Annual Report • Apr 30, 2012
Annual Report
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Consolidated Annual Report 2011
The members of the management bodies, employers, head of administration together with the Company's consultants who are responsible for the preparation of 2011 consolidated annual report and audited financial accounts confirms that, according to their knowledge, annual consolidated financial accounts were formed according to International Financial Reporting Standards, as adopted by European Union, 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 25, 2012
Place the report prepared: AB "Snaigė", Pramonės str. 6, Alytus
The year 2011 for Snaige AB was the year of significant achievements and opportunities. According to the audited consolidated data in 2011 the Company achieved 112.6 m LTL turnover and sold more than 171.4 thousand refrigerators. The biggest part (93,1%) of the turnover was from the export to more than 30 Europe and Asia countries. The biggest part of sold refrigerators was in Germany's, Ukraine's, France's, Portugal's markets.
The Company strengthen its position in Ukraine's market while started collaborating with one of the main home appliances networks in Ukraine – 'Eldorado'. After few years brake Snaige AB had renewed its export to Russia and Belorussia.
One of the main facts in 2011 was the advent of the strategical investor. Russian industrial refrigerating equipment manufacturer Polair indirectly acting through "VAIDANA" UAB has acquired 59.86% of all the shares of the Company (23 716 668 units of the shares) and got the adequate amount of votes in the General Shareholders' meeting.
The company made a lot while creating new products and improving the old ones in 2011. On June it was represented the new glass door refrigerator – "Snaige Glassy". Those refrigerators got much of attention both in Lithuania and Western Europe, and at the end of the year it got the golden medal for the Lithuania's Year Product. The company created the refrigerator RF35 with bigger freezing section and it became one of the best Snaige AB selling in a very short time.
The company attended one of the most important home appliances expositions in Europe – IFA 2011, where it had got very positive appreciations from its customers and business partners.
In the year of 2011 according to not consolidated and audited data Snaige AB ganed profit 0,908 m LTL. The Company's not consolidated and not audited EBITDA was almost the same as in 2010 – 9.4 m LTL, without any doubt it is a very positive result of the Company.
I am sure that the year 2012 will be full of good changes for Snaige AB. With a help of Polair we will keep struggling into Russia market, we will develop the segment of commercial refrigerators and keep developing the current products as well. I think that in front of us full of work, very creative and, no doubts, full of new achievements year.
Managing Director, Gediminas Čeika
The annual report-prospectus has been prepared for the year 2011.
The name of the Company – SNAIGĖ PLC (hereinafter referred to as the Company) Authorised capital on 31 December 2011– 39 622 395 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; registrationnumber AB 92-119; enterprise register code 249664610. The latest Statute of AB "Snaigė" was registered on12 May 2011 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.
| GĖ" 1. G ENE RAL INF ORM ATIO N A BOU T A B "S NAI |
5 |
|---|---|
| of t Acc ting riod he a al re 1.1 t-pr ect oun pe nnu por osp us |
5 |
| 1.2 T he b asic dat a ab the Co out mp any |
5 |
| of t 1.3 T he t he C y's m ain bus ines tivit ies ype om pan s ac |
5 |
| 1.4 T he C y's truc ture om pan gro up s |
5 |
| Info ffice d affi tion abo he C y's o liate 1.5 ut t rma om pan s an s |
6 |
| f th Sho rt h isto e Co 's ac tivit ies 1.6 ry o mp any |
6 |
| Mis sion . Vis ion . Va lues 1.7 |
6 |
| of t List he m imp ts in 1.8 20 11 ost orta nt e ven |
7 |
| GĖ" 2. A B "S NAI GO VER NAN CE A ND MA NAG EME NT |
7 |
| The Co 's M bo dies 2.1 ent mp any ana gem |
7 |
| Cor e bo dies 2.2 ate por gov ern anc |
7 |
| The Co 's g p's Man 2.3 nt s truc ture mp any rou age me |
10 |
| Pro ced s of cha ngi ng C y's a rtic les o f as iatio 2.4 ure om pan soc n |
10 |
| GĖ" 3 A B "S NAI AU THO RISE D C API TAL , SH ARE HO LDE RS, INF ROM ACI ON ABO UT S ECU RITI ES |
10 |
| Issu hor ized ital 3.1 aut ers cap |
10 |
| Sha reh old 3.2 ers |
13 |
| Info tion abo rad ing of is ities in t he r late d se ities rket 3.3 ut t rma sue rs se cur egu cur ma s |
13 |
| Info tion abo he r rcha f ow n sh 3.4 ut t rma epu se o ares |
15 |
| Div iden ds 3.5 |
15 |
| Con ith pub lic c ircu latio n of urit ies d eale 3.6 trac ts w sec rs |
16 |
| Res tric tion nsfe r of urit ies 3.7 tra s on sec |
16 |
| GĖ" 4. A B "S NAI OP ERA TIN G R EVIE W |
16 |
| Gen l rat es, d ribi he C y's bus ines rfor the ir be hav iou 4.1 ng t era esc om pan s pe man ce, r |
16 |
| Pro duc tion 4.2 |
16 |
| Sale 4.3 s |
17 |
| Sup ply 4.4 |
19 |
| loye nd hum licy 4.5 Emp es a an r eso urce po |
19 |
| licy 4.6 Inve stm ent po |
20 |
| 4.7 Env iron ctio nt p rote me n |
22 |
| Risk fac rela ted he b of t he C 4.8 usin tors to t ess om pan y |
22 |
| Rela ted 4.9 ions rty t sact pa ran |
24 |
| al a nd a rbit 4.10 Leg rary pro ces ses |
24 |
| Ė" 5. O FOR ION OUT "SN AIG THE R IN MAT AB AB |
24 |
| ber ship ed o 5.1 Mem in a ciat nisa tion sso rga s |
24 |
| lice d co 5.2 Pate nts, ntra cts nce s an |
24 |
| and the s of the Co 5.3 Rec st im ent tan t ev ent mo por mp any |
24 |
| Stra d P lans 5.4 teg y an |
38 |
| isclo for the plia h th 6. D ing wit e G sure m c onc ern com nce ove rna nce |
39 |
Code for the companies listed on the regulated market
99 % OOO "Snaigė Ukraine" Kiev (Ukraine)
100 % "Almecha" Alytus (Lithuania)
7
The Company's group consist of parent refrigerator manufacturing "Snaigė" 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 registered in November 2002. Address: Bolshaja Okruzhnaja str.1-a, Kaliningrad, Russia. Since March 2009, the Company has stopped the production in the plant, 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 registered in November 2002. Address: Grushevski str. 28-2a/43 Kiev, Ukraine.
· OOO "Moroz Trade" – trade and marketing services. The enterprise was registered in May 2004. Adress: Prospect Mira st. 52 Moscow, Russia. 2010 -2011 years the Company does not execute activity.
· OOO "Liga-servis" activities: sales of refrigeration appliances, consulting services, transportation services and other. The enterprise was registered in August 2005; Address: Prospect Mira 52 Moscow, Russia.
· UAB "Almecha" activities: manufacturing of miscellaneous machinery and equipment. The enterprise was registered in November 2006. Address: Pramones str. 6 Alytus, Lithuania.
The Company has no offices and affiliates.
