not fully redeemed, but till the set deadline for providing a request to convert the bonds owners of 8 430 units of bonds have indicated their will to convert the securities. These owners will be provided with 2 908 350 units 1 LTL nominal valure ordinary shares of the Company by increasing the Company's subscribed capital with a corresponding bumber of shares.
In 9 April, 2010 the Company has issued 61 372 units of convertible ordinary bonds. On the redemption day one bond can be converted into 380 ordinary shares of AB "Snaigė" with nominal value of 1 LTL. In case all the bondholders convert the bonds the authorized capital will increase by 23 321 360 LTL.
3.1.3.1 Name, amount and specification of the loan or secondary securities to be converted or traded for shares providing the right to sign the issuer's shares, as well as the term(s) and conditions of such trading for shares
Currently the Company has two convertible bonds issues outstanding: the issue which took validity on 7 April, 2009, which was not redeemed on agreed term (8 April, 2010), and the issue which took validity on 9 April, 2010.
| The main information about convertible bonds issued in 2009 | |
|---|---|
| Securities | 75 000 units of convertible bonds (hereinafter – bonds, convertible bonds). Each bond has a nominal value of 100 EUR, maturity of the Bonds – 367 days. |
| Yield of the securities | The securities are issued with 18 (eighteen) percent annual interest rate calculated from the bonds subscription price. Interest will be paid at the day of redemption and will be included into redemption price. Interest is paid for the period from the subscription till the redemption of the bonds. |
| Start of bonds validity | 7 April, 2009 |
| Redeption date | 8 April, 2010 |
| Redemption price | 100.00 EUR. |
| Nominal price of one bond 100 EUR | |
| Total nominal value of the issue |
7 500 000 EUR |
| Securities to be issued after conversion of the bonds |
Bonds can be converted into AB "Snaigė" ordinary shares. Conversion rate is 1:345 (one Convertible bond is convertible to 345 (three hundred forty five) shares). |
| Conversion ratio | 1:345 (one Convertible bond is convertible to 345 (three hundred forty five) shares). |
| Procedure of the conversion |
At the day of bonds redemption the bondholders have a right to demand to convert their bonds into ordinary shares of the Issuer. Every convertible bond is converted into 345 ordinary shares. If the bondholder decides to convert bonds into ordinary shares, he loses the right on the redemption day to receive the nominal value of the bond, to which the interest is already included. After the redemption date of the bonds, if there will be any requests to convert the Bonds, the shareholders of the Issuer in an extraordinary shareholders meeting will change the articles of association of the Issuer and will confirm the new articles of the Company to represent increased share capital and new number of shares. If all bondholders will express their wish to convert the bonds, the number of ordinary shares of the Issuer will increase by 25 875 000. The total number of ordinary shares outstanding will amount to 53 702 365. |
| Conversion terms | bonds can be converted into ordinary shares of the Issuer at the day of redemption. The bondholders must express the wish to convert the bonds into shares in a written form to the Coordinator or the Issuer no later than 5 working days to the redemption date. If the written form is not received, the Issuer and the Coordinator will assume that the bondholder is not willing to convert bonds into ordinary shares and will proceed with bond redemption. |
| The main information about convertible bonds issued in 2010 | |
|---|---|
| Securities | 61 372 units 100 EUR nominal value 368 days to maturity convertible bonds. |
| Yield of the securities | The securities are issued with 10 (ten) percent annual interest rate yield from the bonds nominal price. Interest will be paid at the day of redemption, included into redemption price (bonds redemption price – 110.2222 EUR which is composed of nominal price of one bond and 10.2222 EUR accrued interest). Interest is calculated for the whole validity period of the Bonds (9 April, 2010 – 11 April, 2011). |
| Start of bonds validity | 9 April, 2010 |
| Redemption date | 11 April, 2011 |
| Redemption price | On the redemption day (11 April, 2011) the Issuer will redeem the bonds from investors not willing to convert the securities at a price per one bond equal to 110.2222 EUR (100 EUR nominal price of one bond and 10,2222 EUR accrued interest). |
| Nominal price of one bond |
100.00 EUR. |
| Nominal value of the whole issue |
6 137 200 EUR |
| after conversion of the bonds |
Securities to be issued Bonds can be converted into AB Snaigė ordinary shares. Conversion rate is 1:380 (one Convertible bond is converted to 380 (three hundred eighty) shares). |
| Conversion ratio | 1:380 (one Convertible bond is converted to 380 (three hundred eighty) shares). |
| Procedure of the conversion |
At the day of bonds redemption the bondholders have a right to demand to convert their bonds into ordinary shares of the Issuer. Every convertible bond is converted into 380 ordinary shares. If the bondholder decides to convert bonds into ordinary shares, he loses the right on the redemption day to receive the nominal value of the bond and accrued interest. After the redemption date of the bonds, if there will be any requests to convert the bonds, the shareholders of the Issuer in an extraordinary shareholders meeting will change the articles of association of the Issuer and will confirm the new articles of the Company to represent increased share capital and new number of shares. If all bondholders will express their wish to convert the bonds, the number of ordinary shares of the Issuer will increase by 23 321 360. The total number of ordinary shares outstanding will amount to 51 148 725. |
| Conversion terms | Bonds can be converted into ordinary shares of the Issuer at the day of redemption. The bondholders must express the wish to convert the bonds into shares in a written form to the Coordinator or the Issuer no later than 5 working days to the redemption date. If the written form is not received, the Issuer and the Coordinator will assume that the bondholder is not willing to convert bonds into ordinary shares and will proceed with bond redemption. |
3.1.3.2 Scope of conversion, trade or right realisation of the loan or secondary securities with regard to the prospective increase of the authorized capital by converting, trading or providing the right to sign the issuer's shares, as well as the preliminary date (dates) of such increase;
One convertible bond issued in 2010 on the redemption day, 11 April, 2011, if requested by investors, can be converted into 380 ordinary shares of the Company. In case all the investors request to converted possessed securities, 23 321 360 ordinary shares of the Company with nominal value of 1 LTL would be additionally issued. After the redemption of the Bonds, if there are any requests to convert the Bonds, the management board of the the Company will change the articles of association of the Issuer and will confirm the new articles to represent increased share capital and number of shares.
The owners of the convertible bonds issued in 2009 have requested to convert 8 430 units of convertible bonds. In total 2 908 350 ordinary shares with nominal value of 1 LTL will be provided for these investors while increasing the Company's subscribed capital by the corresponding number of shares.
3.1.3.3 The prospective changes in the structure of the authorized capital (according to the type and class of the shares) due to conversion, trade or right realisation of the loan or secondary securities to be converted, traded for shares or providing the right to sign the issuer's shares;
Due to the conversion of 8 430 units of convertible bonds issued in 2009, the subscribed capital of the company has increased by 2 908 350 units of ordinary shares of AB "Snaigė". Due to conversion the structure of subscribed capital has not changed.
In case the owners of all the convertible bonds issued in 2010 decide to convert, the subscribed capital would increase by 23 321 360 units of ordinary shares of AB "Snaigė". The subscribed capital of the company then would be increased to 51 148 725 LTL. The structure of the subscribed capital would not be changed due to the conversion.
3.1.3.4 Procedure and terms of signing or trading of the issued shares due to increase of the authorized capital by trading the loan or secondary securities or by right realisation; the categories of the owners of the loan or secondary securities to be provided with the preferential right to sign the shares (provided that the preferential right with regard to the individual categories of the loan or secondary securities has been ensured in the terms of issuance thereof).
One convertible bond issued in 2010 on the redemption day, 11 April, 2011, if requested by investors, can be converted into 380 ordinary shares of the Company.
In case there are bond owners of bonds willing to convert the securities, they will be provided with 380 ordinary shares of AB "Snaigė" for each convertible bond being converted. There are no any preemptive rights provided for any group of investors to obtain the converted shares.
The bonds could be converted to ordinary shares at their redemption day. The bondholders must inform the Issuer or the Coordinator in a written form or by telephone to convert the bonds no later than 5 working days until redemption.
The total number of the shareholders on 31 December, 2009 was 1 513.
The major shareholders who own or control more than 5 percent of the issuer's authorized capital are listed below:
| Amount of the ordinary | Share of the authorized capital and votes available, in percentage | ||||||
|---|---|---|---|---|---|---|---|
| Names (Company | registered shares available, in pcs. | ||||||
| names, addresses, | Total | incl. the ones | Total | incl. the ordinary | Total incl. the | ||
| enterprise register codes) | owned by the | registered shares owned | share of the | ||||
| of the shareholders | shareholder | by the shareholder | entities group | ||||
| operating jointly, | |||||||
| share of | share of | share of the | share of | in percentage | |||
| the votes | the capital | appointed votes | the capital | ||||
| Swedbank – client securi- 13 229 667 | 13 229 667 | 47,54 | 47,54 | 47,54 | 47,54 | - | |
| ties, Liivalaia 8, Tallinn | |||||||
| 15040 Estonia, comp. | |||||||
| code 10060701 | |||||||
| UAB "Hermis capital" | 4 412 032 | 4 412 032 | 15,86 | 15,86 | 15,86 | 15,86 | - |
| A. Tumėno g. 4, Vilnius | |||||||
| comp. no. 125699527 | |||||||
| Skandinaviska Enskilda – 3 351 924 | 3 351 924 | 12,05 | 12,05 | 12,05 | 12,05 | - | |
| client securities, Sergels | |||||||
| Torg 2, 10640 Stockholm, | |||||||
| Sweden, comp. code | |||||||
| 502032908101 |
3.2.2 Shareholders with special control rights
There are no shareholders with special control rights.
All the shareholders have equal voting rights.
3.2.4 Shareholders agreement, about which the Issuer is informer and due to which the transfer of securities or voting rights can be restricted
The issuer has no information about any shareholder agreements of such type.
27,827,365 ordinary registered shares of AB "Snaigė" are included into the Official trading list of the NASDAQ OMX Vilnius stock exchange. The total nominal value of the shares is 27,827,365 LTL. The VP CD (Securities Central Depositary) number is 10927. The nominal value of a share was 1 (one) LTL.
From April 2009 till 8 April, 2010 75 000 units of AB "Snaigė" convertible bonds, ISIN no. LT1000401174, were included in debt securities list of the NASDAQ OMX Vilnius stock exchange.
On 14 April, 2009 the Company has pilled in an application to list 61 372 units of the Company's convertible bonds with maturity of 368 days on the debt securities list of the NASDAQ OMX Vilnius. Total nominal value of the issue: 6 137 200 EUR, securities ISIN code LT1000401315. The nominal value of one bond – 100 EUR. Bonds redemption date – 11 April, 2011.
Since 8 May, 2009 the Company on its own initiative requested NASDAQ OMX Vilnius to swich its shares from the NASDAQ OMX Vilnius Official listing and add them to the OMX Vilnius Additional listing.
Trade of the Company's ordinary registered shares in the securities stock exchange was started on 11 August, 1995.
The ordinary registered shares of AB "Snaigė" have been listed in the Official trading list of NASDAQ OMX Vilnius stock Exchange since 9 April, 1998.
Since 8 May, 2009 the Company on its own initiative requested NASDAQ OMX to swich its shares from NASDAQ OMX Vilnius Official listing and add them to the NASDAQ OMX Vilnius Additional listing.
Trade in Company's shares during 2008-2010 m.
| Accounting period | Price (LTL) | Turnover (LTL) | Date | Total turnover | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| from | to | max | min | last | from | to | max | min | last | from |
| session | session | |||||||||
| 2008-01-01 | 2008-03-31 | 6.99 | 4.30 | 4.50 | 1 597 050 | - | 4 564 | 2008-03-31 | 600 671 | 2 812 040 |
| 2008-04-01 | 2008-06-30 | 4.35 | 2.52 | 2.58 | 1 744 380 | - | 5 103 | 2008-06-30 | 660 946 | 2 589 446 |
| 2008-07-01 | 2008-09-30 | 2.59 | 1.54 | 1.54 | 46 496 | - | - | 2008-09-30 | 136 889 | 309 287 |
| 2008-10-01 | 2008-12-31 | 1.59 | 0.5 | 0.55 | 65 519 | - | 550 | 2008-12-30 | 291 640 | 231 584 |
| 2009-01-01 | 2009-03-31 | 0.55 | 0.2 | 0.2 | 283 817 | - | 3 311 | 2008-03-31 | 1 684 678 | 536 730.45 |
| 2009-04-01 | 2009-06-30 | 0.71 | 0.19 | 0.51 | 672 269 | - | 20 127 | 2009-06-30 | 6 759 213 | 3 302 407 |
| 2009-07-01 | 2009-09-30 | 1.02 | 0.39 | 0.74 | 961 510 | - | 136 229 | 2009-09-30 | 18 767 808 | 11 902 104 |
| 2009-10-01 | 2009-12-31 | 0.79 | 0.5 | 0.57 | 1 131 084 | 2 017 | 94 031 | 2009-12-30 | 9 043 825 | 6 274 783 |
| 2010-01-01 | 2010-03-31 | 0.86 | 0.55 | 0.7 | 648 185 | - | 18 933 | 2010-03-31 | 9 627 794 | 7 380 575 |
According to the data provided by NASDAQ OMX Vilnius in 2009 there were no the Company's convertible bonds sale-purchase agreements made. In January – March 2010 2 751 units of the Company's convertible bonds LT1000401174 were sold-purchased in the NASDAQ OMX Vilnius stock exchange.
The securities are traded only on NASDAQ OMX Vilnius stock exchange.
3.3.4 Trade of securities outside the stock exchange
Since the ordinary registered shares are included into the Additional trading list of NASDAQ OMX Vilnius stock exchange, the purchase-sale transactions of the shares can be executed only in NASDAQ OMX Vilnius stock exchange. The transactions performed outside the stock exchange comprise exchange, endowment, inheritance and settlement of debts and repay transactions.
| The transactions with regard to the ordinary registered shares of AB "Snaigė" executed outside stock exchange | ||
|---|---|---|
| Accounting period | Non-monetary | Total | ||||||
|---|---|---|---|---|---|---|---|---|
| settlement | amount | |||||||
| Price (LTL) | Amount of | Sum (LTL) | Number | Amount of | Amount of | (pcs.) | ||
| max | min | securities (pcs.) | of deals | securities (pcs.) transactions | ||||
| 2007 m. I ketv. | 11.50 | 5.47 | 347 690 | 2 548 606 | 16 | - | - | 347 690 |
| 2007 m. II ketv. | 11.21 | 4.48 | 212 610 | 1 197 021 | 9 | 55 | 1 | 212 665 |
| 2007 m. III ketv. | 8.83 | 7.02 | 78 146 | 684 792 | 5 | 8 150 | 1 | 86 296 |
| 2007 m. IV ketv. | 8.52 | - | 1 160 430 | 7 832 783 | 16 | 4 420 | 2 | 1 164 850 |
| 2008 m. I ketv. | 8.69 | 3.22 | 1 390 247 | 6 366 309 | 13 | - | - | 1 390 247 |
| 2008 m. II ketv. | 4.62 | - | 1 920 374 | 7 414 931 | 16 | - | - | 1 920 374 |
| 2008 m. III ketv. | 4.66 | 1.27 | 889 999 | 1 976 210 | 21 | - | - | 889 999 |
| 2008 m. IV ketv | 2.73 | 0.34 | 2 427 029 | 2 896 711 | 19 | 2 427 029 | ||
| 2009 m. I ketv. | 0.79 | 0.21 | 557 536 | 322 181 | 29 | 90 | 1 | 557 626 |
| 2009 m. II ketv. | 0.69 | 0.19 | 2 412 906 | 1 088 399 | 19 | 645 | 1 | 2 413 551 |
| 2009 m. III ketv. | 0.78 | 0.40 | 4 166 132 | 2 165 669 | 18 | 1 042 000 | 1 | 5 208 132 |
| 009 m. IV ketv | 0.68 | 0.28 | 474 000 | 313 858 | 4 | - | - | 474 000 |
| 2010 m. I ketv. | 0.89 | 0.28 | 1 262 171 | 932 415 | 14 | 800 | 2 | 1 262 971 |
During the general meeting of shareholders held on 4 August, 2003 it was decided to purchase up to 10 percent of the Company's shares in the National securities market in order to maintain and increase the price of the Company's shares. The Company decided to purchase own shares until May 5, 2004. The maximum price of the own shares to be purchased was set to 300 LTL, whereas the minimum price was set to 175 LTL for one ordinary registered share. The Board of the Company was delegated to purchase own shares on behalf of the Company. The reserve composed for purchase of own shares amounted to 6,673,000 LTL.
The circulation of own shares as per 2003 can be described as follows:
On 20 November, 2003 the Company purchased 1 thousand of shares for the price of 200 thous. LTL in the National securities stock exchange.
On 19-30 April, 2004 the Company sold 1000 of shares for the price of 258,6 thous. LTL in the National securities stock exchange.
During the general meeting of shareholders held on March 29, 2004 it was decided to purchase up to 10 percent of the Company's shares in the National securities market for the price of 10 000 000 (ten million) Litas until June 1, 2005, i.e., such profit share appropriated to the reserve for acquisition of own shares. The maximum price of the own shares to be purchased was set to 350 LTL, whereas the minimum price was set to 175 LTL for one ordinary registered share. The minimum sales price of own shares is 175 LTL for one ordinary registered share. The valid nominal value of a share at that time was 15 LTL.