1963 -The Company produced the first domestic refrigerators in Lithuania. During the first year was made the 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 and A + energy efficiency refrigerator production. Snaige become EU project "Energy +" participant;
2003 - A + Grade energy efficiency fridge Snaigė RF310 LCI won the 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 products to more than 40 countries around the world;
2007 – The Company's Alytus plant started serial production of new line models "Snaigė ICE LOGIC";
2007 - The Company was 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 assessed as the "Product of the Year" and awarded a Gold medal;
Snaige was awarded for "Innovation Award" in "Innovative product" category;
2009 - The loss of production and devaluation of the rubble conditioned to close the Company's factory in Kaliningrad; 2010 - The Company started of A ++ highest energy efficiency refrigerators serial production; The Company and Kazakhstan national business corporation "Saryarka" has established a joint venture. "Snaigė ICE LOGIC" RF34 A++ was assessed as the "Product of the Year" and awarded a Gold medal. 2011- Snaigė ICE LOGIC Glassy RF34SM ++ was awarded with a Gold medal as " Lithuanian Product of the Year". 2011 - Russian company "Polair", indirectly acting through UAB "VAIDANA" has acquired 59.86% of all the shares of the Company
Our Mission is to develop financially disciplined business that provides consumers with good value and quality products and our shareholders with top-tier returns on their investments.
To become the most reliable home appliances brand for consumers in Eastern Europe and the preferred choice for OEM supplier in Western Europe.
Open minded Trustworthy Teamwork Flexibility
The Company continuing of A ++ highest energy efficiency refrigerators serial production.
Based on "Intelektas LT", The Company's project "Strengthening AB "Snaige" Competitiveness by Investing in Development of Next-Generation "3D Frost" Refrigeration Serias" in 2010 received funding of 865 161 Lt from EU Structural Funds and it was started in 2011
There was developed sales of refrigerators to Tajikistan and Uzbekistan. The sales were renewed to Belarus. The company made a lot while creating new products and improving the old ones in 2011. On June it was represented the new glass door refrigerator – "Snaige Glassy". Those refrigerators got much of attention both in Lit-
huania and Western Europe.
The company created the refrigerator RF35 with bigger freezing section and it became one of the best Snaige AB selling in a very short time.
2011- Snaigė ICE LOGIC Glassy RF34SM ++ was awarded with a Gold medal as " Lithuanian Product of the Year"; The company attended one of the most important home appliances expositions in Europe – IFA 2011, where it had got very positive appreciations from its customers and business partners.
2011 - Russian company "Polair", indirectly acting through UAB "VAIDANA" has acquired 59.86% of all the shares of the Company.
2.1.1 Management bodies
Management bodies:
• General Shareholder Meeting;
• The Management Board is formed of six members and elected for the period of 4 years; • Head of the Company – Manging Director.
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 General 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.
The company has the audit committee which is the operating collegial administrative body and which was selected by shareholders in 2009. The audit committee is operating by audit committee's labor regalement. On the 14th of December, 2011 the Extraordinary General Meeting of Shareholders of the Company revoked the Board of the Company in corpore. The new audit committee will be elected during the ordinary shareholders general meeting which will be held on the 30th April, 2012.
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
| NAM E |
Posi tion |
The avail able ber o f sha num res, u |
nits | The s hare capi tal, p nt er ce |
Vote t s, pe r cen |
|---|---|---|---|---|---|
| BOA RD |
|||||
| Alek ovalc huk sey K |
ė" Ch AB " Snaig |
an of the boar d fro airm m 20 11 12 14 |
- | - | - |
| Česn Mart aviči ynas us |
AB "S ė" Ch naig |
an of the boar d till airm 201 1 12 14, |
15 | 0,00 | 0,0 0 |
| ber o f the mem |
boa rd fro m 20 11 12 15 |
||||
| Robe Berž inska rtas s |
AB "S naig ė" m |
er of emb the boar d |
- | - | - |
| Andr ibny ei Dr |
ė" m AB " Snaig |
emb er of the boar d fro m 20 11 12 14 |
- | - | - |
| Mikh ail St ukalo |
AB " Snaig ė" m |
emb er of the boar d fro m 20 11 12 14 |
- | - | - |
| Robi n Pet er W alker |
AB " Snaig ė" m emb er of the boar d fro m 20 11 12 14 |
- | - | - |
|---|---|---|---|---|
| Nerij us Da gilis |
er of AB "S naig ė" m emb the boar d till 201 1 04 26 |
- | - | - |
| lipuit Kęstu tis Pi is |
AB "S ė" m emb er of the d till naig Boar 201 0 11 19 |
|||
| Harv ey Sa wiki n |
AB " Snaig ė" m emb er of the boar d |
- | - | - |
| from 201 1 04 26 ti ll 201 1 12 14 |
||||
| Jaak ko Sa lmel in |
er of AB " Snaig ė" m emb the boar d |
- | - | - |
| from ll 201 201 1 04 26 ti 1 12 14 |
||||
| Kusta a Aim a |
AB " Snaig ė" m emb er of the boar d |
- | - | - |
| from 201 1 04 26 ti ll 201 1 12 14 |
||||
| Mind s Ged vilas auga |
emb er of the boar d till AB " Snaig ė" m 201 1 11 14 |
- | - | - |
| ADM INIST RATI ON ( Man agin |
g Dir r and Chie f Fin anci er) ecto |
|||
|---|---|---|---|---|
| s Čei Gedi ka mina |
AB " Snaig ė" M ing D irect anag or |
1531 | 0,00 | 0,00 |
| Nerin ga M enčiū nien ė |
AB " Snaig ė" Fin Dire ctor ance |
- | - | - |
on the 10th of March, 2011 the Company informed the NASDAQ OMX Vilnius Stock Exchange information system that the member of the board Nerijus Dagilis presented a report on his resignation as a member of the board from the 26th of April, 2011.
29 April, 2011 at the ordinary general shareholders meeting, Kustaa Aima, Jaakko Salmelin ir Harvey Sawikin were elected to the board members until the end of the term ofoffice of the Board.
On December 14th, 2011 the Extraordinary General Meeting of Shareholders revoke the Board of the Company in corpore and elect Robin Peter Walker, Andrey Dribny, Aleksey Kovalchuk, Mikhail Stukalo, Martynas Česnavičius and Robertas Beržinskas as the members of the Board for its new term of office.
Aleksey Kovalchuk had been elected to the position of the Chairman of the Board of Snaige AB during the Board meeting which was held on the 14th of December, 2011.