During the general meeting of shareholders held on April 27, 2005 it was decided to purchase the ordinary registered shares (with the nominal value of 1 LTL each / VP ISIN code LT 0000109274) of AB "Snaigė", by submitting the official tender in accordance to the procedure established in the legislative enactments regulating the securities market and implementing it in Vilnius stock exchange; the purpose of acquisition of shares was to maintain and increase the price of the Company's shares. It was decided to purchase up to 10 percent of the Company's shares in the Vilnius stock exchange for the price of 10 000 000 (ten million) Litas, i.e., such profit share appropriated to the reserve for acquisition of own shares; the Company will purchase the shares up to October 27, 2006; the maximum and minimum acquisition price of the shares: the minimum purchase price of the shares was set to 14 LTL, whereas the maximum price was set to 22 LTL; the minimum sales price of own shares is 14 LTL for one share.
During 2006 no repurchase of own shares was made. During 2007 no repurchase of own shares was made.
During 2008 no repurchase of own shares was made.
During 2009 no repurchase of own shares was made.
| Year | Dividends paid out, LTL | Amount of dividends per share, LTL | Percentage of the nominal value of a share |
|---|---|---|---|
| 1997 | 634 014 | 0,50 | 3,33 |
| 1998 | 900 299 | 0,71 | 4,73 |
| 1999 | 553 690 | 0,36 | 2,40 |
| 2000 | 169 183 | 0,11 | 0,73 |
| 2001 | 2 676 166 | 1,74 | 11,60 |
| 2002 | 18 456 324 | 12,00 | 80,00 |
| 2003 | 3 074 054 | 2,00 | 11,33 |
| 2004 | 1 384 224 | 0,06 | 6,00 |
| 2005 | 0 | 0 | 0 |
| 2006 | 0 | 0 | 0 |
| 2007 | 0 | 0 | 0 |
| 2008 | 0 | 0 | 0 |
| 2009 | 0 | 0 | 0 |
On 3 March, 2010 The Company entered into a contract with UAB FMĮ "Orion Securities" (A. Tumėno Street 4, Block B, LT-01109, Vilnius) for the Company's securities accounts and securities accounts for private management. 30 January, 2008 Snaige signed a market making agreement with UAB FMĮ "Orion Securities".
3.7 Restrictions on transfer of securities
The main indicators of the Company's activities and dynamics (consolidated data):
| Financial Figures | 2009 | 2008 | 2007 |
|---|---|---|---|
| Profit before tax indicator, % | -31,51% | -7,60% | -2,90% |
| General mark-up, % | 8,87% | 12,60% | 12,00% |
| EBITDA mark-up, % | -16,96% | 0,90% | 3,00% |
| Solvency ratio, % | 50,46% | 86% | 86% |
| Debt to assets ratio, % | 36,53% | 64,95% | 63,73% |
| Return on average shareholders' equity, % | -128,50% | -34,68% | -12,96% |
| Shares indicators | 2009 | 2008 | 2007 |
|---|---|---|---|
| Earnings per share, LTL | -1,37 | -0,87 | -0,49 |
| Average annual share market price, LTL | 0,49 | 3,02 | 9,57 |
| EBITDA per share, LTL | -0,74 | 0,11 | 0,51 |
| EBITDA multiplier (EBITDA per share / Average annual share market price) | -1,50 | 0,04 | 0,05 |
| Total dividends, in thous. LTL | - | - | - |
| Dividends per share, LTL | - | - | - |
| Average net book share value, LTL | 1,07 | 2,5 | 3,69 |
The Company produces various models of high-quality household refrigerators, fridges - showcases and wine coolers for businesses and hotels, freezers and their spare parts.
The Company produces high quality of various models of household refrigerators, refrigerator - and showcases, wine refrigerators, freezers and their spare parts.
The Company's main products - refrigerators. They are classified into four main categories:
• Combined refrigerators with separate external doors;
• Refrigerators;
• Freezers;
• Commercial refrigerators.
The sales figures of Alytus Factory for the last three years are as follows:
| Type of activities | 2009 | 2008 | 2007 | |||
|---|---|---|---|---|---|---|
| units | perc. | units | perc. | units | perc. | |
| Refrigerators sold, units | 199 418 | 100 | 523 219 | 100 | 657 467 | 100 |
| including: | ||||||
| Combined refrigerators – freezers with | 14 0318 | 70,4 | 410 761 | 78,5 | 538 749 | 81,9 |
| separate external door | ||||||
| Domestic refrigerators (single cooler) | 17 930 | 9,0 | 28 466 | 5,4 | 28 625 | 4,4 |
| Freezers | 33 185 | 16,6 | 66 766 | 12,8 | 70 775 | 10,8 |
| Commercial refrigerators | 7 985 | 4,0 | 17 226 | 3,3 | 19 318 | 2,9 |
4.2.2 Termination or reduction of production volume with the critical effect on the Company's performance during recent 2 economical years
Kaliningrad factory has stopped it's production on 2 March, 2009.
In 2009 AB "Snaigė" has sold more than 199 thous. refrigerators. The sales income for the period have totaled 117 m. LTL, which is 65% less than in previous year. The export revenues have accounted to 95% of total sales income, i.e. it was equal to 112 m.LTL.
The sales have shrunk due to decreased consumption in all the markets of the company. The consumption decrease was a result of global economic crisis, which has influenced almost all the markets of the company. In the downturn conditions large percentage of consumers has deferred acquisition of large household appliance to the future periods. The market for large household appliances has decreased by 40-50 percent. In some markets – even by 70%. According to the importance and geographic division the company segments its sales markets into the following main groups: Baltic states market (Lithuania, Latvia, Estonia), Eastern market (Russia, Ukraine, Kazakhstan, Uzbekistan, other countries of CIS), Western market (Germany, France, Belgium, Netherlands, Poland, Portugal, Czech Republic, other Western and Central Europe countries).
Companies sales in 2009 (according to sales revenue):
In 2009 the comparative weight of the Eastern market in the company's sales has decreased significantly – from 55% in 2008 to 31% in 2009. The company has received around 35 m. LTL of sales revenues from Eastern market, i.e. 5.7 times less than in 2008.
The reason for such a significant sales decrease – the devaluation of local currencies in Russia and Ukraine and the import duty increase to 18% in Ukraine, which was in place for the larger part of the year. Due to devaluation of rubble and associated losses the company was forced to close its plant in Kaliningrad.
More than 28 thous. refrigerators were sold in Russia, sales revenues accounted to 19 m.LTL. 23 thous. refrigerators were sold in Ukraine, 12 m.LTL of sales revenues were received.
Sales in the Eastern market in 2009 (according to sales revenue):
After decrease in commerce in Eastern markets the company has strengthened and developed trade relationships with its clients in Western markets. As a result, majority of products manufactured in 2009 (63%) was sold in Western markets, more than 74 m.LTL of revenues were received from the segment.
Comparing with 2008, the sales revenues from Western market have decreased by 38% in 2009. 127.5 thous. refrigerators were sold and 74 m.LTL of revenues were received. The majority of production was sold in France, Germany, and Portugal.
Sales in the Western market in 2009 (according to income):
In 2009 AB "Snaigė" has sold more than 14 thous. refrigerators and received almost 8 m.LTL of sales revenues in the Baltic states market.
As well as in other markets of the company, the sales of large household appliances have significantly decreased in the Baltic states. The company has sold 1.7 times less refrigerators and received 1.5 times less revenues in the Baltic states.
In 2009 in Lithuania AB "Snaigė" has sold more than 9.5 thous. refrigerators, sales revenues have reached 5.5 m.LTL. In 2009 in Latvia AB "Snaigė" has sold more than 2 thous. refrigerators, sales revenues have reached 1.2 m.LTL. In 2009 in Estonia AB "Snaigė" has sold more than 1.5 thous. refrigerators, sales revenues have exceeded 0.5 m.LTL.
In 2009 The Company sold 50 percent of the products with their brands SNAIGE and GENERAL FROST. Besides these, the plant is producing refrigerators under other brands of trade partners and retail networks:
Аlaska - METRO, the largest domestic appliance retail network in Europe.
General Frost - TESCO, the second largest domestic appliance retail network in Europe.
Far - CONFORAMA, the largest domestic appliance retail network in France.
Carad – ELDI, one of the largest domestic appliance retail network in Belgium.
Smeg (Italy); Electrolux; Whirlpool; Zannusi; Bartscher; S-Frost; Brandy Best; Coldis; Continent; Cool; Exquisit; Faure (Electrolux); Frigibel; Helkina; KBS; Orima; Raymond; Tschibo.
The Company's brand portfolio in 2009 (according to income):
20
The materials and completing parts are supplied to the Company from more than 20 countries worldwide. European manufacturers and suppliers of materials constitute the major part of them. Procurement volumes mainly from China were constantly increasing. The Company is in cooperation with South America's and Korean compressor manufacturers.
The major suppliers are listed below: ACC, Danfos Compressors Gmbh, Bay systems, Geko-Kart, CFF, AO Severstallat, Arcelor-Mittal, KME Europa metal AG, KM Ibertubos S.A., Sintur s.z o.o., Ilpea, Basf, Dipol, Bay Systems Northern Europe, UAB Alytaus ARA, UAB Lisiplast, and UAB "Hoda".
The priorities set in the Companys' purchase strategy of high quality assurance and effective logistics. Increasing competition between the suppliers stimulates continuous improvement of the purchased product.
The technical servicing teams of AB "Snaigė" suppliers closely cooperates with the technicians and engineers of the The Company in search for common technical solutions increasing quality and decreasing costs of the products.
The Company's success depends not only on its size, image, strategy, but to a large account on how it treats its employees. All the challenges and changes faced by the Company are related to the employees, so business effectiveness firstly depends on ability to manage human resources.
The Company's human resource policy and management is comprised of: human resource planning, employees staffing (recruiting, selection, admission, and retention), employees development, evaluation, motivation, norms of actions, assurance of work safety and social conditions.
While facing changes and new challenges, it is most important for the Company to retain qualified, skilled, motivated personnel, who is able to implement set tasks and help the Company achieve its strategic goals, with as minimum costs as possible.
Strategic management of human resources. The aim of the personnel policy is to help the Company to adapt to new requirements of business environment and accomplish strategic goals while increasing administration effectiveness, connecting human resource practice with common the Company's business strategy, evaluating human resources.
Human resource planning. To ensure effective number of employment positions and structure planning, to ensure human resource demand planning, evaluation of planning quality.
Analysis of operations. In order to ensure more effective management of human resources it is necessary to evaluate new operation tasks, to spin off ineffective operations, doubling of functions, to regroup and reassign functions.
Development of the Company. Personnel development is a necessary condition for achieving the Company's strategic goals, as while learning personnel obtains qualification and skills. Changing the Company's challenges, environment where the tasks have to be completed, application of new technologies, difficult situation in the labour market indicates that it is necessary to invest into education of personnel, as it motivates, improves work conditions, increases loyalty and ensures more effective adaptation to new challenges and conditions.
Evaluation of activities and career. Evaluation of personnel activities – inseparable part of career planning. Potential of a person and areas of improvement can be assessed only by an objective evaluation. The goal of activities evaluation – to align personnel activities with the Company's goals to a maximum extent. The process of activities management is the setting of clear and achievable goals, monitoring of the progress, coordination of employee's goals, correction of set goals, annual evaluation of personnel activities. While planning the career it is important that it is not directed to the past i.e. results of person's work, but also to the future – his abilities, ability to change, implement more complex tasks – into his potential.
Personnel motivation. During the surveys majority indicate the insufficient remuneration as the most important factor hindering higher motivation. In current difficult conditions it is necessary to pay more attention to strengthening social motives: encourage personal goals, increase responsibility taken, increase association with a group or team, form conditions to realize management, self expression skills.
| Employees | 2009 | 2008 | 2007 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Amount | % | Average | Amounts | % | Average | Amounts | % | Average | |
| salary | salary | salary | |||||||
| managers | 4 | 0,5 | 17202 | 6 | 0,4 | 18 921 | 8 | 0,5 | 19 248 |
| specialists | 146 | 20,0 | 2938 | 230 | 16,4 | 3 046 | 259 | 17 | 2 620 |
| workers | 582 | 79,5 | 1250 | 1 168 | 83,2 | 1 508 | 1 261 | 82,5 | 1 377 |
| In total: | 732 | 100,0 | 1653 | 1 404 | 100 | 1 845 | 1 528 | 100 | 1 680 |
4.5.2 The employees of the Company in 2007-2009 according to the personnel groups:
| Education level of the | 2009 | 2008 | 2007 | ||||
|---|---|---|---|---|---|---|---|
| employees | Amount | % | Amount | % | Amount | % | |
| university education | 131 | 17,9 | 168 | 12 | 175 | 11,4 | |
| professional high school education | 431 | 58,9 | 771 | 55 | 822 | 53,8 | |
| secondary education | 160 | 21,9 | 449 | 31,9 | 484 | 31,7 | |
| uncompleted secondary education | 10 | 1,4 | 16 | 1,1 | 47 | 3,1 | |
| Total: | 732 | 100 | 1 404 | 100 | 1 528 | 100 |
4.5.4 The employees of the Company and its subsidiaries in 2007-2009 according to the personnel groups*
| Employees | 2009 | 2008 | 2007 | ||||
|---|---|---|---|---|---|---|---|
| Amount | % | Amount | % | Amount | % | ||
| managers | 8 | 0,6 | 11 | 0,5 | 12 | 0,5 | |
| specialists | 294 | 20,6 | 394 | 18 | 443 | 18 | |
| workers | 1123 | 78,8 | 1 832 | 81,5 | 2 006 | 81,5 | |
| Total: | 1425 | 100 | 2 237 | 100 | 2 461 | 100 |
*Average yearly data
4.6.1 Subsidiary companies' names, head office addresses, type of activities, the authorised capital, share of the authorized capital unpaid by the Company, net profit (loss), ratio of short-term liabilities and current assets, ratio of total liabilities and total assets.
| TECHPROMINVEST | MOROZ TRADE* | LIGA SERVIS | SNAIGE – UKRAINE | ALMECHA | |
|---|---|---|---|---|---|
| Head-office address | Russia | Russia | Russia | Ukraine | Alytus, Lithuania |
| Type of activities | manufacture of | sales and marketing | sales and marketing | sales and marketing | production of other |
| refrigerators | services | services | services | equipment and | |
| machinery | |||||
| Share of the authorized capital | 100 | 100 | 100 | 99 | 100 |
| available to AB "Snaigė", % | |||||
| The authorized capital | 46 725 692 | 795 | 795 | 49 579 | 1 375 785 |
| (LTL) | |||||
| 2009 profit (loss) (LTL) | -15 444 632 | (-) | -1 050 795 | -83 135 | -706 151 |
| Short-term obligations and | 3,53 | 0,00 | 1,50 | 0,51 | 1,2 |
| short-term assets ratio, | |||||
| 2009.12.31 | |||||
| Total liabilities and total | 3,53 | 0,00 | 1,50 | 0,51 | 1,2 |
| assets ratio, 2008.12.31 | |||||
| Share of the authorized | Completely paid | Completely paid | Completely paid | Completely paid | Completely paid |
| capital unpaid by the | |||||
| Company |
* OOO Moroz Trade doesn't has liquid assets, that's why no financial data.
4.6.2 The major investment projects amounting to more than 10 percent of the issuer's authorized capital, which have been implemented during 3 recent financial (economical) years: types, volumes and financing sources of investments, and geographical allocation thereof
Each year the Company invests into development of technical progress and manufacture of new, ecological-friendly, cost-effective and modern product s. Three new products were developed, and the current products improved. In the process of acquisition of new products the new technologies were assimilated, and the current ones improved.
In 2007 was invested 21,98 m.LTL for development of new products, improvment of manufacturing technologies. 1. In 2007 was invested over 20.6 m.LTL for development of new products. 7 new RF refrigerator models launched. Technologies obtained while introducing new products:
New equipment for stamped, moulded, vacuumformed components manufacturing, plastic moulding, protective coating and painting, manufacturing of refrigerating system components, assembly of refrigerators and packaging: 5,52 m.LTL.
For the further development of currently installed technologies, technical support of manufacturing, capacity increase of and modernization of energy infrastructure was invested 1,26 m. LTL.
In order to reduce the Company's operating costs and improve production quality, there was invested 0,12 m. LTL in 2007. Technical department prepared and implemented 24 different cost saving measures, there was achieved 1.081 m. LTL of annual savings.
In 2008 in total 3,284 m. LTL was invested into development of new products, improving of manufacturing technologies.
In 2009 there was invested 1,659 mln. LTL for development of new products, improving of manufacturing technologies.
0,516 mln. LTL was dedicated for development of new products.
During the year 2009 research studies of increasing energy efficiency of refrigerator models RF27, RF31 and RF34 implemented allowed to start production of "A++" line of these refrigerator models.