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):
| Nam e |
e of o Nam isatio sition rgan n, po |
Shar e of t he ca pital and ilable vote s ava |
|---|---|---|
| in ot her c anies , in p tage omp ercen |
||
| as Č avič Mar ius tyn esn |
B "L NK" mb f th ard UA e Bo me er o |
- |
| ofin UAB "Pr e" anc |
50, 00 |
|
| alse Pliu hair of t he B d UAB "M s" C na- man oar |
- | |
| UAB "Lit a" m ber of t he B d agr em oar |
- | |
| mb f th ard AB " San itas " me e Bo er o |
- | |
| rad dija " me mb f th ard UAB "At imų e Bo stu er o |
31, 00 |
|
| of t AB " Kau no P ieno Ce s" m ber he B d ntra em oar |
- | |
| Rob ska s Be ržin erta s |
ikot ber of t he B d AB "Ut s Tr aža s"m eno em oar |
- |
| as Č Ged imin eika |
OO O "T ech min t" m ber of t he B d pro ves em oar |
|
| Ner inga Me nčiū nien ė |
ech ber of t he B d OO O "T min t" m pro ves em oar |
- |
| "Al ha", Ch f th ard UAB airm e Bo mec an o |
- | |
| AB " Uni kali os i stic ijos " Ma ing Dire cto nve nag r |
- | |
2.2.3 Chairman of the Board, the Head of the administration and Chief Financial
| Nam e |
Educ ation lifica tion , qua |
Wor kplac d po sition s dur ing t he re 10 ye cent es an ars |
|---|---|---|
| Ale ksey |
dem der Fina Aca nce y un |
lair, al D Po Ge irec sin ce 2 009 tor, ner ; |
| Kov alch uk |
of the Go ent ver nm |
y fo Fed l Ag r Co ion, Ho usin d U tilit ies. nstr uct era enc g an |
| the Ru ssia n |
||
| Fed ion, Mo erat sco w. |
||
| Ged imin as |
Viln ius Uni sity ver , |
From Jan y 20 08 – AB "Sn aige " M gin g D irec tor uar ana |
| Čei ka |
helo Bac r in Eco ics. nom |
ė" S ales 200 5 12 – 2 008 01 – A B "S naig Dir ecto r |
| raft - "K Foo ds L ietu va" Bus ines s Cl ient 200 1 05 – 2 005 12 s |
||
| Rela ship or f he B altic tion s Di Sta rect or t tes |
||
| nsh ft Fo ods " Co Cze ch R blic 200 0 11 – 20 01 0 5 – I ip at "Kra ny in nter mpa epu |
||
| aft F tor f 199 7 – 2 000 - "Kr ood s Lie " Sa les D irec or L atvi d Es ia 11 tuva ton a an |
||
| Kraf ods " Sa les M for V ilniu 199 4 – 199 7 - " t Fo Lie gion tuva ana ger s re |
| Ner inga |
Viln ius Uni sity ver , |
From 200 8 06 02 AB " Sna igė" Fin e D irec tor anc |
|---|---|---|
| čiūn Men ienė |
lysis of e ic ana con om |
AB " Viln gis" uida From 200 8 05 – 2 010 05 iaus Vin Liq tor |
| d ac acti vitie ntin s an cou g, |
ilnia 200 6 05 – 2 008 05 – A B "V us V ing is" M gin g D irec ana |
|
| ist tan t - e acc oun con om |
rline "Lie vial s" 200 5 08 – 2 006 04 – ai AB inijo tuv os a |
|
| lific atio qua n |
Fin d P urch Dir ecto anc e an ase r |
|
| ilnia hief 200 3 03 – 2 005 08 – A B "V us V ing is" C Acc tan oun |
||
| B "V ilnia is" C hief 200 1 01 – 2 003 03 – A us V ing Acc tan oun |
||
| 199 6 08 - 20 03 0 3 – AB " Viln iaus Vin gis" Acc tan t oun |
||
| B "V ilnia is" C hief 200 1 01 – 2 003 03 – A us V ing Acc tan oun |
||
| Viln 199 6 08 - 20 03 0 3 – AB " iaus Vin gis" Acc tan t oun |
| lysis of e ic ana con om |
AB " Viln gis" uida From 200 8 05 – 2 010 05 iaus Vin Liq tor |
|---|---|
| acti vitie d ac ntin s an cou g, |
– A B "V ilnia us V ing is" M gin g D irec 200 6 05 – 2 008 05 tor ana |
| ist tan t - e acc oun con om |
rline vial 200 5 08 – 2 006 04 – ai AB "Lie inijo s" tuv os a |
| lific atio qua n |
Fin d P urch Dir ecto anc e an ase r |
| ilnia hief 200 3 03 – 2 005 08 – A B "V us V ing is" C Acc tan t oun |
|
| B "V ilnia is" C hief 200 1 01 – 2 003 03 – A us V ing Acc tan t oun |
|
| AB " Viln iaus Vin gis" Acc 199 6 08 - 20 03 0 3 – tan t oun |
|
| B "V ilnia is" C hief 200 1 01 – 2 003 03 – A us V ing Acc sist tan t as ant oun |
|
2.2.4 Information about start date and end date of the office term of each member of the management body
| Nam e |
Star t dat e of t he offi ce te rm |
End date of th e offi ce te rm |
|---|---|---|
| BOA RD |
||
| Ale ksey alch uk Kov |
Till 201 1 12 14 201 |
5 th ral M inh of S hare hold e G eet ene ers |
| Rob in P r Wa lker ete |
Till 201 1 12 14 201 |
5 th e G ral M inh of S hare hold eet ene ers |
| And ribn re D y |
Till 201 1 12 14 201 |
5 th ral M inh of S hare hold e G eet ene ers |
| Mik hail Stu kalo |
Till 201 1 12 14 201 |
5 th ral M inh of S hare hold e G eet ene ers |
| as Č Mar avič ius tyn esn |
200 6 05 02 Till 201 |
of S 5 th e G ral M inh hare hold eet ene ers |
| Rob ržin ska s Be erta s |
Till 200 8 04 23 201 |
5 th ral M inh of S hare hold e G eet ene ers |
| Min dau Ge dvil gas as |
201 0 04 29 |
201 1 12 14 |
| ikin Har Saw vey |
201 1 04 29 |
201 1 12 14 |
| kko Sal lin Jaa me |
201 1 04 29 |
201 1 12 14 |
| Kus Aim taa a |
201 1 04 29 |
201 1 12 14 |
| AD MIN ISTR ATI ON (M gin g D ana |
and Ch ief A irec ) tor unt ant cco |
|
| as Č Ged imin eika |
200 8 01 03 |
m le Ter ent ss a gre em |
| Ner inga Me nčiū ninė |
200 8 06 02 |
m le Ter ent ss a gre em |
On the 10th of March, 2011the Company informed the NASDAQ OMX Vilnius Stock Exchange information system that the member of the board Nerijus Dagilis presented a report on his resignation as a member of the board from 26 April, 2011.
On the 14th of November, 2011 the Company informed the NASDAQ OMX Vilnius Stock Exchange information system that on the 14th of December, 2011during the extraordinary general meeting of shareholders will be considered the questions of the company board revocation in corpore and the election of the new board. On 14 December, 2011 during the the extraordinary general meeting of shareholders the new board for the new term of office elected.
2.2.5 Information regarding valid conviction of the members of the management bodies for the offences against property, farming procedure and finance
2.2.6 Information about benefits and loans granted to governing bodies
During 2011 years period two board members got salaries under employment contracts (6038 LTL).
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
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
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.
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.
the rights granted to holders of convertible bonds: according to the set order to receive interest from the Company; on the redemption day to receive a redemption amount or to request to change convertible bonds to the shares at the end of the redemption term; also, all other rights set to the creditors of the companies by the
payment of interest: once per quarter on the last day of the quarter (if the last day of the quarter is not a busi-- shares, for which the convertible bonds shall be changed: ordinary registered shares of LTL 1 nominal value,
the conditions of change of convertible bonds to shares: convertible bonds shall be changed to shares accor-
inclusion into trading in the regulated market: the issue will not be involved into trading in the regulated market.
verted to the Company shares and was increased the authorized capital of the Company.
the rights granted to holders of convertible bonds: according to the set order to receive interest from the Company; on redemption day to receive a redemption amount or to request to change convertible bonds to the sha-
the conditions of change of convertible bonds to shares: convertible bonds shall be changed to shares accordingly to the request of the holder submitted to the Company in written no later than 10 business days before
According requests of owners of bonds at the redemption day bonds with ISIN code LT1000401315 were con-
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.
Gediminas Čeika – managing director. Neringa Menčiūnienė - financial director. Rūta Petrauskaitė – marketing director. Kęstutis Urbonavičius – technical and production director.
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
| Nam e of t he se curit ies |
Amo f unt o |
Nom inal v alue, LTL |
Tota l nom inal v alue, LTL |
Shar e of t he au thori zed |
|---|---|---|---|---|
| al, capit |
the s ities ecur |
in pe rcent age |
||
| Ord inar gist ered sha y re res |
39 622 395 |
1 | 39 622 395 |
100 |
3.1.2 Changes in authorized capital during the last 3 years
| Regis n of tratio |
The s f the ize o |
Chan ge |
Reas on fo r cha nge |
The f the size o |
|---|---|---|---|---|
| chan ged |
auth d cap ital orize |
auth d cap ital orize |
||
| auth d cap ital orize |
befo re th e cha nge |
afte r the chan ged |
||
| 201 0.04 .20 |
27 8 27 3 65 |
+2 908 350 LTL |
e of hor ized ital by c Inc erti aut reas cap onv ng |
30 7 35 7 15 L TL |
| sha reh old urit ies t o 2 908 350 its ers sec un |
||||
| orid inar y sh ares |
||||
| 201 1 05 12 |
30 735 715 |
+8 886 680 |
e of hor ized ital by c Inc erti aut reas cap onv ng |
39 6 22 3 95 |
| sha reh old urit ies t its o 8 886 680 ers sec un |
||||
| orid y sh inar ares |
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
The company issued 2 emissions of convertible bonds:
ISIN LT0000402620, 2 years term 3 m LTL total nominal value bonds emission, the term of redemption April 12th, 2013.
ISIN LT0000402638 2 years term 4.3 m LTL total nominal value bonds emission, the term of redemption May 2nd, 2013.
13
The total number of the Shareholders on 31 December 2011 was 1 216 .
The major shareholders who own or control more than 5 percent of the issuer's authorized capital are listed below:
3.2.2 Shareholders with special control rights
There are no Shareholders with special control rights.
3.2.3 Restrictions of Shareholders voting rights
All the shareholders have equal voting rights. The Company has not information about shareholders voting rights restrictions.
3.2.4 Shareholders agreement, about which the Company 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.
3.3.1 Securities included in the trading lists of regulated securities markets
39,622,395 ordinary registered shares of AB "Snaigė" are included into the Secondary trading list of the NASDAQ OMX Vilnius stock exchange. The total nominal value of the shares is 39,622,395 LTL. The VP CD (Securities Central Depositary) number is 10927. The nominal value of a share was 1 (one) LTL.
3.3.2 Trade of the issuer's securities in stock exchanges and other organized markets
Trade of the Company's ordinary registered shares in the securities stock exchange was started on August 11, 1995. The ordinary registered shares of AB "Snaigė" have been listed in the Official trading list of NASDAQ OMX Vilnius stock Exchange since April 9, 1998.
Since 08 May, 2009 the Company on its own initiative requested NASDAQ OMX to switch its shares from NAS-DAQ OMX Vilnius Official listing and add them to the NASDAQ OMX Vilnius Additional listing.
3.3.2.1 Trade on NASDAQ OMX Vilnius stock exchange
Trade in Company's shares during 2008-2011.
| Last ion sess |
Price x, EU R , ma |
Price , EUR , min |
Shar es, p cs. |
Turn over, |
|---|---|---|---|---|
| , EUR price |
mln . EUR |
|||
| 0.15 9 |
1,91 2 |
0,14 5 |
1 69 0 146 |
1,72 |
| 0,16 5 |
0,33 9 |
0,04 9 |
36 2 55 52 4 |
6,38 |
| 0,26 8 |
0,32 4 |
0,15 6 |
38 2 97 84 8 |
9,48 |
| 0,52 5 |
0,53 0 |
0,25 6 |
16 1 37 89 1 |
6,13 |
Below you can find the Company shares turnover and prices during last 5 years graphs. The data from AB NAS-DAQ OMX Vilnius internet page:
http://www.nasdaqomxbaltic.com/market/?instrument=LT0000109274&list=3&pg=details&tab=historical&lang =lt¤cy=0&downloadcsv=0&date=&start_d=1&start_m=1&start_y=2007&end_d=31&end_m=12&end_y= 2011
The price of share is in EUR because the trade of shares is in EUR from 22 November, 2010. The price of share during reporting year (information from AB NASDAQ OMX Vilnius internet page): http://www.nasdaqomxbaltic.com/market/?instrument=LT0000109274&list=3&pg=details&tab=historical&lang =lt¤cy=0&downloadcsv=0&date=&start_d=1&start_m=1&start_y=2011&end_d=31&end_m=12&end_y= 2011
| Amo unt o |
f the ordi nary |
Shar | e of t he au thor ized |
al an d vot capit es av |
ailab le, in enta perc ge |
||
|---|---|---|---|---|---|---|---|
| Nam es (C omp any |
regis tered shar |
ailab le, in es av pcs. |
|||||
| ddre nam es, a sses, |
Tota l |
incl. the ones |
Tota l |
incl. the |
ordin ary |
Tota l incl . the |
|
| rpris ister code s) ente e reg |
ed by the own |
regis tered shar |
ned es ow |
share of th e |
|||
| of th e Sha reho lders |
Shar ehol der |
by th e sha |
reho lder |
entit ies g roup |
|||
| ating joint ly, oper |
|||||||
| share of |
share of |
share of th e |
share of |
in pe rcent age |
|||
| the v otes |
the c apita |
l a ppoi nted vote s |
the c apita l |
||||
| Vaid ana U AB – |
23 7 16 66 8 |
23 7 16 66 8 |
59,8 6 |
59,8 6 |
59,8 6 |
59,8 6 |
- |
| Kons Viln tituc ijos a ve.7, ius, |
|||||||
| Lithu code ania, 302 4737 20 |
|||||||
| Swed bank – cl ient ri- secu |
3 32 1 701 |
3 32 1 701 |
8,38 | 8,38 | 8,38 | 8,38 | - |
| Liiva laia 8 , Tall ties, inn |
|||||||
| 1504 0 Est onia, com p. |
|||||||
| code 100 6070 1 |
|||||||
| Skan dinav iska Ensk ilda – |
2 266 389 |
2 26 6 389 |
5,72 | 5,72 | 5,72 | 5,72 | - |
| clien rgels uritie s, Se t sec |
|||||||
| tockh olm, Torg 2, 10 640 S |
|||||||
| Swed . cod en, c omp e |
|||||||
| 5020 3290 8101 |
15
| Year | fit pe Basi r sha re, Lt c pro |
Shar e pri ce |
Price to E arnin tio gs ra |
|---|---|---|---|
| 201 1 |
0 | 0 | 0 |
On February 9th, 2011 the Company entered into a contract with AB "Šiaulių bankas" for the Company's securities accounts and securities accounts for private management.
There is no restriction on the transfer of securities issued.