After signing agreement with Finance ministry and ministry of Economy regarding partial financing through EU structural funds in August 2009, the development of refrigerator RF36 with multifunctional compartment, having "No frost" refrigerating technology was initiated.
Investment amount were allocated to:
In 2008 – 2009 cost saving programme was being implemented in the Company, the measures of which allows saving 8.28 LTL per refrigerator produced. In total these measures allowed to save 1.264 mln. LTL.
Investments in subsidiary the Company "Techprominvest" (Kaliningrad, Russia):
In 2007 investments into intangible assets were made: the project "New design of TPI" (initiated in 2006) was completed, according to agreement 77/06.
The design and technical projects were prepared, set of sketches was provided (156 sketches).
Total value of completed works: 138 112 LTL.
In 2007 investments for tangible non-current assets (plant and equipment) of "Techprominvest" were made: 3.325 m. LTL
In 2008 there was invested 1,955 m. LTL . The allocation of investment:
• Other technical equipment – 1.4 mln. LTL.
No investment into subsidiary the Company "Techprominvest" were made in 2009.
Company's environmental vision - organic products, clean technology and clean environment. Company's products, production technology and services can not do the illegal exposure of atmospheric air, water, workers, consumers and environment.
Environment must not be contaminated by waste products of production and more than is inevitable and allowed. The Company's management is trying to implement a vision and a clear understanding of environmental importance, assume the following responsibilities:
AB "Snaige"is one of the most advanced manufacturing companies of Lithuania in the field of environment protection. The activities of the Company are regulated by environment protection management system, which complies with international ISO 14001 standard requirements. The system is working since 1995, and last year certificate Bureau Veritas Certification Lithuania has extended the validity of the system for additional three years.
When developing a new product, the Company gives a priority for the manufacturing processes which save raw materials, for safe transportation, waste elimination and quality of products. In manufacturing the Company tries to use materials which later can be recycled. The Company complies with European Parliament and European Commission directive 2005/32/EB, which regulated design of the products.
"Snaigė" refrigerators are manufactured from ecological materials which do not have any harmful elements. For example, every plastic part of a refrigerator is marked (according to ISO), so that it can be reused one more time, recycle according to directive 2002/96/EB describing electrical and electronic equipment waste requirements.
Technological product surface coating process is ecologically clean: solid covering and drying with natural gas is used. Cooling system is filled with natural cooling gas R600a, which do not deteriorate ozone and for insulation of the refrigerator no harmful ciklopentane is used.
When buying refrigerators, customers are provided with information related to environment protection. It is advised, how to install, maintain a product so that it is used as long as possible and the impact on environment would be diminished. In addition to that, it is indicated how to utilize the product after it is no longer usable.
The Company has old refrigerators utilization system. Starting with 2006 the Company started to utilize large electric household equipment – refrigerators and fridges – waste.
AB "Snaige"fully complies with the requirement of Kyoto protocol about the global warming and climate change. Materials used in manufacturing do not deteriorate ozone and do not ad to global warming.
The Company saves electricity, water, heat: during decage the usage of these energy sources was decreased by three times.
Macroeconomic risk – currently Lithuanian and other world markets are in the economic slowdown phase. This might have an effect on Issuers production demand as well as its business perspectives. The investor takes a risk that due to these macroeconomic risks the Issuers financial situation might worsen and this might make it more difficult for the Issuer to redeem the bonds.
Issuer's credit risk – Investors accept the risk, that due to unfavorable changes in products markets, worsening financial situation, diminishing opportunities for refinancing the loans, and other factors, the Issuer might not be able to redeem the bonds at the date of maturity. At the moment Issuer's activities are incurring loss. Over 2009 the Issuer incurred consolidated net loss of 38 182 thou. LTL. Credit risk related to the deposits in banks is limited, as the Issuer is cooperating only with the largest Lithuanian banks. On the 31st December 2009 the debt to assets ratio of the Issuer was 0.72. On the 31st December 2009 financial debts were equal to 38 424 thou. LTL. The largest part of financial debt consisted of short term liabilities (37.5 m. LTL). Real estate (for 22 678 000 LTL), machinery (for 5 204 000 LTL), inventories (for 20 500 000 LTL), part of cash receivable (up to 10 000 000 LTL) and major part of shares of OOO "Techprominvest" are put on pledge to cover loans. Loan repayment is going according to the timetable.
31 December 2009 and 31 December 2008 companies group did not carried out loans, amounting to 9,142 thousand million (December 31 2008m. 16,163 thousand. LTL) contracts for the turnover index of the bank. During this reporting period, the loan was repaid on time and banks have not taken any action on the failure rate. The Issuer did not comply with turnover requirement for operations with loan providing banks. During year 2008 and 2009 the loan installments were paid on time and banks did not take any actions due to above mentioned breach of the covenant. More detailed information about the financial liabilities of the Issuer can be found in the consolidated 12 months interim financial statement of 2009.
Issuer's liquidity risk – Issuer's consolidated current liabilities on 31 December 2009 have exceeded current assets and the liquidity ratio was equal to 0.54. As current liabilities exceed current assets, the risk exists that in case creditors request to cover current liabilities, the Issuer will not be able to meet this requirement using its current assets. Such situation would negatively affect the Issuer's financial situation and its business perspectives and worsen the ability to redeem the bonds on time.
Credit market risk – currently the stagnation has overtaken the credit market not only in Lithuania but on the global scale too. As the Issuers financial reserves are limited, its activity largely depends on the outside financing. In case of decreased supply of attainable credit, the risk exists that this might negatively affect the Issuer's financial situation and make it difficult for the Issuer to redeem bonds on time
Bad debts risk – in previous years the issuer has experienced loss from bad debts due to the insolvency of indebted clients. During year 2009, 2 255 790 LTL of clients' debts were classified as bad debts, during 2008 – 1 757 863 LTL. There is a risk that in future periods Issuer can also incur bad debts.
Issuer's financial accounting accuracy risk – in audit report for year 2007 the auditor of the Issuer has stated conditional opinion on the accuracy of the financial statements (the accurate statements by the auditors can be found in audit report for year 2007 which is included in the Prospectus).
In audit report for year 2008 the auditor of the Issuer refused to provide an opinion on the accuracy of Issuer's financial accounts (the exact refusal and arguments behind it are stated in audit report for year 2008 which is included in the Prospectus). Previous inaccuracies allow making assumptions that in future periods financial accounts can also be inaccurate and inaccurately represents real financial situation of the Issuer.
International trade restrictions risk – the large part of the Issuer's production is exported to the countries outside the European Union. The risk exists that changed trade policy might worsen the export conditions into these countries. Such changes would negatively affect the Issuers export possibilities, financial situation could worsen the ability to redeem bonds on time.
Legal process risk – on 25 June 2009 A/S Comfitt Glass (hereinafter – the Plaintiff) has filed a lawsuit against the Issuer (the defendant) regarding adjudgement of 2 049 thous. LTL of debt. The plaintiff argues that adjudged debt formed due to defendant's refusal to pay for supplied goods. The issuer does not agree with part of the debt which accounts to 489 thous. LTL, as part of the goods were not delivered by the Plaintiff to the Issuer. On 12 February 2010 the court of Kaunas county has taken a decision to adjudge the Plaintiff from defendant 2 049 thous.LTL of debt, 126 thous. LTL of interest, and 6% of legal interest from the adjudged sum, which is calculated for period from the date of filing of the lawsuit till the date of execution of the court's decision. The issuer appealed regarding adjudgement of 489 thous. LTL of debt for goods which were not delivered. In case court of appeal approved the decision of lower instance the Issuer would have to cover all adjudged compensation. Covering the adjudged compensation from working capital of the Issuer could negatively affect Issuer's financial situation.
Market risk – Issuer's companies are involved in production and sale of domestic and commercial use refrigerators. Investors must accept the risk that due to unfavorable changes in realization and production markets the Issuer and its controlled companies might suffer losses, which will worsen the financial situation, and the possibility to redeem the bonds on time.
Political risk – Issuer is involved in production during which hazardous chemical substances as byproduct are emitted. Environment protection is politically heavy regulated in Lithuania and European Union. As a result, a risk exists that due to introduction of new regulations Issuer will be forced to adjust its manufacturing processes. Such adjustment could require large investments and could negatively affect Issuer's financial situation and ability to redeem the Bonds on time.
Operational risk –a risk to incur direct/indirect losses due to inadequate or inoperative internal processes, systems, or technologies, actions of employees, representatives, other external actions. A part of operational risk is the legal risk, which occurs in case of inappropriate execution or implementation of various treaties, contracts, agreements, cases, and laws.
Technological risk – this risk comprises the physical and moral depreciation of technological equipment. The consequences of this type of risk can be direct or indirect. Technological factors may operate directly to the company through physical and moral depreciation of the technical base. Such a change in technology could adversely affect the company's financial situation.
4.8.1 The main indications about internal control and risk management systems related to the preparation of consolidated financial statements.
The Audit Committee supervises preparation of the consolidated financial statements, systems of internal control and financial risk management and how the company follows legal acts that regulate preparation of consolidated financial statements.
Chief financial officer of the company is responsible for the preparation supervision and the final revision of the consolidated financial statements. Moreover, he constantly reviews International Financial Reporting Standards (IFRS) in order to implement in time IFRS changes, analyses company's and group's significant deals, ensures collecting information from the group's companies and timely and fair preparation of this information for the financial statements. CFO of the company periodically informs the Board about the financial statements preparation process.
| 2009 | Purchases | Sales | Receivables | Payables | |
|---|---|---|---|---|---|
| UAB "Baltijos polistirenas" | 2.457.333 | - | - | 225.732 | |
| UAB "Astmaris" | 776.475 | - | - | - | |
| 3.233.808 | - | - | 225.732 | ||
| 2008 | Purchases | Sales | Receivables | Payables | |
| UAB "Baltijos polistirenas" materials | 3 712 781 | 2 821 | - | 375 517 | |
| UAB "Astmaris" | materials | 8 462 171 | - | - | 1 272 617 |
| 12 174 952 | 2 821 | - | 1 648 134 |
The Company group is pursuing a policy to enter into transactions with related parties for commercial purposes and conditions. No guarantees have been received or granted by any related party receivables or payables to ensure payment.
Financial and investment transactions with related parties:
| 2009 | 2008 | |||||
|---|---|---|---|---|---|---|
| Proceeds | Loan | Interest | Proceeds | Loan | Interest | |
| from borrowings | repayments | paid | from borrowings | repayments | paid | |
| UAB "Hermis Capital" | - | 5 713 379 | 1 087 241 | 29 300 000 | 23 586 621 | 87 109 |
| UAB "Genčių nafta" | - | - | - | 8 750 000 | 8 750 000 | 190 137 |
| AB "Kauno duona" | - | - | - | 1 100 000 | 1 100 000 | 33 659 |
| UAB "Baltijos polistirenas" | - | - | - | 3 000 000 | 3 000 000 | - |
| UAB "Meditus" | 1 000 000 | - | - | 6 000 000 | 5 000 000 | - |
| Total : | 1 000 000 | 5 713 379 | 1 087 241 | 48 150 000 | 41 436 621 | 310 905 |
Currently the Company as a claimant participates in the legal case against defendent OOO "Bila technika" due to claim of the debt owed. Ammount of the claim – 340 882,11 LTL. Process takes place in Vilnius commercial arbitrage court.
On 25 June 2009 A/S Comfitt Glass (hereinafter – the Plaintiff) has filed a lawsuit against the Issuer (the defendant) regarding adjudgement of 2 049 thous. LTL of debt. The plaintiff argues that adjudged debt formed due to defendant's refusal to pay for supplied goods. The issuer does not agree with part of the debt which accounts to 489 thous. LTL, as part of the goods were not delivered by the Plaintiff to the Issuer. On 12 February 2010 the court of Kaunas county has taken a decision to adjudge the Plaintiff from defendant 2 049 thous.LTL of debt, 126 thous. LTL of interest, and 6% of legal interest from the adjudged sum, which is calculated for period from the date of filing of the lawsuit till the date of execution of the court's decision. The issuer appealed regarding adjudgement of 489 thous. LTL of debt for goods which were not delivered.
AB "Snaigė" is a member of Lithuanian Confederation of Industrialists.
Lithuanian Confederation of Industrialists comprises 41 branch and 8 regional associations composed of more than 2,700 enterprises of various type. The Confederation includes not only the majority of industrial enterprises but also banks, sales enterprises, subsidiaries of foreign firms, scientific research institutions and scholastic institutions. The activities of the members of LCI encompass all the main industrial areas; the major part of the goods produced in Lithuania is manufactured by them.
AB "Snaigė" is a member and the founder of the Association of Domestic Equipment Manufacturers "CECED Lithuania". The goals of the association are as follows: to coordinate activities of the members of the association active in the area of manufacture of domestic equipment, represent and defend the interests of the members, settle the issues raised by the members, ensure proper protection of the manufacturers' interests, etc.
The Company's activities are independent of patents or licences
5.3.1 Recent important events in the Company's business
On 8 April 2009 the subscription period of Snaigė AB convertible bonds with maturity of 368 days and annual interest rate of 10% has ended. During the subscription period 61 372 units of bonds with nominal value of 100 EUR per bond were subscribed by owners of AB Snaigė bonds issued in 2009 choosing to refinance their securities. In total bond holders have refinanced 73% of bonds issued in year 2009.
Investors who owned 8 430 units of year 2009 convertible bonds LT1000401174 chose to convert securities into ordinary shares of AB Snaigė. These investors in total will be provided with 2 908 350 ordinary shares of AB Snaigė with nominal value of one share equal to 1 LTL, by increasing the Company's subscribed capital with a corresponding value. In total bond holders have converted 11% of convertible bonds issued in year 2009.
Part of the bonds issues the owners of which didn't agree to refinance or convert owned securities were not redeemed. Due to financial loss incurred in year 2009 the Company didn't generate sufficient amount of funds needed for redemption and due to the frozen credit markets of the region needed funds were not possible to be borrowed from outside sources.
The Company will provide holders of non-redeemed bonds with proposals regarding liquidation of formed indebtedness as soon as possible.
Commenting information which appeared in the media today regarding failed redemption of AB Snaigė bonds issued in year 2009, AB Snaigė informs that information which appeared on the website of Central securities depository of Lithuania is not accurate. Official redemption term of the bonds is the end of working day of 8 April, 2010. Currently the subscription of newly issued AB Snaigė convertible bonds LT1000401315 is taking place, the proceeds from which would be used for the redemption of bonds issued in 2009. The Issuer and it's representatives are still negotiating with the owners of bonds issued in 2009 regarding refinancing of the securities. As the subscription period hasn't finished yet, it is not clear if attracted funds will be enough for full redemption of the bonds. Official information regarding redemption of the bonds issued in 2009 and subscription results of newly issued convertible bonds issue will be released on 9 April, 2010.
On April 6, 2010 Management board of AB Snaigė decided to convene the General Meeting AB Snaigė (code 249664610) shareholders on April 29, 2010 at 10:00 in the main meeting hall of the Company (Pramonės str. 6, Alytus). Registration starts 9:30 pm, ends- 9:50 pm.
On the agenda:
The account date of the ordinary General Meeting of Shareholders – the 22 of April, 2010. Shareholders that own AB Snaige shares on the end of the working day of 22 of April, 2010, shall have the right to participate in convened ordinary General Meeting.
The rights account day is 13th of May, 2010. Shareholders who have interests according 15 article 1 part 1, 2, 3 and 4 points of the Lithuanian Company's Law and who will be shareholders at tenth working day after the General Meeting of Shareholders which awarded decision related with shareholders interests.
Proposed decisions project:
To approve the annual report on the Company's activities for the year 2009
To listen the auditor's report of Company's financial statement for the year 2009
To approve annual financial statement for the year 2009
To approve appropriation of profit (loss)) of the year 2009:
Retained earnings of the previous financial year at the end of reporting year 69,217,053 LTL (20,046,644 EUR) Net profit for the year 2009 is -82,245,667 LTL (-23,819,991 EUR)
Net profit (loss) for allocation at the end of financial year -13,028,614 LTL (-3,773,347 EUR)
Shareholders contributions 0 LTL (0 EUR)
Share premium to cover losses 13,028,614 LTL (3,773,347 EUR)
Transfers from reserves 1,860,000 LTL (538,693.2 EUR)
Profit for distribution 1,860,000 LTL (538,693.2 EUR)
Allocation of profit:
Share of profit allocated to the statutory reserve 0 LTL (0 EUR)
Share of profit allocated to other reserves 0 LTL (0 EUR)
Of which:
To charity, support 0 LTL (0 EUR)
To social, cultural needs 30,000 LTL (8,688.6 EUR)
Share of profit allocated to dividends 0 LTL (0 EUR)
Share of profit allocated to bonuses for the Board members 0 LTL (0 EUR)
Share of profit allocated for buy-back of Company's own shares 0 LTL (0 EUR)
Share of profit allocated to investment reserve 1,830,000 LTL (530,004.6 EUR)
Retained earnings at the end of reporting year 0 LTL (0 EUR).
The prospectus of AB Snaigė convertible bonds issue with maturity of 368 days, nominal value of the whole issue of 8.05 m.EUR (27.79 m. LTL) was approved by Securities Commission of Lithuania on 18 March, 2010. The main facts about the issued convertible bonds:
• Maturity of the bonds: 368 days.