The main indicators of the Company's activities and dynamics (consolidated data):
| 2011 | 2010 | 2009 | 2008 | 2007 | ||
|---|---|---|---|---|---|---|
| Tur nov er |
112 .615 .726 |
113 .838 .664 |
123 .035 |
.965 | 340 .955 .610 |
412 .803 .030 |
| Gro rofi t ss p |
16. 397 .040 |
17. 427 .496 |
12. 621 |
.987 | 42. 565 .127 |
49. 087 .235 |
| los Net s |
-5.0 42.4 53 |
-2.6 12.9 07 |
-38 .182 |
.235 | -24 .100 .344 |
-11 .415 .935 |
| e sh Ave pric rag are e |
1,28 8 |
0,8 6 |
0,6 1 |
3,5 2 |
9,4 | |
| Finan cial F igure s |
2011 | 2010 | 2009 | |||
| Profi t be fore ind tax |
icat or, % |
% -5,4 |
-2,7 % |
-31 ,51% |
||
| l ma rk-u Gen p, % era |
75 % 14, |
31% 15, |
8,8 7 % |
|||
| k-up EBIT DA , % mar |
4 % 5.5 |
8,0 6% |
-16 ,96% |
|||
| Solv tio, % enc y ra |
81, 91% |
63. 9% |
50, 46% |
|||
| Deb rati o, % t to ets ass |
59, 99 % |
7% 67.5 |
36, 53% |
|||
| Ret e sh urn on ave rag |
hold ers' ity, are equ |
% | -15, 21 % |
-8,5 5% |
-12 8,50 % |
|
| Shar dicat es in ors |
2011 | 2010 | 2009 | |||
| Earn ing r sh LTL s pe are, |
-0,1 3 |
-0,0 9 |
-1,3 7 |
|||
| Ave l sh rag e an nua are |
ket pric e, LT L mar |
1.2 88 |
0,7 9 |
0,4 9 |
||
| EBIT DA sha re, L TL per |
0.1 6 |
0,3 0 |
-0,7 4 |
|||
| EBIT DA ltip lier (EB mu |
ITD hare / A p er s |
0.12 | 0,3 8 |
-1,5 0 |
||
| l sh Ave rag e an nua are |
ket e) pric mar |
|||||
| al d ivid end tho Tot s, in |
LTL us. |
- | - | - | ||
| iden ds p hare Div er s |
, LT L |
- | - | - | ||
| t bo ok s Ave rag e ne |
hare val LTL ue, |
0.9 | 0.9 9 |
1,0 7 |
||
| 2011 | 2010 | 2009 | 2008 | 2007 | |||
|---|---|---|---|---|---|---|---|
| Tur nov er |
112 .615 |
.726 113 |
.838 .664 |
123 | .035 .965 |
340 .955 .610 |
412 .803 .030 |
| Gro rofi t ss p |
16. 397 |
.040 | 17. 427 .496 |
12. | 621 .987 |
42. 565 .127 |
49. 087 .235 |
| los Net s |
-5.0 42.4 |
53 | -2.6 12.9 07 |
-38 | .182 .235 |
-24 .100 .344 |
-11 .415 .935 |
| e sh Ave pric rag are e |
1,28 | 8 | 0,8 6 |
0,6 1 |
3,5 2 |
9,4 | |
| Finan cial F igure s |
2011 | 2010 | 2009 | ||||
| Profi t be fore ind tax |
icat or, % |
% -5,4 |
-2,7 % |
-31 ,51% |
|||
| l ma rk-u Gen p, % era |
75 % 14, |
31% 15, |
8,8 7 % |
||||
| k-up EBIT DA , % mar |
4 % 5.5 |
8,0 6% |
-16 ,96% |
||||
| Solv tio, % enc y ra |
81, 91% |
63. 9% |
50, 46% |
||||
| Deb rati o, % t to ets ass |
59, 99 % |
7% 67.5 |
36, 53% |
||||
| Ret e sh urn on ave rag |
hold ers' are |
ity, % equ |
-15, 21 % |
-8,5 5% |
-12 8,50 % |
||
| Shar dicat es in ors |
2011 | 2010 | 2009 | ||||
| Earn ing r sh LTL s pe are, |
-0,1 3 |
-0,0 9 |
-1,3 7 |
||||
| Ave l sh rag e an nua are |
ket pric mar |
e, LT L |
1.2 88 |
0,7 9 |
0,4 9 |
||
| EBIT DA sha re, L TL per |
0.1 6 |
0,3 0 |
-0,7 4 |
||||
| EBIT DA ltip lier (EB mu |
ITD A p er s |
hare / |
0.12 | 0,3 8 |
-1,5 0 |
||
| l sh Ave rag e an nua are |
ket pric mar |
e) | |||||
| al d ivid end tho Tot s, in |
LTL us. |
- | - | - | |||
| iden ds p hare Div er s |
, LT L |
- | - | - | |||
| t bo ok s Ave rag e ne |
hare val LTL ue, |
0.9 | 0.9 9 |
1,0 7 |
|||
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; • Coolers;
• Freezers;
• Commercial refrigerators.
In 2011, mainly produced by the combined refrigerators with separate external doors.
Below the graphs are from OMX Baltic Benchmark, OMX Vilnius indexes and Snaige, AB shares prices graphs for period from 1 January, 2009 till 31 December, 2011. The information is from AB NASDAQ OMX Vilnius internet page:
http://www.nasdaqomxbaltic.com/market/?pg=charts&lang=lt&idx_main%5B%5D=OMXBBGI&idx_main%5B% 5D=OMXV&add_index=OMXBBPI&add_equity=LT0000109274&idx_equity%5B%5D=LT0000109274&period=other&start_d=1&start_m=1&start_y=2009&end_d=31&end_m=12&end_y=2011
| Index /Equ ity |
01.0 1.200 9 |
31.1 2.20 11 |
+/-% |
|---|---|---|---|
| OM X B altic Be nch k G I mar |
228 ,12 |
431 ,94 |
89, 35 |
| OM X V ilniu s |
179 ,25 |
298 ,78 |
66, 68 |
| SNG 1L |
6 EU R 0,1 |
3 EU R 0,5 |
229 ,59 |
The securities are traded only on NASDAQ OMX Vilnius stock exchange.
3.3.3 Capitalization of the Company's shares
| Equit y list |
2009 -12- 31 |
2010 -12- 31 |
2011 -12- 31 |
|---|---|---|---|
| Sna ige |
93 8 36,3 4 EU R 4 5 |
8 2 37 1 71,6 2 EU R |
20 801 ,38 EUR 757 |
| Viln ket l ius tota mar |
3 2 19 5 12 5 69,7 4 EU R |
4 2 19 7 61 4 06,8 1 EU R |
3 1 39 3 10 6 61,6 1 EU R |
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 ith ctio tra nsa ns w |
ard he o to t reg |
rdin ary reg |
red sha of A iste res |
B "S naig ė" e ute xec |
d o de s utsi toc |
k Ex cha nge |
|---|---|---|---|---|---|---|
| Acco untin g |
Price | Price | Mon etary |
Amo unt |
Non- etary mon |
f Amo unt o |
| perio d s |
(EUR ), ma x |
(EUR ), mi n |
settl nt, a nt eme mou |
of tra tions nsac |
settl nt, eme |
actio trans ns |
| of se curit ies (p cs.) |
f unt o amo |
|||||
| rities (pcs .) secu |
||||||
| 201 . I q 1 m ter uar |
0,5 6 |
0,26 | 855 000 |
10 | 3 9 50 |
1 |
| 201 . II q 1 m ter uar |
0,6 2 |
0,31 | 861 265 |
9 | - | - |
| 201 . III 1 m rter qua |
0,7 8 |
0,1 6 |
26 574 1 |
14 | 8 9 50 |
6 |
| 201 . IV 1 m rter qua |
1,8 6 (0 ,54) |
0,4 0 |
24 639 324 |
18 | 12 930 |
3 |
There no information on Central Securities Depository of Lithuania system about executed outside stock exchange of the Company issued convertible bonds.