• Shares, to which bonds can be converted: AB Snaigė ordinary shares.
• Beginning of the bonds validity period: 9 April, 2010.
• Bonds redemption date: 11 April, 2011.
Bond holders will have a right to convert one owned bond into 380 ordinary shares of Snaigė AB at the date of the bond redemption (11 April, 2011).
On 5 March 2010 the general shareholder meeting of AB Snaigė has decided to cancel a preemptive right for the shareholders to subscribe the issued bonds. As a result, during the whole subscription period (22 March, 2010 – 8 April, 2010) the issued bonds can be subscribed by all interested investors.
Investors are invited to sign the Bonds purchase agreements during the Bonds subscription period at UAB FMĮ "Orion Securities", A.Tumėno str. 4B, LT – 01109, Vilnius, Lithuania during working days from 8.30 till 17.30.
Extraordinary general meeting of shareholders held on March 5th in 2010 passed the following decision: 1. Convertible bonds issue.
1.1. Number of issued Bonds up to 80 500 (eighty thousand fifty hundred) units;
1.2. Nominal value of one Bond 100, EUR (one hundred Euros);
To cancel the preemptive right of the shareholders of the Company to acquire issued Bonds which is provided by the article 57 of the Lithuanian Republic public companies law.
After the end of bonds subscription period to submit an application to the management board of AB "NASDAQ OMX Vilnius" with a request to include the issued bonds in the debt securities list of the "NASDAQ OMX Vilnius" stock exchange.
Change of articles of the Company if after the bonds redemption date there are Bonds which were converted into shares, to increase the Company's subscribed capital by the nominal value of shares to which the Bonds were converted. 5. Change of articles of the Company.
To authorize (with the right to reauthorize) and to oblige Company's General Director :
6.3. To sign all other documents related to the subscription of Bonds, registration of Bonds in the Central Securities Depository of Lithuania, inclusion of bonds into the debt securities list of "NASDAQ OMX Vilnius" stock exchange.
6.4. To sign changed articles of the Company after the increase in subscribed capital and number of ordinary shares and to provide the articles to the enterprise register of Lithuania;
6.6. To execute any other actions, related to the implementation of the decisions of this meeting.
On 2 March 2010 in Astana, Kazakhstan, managing director of AB "Snaigė" Gediminas Čeika and a representative of Kazakhstan national business corporation "Saryarka" has signed documents regarding the establishment of a new joint venture. The new venture was named "Snaigė" Saryarka" ant will be registered in the register of the Kazakhstan Republic Ministry of Justice. The share capital owned by AB "Snaigė" will be equal to 49%, by "Saryarka" – 51% of total equity.
According to General Director of AB "Snaigė" the first and most important task of a newly established enterprise is securing the financing. "Negotiations with Kazakhstan banks and large investment funds have been started" – said G. Čeika. "Our partners are optimistic, moreover, the project is supported by economy and trade ministry of Kazakhstan Republic. Minister of Kazakhstan Republic economy and trade ministry Aset Isekeshev has stressed the importance of the project to the Kazakhstan economy during the meeting with representatives of "Snaigė Saryarka". After securing financing "Snaigė Saryarka" will build refrigerator manufacturing plant in Astana, later it will produce and sell refrigerators and freezers in Kazakhstan, Russia, Kyrgyzstan, and other neighbouring markets.
According to the directors of AB "Snaigė", the establishment of a new business venture and building of a new plant is highly advantageous for the Company. If the new business venture secures financing, the redeployment of manufacturing to Kazakhstan not only will allow AB "Snaigė" to establish presence in Kazakh market, but also after the duty-free trading policy sets in will help AB "Snaigė" to regain lost position in Russia as well as to enter other ne ighbouring markets. In addition to that, the new plant will be close to the suppliers of raw materials and component parts in Kazakhstan and China.
AB "Snaigė" manufacturing plant in Alytus will further manufacture refrigerators for Baltic, Ukraine, Western and Central Europe markets.
Public limited corporation "National Company Social-business corporation "Saryarka" was established in 2007 following order of the president of the Republic of Kazakhstan N. Nazarbaev. The mission of the corporation – to promote economic development in Kazakhstan capital Astana, districts of Akmolinsk and Karaganda. The goal of the corporation – creation of competitive manufacturing businesses able to export their products, establishment of effective systems for state assets management, launch of innovative projects, creation of business conditions favourable for development of small businesses.
The work of the corporation is developed by applying public-private-partnership model. "SPK-Saryarka" invests half of earned profit into development of manufacturing industries not related extraction of raw materials, other part is devoted for implementation of social projects. "SPK-Saryarka" owns 22 companies working in alternative fuel manufacturing area, manufacturing companies oriented to meeting resident needs, transport, logistics, building, waste recycling, agricultural, and medicine manufacturing companies.
On 26 of February, 2010, by decision No. 1-6 of Board proposed changes in decision project in points 1.5.2., 1.6., 1.8. 1. Convertible bonds issue;
1.5. Shares, to which one Bond is convertible:
1.5.1. Class ordinary shares;
1.6. Ratio, by which bonds are convertible into ordinary shares of the Company - 1:380 (one bond is convertible to 380 ordinary shares);
1.7. Bonds redemption date – 368th day after the end of Bonds subscription period. Bonds are convertible into shares on the redemption day;
To cancel the preemptive right of the shareholders of the Company to acquire issued Bonds which is provided by the article 57 of the Lithuanian Republic public companies law.
After the end of bonds subscription period to submit an application to the management board of AB "NASDAQ OMX Vilnius" with a request to include the issued bonds in the debt securities list of the "NASDAQ OMX Vilnius" stock exchange.
Change of articles of the Company if after the bonds redemption date there are Bonds which were converted into shares, to increase the Company's subscribed capital by the nominal value of shares to which the Bonds were converted. 5. Change of articles of the Company;
Change of articles of the Company (addition "The new edit of AB Snaige articles").
To authorize (with the right to reauthorize) and to oblige Company's General Director:
AB Snaigė interim financial report for 12 months of 2009 and preliminary consolidated non-audited results for year 2009
| Revenues from sales and other activities: | 123.518 m.Lt (35.77 m.EUR). |
|---|---|
| Loss before tax: | -35.53 m. Lt (- 10.29 m.EUR), |
| Net loss: | -36.45 m. Lt (-10.56 m.EUR), |
| EBITDA: | -19.85 mln. Lt (-5.75 mln.EUR). |
AB Snaigė has timely and appropriately prepared for the downturn – the business was restructured, manufacturing was reorganized, number of employees was decreased. During 2009 the Company has decreased operating costs by almost 11 m. LTL. Despite the downturn, in 2009 the Company managed to work steadily, saved majority of markets and demand of manufactured products.
The most sever loss of AB Snaigė in 2009 – the close down of manufacturing plant in Kaliningrad. The decision to close the factory was taken in the beginning of the year when due to the devaluation of rubble manufacturing in Russia became unprofitable. The Company incurred consolidated loss of 12 m.LTL due to the closure of the plant and lost position in Russian market.
Other factors which negatively affected Company's results:
Common effect of economic downturn factors totalled 21.5 m.LTL
The Company presents together with confirmation by responsible persons regarding accuracy of the report.
Information published in "Verslo zinios" February 26 related "Snaige" future partners is not correct
On 26 February 2010 management board of AB "Snaigė" has decided to establish a joint venture with Kazakh national business corporation "Saryarka". The new Company will build household refrigerating equipment manufacturing plant in Astana, later it will be responsible for manufacturing and refrigerators sales in Kazakh, Russian, Kyrgyzstan and other neighboring markets.
The asset contribution of AB "Snaigė" into the new joint venture will comprise of manufacturing equipment transferred from closed Kaliningrad plant and manufacturing know-how. AB "Snaigė" will be responsible for launch of manufacturing operations in the new plant, assurance of effectiveness of manufacturing technologies, and organization and planning of sales and marketing processes. The Company's partner corporation "Saryarka" will be responsible of acquisition of land plot for the building of a plant, management of building processes, supply of labor force and financial resources.
According to the chairman of the management board of AB "Snaigė" Nerijus Dagilis, the establishment of a new business venture and building of a new plant is highly advantageous for the Company. "After the close down of Kaliningrad plant our sales have decreased significantly"– said N. Dagilis. "If the new business venture secures financing, the redeployment of manufacturing to Kazakhstan not only will allow AB "Snaigė" to establish presence in Kazakh market, but also after the duty-free trading policy sets in will help us to regain lost position in Russia as well as to enter other neighboring markets.
The new joint venture will allow business consortium "Saryarka" to contribute to the implementation of rapid industrialization strategy set by Kazakh government. According to the chairman of the management board of the consortium Berik Kamalijev, building of refrigerators manufacturing plant will be the first project of such level in Kazakhstan. "The establishment of the plant will significantly contribute to the formation of positive image of the Republic of Kazakhstan"– said B. Kamalijev. "Moreover, the plant will create new workplaces, the network of supporting businesses will cluster around the plant. "
AB "Snaigė" manufacturing plant in Alytus will further manufacture refrigerators for Baltic, Ukraine, Western and Central Europe markets.
Public limited corporation "National Company Social-business corporation "Saryarka" was established in 2007 following order of the president of the Republic of Kazakhstan N. Nazarbaev. The mission of the corporation – to pro-
mote economic development in Kazakhstan capital Astana, districts of Akmolinsk and Karaganda. The goal of the corporation – creation of competitive manufacturing businesses able to export their products, establishment of effective systems for state assets management, launch of innovative projects, creation of business conditions favorable for development of small businesses.
The work of the corporation is developed by applying public-private-partnership model. "SPK-Saryarka" invests half of earned profit into development of manufacturing industries not related extraction of raw materials, other part is devoted for implementation of social projects. "SPK-Saryarka" owns 22 companies working in alternative fuel manufacturing area, manufacturing companies oriented to meeting resident needs, transport, logistics, building, waste recycling, agricultural, and medicine manufacturing companies.
To cancel the preemptive right of the shareholders of the Company to acquire issued Bonds which is provided by the article 57 of the Lithuanian Republic public companies law.
preemptive right of the shareholders of the Company is valid for the whole Bonds issue.
After the end of bonds subscription period to submit an application to the management board of AB "NASDAQ OMX Vilnius" with a request to include the issued bonds in the debt securities list of the "NASDAQ OMX Vilnius" stock exchange.
Change of articles of the Company if after the bonds redemption date there are Bonds which were converted into shares, to increase the Company's subscribed capital by the nominal value of shares to which the Bonds were converted.
Change of articles of the Company
To authorize (with the right to reauthorize) and to oblige Company's director general:
To execute any other actions, related to the implementation of the decisions of this meeting.
On February 1, 2010 Management board of AB "Snaigė" decided to convene the Extraordinary General Meeting AB "Snaigė" (code 249664610) shareholders on March 5, 2010 at 10:00 in the main meeting hall of the Company (Pramonės str. 6, Alytus).
Registration starts 9:30 pm, ends- 9:50 pm.
On the agenda:
Convertible bonds issue;
Change of articles of the Company if after the bonds redemption date there are Bonds which were converted into shares, to increase the Company's subscribed capital by the nominal value of shares to which the Bonds were converted;
Change of articles of the Company;
Grant of authorization.
The account date of the Extraordinary General Meeting of Shareholders – the 26th of February, 2010. Shareholders that own Snaige AB shares on the end of the working day of 26th of February, 2010, shall have the right to participate in convened Extraordinary General Meeting.
The agenda of the Extraordinary General Meeting of Shareholders may be supplemented by initiative of shareholders who own shares no less than 1/20 of all the votes. Proposals to the agenda of the Extraordinary General Meeting of Shareholders may be submitted by e-mail [email protected] or delivered to the Company's representative office at Pramones st. 6, Alytus (2rd floor) no later than the 19th of February, 2010. Please be informed that along with a proposal to supplement the agenda of the Extraordinary General Meeting of Shareholders must be submitted the drafts of proposed decisions, or if the decisions shall not be adopted, explanations on each of the proposed issue.
Please be informed that shareholders who own shares no less than 1/20 of all votes own the right at any time before the Extraordinary General Meeting of Shareholders or during the meeting in writing or by e-mail [email protected] propose new draft decisions related to the questions included into agenda, also nominate candidates to the Company board or propose an audit Company.
Shareholders own the right to ask the questions concerning the agenda of the Extraordinary General Meeting of Shareholders. Questions may be submitted by e-mail [email protected] or delivered directly to the Company's office at Pramones st. 6, Alytus (2rd floor) not later than 4th of March, 2010.
Persons who participate in General Meeting of Shareholders must submit an identity document. A person who
is not a shareholder, to this document, also must submit a document confirming the right to vote at an Extraordinary General Meeting of Shareholders. The authorized person at an Extraordinary General Meeting of Shareholders shall have the same rights as represented shareholder. Shareholder's right to attend General Meeting of Shareholders also include the right to ask.
Please be informed that shareholders, who are entitled to participate at an Extraordinary General Meeting of Shareholders, own the right to authorize by electronic means phisical or legal person to attend and vote on behalf of them at Extraordinary General Meeting of Shareholders. Power of attorney that is issued by the shareholder must be submitted by sending e-mail [email protected]; [email protected], fax. 8-315-56-207 not later than the 4nd of March, 2010.
Please be informed that on decisions which are included into Extraordinary General Meeting of Shareholders agenda can be voted in writing by completing the general ballot paper. If the person who had completed the general ballot paper is not a shareholder, the completed general ballot paper must be accompanied by a document confirming the right to vote. The duly completed general ballot paper (voting bulletin) should be sent by e-mail [email protected]; [email protected], fax. 8-315-56-207 or delivered directly to the Company's Office at Pramones st. 6, Alytus (2rd floor) not later than the 4th of March, 2010. The Company reserves the right not to include in the shareholder vote, if the general ballot paper does not meet the third and fourth parts of the 30 Article of Law on Companies requirements or the general ballot paper is written in a way that it is impossible to establish shareholder's will on a separate issue.
5.3.2 Important events in Company's business
According to the non audited consolidated financial information the AB "Snaigė"has achieved a consolidated turnover of 100 million LTL during 9 months of 2009. Major part of turnover, namely 86.7 million LTL, the Company achieved in Alytus plant. The work in in Kaliningrad plant was suspended since beginning of the year due to ruble devaluation and economic recession in Russia.
During the nine months of 2009 AB "Snaigė"had 32.5 million LTL non audited consolidated loss before taxes. Large part of the loss - 12 m.LTL was incurred due to write-off of overestimated market value of Kaliningrad factory.
The loss due to the ruble devaluation amounted to over 5 million LTL, and severance pay for dismissed employees amounted to around 5 million LTL.
Currently, Alytaus plant is running on 100% capacity works five days a week. In September the customs duty for AB "Snaigė" products to Moldova and Ukraine hasbeen cancelled. The Company expects export increase to these countries.
The consolidated non-audited interim financial reports for 9 months of 2009 and the confirmation of accountable persons (attached).
On 30 October 2009 the subscription period of AB "Snaigė" bonds with maturity of 160 days and annual interest rate of 18% has ended. During the subscription period 15 996 bonds with a nominal value of 100LTL were subscribed.
The issued securities were exceptionally offered only for the holders of AB "Snaigė" bonds which were not redeemed on 6 April 2009 by allowing to swap one non-redeemed bond to one newly issued. During the subscription period all the non-redeemed bonds were swapped with the newly issued ones and all the obligations related to the bond issue not redeemed on 6 April 2009 were fully covered.
According to the non audited consolidated financial information the AB "Snaigė" has achieved a consolidated turnover of 64,3 million LTL during the first half of 2009. Major part of turnover, namely 53,8 million LTL, the Company achieved in Alytus plant. The work in in Kaliningrad plant was suspended since March due
to ruble devaluation and economic recession in Russia.
According to AB "Snaigė" managing director Gediminas Čeika the Company was able to stabilize its activities. "During the second quarter of this year the Company experienced only 3,5 million LTL. consolidated non audited loss, which is 4 times lower than it was the first quarter" said G. Čeika. "Second quarters
consolidated non audited EBITDA was 144 thous. LTL. This is a good result compared with first quarters (-9,2 million LTT) and it shows that Company is moving towards the right direction.
First quaters optimization of management processes in the Company and a significant decrease in sales in the key markets of Russia and Ukraine, had major consequences on AB "Snaigė" first half results of 2009.
During the first half of 2009 AB "Snaigė" had 17,6 million LTL non audited consolidated loss before taxes. The loss due to the ruble devaluation amounted to over 6 million LTL, and severance pay for sidmissed employees amounted to around 5 million LTL.
Currently, Alytaus plant is running on 100% capacity., works five days a week. The Company has more orders then it can produce, but cannot increase production due to the lack of working capital.
The Company received INVEGA guarantee for 5 million. LTL. and is negotiating with banks to recieve a loan for its working capital.
The consolidated non-audited interim financial reports for 6 months of 2009 and the confirmation of accountable persons (attached).
On 12 of August 2009 AB "Snaige" board of directors has decided to close down its refrigerators manufacturing factory in Kaliningrad, Russia. Manufacturing activity at this factory has been suspended since 2 March 2009. According to managing director of AB "Snaigė" Gediminas Čeika, after devaluation of Russian rubble manufacturing at this country has become highly unprofitable. "Despite being very hard, decision to close down Kaliningrad factory was inevitable" - stated G. Čeika. -"We do not see any positive changes in the Russian market and even after manufacturing suspension the Company is each month incurring loss due to Kaliningrad factory. Such financial burden during the times of economical downturn is too heavy, as a result, the decision to close down the factory was taken". The Company plans to sell Kaliningrad factory premises. Refrigerator manufacturing equipment will be transported and used in the main and stably working factory in Alytus.
The Company will incur 70 m.LTL losses due to failed investments in Kaliningrad. However, after selling Kaliningrad factory premises the Company will raise additional financial reserve. Currently AB "Snaige" has more orders for new refrigerators than it is able to produce, however, it is unable to increase production due to lack of working capital.
According to G. Čeika, AB "Snaige" does not rule out possibility to sell refrigerators in Russia. "Economic instability and recession will not go on forever, after reversion of current business situation we will look for ways to recover trading relations in Russian market" - said G. Čeika.
On 8 July, 2009 the subscription period of AB "Snaigė" bonds with maturity of 274 days and annual interest rate of 14% has ended. During the subscription period 6 962 bonds with nominal value of 100LTL were subscribed.
The issued securities were exceptionally offered only for the holders of AB "Snaigė" bonds which were not redeemed on 6 April, 2009 by allowing to swap one non-redeemed bond to one newly issued. In such a way holders of approximately one third of all non-redeemed bonds agreed to restructure their overdue securities. After the end of subscription period the residual nominal value of non-redeemed bonds decreased to 1.67 m.LTL (or 8.4% of the whole bonds issue of year 2008).
The Company invites the holders of remaining non-redeemed bonds to continue negotiations in order to identify solution appropriate for both parties.
According to unaudited consolidated data the revenues of AB "Snaige" have reached 32.8 m.LTL in the first quarter of 2009. The revenues were two times smaller than in the same period in 2008 (79.08 m.LTL).
According to the director general of AB "Snaige" Gediminas Čeika, reached revenues are the same as planned in the beginning of the year, taking into account that only one of Company's two factories was operating and that only one shift was employed for 4 days a week. "The first quarter was challenging" - says G. Čeika. -"Due to devaluation of local currencies in Russia and Ukraine and due to 18% increase in import tax in Ukraine sales in these main markets of AB "Snaige" have significantly decreased. Due to decreased sales we were forced to reduce number of employees, restructure manufacturing and adapt to new conditions.
During the first wuarter of 2009 the Company has incurred consolidated unaudited loss before tax of 14 m.LTL. Loss due to devaluation of Russian rubble amounted about 6 m.LTL, and due to employees severance compensation - about 3 m.LTL.
According to director general of AB "Snaige" the loss is almost 5 m.LTL smaller than consolidated loss before taxes incurred during the last quarter of 2008. "This is small, but still a step ahead" - says G. Čeika. - "After the beginning of hot season we started to receive more orders, entered into 5 working daysper week manufacturing mode. However we are unable to increase manufacturing significantly due to lack of working capital. If the Company would be successful in receiving government support or reaching more favorable agreements with Lithuanian banks, we would be able to manufacture more refrigerators and fulfill more orders."
According to consolidated unaudited data, AB "Snaige" has reached EBITDA of -9.2 m.LTL.
On 22 May 2009 the subscription period of AB "Snaigė" bonds with maturity of 321 days and annual interest rate of 14% has ended. During the subscription period 5 295 bonds with nominal value of 100LTL were subscribed. The issued securities were exceptionally offered only for the holders of AB "Snaigė" bonds which were not redeemed
36
on 6 April 2009 by allowing to swap one non-redeemed bond to one newly issued. In such a way holders of 18% of all non-redeemed bonds agreed to restructure their overdue securities.
The Company invites the holders of remaining non-redeemed bonds to continue negotiations in order to identify solution appropriate for both parties.
Alytus, 15 May 2009. The only domestic refrigerators manufacturer in the Baltic states AB "Snaigė" submitted an application to the NASDAQ OMX Vilnius AB for the transfer of the issuer's securities from the NASDAQ OMX Vilnius Main List to the NASDAQ OMX Vilnius Secondary List.
Joint Stock Company "Snaige" from the May 4th is back to the normal five days a week work schedule.
Joint Stock Company "Snaige" from the May 4th is back to the normal five days a week work schedule. According to AB Snaige General Manager Gediminas Čeika, returning to the five working days have been planned in advance. "Refrigerators sale season starts from around the month of May. From this period, always feel the increased need for our products. Therefore, the return to five working days of the week was provided at the end of last year, "- said Gediminas Čeika.
Decisions of the ordinary General Shareholder's meeting
General meeting of shareholders held on April 22th in 2009 passed the following decision:
Approved the annual report on the Company's activities for the year 2008.
Approved appropriation of profit (loss)) of the year 2008:
Retained earnings of the previous financial year at the end of reporting year 52,517,654 LTL (15,210,164 EUR) Net profit for the year 2008 is -15,128,201 LTL (-4,381,430 EUR)
Net profit (loss) for allocation at the end of financial year 37,389,453LTL (10,828,734 EUR)
Shareholders contributions 0 LTL (0 EUR)
Transfers from reserves 34,087,600 LTL (9,872,451 EUR)
Profit for distribution 71,477,053 LTL (20,701,185 EUR)
Allocation of profit:
Share of profit allocated to the statutory reserve 400,000 LTL (115,848 EUR)
Share of profit allocated to other reserves 1,860,000 LTL (538,693 EUR)
Of which:
To charity, support 0 LTL (0 EUR)
To social, cultural needs 60,000 LTL (17,377 EUR)
Share of profit allocated to dividends 0 LTL (0 EUR)
Share of profit allocated to bonuses for the Board members 0 LTL (0 EUR)
Share of profit allocated for buy-back of Company's own shares 0 LTL (0 EUR)
Share of profit allocated to investment reserve 1,800,000 LTL (521,316 EUR)
Retained earnings at the end of reporting year 69,217,053 LTL (20,046,644 EUR).
Approved changed Company's statute parts:
"2.2. The Company performs manufacture of refrigerators and freezers (manufacture of electric domestic appliances and devices (27.51) and other activity not forbidden by laws of the Republic of Lithuania" and 9.1.2, 9.1.6, 9.1.8, 9.1.9, 9.1.10 items relating with The Company's announcements publishing in newspaper. The Company changing newspaper Lietuvos rytas to the newspaper Kauno diena.
On 8 April, 2009 AB "Snaigė" has submitted to the management board of Nasdaq OMX Vilnius securities exchange application to list convertible bonds with maturity of 367 days on Nasdaq OMX Vilnius debt securities trading list.
On 6 April, 2009 the subscription period of AB "Snaigė" convertible bonds with maturity of 367 days and annual interest rate of 18% has ended. During the subscription period the whole issue with nominal value of 7 500 000 EUR was subscribed.
80% of bonds were subscribed by holders of year 2008 AB "Snaigė" bond issue who decided to refinance their securities. Instead of receiving cash on the redemption day these investors were granted newly issued bonds for the corresponding subscription value.
The remaining part of the issue was subscribed by major shareholders of AB "Snaigė" who converted loans, earlier provided to the Company, into newly issued bonds.
The fact that majority of the newly issued bonds were subscribed by the holders of year 2008 bond issue shows that bond holders do understand current complicated financial situation of the Company and believe in Company's ability to redeem the newly issued bonds after one year.
On 6 April, 2009 AB "Snaigė" did not fully redeem the bond issue with maturity of 367 days, which was issued in year 2008.
Due to high losses incurred during 2008 the Company didn't manage to generate enough cash needed for redemption of the bonds and due to unfavourable conditions in country's credit market required funds were not possible to borrow from banks.
Almost all of the owners of the bonds issued in 2008 agreed to refinance possessed securities by acquiring newly issued AB "Snaigė" convertible bonds with maturity of 367 days and annual interest rate of 18%. For such investors instead of cash, payable on the redemption day, newly issued bonds with corresponding acquisition value were granted. Major shareholders of AB "Snaigė", who were also the holders of largest part of bond issue of year 2008, decided to refinance all securities. In total bond holders have refinanced 85% of year 2008 bonds issue.
The Company will start negotiation with the owners of bonds which were not redeemed regarding settlement of new redemption term.
On March 19, 2009 Management board of AB "Snaigė" decided to convene the Annual General Meeting AB "Snaigė" (code 249664610) shareholders on April 22, 2009 at 10:00 in the main meeting hall of the Company (Pramonės str. 6, Alytus). Registration starts 9:30 pm, ends- 9:50 pm. On the agenda:
The annual report on the Company's activities for the year 2008;
Members of audit committee election and regulations of committee approval.
Shareholders who at the end of the accounting day of the Annual General Meeting of Shareholders, i.e. April 15, 2009, will be on the shareholders list of the Company have a right to participate and vote at the General Meeting personally, by proxy, or represented by a person with whom an agreement on the transfer of voting rights is concluded.
The shareholders attending the meeting must provide personal identification document. The authorized representatives of the shareholders must additionally posses a proxy approved by the procedure prescribed by law. 10 03 2009.
Investments of the only refrigerator manufacturer in the Baltic States AB "Snaigė"in year 2009 will amount up to 1.8 m.LTL. These investments will be intended to maintain effective functioning of current technological base. 09 03 2009.
Alytus, 9 March 2009. Alytus factory of the only refrigerators producer in the Baltic states AB "Snaigė" from 9 March 2009 will not work for 4 days.
According to the director general Gediminas Čeika, the Company meets its customers' demand both by manufacturing new products and selling already manufactured products form the warehouses. "After the decrease in demand in main Company's markets we are seeking not to increase the number of ready-made products kept in warehouses and to manufacture only the amount for which we have outstanding orders" - said Gediminas Čeika. According to Gediminas Čeika, effective management of manufacturing processes and minimization of costs are the main means to assure successful business activity during current adverse economic period.
AB "Snaigė" will restore manufacturing on 16 March 2009. 05 03 2009.
The prospectus of AB "Snaige" convertible bonds issue with maturity of 367 days, nominal value of the whole issue of 7.5 m.EUR (25.9 m. LTL) was approved by Securities Commission on 5 March 2009.
The main facts about the issued convertible bonds:
Bond holders will have a right to convert the bonds to ordinary shares of AB "Snaigė" at the date of the redemption (8 April 2010).
The shareholders of AB "Snaigė" will have a pre-emptive right to acquire the issued bonds during the first 14 subscription days (10 March 2009 - 23 March 2009), proportionally to the nominal value of shares owned at the end of 23 February 2009 general shareholder meeting rights accounting day (9 march 2009).
During the remaining subscription period (24 March 2009 - 6 March 2009) the remaining investors will have a right to acquire the bonds.
Investors are invited to sign the Bonds purchase agreements during the Bonds subscription period at UAB FMĮ "Orion Securities", A.Tumėno g.4B, LT - 01109, Vilnius, Lithuania during working days from 8.30 till 17.30. 23 02 2009.
Extraordinary general meeting of shareholders held on February 23rd in 2009 passed the following decision:
1.6.4.9. According to the articles of association and other legal acts, to receive information about Company's activities; 1.6.4.10. Other material and immaterial rights specified in legal acts and in the articles of the Company.
1.7. Ratio, by which bonds are convertible into ordinary shares of the Company 1:345 (one bond is convertible to 345 ordinary shares);
B. If after the bonds redemption date there are Bonds which were converted into shares, to increase the Company's subscribed capital by the nominal value of shares to which the Bonds were converted.
the Company's subscribed capital by the nominal value of shares to which the Bonds were converted. 2. Grant of authorization
To authorize (with the right to reauthorize) and to oblige Company's director general:
To sign an agreement with the public turnover intermediary UAB FMĮ "Orion securities", enterprise code 1220 33915, regarding to the processes needed to be taken to implement this meeting's decision of issuing convertible Bonds; 2.1. To sign Bonds subscription agreements, while setting other parts of the agreement at discretion;
2.2. To sign changed articles of the Company after the increase in subscribed capital and number of ordinary shares and to provide the articles to the enterprise register of Lithuania;
2.3. To execute any other actions, related to the implementation of the decisions of this meeting. 27 02 2009.
Interim financial reports for 12 month of year 2008 and preliminary results for year 2008 of AB "Snaigė" 1. Preliminary consolidated non-audited results for 2008
Sales and other revenues: 341.69 m. LTL (98.96 m. EUR).
Loss before tax: -25.98 m. LTL (-7.52 m.EUR),
Net loss: -22.99 m. LTL (-6.66 m.EUR),
Increase the profitability of the enterprise, the concentration of trade flows, profitable export markets.
A new class of high-energy product delivery to Western and Baltic markets.
Continue cost-optimization policies:
Continue to reduce its costs.
Continue its work in eliminating unnecessary features.
To reduce production cost.
Transfer production to Kazakhstan, the new plant construction.
Active search for new business opportunities.
| PRINCIPLES/ RECOMMENDATIONS Principle I: Basic Provisions |
YES/NO /NOT APPLICABLE |
COMMENTARY |
|---|---|---|
| The overriding objective of a company should be to operate in common interests of all the shareholders by optimizing over time shareholder value. | ||
| 1.1. A company should adopt and make public the company's development strategy and objectives by clearly declaring how the company intends to meet the interests of its shareholders and optimize shareholder value. |
YES | Company's business strategy is listed in the annual report, partly in the an nual account, as well as in some press reports. The Company's published ma terial events and announcements to investors also reflect the Company's policy. |
| 1.2. All management bodies of a company should act in furtherance of the declared strategic objectives in view of the need to optimize shareholder value. |
YES | The operational strategy of the Company is considered and approved by the Board of the Company; the strategy targets the need to ensure profitable performance with an ultimate view to increase the shareholders' equity. The compliance with the provisions of the Company's operational strategy is supervised by the Manager of the Company. |
| 1.3. A company's supervisory and management bodies should act in close co-operation in order to attain maximum benefit for the company and its shareholders. |
NO | The Company has not formed the Supervisory Board as the shareholders have refused to form such. |
| 1.4. A company's supervisory and management bodies should ensure that the rights and interests of persons other than the company's shareholders (e.g. employees, creditors, suppliers, clients, local community), participating in or connected with the company's operation, are duly respected. |
YES | The Board of the Company monitors and assesses the performance of the Company's Manager by analyzing the financial statement submitted by the Company's Manager, also the organization of the activities, data on the changes in equity, and has an authority to point out to the Manager the in appropriate execution of the above provisions. |
| Principle II: The corporate governance framework bodies, an appropriate balance and distribution of functions between the company's bodies, protection of the shareholders' interests. |
The corporate governance framework should ensure the strategic guidance of the company, the effective oversight of the company's management | |
| 2.1. Besides obligatory bodies provided for in the Law on Companies of the Republic of Lithuania – a general shareholders' meeting and the chief exec utive officer, it is recommended that a company should set up both a colle gial supervisory body and a collegial management body. The setting up of collegial bodies for supervision and management facilitates clear separation of management and supervisory functions in the company, accountability and control on the part of the chief executive officer, which, in its turn, facil itate a more efficient and transparent management process. |
NO | Upon the decision of the shareholders since May 2006 the Supervisory Board is not formed. |
| 2.2. A collegial management body is responsible for the strategic manage ment of the company and performs other key functions of corporate gover nance. A collegial supervisory body is responsible for the effective supervision of the company's management bodies. |
YES | The Board of the Company is responsible for the formation of the Company's operational strategy, organization of the enforcement thereof, the repre sentation and the protection of the shareholders' interest. |
| 2.3. Where a company chooses to form only one collegial body, it is recom mended that it should be a supervisory body, i.e. the supervisory board. In such a case, the supervisory board is responsible for the effective monitoring of the functions performed by the company's chief executive officer. |
NO | Only the Board is formed in the Company (upon the shareholders' decision of May 2006). |
| 2.4. The collegial supervisory body to be elected by the general sharehold ers' meeting should be set up and should act in the manner defined in Prin ciples III and IV. Where a company should decide not to set up a collegial supervisory body but rather a collegial management body, i.e. the board, Principles III and IV should apply to the board as long as that does not con tradict the essence and purpose of this body. |
YES | These principles apply to the Board to the extent they do not contradict the essence and the purpose of the Board. |
| 2.5. Company's management and supervisory bodies should comprise such number of board (executive directors) and supervisory (non-executive di rectors) board members that no individual or small group of individuals can dominate decision-making on the part of these bodies.2 |
YES | There are five Members of the Board and in the opinion of the shareholders this is sufficient. |
| 2.6. Non-executive directors or members of the supervisory board should be appointed for specified terms subject to individual re-election, at maximum intervals provided for in the Lithuanian legislation with a view to ensuring necessary development of professional experience and sufficiently frequent reconfirmation of their status. A possibility to remove them should also be stipulated however this procedure should not be easier than the removal procedure for an executive director or a member of the management board. |
NO | The Supervisory Board is not elected. |
1 Provisions of Principles III and IV are more applicable to those instances when the general shareholders' meeting elects the supervisory board, i.e. a body that is essentially formed to ensure oversight of the company's board and the chief executive officer and to represent the company's shareholders. However, in case the company does not form the supervisory board but rather the board, most of the recommendations set out in Principles III and IV become important and applicable to the board as well. Furthermore, it should be noted that certain recommendations, which are in their essence and nature applicable exclusively to the supervisory board, should not be applied to the board, as the competence and functions of these bodies according to the Law on Companies of the Republic of Lithuania (Official Gazette, 2003, No 123-5574) are different. For instance, item 3.1 of the Code concerning oversight of the management bodies applies to the extent it concerns the oversight of the chief executive officer of the company, but not of the board itself; item 4.1 of the Code concerning recommendations to the management bodies applies to the extent it relates to the provision of recommendations to the company's chief executive officer; item 4.4 of the Code concerning independence of the collegial body elected by the general meeting from the company's management bodies is applied to the extent it concerns independence from the chief executive officer.