During 2011 no repurchase of own shares was made. The Company had not own shares at the end of the 2011 year.
17
The sales figures of Alytus Factory for the last three years are as follows:
| of ac Type tiviti es |
2010 | 2009 | ||||
|---|---|---|---|---|---|---|
| units | perc | unit s |
perc | unit s |
perc | |
| Ref ld, u rige nits rato rs so |
171 433 |
100 | 184 635 |
100 | 199 418 |
100 |
| incl udi ng: |
||||||
| bin ed r efri fre ith Com ato ger rs – eze rs w |
123 082 |
71, 8 |
125 938 |
68, 2 |
140 318 |
70, 4 |
| al d arat tern sep e ex oor |
||||||
| frig gle ler) Dom esti (sin erat c re ors coo |
8 0 46 |
4,7 | 139 92 |
7,6 | 179 30 |
9,0 |
| Free zers |
30 322 |
17, 7 |
348 93 |
18, 9 |
331 85 |
16, 6 |
| l ref Com rcia rige rato me rs |
9 9 83 |
5,8 | 981 2 |
5,3 | 798 5 |
4,0 |
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 stopped working on 2009 03 02
The company divides its sales markets into the following main groups by importance of sales markets and geographic distribution:
Baltic market (Lithuania, Latvia and Estonia), Eastern market (Russia, Ukraine, Kazakhstan, Uzbekistan, Tajikistan, other CIS countries), Western market (Germany, France, Belgium, the Netherlands, Poland, Portugal, Czech Republic, other countries of Western and Central Europe).
In 2011 Snaigė, AB sold over 171.4 thousand refrigerators. Revenues from main production sales reached 111,1m LTL, that is, 2.4 per cent lees as compared to the previous year. Decrease in turnover was due to the drop in sales on the Western and Baltic markets. Sales on the Eastern market accounted for the majority of sales revenue (50.28 per cent). Slightly lower figures (41.70 per cent) were on the Western market. Lowest sales revenue (8.02 per cent) was on the Baltic market.
Exports accounted for 93,1 per cent of total product sales, i.e. 103.5m LTL.
Company's sales in 2011 (according to sales revenue):
In 2011 the company sold 89.5 thousand production pcs on the Eastern market and earned 55.9m LTL in sales revenue, i.e. 10.7per cent increase as compared to 2010.
This significant increase in sales revenue was for the most part due to the rising sales in Ukraine. Following the repeal of additional duties at the end of 2009, which were applied almost throughout entire 2009, the company managed, for the most part, to recover its market positions in 2010. In 2011 Snaigė, AB sold 70.6 thousand fridges on the Ukrainian market and sales revenue reached 44.4 m LTL, i.e. 7.2 per cent the revenue of the previous year. Expert data show that Snaigė, AB had a 7 per cent market share on the Ukrainian household refrigerator market.
In Moldova market the company sold 5.4 thousand production pcs and generated 2.7m LTL in revenue. Expert data show that Snaigė, AB had around 8 per cent market share on the Moldavian household refrigerator market. 2011 for Snaigė, AB also continued market of trade connections with Tajikistan and more active trading activities with Uzbekistan. These are exotic and far away countries yet very profitable markets where refrigerators by Snaigė are particularly valued. In 2011 the company sold 10 thousand production pcs and earned 6.2m LTL in revenue. Two time more than the last year.
Sales in the Eastern market in 2011 (according to sales revenue):
On the Western market Snaigė, AB sales in 2011 were 73.4 thousand production pcs and 46.3m LTL in revenue. This constitutes 14.2 per cent drop in revenue as compared to the previous year. The majority of production was sold and revenue generated on the German market (24.2 thousand pcs; 15.6m LTL), French market (20.2 thousand pcs; 11.3m LTL), and Portuguese market (9.2 thousand pcs; 5.2m LTL). The market of domestic electric appliances had not demonstrated any clear evidence of the recovery. Othervise the recession was continuing in Central and West Europe countries. During 2011 year the Company was started commercial relations and started to realize the Company's production for these clients:
• "DIA" (Slovakia), the realization started to market net NAY;
• "La Maison" (France), the trade by postu; • "Baytronic" (Austria), wholesaler.
The long term partners Severin (Germany), Orima (Portugal), Conforama (France) are continuing successful relations with Snaige AB.
Snaigė, AB struggled to compete with Chinese and Turkish manufacturers which offered production at very low prices, a factor so relevant in the times of crisis. Nevertheless on the segment of highest energy efficiency class production the company did very well being, it was the one of the first ones in Europe introducing products in this class. Quality of these refrigerators was highly appreciated by German, French and Italian customers. Moreover, the company found a new trade niche in Western countries. It's the production of refrigerators in a variety of colours in small runs and refrigerators with glass doors.. To this end the company acquired specialized paint application equipment which completely met our expectations. The company plans to expand these niches in the following year also.
Sales in the Western market in 2011 (according to income):
19
In 2011 Snaige AB in the Baltic States market had sold more than 8.4 thousand refrigerators and its income was about 8.9 million LTL.
At the same period in Lithuania Snaige AB had sold about 6.6 thousand refrigerators and had got more than 7.6 million LTL incomes. According to the analysis Snaige AB had hold about 10 percents of the domestic refrigerators' market in Lithuania in 2011.
In the meantime in Latvia Snaige AB had sold about 1.2 thousand refrigerators and its incomes was close to 0,87 million LTL. At the same period of time in Estonia Snaige AB had sold a little bit more than 0.6 thousan refrigerators and had got more than 0.4 million LTL.
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 from Asia (mainly from China) were constantly increasing. The strategic raw materials suppliers are listed below: "ACC", "Secop Compressors" Gmbh (compressors, Donper, ЛAXIPERA, Huayi"Geko-Kart", Marcegalia, "SRukki", "Arcelor-Mittal", "KME Europa Metal", "KM Ibertubos" S.A., "Sintur" s.z o.o., "BASF", "Total Petrochemical", Bay "Systems Nothern Europe", DOW, UAB "ARA", UAB "Lisiplast", UAB "Hoda", "Telko group".
The priorities set in the purchase strategy of the The Company are 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.
In 2011 The Company sold 64.3 percent of the products with their brand SNAIGE. Besides these, the plant is producing refrigerators under other brands of trade partners and retail networks: General Frost - TESCO, the second largest domestic appliance retail network in Europe. Far - CONFORAMA, the largest domestic appliance retail network in France. Smeg (Italija); Bartscher; Brandy Best; Coldis; Continent; Cool; Exquisit; Frigibel; Helkina; KBS; Orima; Raymond; Tschibo. The Company's brand portfolio in 2011 (according to income): 35,7% - OEM 64,3% - "Snaigė"
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 and 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.
4.5.2 The employees of the Company in 2009-2011 according to the personnel groups:
| loyee Emp s |
2010 | 2009 | 2008 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Amo unt |
% | Aver age |
Amo unts |
% | Aver age |
Amo unts |
% | Aver age |
|
| salar y |
sala ry |
sala ry |
|||||||
| man age rs |
4 | 0,6 | 264 76 |
4 | 0,6 | 205 24 |
4 | 0,5 | 172 02 |
| cial ists spe |
123 | 19, 7 |
310 9 |
127 | 19, 9 |
299 5 |
146 | 20, 0 |
293 8 |
| rker wo s |
498 | 79, 7 |
149 4 |
506 | 79, 4 |
139 4 |
582 | 79, 5 |
125 0 |
| tal: In to |
625 | 100 ,0 |
196 6 |
637 | 100 ,0 |
181 8 |
732 | 100 | 165 3 |
21
In 2011 the number of staff in the company went down by 2 per cent as compared to 2010. This reduction was the result of cost-saving. Such reduction in the number of staff was determined by the implementation of this strategy.