2 Definitions 'executive director' and 'non-executive director' are used in cases when a company has only one collegial body.
2.7. Chairman of the collegial body elected by the general shareholders' meeting may be a person whose current or past office constitutes no obstacle to conduct independent and impartial supervision. Where a company should decide not to set up a supervisory board but rather the board, it is recommended that the chairman of the board and chief executive officer of the company should be a different person. Former company's chief executive officer should not be immediately nominated as the chairman of the collegial body elected by the general shareholders' meeting. When a company chooses to departure from these recommendations, it should furnish information on the measures it has taken to ensure impartiality of the supervision. The Chairman of the Company is not and has not been the manager of the Company. YES
Principle III: The order of the formation of a collegial body to be elected by a general shareholders' meeting The order of the formation a collegial body to be elected by a general shareholders' meeting should ensure representation of minority shareholders, accountability of this body to the shareholders and objective monitoring of the company's operation and its management bodies. 3
| 3.1. The mechanism of the formation of a collegial body to be elected by a general shareholders' meeting (hereinafter in this Principle referred to as the 'collegial body') should ensure objective and fair monitoring of the com pany's management bodies as well as representation of minority share holders. |
YES | The collegial management body – the Board is elected in the general meet ing of shareholders in which the candidates to the Members of the Board in troduce themselves to the shareholders, provide information of the positions they hold in other companies and their professional qualifications. All pres ent in the meeting are provided a possibility to propose other candidates to the Members of the Board. |
|---|---|---|
| 3.2. Names and surnames of the candidates to become members of a colle gial body, information about their education, qualification, professional back ground, positions taken and potential conflicts of interest should be disclosed early enough before the general shareholders' meeting so that the share holders would have sufficient time to make an informed voting decision. All factors affecting the candidate's independence, the sample list of which is set out in Recommendation 3.7, should be also disclosed. The collegial body should also be informed on any subsequent changes in the provided infor mation. The collegial body should, on yearly basis, collect data provided in this item on its members and disclose this in the company's annual report. |
NOT APPLICABLE | The Rules of Procedure of the Company does not provide for this position. However the shareholders at a general shareholders' meeting (when Board members are elected) are introduced with work experience, education, the other important information of the candidates for the Board. |
| 3.3. Should a person be nominated for members of a collegial body, such nomination should be followed by the disclosure of information on candi date's particular competences relevant to his/her service on the collegial body. In order shareholders and investors are able to ascertain whether mem ber's competence is further relevant, the collegial body should, in its annual report, disclose the information on its composition and particular compe tences of individual members which are relevant to their service on the col legial body. |
NOT APPLICABLE | As candidates for the Board members introduce themselves for the share holders, and the shareholders while electing the board members have the opportunity to decide about the candidates' competence and suitability to represent shareholders' interests. The Board members competence relevant to their work at the collegiate body is not published in the annual report, but it is published in the composition of the Board. |
| 3.4 In order to maintain a proper balance in terms of the current qualifications possessed by its members, the desired composition of the collegial body shall be determined with regard to the company's structure and activities, and have this periodically evaluated. The collegial body should ensure that it is composed of members who, as a whole, have the required diversity of knowl edge, judgment and experience to complete their tasks properly. The mem bers of the audit committee, collectively, should have a recent knowledge and relevant experience in the fields of finance, accounting and/or audit for the stock exchange listed companies. At least one of the members of the re muneration committee should have knowledge of and experience in the field of remuneration policy. |
YES | The company's board and audit committee members have sufficiency of ex perience and skills, sufficiency of knowledge to perform their duties appro priately. Shareholders decision to elect them as the board of directors or audit committee members is made after their readiness and competence is eval uated. The company has not yet drawn the salaries committee. |
| 3.5. All new members of the collegial body should be offered a tailored pro gram focused on introducing a member with his/her duties, corporate organ ization and activities. The collegial body should conduct an annual review to identify fields where its members need to update their skills and knowledge. |
NOT APPLICABLE | Individual training programs were not developed, as the Company makes opportunity for the Company's Board members to take a look to the com pany's activity, thus newly elected members of the Board is provided a suffi ciency of knowledge and information. Board members' skills and knowledge are constantly updated while they performance their functions. |
| 3.6. In order to ensure that all material conflicts of interest related with a member of the collegial body are resolved properly, the collegial body should comprise a sufficient number of independent5 members. |
NO | Until now the independence of the Members of the Board has not been as sessed, and the contents of the concept of "adequacy" of the independent Members of the Board has not been discussed. The Company has not taken any decision concerning the implementation of these provisions in the future. |
3 Attention should be drawn to the fact that in the situation where the collegial body elected by the general shareholders' meeting is the board, it is natural that being a management body it should ensure oversight not of all management bodies of the company, but only of the single-person body of management, i.e. the company's chief executive officer. This note shall apply in respect of item 3.1 as well.
4 The Code does not provide for a concrete number of independent members to comprise a collegial body. Many codes in foreign countries fix a concrete number of independent members (e.g. at least 1/3 or 1/2 of the members of the collegial body) to comprise the collegial body. However, having regard to the novelty of the institution of independent members in Lithuania and potential problems in finding and electing a concrete number of independent members, the Code provides for a more flexible wording and allows the companies themselves to decide what number of independent members is sufficient. Of course, a larger number of independent members in a collegial body is encouraged and will constitute an example of more suitable corporate governance.
5 It is notable that in some companies all members of the collegial body may, due to a very small number of minority shareholders, be elected by the votes of the majority shareholder or a few major shareholders. But even a member of the collegial body elected by the majority shareholders may be considered independent if he/she meets the independence criteria set out in the Code.
3.7. A member of the collegial body should be considered to be independent only if he is free of any business, family or other relationship with the company, its controlling shareholder or the management of either, that creates a conflict of interest such as to impair his judgment. Since all cases when member of the collegial body is likely to become dependant are impossible to list, moreover, relationships and circumstances associated with the determination of independence may vary amongst companies and the best practices of solving this problem are yet to evolve in the course of time, assessment of independence of a member of the collegial body should be based on the contents of the relationship and circumstances rather than their form. The key criteria for identifying whether a member of the collegial body can be considered to be independent are the following:
3.8. The determination of what constitutes independence is fundamentally an issue for the collegial body itself to determine. The collegial body may decide that, despite a particular member meets all the criteria of independence laid down in this Code, he cannot be considered independent due to special personal or company-related circumstances.
3.9. Necessary information on conclusions the collegial body has come to in its determination of whether a particular member of the body should be considered to be independent should be disclosed. When a person is nominated to become a member of the collegial body, the company should disclose whether it considers the person to be independent. When a particular member of the collegial body does not meet one or more criteria of independence set out in this Code, the company should disclose its reasons for nevertheless considering the member to be independent. In addition, the company should annually disclose which members of the collegial body it considers to be independent.
Until now the independence of the Members of the Board has not been assessed, and the contents of the concept of "adequacy" of the independent Members of the Board have not been discussed.
The Company has not taken any decision concerning the implementation of these provisions in the future.
The board has not defined the concept of independence.
Consolidated annual report 2009
No such practice exists.
NO
NO
| 3.10. When one or more criteria of independence set out in this Code has not been met throughout the year, the company should disclose its reasons for considering a particular member of the collegial body to be independent. To ensure accuracy of the information disclosed in relation with the independ ence of the members of the collegial body, the company should require in dependent members to have their independence periodically re-confirmed. |
NO | No such practice or requirements existed. |
|---|---|---|
| 3.11. In order to remunerate members of a collegial body for their work and participation in the meetings of the collegial body, they may be remuner ated from the company's funds.6 The general shareholders' meeting should approve the amount of such remuneration. |
NOT APPLICABLE | No such practice exists yet. |
| Principle IV: The duties and liabilities of a collegial body elected by the general shareholders' meeting | ||
| The corporate governance framework should ensure proper and effective functioning of the collegial body elected by the general shareholders' meet ing, and the powers granted to the collegial body should ensure effective monitoring7 of the company's management bodies and protection of interests |
||
| of all the company's shareholders. | ||
| 4.1. The collegial body elected by the general shareholders' meeting (here inafter in this Principle referred to as the 'collegial body') should ensure in tegrity and transparency of the company's financial statements and the control system. The collegial body should issue recommendations to the com pany's management bodies and monitor and control the company's man agement performance. |
YES | These functions are performed by the Board elected by the general meeting of shareholders. The Board shall submit to the general meeting of share holders the annual report on the activities of the Company, evaluate the re sults of the business activities of the Company and assess the performance of the Manager of the Company. |
| 4.2. Members of the collegial body should act in good faith, with care and re sponsibility for the benefit and in the interests of the company and its share holders with due regard to the interests of employees and public welfare. Independent members of the collegial body should (a) under all circum stances maintain independence of their analysis, decision-making and ac tions (b) do not seek and accept any unjustified privileges that might compromise their independence, and (c) clearly express their objections should a member consider that decision of the collegial body is against the interests of the company. Should a collegial body have passed decisions in dependent member has serious doubts about, the member should make ad equate conclusions. Should an independent member resign from his office, he should explain the reasons in a letter addressed to the collegial body or audit committee and, if necessary, respective company-not-pertaining body (institution). |
YES | In performing their duties the Members of the Board are guided by the in terests of the Company and there have not been any cases allowing an as sumption to the contrary. |
| 4.3. Each member should devote sufficient time and attention to perform his duties as a member of the collegial body. Each member of the collegial body should limit other professional obligations of his (in particular any di rectorships held in other companies) in such a manner they do not interfere with proper performance of duties of a member of the collegial body. In the event a member of the collegial body should be present in less than a half of the meetings of the collegial body throughout the financial year of the com pany, shareholders of the company should be notified. |
YES | Members of the Board act in accordance with the Rules of Procedure of the Board and allocate sufficient time for the performance of their duties. |
| 4.4. Where decisions of a collegial body may have a different effect on the company's shareholders, the collegial body should treat all shareholders im partially and fairly. It should ensure that shareholders are properly informed on the company's affairs, strategies, risk management and resolution of con flicts of interest. The company should have a clearly established role of mem bers of the collegial body when communicating with and committing to shareholders. |
YES | There haven't been any cases of the conflict of interests between the share holders and the Board. The Company has put in place the procedure of the provision of information to the shareholders in accordance with the Law on Companies, and this has been provided in the Articles of Association of the Company. |
| 4.5. It is recommended that transactions (except insignificant ones due to their low value or concluded when carrying out routine operations in the company under usual conditions), concluded between the company and its shareholders, members of the supervisory or managing bodies or other nat ural or legal persons that exert or may exert influence on the company's man agement should be subject to approval of the collegial body. The decision concerning approval of such transactions should be deemed adopted only provided the majority of the independent members of the collegial body voted for such a decision. |
NO | There has been no suggestion to include such point into the articles of asso - ciation. |
| 4.6. The collegial body should be independent in passing decisions that are significant for the company's operations and strategy. Taken separately, the collegial body should be independent of the company's management bod ies . Members of the collegial body should act and pass decisions without an outside influence from the persons who have elected it. Companies should ensure that the collegial body and its committees are provided with suffi cient administrative and financial resources to discharge their duties, in |
YES | Since the collegial management body – the Board is elected by the general meeting of shareholders, in its decision making function the Board is inde - pendent from the manager of the Company. The Company's management ensures that the collegial body and its committees are provided with suffi cient resources to carry their duties. |
6 It is notable that currently it is not yet completely clear, in what form members of the supervisory board or the board may be remunerated for their work in these bodies. The Law on Companies of the Republic of Lithuania (Official Gazette, 2003, No 123-5574) provides that members of the supervisory board or the board may be remunerated for their work in the supervisory board or the board by payment of annual bonuses (tantiems) in the manner prescribed by Article 59 of this Law, i.e. from the company's profit. The current wording, contrary to the wording effective before 1 January 2004, eliminates the exclusive requirement that annual bonuses (tantiems) should be the only form of the company's compensation to members of the supervisory board or the board. So it seems that the Law contains no prohibition to remunerate members of the supervisory board or the board for their work in other forms, besides bonuses, although this possibility is not expressly stated either. 7 See Footnote 3.
8 See Footnote 3. In the event the collegial body elected by the general shareholders' meeting is the board, it should provide recommendations to the company's single-person body of management, i.e. the company's chief executive officer.
9 It is notable that companies can make this requirement more stringent and provide that shareholders should be informed about failure to participate at the meetings of the collegial body if, for instance, a member of the collegial body participated at less than 2/3 or 3/4 of the meetings. Such measures, which ensure active participation in the meetings of the collegial body, are encouraged and will constitute an example of more suitable corporate governance.
cluding the right to obtain, in particular from employees of the company, all the necessary information or to seek independent legal, accounting or any other advice on issues pertaining to the competence of the collegial body and its committees. When using the services of a consultant with a view to obtaining information on market standards for remuneration systems, the remuneration committee should ensure that the consultant concerned does not at the same time advice the human resources department, executive directors or collegial management organs of the company concerned.
4.7. Activities of the collegial body should be organized in a manner that independent members of the collegial body could have major influence in relevant areas where chances of occurrence of conflicts of interest are very high. Such areas to be considered as highly relevant are issues of nomination of company's directors, determination of directors' remuneration and control and assessment of company's audit. Therefore when the mentioned issues are attributable to the competence of the collegial body, it is recommended that the collegial body should establish nomination, remuneration, and audit committees. Companies should ensure that the functions attributable to the nomination, remuneration, and audit committees are carried out. However they may decide to merge these functions and set up less than three committees. In such case a company should explain in detail reasons behind the selection of alternative approach and how the selected approach complies with the objectives set forth for the three different committees. Should the collegial body of the company comprise small number of members, the functions assigned to the three committees may be performed by the collegial body itself, provided that it meets composition requirements advocated for the committees and that adequate information is provided in this respect. In such case provisions of this Code relating to the committees of the collegial body (in particular with respect to their role, operation, and transparency) should apply, where relevant, to the collegial body as a whole.
4.8. The key objective of the committees is to increase efficiency of the activities of the collegial body by ensuring that decisions are based on due consideration, and to help organize its work with a view to ensuring that the decisions it takes are free of material conflicts of interest. Committees should exercise independent judgement and integrity when exercising its functions as well as present the collegial body with recommendations concerning the decisions of the collegial body. Nevertheless the final decision shall be adopted by the collegial body. The recommendation on creation of committees is not intended, in principle, to constrict the competence of the collegial body or to remove the matters considered from the purview of the collegial body itself, which remains fully responsible for the decisions taken in its field of competence.
4.9. Committees established by the collegial body should normally be composed of at least three members. In companies with small number of members of the collegial body, they could exceptionally be composed of two members. Majority of the members of each committee should be constituted from independent members of the collegial body. In cases when the company chooses not to set up a supervisory board, remuneration and audit committees should be entirely comprised of non-executive directors. Chairmanship and membership of the committees should be decided with due regard to the need to ensure that committee membership is refreshed and that undue reliance is not placed on particular individuals. Chairmanship and membership of the committees should be decided with due regard to the need to ensure that committee membership is refreshed and that undue reliance is not placed on particular individuals.
4.10. Authority of each of the committees should be determined by the collegial body. Committees should perform their duties in line with authority delegated to them and inform the collegial body on their activities and performance on regular basis. Authority of every committee stipulating the role and rights and duties of the committee should be made public at least once a year (as part of the information disclosed by the company annually on its corporate governance structures and practices). Companies should also make public annually a statement by existing committees on their composition, number of meetings and attendance over the year, and their main activities. Audit committee should confirm that it is satisfied with the independence of the audit process and describe briefly the actions it has taken to reach this conclusion.
4.11. In order to ensure independence and impartiality of the committees, members of the collegial body that are not members of the committee should commonly have a right to participate in the meetings of the committee only if invited by the committee. A committee may invite or demand participation in the meeting of particular officers or experts. Chairman of each of the committees should have a possibility to maintain direct communication with the shareholders. Events when such are to be performed should be specified in the regulations for committee activities.
The Audit Committee was elected in 2009. The Company's directors nomination and remuneration committees are not formed, whereas such practice and requirements had not existed in the past. The functions pointed at this item still are implemented by the Board within its jurisdiction. If the shareholders accept the decision to establish such committees or it is required by the law of the Republic of Lithuania, the committees would be established. YES
The Company's collegiate bodies are independent and make self-contained decisions not influenced by any conflicts of interest.
The Audit Committee consists of three members, one of whom is independent. YES
Whereas the audit committee was established only in 2009, this committee's practice is still currently being formed; the audit committee monitors the process of the company's audit accomplishment. NO
In the law of the Audit Committee is allowed the right to obtain the necessary information, the staff's comments, as well as the Regulation provides that the audit committee members have other rights provided in the existing legislation. YES
10 In the event the collegial body elected by the general shareholders' meeting is the board, the recommendation concerning its independence from the company's management bodies applies to the extent it relates to the independence from the company's chief executive officer.
YES
| 4.12. Nomination Committee. 4.12.1. Key functions of the nomination committee should be the following: • Identify and recommend, for the approval of the collegial body, candidates to fill board vacancies. The nomination committee should evaluate the bal ance of skills, knowledge and experience on the management body, prepare a description of the roles and capabilities required to assume a particular of fice, and assess the time commitment expected. Nomination committee can also consider candidates to members of the collegial body delegated by the shareholders of the company; • Assess on regular basis the structure, size, composition and performance of the supervisory and management bodies, and make recommendations to the collegial body regarding the means of achieving necessary changes; • Assess on regular basis the skills, knowledge and experience of individual directors and report on this to the collegial body; • Properly consider issues related to succession planning; • Review the policy of the management bodies for selection and appoint ment of senior management. 4.12.2. Nomination committee should consider proposals by other parties, in cluding management and shareholders. When dealing with issues related to executive directors or members of the board (if a collegial body elected by the general shareholders' meeting is the supervisory board) and senior man agement, chief executive officer of the company should be consulted by, and entitled to submit proposals to the nomination committee. |
NOT APPLICABLE | Not formed (explanation in Clause 4.7.). | |
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| 4.13. Remuneration Committee. | NOT APPLICABLE | Not formed (explanation in Clause 4.7.). | |
| 4.13.1. Key functions of the remuneration committee should be the following: • Make proposals, for the approval of the collegial body, on the remuneration policy for members of management bodies and executive directors. Such policy should address all forms of compensation, including the fixed remu neration, performance-based remuneration schemes, pension arrangements, and termination payments. Proposals considering performance-based re muneration schemes should be accompanied with recommendations on the related objectives and evaluation criteria, with a view to properly aligning the pay of executive director and members of the management bodies with the long-term interests of the shareholders and the objectives set by the colle gial body; • Make proposals to the collegial body on the individual remuneration for executive directors and member of management bodies in order their re munerations are consistent with company's remuneration policy and the evaluation of the performance of these persons concerned. In doing so, the committee should be properly informed on the total compensation obtained by executive directors and members of the management bodies from the af filiated companies; • Ensure that remuneration of individual executive directors or members of man agement body is proportionate to the remuneration of other executive directors or members of management body and other staff members of the company; • Periodically review the remuneration policy for executive directors or mem bers of management body, including the policy regarding share-based re muneration, and its implementation; • Make proposals to the collegial body on suitable forms of contracts for ex ecutive directors and members of the management bodies; |
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| • Assist the collegial body in overseeing how the company complies with ap | |||
| plicable provisions regarding the remuneration-related information disclo | |||
| sure (in particular the remuneration policy applied and individual remuneration of directors); |
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| • Make general recommendations to the executive directors and members of the management bodies on the level and structure of remuneration for sen ior management (as defined by the collegial body) with regard to the re spective information provided by the executive directors and members of |
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| the management bodies. | |||
| 4.13.2. With respect to stock options and other share-based incentives which may be granted to directors or other employees, the committee should: |
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| • Consider general policy regarding the granting of the above mentioned schemes, in particular stock options, and make any related proposals to the |
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| collegial body; | |||
| • Examine the related information that is given in the company's annual re port and documents intended for the use during the shareholders meeting; |
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| • Make proposals to the collegial body regarding the choice between granting | |||
| options to subscribe shares or granting options to purchase shares, specify ing the reasons for its choice as well as the consequences that this choice has. |
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| 4.13.3. Upon resolution of the issues attributable to the competence of the | |||
| remuneration committee, the committee should at least address the chair man of the collegial body and/or chief executive officer of the company for |
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| their opinion on the remuneration of other executive directors or members | |||
| of the management bodies. |
4.13.4. The remuneration committee should report on the exercise of its functions to the shareholders and be present at the annual general meeting for this purpose.
4.14.1. Key functions of the audit committee should be the following: • Observe the integrity of the financial information provided by the company, in particular by reviewing the relevance and consistency of the accounting methods used by the company and its group (including the criteria for the consolidation of the accounts of companies in the group);
• At least once a year review the systems of internal control and risk management to ensure that the key risks (inclusive of the risks in relation with compliance with existing laws and regulations) are properly identified, managed and reflected in the information provided;
• Ensure the efficiency of the internal audit function, among other things, by making recommendations on the selection, appointment, reappointment and removal of the head of the internal audit department and on the budget of the department, and by monitoring the responsiveness of the management to its findings and recommendations. Should there be no internal audit authority in the company, the need for one should be reviewed at least annually;
• Make recommendations to the collegial body related with selection, appointment, reappointment and removal of the external auditor (to be done by the general shareholders' meeting) and with the terms and conditions of his engagement. The committee should investigate situations that lead to a resignation of the audit company or auditor and make recommendations on required actions in such situations;
• Monitor independence and impartiality of the external auditor, in particular by reviewing the audit company's compliance with applicable guidance relating to the rotation of audit partners, the level of fees paid by the company, and similar issues. In order to prevent occurrence of material conflicts of interest, the committee, based on the auditor's disclosed inter alia data on all remunerations paid by the company to the auditor and network, should at all times monitor nature and extent of the non-audit services. Having regard to the principals and guidelines established in the 16 May 2002 Commission Recommendation 2002/590/EC, the committee should determine and apply a formal policy establishing types of non-audit services that are (a) excluded, (b) permissible only after review by the committee, and (c) permissible without referral to the committee;
• Review efficiency of the external audit process and responsiveness of management to recommendations made in the external auditor's management letter.
4.14.2. All members of the committee should be furnished with complete information on particulars of accounting, financial and other operations of the company. Company's management should inform the audit committee of the methods used to account for significant and unusual transactions where the accounting treatment may be open to different approaches. In such case a special consideration should be given to company's operations in offshore centers and/or activities carried out through special purpose vehicles (organizations) and justification of such operations.
4.14.3. The audit committee should decide whether participation of the chairman of the collegial body, chief executive officer of the company, chief financial officer (or superior employees in charge of finances, treasury and accounting), or internal and external auditors in the meetings of the committee is required (if required, when). The committee should be entitled, when needed, to meet with any relevant person without executive directors and members of the management bodies present.
4.14.4. Internal and external auditors should be secured with not only effective working relationship with management, but also with free access to the collegial body. For this purpose the audit committee should act as the principal contact person for the internal and external auditors.
4.14.5. The audit committee should be informed of the internal auditor's work program, and should be furnished with internal audit's reports or periodic summaries. The audit committee should also be informed of the work program of the external auditor and should be furnished with report disclosing all relationships between the independent auditor and the company and its group. The committee should be timely furnished information on all issues arising from the audit.
4.14.6. The audit committee should examine whether the company is following applicable provisions regarding the possibility for employees to report alleged significant irregularities in the company, by way of complaints or through anonymous submissions (normally to an independent member of the collegial body), and should ensure that there is a procedure established for proportionate and independent investigation of these issues and for appropriate follow-up action.
YES The company's Audit committee was elected only in 2009 so its practice is still currently emerging. However, the audit committee's main operational functions are:
1) make recommendations for the Board of the Company related with the external audit firm selection, its imposing, reappointment and removal and conditions of the contract with the audit company;
2) monitor the external audit process;
3) monitor the external auditor and audit firm are following the principles of independence and objectivity;
4) monitor the Company's financial reporting process;
5) pursue other acts of the Republic of Lithuania and Governance Code for the companies listed on NASDAQ OMX Vilnius.
These functions are provided by the audit committee regulations.
| 4.14.7. The audit committee should report on its activities to the collegial body at least once in every six months, at the time the yearly and half-yearly statements are approved. |
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| 4.15. Every year the collegial body should conduct the assessment of its ac tivities. The assessment should include evaluation of collegial body's struc ture, work organization and ability to act as a group, evaluation of each of the collegial body member's and committee's competence and work efficiency and assessment whether the collegial body has achieved its objectives. The collegial body should, at least once a year, make public (as part of the infor mation the company annually discloses on its management structures and practices) respective information on its internal organization and working procedures, and specify what material changes were made as a result of the assessment of the collegial body of its own activities. |
NO | Thus far the Company have not such practice. |
| Principle V: The working procedure of the company's collegial bodies sion-making and encourage active co-operation between the company's bodies. |
The working procedure of supervisory and management bodies established in the company should ensure efficient operation of these bodies and deci | |
| 5.1. The company's supervisory and management bodies (hereinafter in this Principle the concept 'collegial bodies' covers both the collegial bodies of su pervision and the collegial bodies of management) should be chaired by chairpersons of these bodies. The chairperson of a collegial body is respon sible for proper convocation of the collegial body meetings. The chairperson should ensure that information about the meeting being convened and its agenda are communicated to all members of the body. The chairperson of a collegial body should ensure appropriate conducting of the meetings of the collegial body. The chairperson should ensure order and working atmosphere during the meeting. |
YES | Convening the meeting is conferred to each Member of the Board. The notice on the general meeting to be convened shall be sent by the ini tiator of the meeting in advance, according to the regulations of the board. |
| 5.2. It is recommended that meetings of the company's collegial bodies should be carried out according to the schedule approved in advance at cer tain intervals of time. Each company is free to decide how often to convene meetings of the collegial bodies, but it is recommended that these meetings should be convened at such intervals, which would guarantee an interrupted resolution of the essential corporate governance issues. Meetings of the com pany's supervisory board should be convened at least once in a quarter, and the company's board should meet at least once a month12. |
YES | Board meetings are called at appropriate intervals to ensure continuity of essential corporate governance issues, the Board must meet at least once a month. Urgent issues convened during emergency meetings. |
| 5.3. Members of a collegial body should be notified about the meeting being convened in advance in order to allow sufficient time for proper preparation for the issues on the agenda of the meeting and to ensure fruitful discussion and adoption of appropriate decisions. Alongside with the notice about the meet ing being convened, all the documents relevant to the issues on the agenda of the meeting should be submitted to the members of the collegial body. The agenda of the meeting should not be changed or supplemented during the meeting, unless all members of the collegial body are present or certain issues of great importance to the company require immediate resolution. |
YES | All materials required according to the agenda shall be sent to the Members of the Board by electronic mail; normally the agenda is not changed since in accordance with the Regulations of the Company the decisions may be passed and voting may be organised by way of electronic means; Members of the Board do have a possibility in the same manner to supple ment the agenda upon their common agreement. |
| 5.4. In order to co-ordinate operation of the company's collegial bodies and en sure effective decision-making process, chairpersons of the company's colle gial bodies of supervision and management should closely co-operate by co-coordinating dates of the meetings, their agendas and resolving other issues of corporate governance. Members of the company's board should be free to at tend meetings of the company's supervisory board, especially where issues concerning removal of the board members, their liability or remuneration are discussed. |
NOT APPLICABLE | Not relevant, as the Supervisory Board is not formed. |
| Principle VI: The equitable treatment of shareholders and shareholder rights porate governance framework should protect the rights of the shareholders. |
The corporate governance framework should ensure the equitable treatment of all shareholders, including minority and foreign shareholders. The cor | |
| 6.1. It is recommended that the company's capital should consist only of the shares that grant the same rights to voting, ownership, dividend and other rights to all their holders. |
YES | The capital of the Company is made up of shares conferring to the holders thereof equal voting and ownership rights, and the right to receive dividends. |
| 6.2. It is recommended that investors should have access to the information concerning the rights attached to the shares of the new issue or those issued earlier in advance, i.e. before they purchase shares. |
YES | The Company provides its investors information about the rights conferred by the newly issued shares by making a public announcement to this effect. |
11The frequency of meetings of the collegial body provided for in the recommendation must be applied in those cases when both additional collegial bodies are formed at the company, the board and the supervisory board. In the event only one additional collegial body is formed in the company, the frequency of its meetings may be as established for the supervisory board, i.e. at least once in a quarter.
| 6.3. Transactions that are important to the company and its shareholders, such as transfer, investment, and pledge of the company's assets or any other type of encumbrance should be subject to approval of the general share holders' meeting. All shareholders should be furnished with equal oppor tunity to familiarize with and participate in the decision-making process when significant corporate issues, including approval of transactions referred to above, are discussed. |
NO | The Articles of Association of the Company do not provide for such right granted to the general meeting of shareholders, and the Board of the Com pany passes such decisions without the consent of the shareholders. |
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| 6.4. Procedures of convening and conducting a general shareholders' meet ing should ensure equal opportunities for the shareholders to effectively par ticipate at the meetings and should not prejudice the rights and interests of the shareholders. The venue, date, and time of the shareholders' meeting should not hinder wide attendance of the shareholders. |
YES | Information about shareholders' meetings is published in the same way as it is required by the Ministry of Law. Shareholders' meetings convened at the Company's residence, which has not been changed since the establishment of the company. |
| 6.5. If is possible, in order to ensure shareholders living abroad the right to access to the information, it is recommended that documents on the course of the general shareholders' meeting should be placed on the publicly ac cessible website of the company not only in Lithuanian language, but in Eng lish and /or other foreign languages in advance. It is recommended that the minutes of the general shareholders' meeting after signing them and/or adopted resolutions should be also placed on the publicly accessible web site of the company. Seeking to ensure the right of foreigners to familiarize with the information, whenever feasible, documents referred to in this rec ommendation should be published in Lithuanian, English and/or other for eign languages. Documents referred to in this recommendation may be published on the publicly accessible website of the company to the extent that publishing of these documents is not detrimental to the company or the company's commercial secrets are not revealed. |
YES | All information about the Board meeting, the proposed drafts of decisions, the taken decisions is hosted in the company's website on the Lithuanian and English languages. |
| 6.6. Shareholders should be furnished with the opportunity to vote in the general shareholders' meeting in person and in absentia. Shareholders should not be prevented from voting in writing in advance by completing the gen eral voting ballot. |
YES | The shareholders of the Company may exercise their rights individually in person, via their proxies also by voting in writing in advance. The Company confers to its shareholders the rights provided for by the Law on Companies. |
| 6.7. With a view to increasing the shareholders' opportunities to participate effectively at shareholders' meetings, the companies are recommended to expand use of modern technologies by allowing the shareholders to partic ipate and vote in general meetings via electronic means of communication. In such cases security of transmitted information and a possibility to identify the identity of the participating and voting person should be guaranteed. Moreover, companies could furnish its shareholders, especially shareholders living abroad, with the opportunity to watch shareholder meetings by means of modern technologies. |
NO | The Company does not have the technical potential. |
| Principle VII: The avoidance of conflicts of interest and their disclosure The corporate governance framework should encourage members of the corporate bodies to avoid conflicts of interest and assure transparent and |
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| effective mechanism of disclosure of conflicts of interest regarding members of the corporate bodies. | ||
| 7.1. Any member of the company's supervisory and management body should avoid a situation, in which his/her personal interests are in conflict or may be in conflict with the company's interests. In case such a situation did occur, a member of the company's supervisory and management body should, within reasonable time, inform other members of the same colle gial body or the company's body that has elected him/her, or to the com pany's shareholders about a situation of a conflict of interest, indicate the nature of the conflict and value, where possible. |
YES | Members of the Company's management are trying to follow the recom mendations listed at this article, but there are no any regulations about such reports and information in the company. |
| 7.2. Any member of the company's supervisory and management body may not mix the company's assets, the use of which has not been mutually agreed upon, with his/her personal assets or use them or the information which he/she learns by virtue of his/her position as a member of a corporate body for his/her personal benefit or for the benefit of any third person without a prior agreement of the general shareholders' meeting or any other corpo rate body authorized by the meeting. |
YES | Members of the Company's management are trying to follow the recom mendations listed at this article, but there are no any regulations about such reports and information in the company. |
| 7.3. Any member of the company's supervisory and management body may conclude a transaction with the company, a member of a corporate body of which he/she is. Such a transaction (except insignificant ones due to their low value or concluded when carrying out routine operations in the com pany under usual conditions) must be immediately reported in writing or orally, by recording this in the minutes of the meeting, to other members of the same corporate body or to the corporate body that has elected him/her or to the company's shareholders. Transactions specified in this recommen dation are also subject to recommendation 4.5 |
YES | Members of the Company's management are trying to follow the recom mendations listed at this article, but there are no any regulations about such reports and information in the company. |
12The Law on Companies of the Republic of Lithuania (Official Gazette, 2003, No 123-5574) no longer assigns resolutions concerning the investment, transfer, lease, mortgage or acquisition of the long-terms assets accounting for more than 1/20 of the company's authorised capital to the competence of the general shareholders' meeting. However, transactions that are important and material for the company's activity should be considered and approved by the general shareholders' meeting. The Law on Companies contains no prohibition to this effect either. Yet, in order not to encumber the company's activity and escape an unreasonably frequent consideration of transactions at the meetings, companies are free to establish their own criteria of material transactions, which are subject to the approval of the meeting. While establishing these criteria of material transactions, companies may follow the criteria set out in items 3, 4, 5 and 6 of paragraph 4 of Article 34 of the Law on Companies or derogate from them in view of the specific nature of their operation and their attempt to ensure uninterrupted, efficient functioning of the company.