4.5.3 The structure of the Company's employees in 2009-2011 according to education level
| Educ leve l of th ation e |
2011 | 2010 | 2009 | |||
|---|---|---|---|---|---|---|
| empl oyee s |
Amo unt |
% | Amo unt |
% | Amo unt |
% |
| educ unive rsity ation |
103 | 16,5 | 100 | 15,7 | 131 | 17,9 |
| profe al hig h sch ool e duca ssion tion |
377 | 60,3 | 383 | 60,1 | 431 | 58,9 |
| ndar y edu catio seco n |
136 | 21,8 | 145 | 22,8 | 160 | 21,9 |
| mple ted s dary edu catio unco econ n |
9 | 1,4 | 9 | 1,4 | 10 | 1,4 |
| Tota l: |
625 | 100 | 637 | 100 | 732 | 100 |
4.5.4 The employees of the Company and its subsidiaries in 2009-2011 according to the personnel groups*
| 2011 | 2010 | 2009 | ||||
|---|---|---|---|---|---|---|
| Amo unt |
% | Amo unt |
% | Amo unt |
% | |
| 8 | 1,1 | 8 | 1,0 4 |
8 | 0,6 | |
| 153 | 20, 5 |
171 | 22, 2 |
294 | 20, 6 |
|
| 584 | 78, 4 |
591 | 76, 8 |
112 3 |
78, 8 |
|
| 745 | 100 | 770 | 100 | 142 5 |
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.
| TECH PROM INVE ST |
MOR OZ TR ADE |
LIGA SERV IS |
SNA IGE – UKR AINE |
ALM ECHA |
|
|---|---|---|---|---|---|
| Regis tratio n dat e, |
Regis tratio n dat e |
Regis tratio n dat e |
Regis tratio n dat e |
Regi strati on da te |
Regi strati on da te |
| head -offic e add ress |
Nove mber 2. Ad dress , 200 |
: M 04. A ddres ay, 20 s: |
Augu 05, A ddres st, 20 |
s: N ber, 2 Addr 002. ovem ess: |
Nove mber 6. Ad dress , 200 : |
| Bolsh ja Ok ja str . 1-a, ruzna |
Prosp ekt M ira 52 , |
Prosp ekt M ira 52 , |
Grush evsky 8-2a/ str. 2 43, |
Pram str. 6 ones , |
|
| Kalin d, Ru ingra ssia |
Mos Russi cow, a |
Mos Russi cow, a |
Kiev, Ukra ine |
Alytu s, Lith uania |
|
| Type of ac tiviti es |
ufact f man ure o |
sales and ketin mar |
ales and mark eting g s |
sales and ketin mar g |
prod n of o ther uctio |
| refrig erato rs |
ices serv |
ices serv |
ices serv |
d equi nt an pme |
|
| mach inery |
|||||
| Share of th horiz ed ca e aut |
pital 100 |
100 | 100 | 99 | 100 |
| avail able to AB "Sna igė", |
% | ||||
| The a utho rized tal capi |
88.8 52.8 96 |
833 | 833 | 55.2 30 |
1.37 5.78 5 |
| (LTL) | |||||
| Shar e of t he au thor ized |
plete ly pa id Com |
plete ly pa id Com |
plete ly pa id Com |
plete ly pa id Com |
plete ly pa id Com |
| al un paid by th capit e |
|||||
| Com pany |
|||||
| profi t (los s) (LT L) 2011 |
(9.02 3) 3.45 |
- | (134 ) .754 |
40.6 43 |
200. 754 |
4.6.2 The major investment projects amounting to more than 10 percent of theCompany'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, ecologicalfriendly, cost-effective and modern products.
It was placed 2.557,3 thousand LTL into realization of investment programs within 2011.
Including the partial funding of structural funds of EU for the project "Strengthening of AB "Snaige" competitive ability by investing to the development of new generation "3D frost" refrigerator series", for what in 2011 was received 389,4 thousand LTL, within 2011 has been invested 2 million 167,9 thousand LTL of its own funds.
The following new products have been developed during 2011: - Refrigerators FR275 and FR240 A++ energy efficiency class; - Refrigerators RF31 and RF34 with glass on door;
There was spent 2 mln 307,5 thousand LTL on development and production preparation of these products. For development of technologies, mastering of especially important and effective projects, improvement of work places was invested 67,7 thousand LTL.
It was placed 126,0 thousand LTL into implementation of effective means for saving of energy in 2011: it was made isolation of heating pipelines, replacement of ventilators in venting chambers, installed the new compressed air dryer.
Fro replacement of out-of-date and weared out production tools and instruments in 2011 was invested 19,9 thousand LTL, for improvement of logistics and warehouses equipment – 1,1 thousand LTL, for renovation of computers and other IT equipment - 35,2 thousand LTL. Investments in subsidiary the Company "Techprominvest" (Kaliningrad, Russia): In 2011 year the authorised capital of "Techprominvest" was increased 11 152 974 EUR by capitalizing the part of the payable debt to the Company.
The Company's environmental vision - organic products, clean technology and clean environment. The Company's products, production technology and services cannot 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:
• Do pollution prevention, paying attention to gas, increasing the greenhouse effect, the use of control and thus
• To increase our staff approach to environmental protection; • Design products, according to materials and efficient resources, hazardous materials use, waste reduction and the reuse and recycling of consumer needs.
AB "Snaigė" 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 2001, 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 "Snaigė" 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 add to global warming. The Company saves electricity, water, heat: during decade the usage of these energy sources was decreased by three times.
23
Macroeconomic Risk. At present both Lithuanian and global markets feel the effects of the economic and consumption recuperation but this recuperation is not so fast as expected which could affect the demand for company's products and company's business prospects.
Credit Market Risk. Currently there is more activity and better credit availability on both Lithuanian and global markets. Internal financial resources of the company are limited, operations rely on external credit financing, too. In light of the global credit market recovery, it can be presumed that this recovery will have a positive impact on the company's financial situation, the Company will have possibility to take short and long term credits for its operations.
Company's Financial Accounting Accuracy Risk. On 25 April 2012 the Company's auditor expressed an unqualified audit opinion on the Company's stand alone and consolidated financial statements.
International Trade Restrictions Risk. The Company exports portion of its production to third parties (outside the European Union). There is a risk that changes in foreign trade policies of third countries could aggravate export conditions to those countries. Any such change would negatively impact export opportunities for the company and its financial situation.
Risk of Legal Proceedings. On the 12th February 2010 Kaunas District Court made a ruling in the case where Snaigė, AB was involved as the respondent and AS Compfitt Glass as the plaintiff. On 5 October 2010 Lithuanian Court of Appeals decided to change the above mentioned ruling, i.e. the Court of Appeals divided the amount adjudged, that is, 2,191,089.04 LTL, into two equal instalments of 1,095,544.52 LTL each, and ordered Snaigė, AB to pay the first instalment by 1 February 2011 and the remainder was to be payable in equal instalments by 12 February 2012. Today the prosecution of this decision is suspended by decision of the court. The part of the goods (valued at almost 500,000 LTL) Snaige AB had not been receiveduntill today. The issue between Snaige AB and Comfitt Glass AS is continuing in Lithuanian Appellate Cout (LAC). If LAC will meet with Snaige application for renewing the process and cancel the decision of Kaunas distric court, thanthe duty to pay all awarded sum to Compfitt Glass As will vanish for Snaige AB. Otherwise settlement of this obligation from the working capital of the company could negatively impact financial situation of the Company.