13The documents referred to above should be placed on the company's website in advance with due regard to a 10-day period before the general shareholders' meeting, determined in paragraph 7 of Article 26 of the Law on Companies of the Republic of Lithuania (Official Gazette, 2003, No 123-5574).
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7.4. Any member of the company's supervisory and management body should abstain from voting when decisions concerning transactions or other issues of personal or business interest are voted on.
YES
Members of the Company's management are trying to follow the recommendations listed at this article.
| Principle VIII: Company's remuneration policy | |||
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| -- | -- | ----------------------------------------------- | -- |
| remuneration policy and remuneration of directors. | Remuneration policy and procedure for approval, revision and disclosure of directors' remuneration established in the company should prevent poten tial conflicts of interest and abuse in determining remuneration of directors, in addition it should ensure publicity and transparency both of company's |
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| 8.1. A company should make a public statement of the company's remuner ation policy (hereinafter the remuneration statement) which should be clear and easily understandable. This remuneration statement should be pub lished as a part of the company's annual statement as well as posted on the company's website. |
NO | The earnings of the company's employees is the confidential information, the company's business secret, in addition there is no practice to prepare re port about the company's earnings policy. Questions about the Code of Rec ommended earnings and benefits policy is planned to discuss in the future due to the exchanges of the market conditions. Brief information about the benefits for the Company management bodies is available in the legislation. |
| 8.2. Remuneration statement should mainly focus on directors' remuneration policy for the following year and, if appropriate, the subsequent years. The statement should contain a summary of the implementation of the remu neration policy in the previous financial year. Special attention should be given to any significant changes in company's remuneration policy as com pared to the previous financial year. |
NO | The reasons are shown in Clause 8.1. |
| 8.3. Remuneration statement should leastwise include the following information: | NO | The reasons are shown in Clause 8.1. |
| • Explanation of the relative importance of the variable and non-variable components of directors' remuneration; |
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| • Sufficient information on performance criteria that entitles directors to share options, shares or variable components of remuneration; |
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| • An explanation how the choice of performance criteria contributes to the long-term interests of the company; |
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| • An explanation of the methods, applied in order to determine whether per formance criteria have been fulfilled; |
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| • Sufficient information on deferment periods with regard to variable com ponents of remuneration; |
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| • Sufficient information on the linkage between the remuneration and per formance; |
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| • The main parameters and rationale for any annual bonus scheme and any other non-cash benefits; |
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| • Sufficient information on the policy regarding termination payments; | ||
| • Sufficient information with regard to vesting periods for share-based re muneration, as referred to in point 8.13 of this Code; |
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| • Sufficient information on the policy regarding retention of shares after vest ing, as referred to in point 8.15 of this Code; |
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| • Sufficient information on the composition of peer groups of companies the remuneration policy of which has been examined in relation to the estab lishment of the remuneration policy of the company concerned; |
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| • A description of the main characteristics of supplementary pension or early retirement schemes for directors; |
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| • Remuneration statement should not include commercially sensitive information. | ||
| 8.4. Remuneration statement should also summarize and explain company's policy regarding the terms of the contracts executed with executive direc tors and members of the management bodies. It should include, inter alia, information on the duration of contracts with executive directors and mem bers of the management bodies, the applicable notice periods and details of provisions for termination payments linked to early termination under contracts for executive directors and members of the management bodies. |
NO | The reasons are shown in Clause 8.1. This information will be possible to pub lish, except part of the information considered to constitute a commercial secret of the Company. |
| 8.5. Remuneration statement should also contain detailed information on the en tire amount of remuneration, inclusive of other benefits, that was paid to indi vidual directors over the relevant financial year. This document should list at least the information set out in items 8.5.1 to 8.5.4 for each person who has served as a director of the company at any time during the relevant financial year. |
NO | The reasons are shown in Clause 8.1. This information will be possible to pub lish, except part of the information considered to constitute a commercial secret of the Company. |
| 8.5.1. The following remuneration and/or emoluments-related information should be disclosed: |
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| • The total amount of remuneration paid or due to the director for services per |
formed during the relevant financial year, inclusive of, where relevant, attendance fees fixed by the annual general shareholders meeting;
• The remuneration and advantages received from any undertaking belonging to the same group;
• The remuneration paid in the form of profit sharing and/or bonus payments and the reasons why such bonus payments and/or profit sharing were granted;
• If permissible by the law, any significant additional remuneration paid to directors for special services outside the scope of the usual functions of a director;
• Compensation receivable or paid to each former executive director or member of the management body as a result of his resignation from the office during the previous financial year;
• Total estimated value of non-cash benefits considered as remuneration, other than the items covered in the above points.
8.5.2. As regards shares and/or rights to acquire share options and/or all other share-incentive schemes, the following information should be disclosed:
• The number of share options offered or shares granted by the company during the relevant financial year and their conditions of application;
• The number of shares options exercised during the relevant financial year and, for each of them, the number of shares involved and the exercise price or the value of the interest in the share incentive scheme at the end of the financial year;
• The number of share options unexercised at the end of the financial year; their exercise price, the exercise date and the main conditions for the exercise of the rights;
• All changes in the terms and conditions of existing share options occurring during the financial year.
8.5.3. The following supplementary pension schemes-related information should be disclosed:
• When the pension scheme is a defined-benefit scheme, changes in the directors' accrued benefits under that scheme during the relevant financial year;
• When the pension scheme is defined-contribution scheme, detailed information on contributions paid or payable by the company in respect of that director during the relevant financial year.
8.5.4. The statement should also state amounts that the company or any subsidiary company or entity included in the consolidated annual financial report of the company has paid to each person who has served as a director in the company at any time during the relevant financial year in the form of loans, advance payments or guarantees, including the amount outstanding and the interest rate.
8.6. Where the remuneration policy includes variable components of remuneration, companies should set limits on the variable component(s). The non-variable component of remuneration should be sufficient to allow the company to withhold variable components of remuneration when performance criteria are not met.
8.7. Award of variable components of remuneration should be subject to predetermined and measurable performance criteria.
8.8. Where a variable component of remuneration is awarded, a major part of the variable component should be deferred for a minimum period of time. The part of the variable component subject to deferment should be determined in relation to the relative weight of the variable component compared to the non-variable component of remuneration.
8.9. Contractual arrangements with executive or managing directors should include provisions that permit the company to reclaim variable components of remuneration that were awarded on the basis of data which subsequently proved to be manifestly misstated.
8.10. Termination payments should not exceed a fixed amount or fixed number of years of annual remuneration, which should, in general, not be higher than two years of the non-variable component of remuneration or the equivalent thereof.
The reasons are shown in Clause 8.1. NO
| NO | The reasons are shown in Clause 8.1. |
|---|---|
| NO | The reasons are shown in Clause 8.1. |
| NO | The reasons are shown in Clause 8.1. |
The reasons are shown in Clause 8.1.
NO
| 8.11. Termination payments should not be paid if the termination is due to inadequate performance. |
NO | The reasons are shown in Clause 8.1. |
|---|---|---|
| 8.12. The information on preparatory and decision-making processes, during which a policy of remuneration of directors is being established, should also be disclosed. Information should include data, if applicable, on authorities and composition of the remuneration committee, names and surnames of external consultants whose services have been used in determination of the remuner ation policy as well as the role of shareholders' annual general meeting. |
NO | The reasons are shown in Clause 8.1. |
| 8.13. Shares should not vest for at least three years after their award. | NO | The reasons are shown in Clause 8.1. |
| 8.14. Share options or any other right to acquire shares or to be remunerated on the basis of share price movements should not be exercisable for at least three years after their award. Vesting of shares and the right to exercise share options or any other right to acquire shares or to be remunerated on the basis of share price movements, should be subject to predetermined and measura ble performance criteria. |
NO | The reasons are shown in Clause 8.1. |
| 8.15. After vesting, directors should retain a number of shares, until the end of their mandate, subject to the need to finance any costs related to acquisition of the shares. The number of shares to be retained should be fixed, for example, twice the value of total annual remuneration (the non-variable plus the vari able components). |
NO | The reasons are shown in Clause 8.1. |
| 8.16. Remuneration of non-executive or supervisory directors should not in clude share options. |
NO | The reasons are shown in Clause 8.1. |
| 8.17. Shareholders, in particular institutional shareholders, should be encour aged to attend general meetings where appropriate and make considered use of their votes regarding directors' remuneration. |
NO | The reasons are shown in Clause 8.1. |
| 8.18. Without prejudice to the role and organization of the relevant bodies re sponsible for setting directors' remunerations, the remuneration policy or any other significant change in remuneration policy should be included into the agenda of the shareholders' annual general meeting. Remuneration statement should be put for voting in shareholders' annual general meeting. The vote may be either mandatory or advisory. |
NO | The reasons are shown in Clause 8.1. |
| 8.19. Schemes anticipating remuneration of directors in shares, share options or any other right to purchase shares or be remunerated on the basis of share price movements should be subject to the prior approval of shareholders' an nual general meeting by way of a resolution prior to their adoption. The ap proval of scheme should be related with the scheme itself and not to the grant of such share-based benefits under that scheme to individual directors. All sig nificant changes in scheme provisions should also be subject to shareholders' approval prior to their adoption; the approval decision should be made in share holders' annual general meeting. In such case shareholders should be notified on all terms of suggested changes and get an explanation on the impact of the suggested changes. |
NO | The Company does not practice the remuneration by director stocks or op tions. |
| 8.20. The following issues should be subject to approval by the shareholders' an nual general meeting: |
NO | No such practice is being enforced in the Company |
| • Grant of share-based schemes, including share options, to directors; | ||
| • Determination of maximum number of shares and main conditions of share granting; |
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| • The term within which options can be exercised; | ||
| • The conditions for any subsequent change in the exercise of the options, if permissible by law; |
||
| • All other long-term incentive schemes for which directors are eligible and which are not available to other employees of the company under similar terms. Annual general meeting should also set the deadline within which the body re sponsible for remuneration of directors may award compensations listed in this article to individual directors. |
||
| 8.21. Should national law or company's Articles of Association allow, any dis counted option arrangement under which any rights are granted to subscribe to shares at a price lower than the market value of the share prevailing on the day of the price determination, or the average of the market values over a num ber of days preceding the date when the exercise price is determined, should also be subject to the shareholders' approval. |
NO | No such practice is being enforced in the Company |
| 8.22. Provisions of Articles 8.19 and 8.20 should not be applicable to schemes allowing for participation under similar conditions to company's employees or employees of any subsidiary company whose employees are eligible to partic ipate in the scheme and which has been approved in the shareholders' annual general meeting. |
NO | No such practice is being enforced in the Company |
|---|---|---|
| 8.23. Prior to the annual general meeting that is intended to consider decision stipulated in Article 8.19, the shareholders must be provided an opportunity to familiarize with draft resolution and project-related notice (the documents should be posted on the company's website). The notice should contain the full text of the share-based remuneration schemes or a description of their key terms, as well as full names of the participants in the schemes. Notice should also spec ify the relationship of the schemes and the overall remuneration policy of the di rectors. Draft resolution must have a clear reference to the scheme itself or to the summary of its key terms. Shareholders must also be presented with infor mation on how the company intends to provide for the shares required to meet its obligations under incentive schemes. It should be clearly stated whether the company intends to buy shares in the market, hold the shares in reserve or issue new ones. There should also be a summary on scheme-related expenses the company will suffer due to the anticipated application of the scheme. All infor mation given in this article must be posted on the company's website. Principle IX: The role of stakeholders in corporate governance The corporate governance framework should recognize the rights of stakeholders as established by law and encourage active co-operation between companies and stakeholders in creating the company value, jobs and financial sustainability. For the purposes of this Principle, the concept "stakehold |
NO | No such practice is being enforced in the Company |
| ers" includes investors, employees, creditors, suppliers, clients, local community and other persons having certain interest in the company concerned. 9.1. The corporate governance framework should assure that the rights of |
YES | The management bodies of the Company seek to ensure the rights of all in |
| stakeholders that are protected by law are respected. 9.2. The corporate governance framework should create conditions for the stakeholders to participate in corporate governance in the manner prescribed by law. Examples of mechanisms of stakeholder participation in corporate governance include: employee participation in adoption of certain key deci sions for the company; consulting the employees on corporate governance and other important issues; employee participation in the company's share capital; creditor involvement in governance in the context of the company's |
YES | terest holders and, to an extent possible, takes their opinion into account. Interest holders are authorised to participate in the management of the Com pany and in the process of taking the decisions relevant to the Company to the extent permitted by the laws of the Republic of Lithuania. |
| insolvency, etc. 9.3. Where stakeholders participate in the corporate governance process, they should have access to relevant information. |
YES | These requirements are complied with to the extent required by the laws of the Republic of Lithuania. |
| Principle X: Information disclosure and transparency The corporate governance framework should ensure that timely and accurate disclosure is made on all material information regarding the company, in cluding the financial situation, performance and governance of the company. |
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| 10.1. The company should disclose information on: • The financial and operating results of the company; • Company objectives; • Persons holding by the right of ownership or in control of a block of shares in the company; • Members of the company's supervisory and management bodies, chief ex ecutive officer of the company and their remuneration; • Material foreseeable risk factors; • Transactions between the company and connected persons, as well as trans actions concluded outside the course of the company's regular operations; • Material issues regarding employees and other stakeholders; • Governance structures and strategy. This list should be deemed as a minimum recommendation, while the com panies are encouraged not to limit themselves to disclosure of the informa |
YES | The Company discloses the relevant information, in the established manner, to the Securities Commission, Vilnius NASDAQ OMX Vilnius Stock Exchange, ELTA, BNS, and the daily "Kauno diena", the Company's web site. |
| tion specified in this list. |
Consolidated annual report 2009
| 10.3. It is recommended that information on the professional background, qualifications of the members of supervisory and management bodies, chief executive officer of the company should be disclosed as well as potential con flicts of interest that may have an effect on their decisions when informa tion specified in item 4 of Recommendation 10.1 about the members of the company's supervisory and management bodies is under disclosure. It is also recommended that information about the amount of remuneration received from the company and other income should be disclosed with regard to members of the company's supervisory and management bodies and chief executive officer as per Principle VIII. |
NO | It is available that company's information that is not confidential. |
|---|---|---|
| 10.4. It is recommended that information about the links between the com pany and its stakeholders, including employees, creditors, suppliers, local community, as well as the company's policy with regard to human resources, employee participation schemes in the company's share capital, etc. should be disclosed when information specified in item 7 of Recommendation 10.1 is under disclosure. |
NO | This is a practice the company does not employ. |
| 10.5. Information should be disclosed in such a way that neither sharehold ers nor investors are discriminated with regard to the manner or scope of ac cess to information. Information should be disclosed to all simultaneously. It is recommended that notices about material events should be announced before or after a trading session on the Vilnius Stock Exchange, so that all the company's shareholders and investors should have equal access to the information and make informed investing decisions. |
YES | The Company ensures the accuracy and expedition of the given information. |
| 10.6. Channels for disseminating information should provide for fair, timely and cost-efficient or in cases provided by the legal acts free of charge access to relevant information by users. It is recommended that information tech nologies should be employed for wider dissemination of information, for in stance, by placing the information on the company's website. It is recommended that information should be published and placed on the com pany's website not only in Lithuanian, but also in English, and, whenever possible and necessary, in other languages as well. |
YES | The Company ensures compliance with these requirement, the information is announced in Lithuanian and English. |
| 10.7. It is recommended that the company's annual reports and other peri odical accounts prepared by the company should be placed on the company's website. It is recommended that the company should announce information about material events and changes in the price of the company's shares on the Stock Exchange on the company's website too. |
YES | The Company ensures compliance with these requirement. |
| Principle XI: The selection of the company's auditor The mechanism of the selection of the company's auditor should ensure independence of the firm of auditor's conclusion and opinion. |
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| 11.1. An annual audit of the company's financial reports and interim reports should be conducted by an independent firm of auditors in order to provide an external and objective opinion on the company's financial statements |
YES | The recommendation is being followed partly, because an independent firm of auditors is not supervise interim reports of the Company. |
| 11.2. It is recommended that the company's supervisory board and, where it is not set up, the company's board should propose a candidate firm of audi tors to the general shareholders' meeting. |
YES | The audit is proposed to the general meeting of shareholders by the Board of the Company. |
| 11.3. It is recommended that the company should disclose to its sharehold ers the level of fees paid to the firm of auditors for non-audit services ren dered to the company. This information should be also known to the company's supervisory board and, where it is not formed, the company's board upon their consideration which firm of auditors to propose for the gen eral shareholders' meeting. |
YES | The information is usually disclosed to shareholders, it is available and the Company's board. |
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