Market Risk. The Company is engaged in the manufacturing of a variety of commercial and household refrigerators and freezers and their sale. Investors assume the risk that the Company will suffer losses aggravating financial situation of the Company in the vent of negative changes on product markets and markets of raw materials needed in production processes.
Policy Risk. The Company is engaged in manufacturing activities which generate chemical substances harmful to the environment. Environmental matters both at Lithuanian and European Union levels are policy-regulated. There is a risk that in the event of changes in existing environmental requirements and restrictions the company might need additional investments to ensure compliance of production processes with new requirements. These investments could negatively affect financial situation of the Company.
Business Continuity Risk. Business continuity presumptions are disclosed in detail under Note 2.2 of consolidated audited financial statements of 2011.
Operational Risk. This is the risk that includes both direct and indirect losses resulting from improper or inoperative internal processes, systems or technologies, actions by staff and agents, and external factors. Constituent part of the operational risk is legal risk, i.e. risk of losses potentially occurring as a result of the Company's present or past obligations under various contracts and agreements, legal actions or laws, non-performance or improper performance.
Technical and Technological Factors. This includes physical and moral depreciation of a variety of technical means. Risk factors of this type could affect operations of the Company both directly and indirectly. Technological factors can affect the Company directly through physical and moral depreciation of technical base. Due to potential moral and technological depreciation of Company's manufactured products in comparison with competition products (indirect technological factors) there is a risk of loss in demand for products of the Company on the market. Such change in technological environment could have negative impact on the financial situation of the Company.
More detailed disclosures of Company's risk management and interest rate, exchange rate, credit and liquidity risks can be found under Note 29 of consolidated financial statements.
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), as adopted by European Union 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
The information about related party transactions is revealed in the 31th note of the consolidated financial statements.
The information about the legal and the arbitrary processes is revealed in the 30th note of the consolidated financial statements.
AB "Snaigė" is a member of Lithuanian Confederation of Industrialists. Lithuanian Confederation of Industrialists comprises 39 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.
Snaigė, AB is a member of the EEPA association. The EEPA is an association established by manufacturers and importers of electrical equipment and batteries and accumulators. The main objective of the association is the implementation of waste management obligations by the association members stipulated in both EU and Lithuanian legislation. As of 2006 the association organizes waste from electrical and electronic equipment management and as of the end of 2009 – management of waste from batteries and accumulators. Activities of the association:
• Organizes waste management system for electrical and electronic equipment and batteries, and accumulators
• Registers incorporators and members of the association as required by a governmental or other competent
Reports to the Government or other competent authority on waste management
ronic and electrical equipment, batteries and accumulators EEPA has 67 members.
• Provides guarantees on behalf of incorporators and members of the association that their annual waste management goals in relation to electronic and electrical equipment, batteries and accumulators will be achieved • Provides free consultations to incorporators and members of the association on waste management issues • Informs and increases awareness among the general public on waste management matters in relation to elect-
AB "Snaigė" is a member of LINPRA. The Engineering Industries Association of Lithuania LINPRA is an independent self-governing business association. Both nationally and internationally, it represents the interests of the Lithuanian mechanical, electrical, electronic and metalworking industrial sector and seeks to promote its business competitiveness.
Number of members: 80 (including almost all major companies of the sector). Together with its partners, LINPRA responds to the needs of the companies operating in the sector and their potential counterparts by providing the following services: • providing on-line information from the most comprehensive sectorial database in Lithuania;
• searching for Lithuanian partners and suppliers according to incoming investment, outsourcing and other bu-
• searching for foreign partners required by Lithuanian companies operating in the sector;
• organising incoming and outgoing missions, consultations, exhibitions and matchmaking events;
• initiating and implementing other types of projects aimed to strengthen competitiveness and business inter-
25
AB "Snaigė" is a member and the founder of the Association of Domestic Equipment Manufacturers "CE CED 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
Recent important events in the Company's business
5.3.1 Recent important events in the Company's business 05-03-2012
On 5 March, 2012 Snaige AB has received notifications on the transactions in issuer's securities concluded by the person closely associated with the manager of the issuer.
For AB "Snaigė" 2011 became a year of significant achievement and great opportunities. Last year Company sold over 175k refrigerators. The largest proportion was exported to 30 countries in Europe and Asia. Key sales were in Germany, Ukraine, France and Portugal.
The Company significantly stepped up its sales positions in Ukraine started trading with one of the most important Ukrainian household appliances retailers – "Eldorado". Also after a few years break "Snaigė" refrigerators again were exported to Russia and Belarus.
According to CEO Gediminas Čeika in 2011 the Company also has several positive achievements which will have a positive effect on the future of the business. The most important one was introduction of strategic investor. "Polair" a Russian manufacturer of industrial refrigeration equipment acting indirectly through the "Vaidana" UAB, acquired 23,716,668 ordinary shares amounting 59,86% of all shares and votes given by the general meeting of shareholders of the Company.
According to CEO Gediminas Čeika, 2011 the company put a lot of effort into creating new products and improving existing ones. "In June, we manufactured a new premium class refrigerator with glass doors - Snaigė Glassy", said G. Čeika. "These refrigerators have received a lot of attention both from Lithuanian consumers and from consumers in Western Europe, and at the end of the year they were awarded by golden medal in the annual "Lithuanian product of the Year" Competition said G. Čeika."We have created a new refrigerator RF35 with increased freezer section, which within a short time became one the best selling product of AB "Snaigė" in Baltic and Eastern markets.
The company participated in one of the most important household appliances exhibitions in Europe - the IFA 2011, where there was an extremely positive assessment by customers and partners."
Unconsolidated unaudited EBITDA of the Company for 2011 totaled LTL 9.3 million which is clearly a positive performance for the Company. AB "Snaigė" incurred a consolidated unaudited loss of LTL 0.53 million.
According to Gediminas Čeika, "Snaigė" AB CEO , due to foreign currency exchange fluctuations, "Snaigė" AB had revaluated debts from the closed factory in Kaliningrad. For these reasons the Company lost LTL 5,6 million. "However, this revaluation of the paper debt is unrelated to the activities of the Company and should be eliminated in assessing the annual results of the company."- said G. Čeika.
Due to damage and repair of the factory roof, the Company wasn't able to sell the Kaliningrad plant last year. Currently, the Company is actively negotiating with potential buyers of factory in Kaliningrad and in 2012 expects revenue from this sale.
AB "Snaigė" during the 2011 reached 111,1 million. Lt unaudited consolidated turnover and suffered a consolidated unaudited loss of 5 million.
Because of the Company's accounting program breakdown due to ongoing programming works, Company currently has no possibility to prepare and publish interim report for the twelve months of 2011. Company's interim report for the twelve months of 2011 will be announced not later than the 2nd of March, 2012.
Notification on transaction of manager of the company Snaige AB has received notification on the transaction in issuer's securities concluded by the person closely associated with the manager of the issuer. 22-12-2011
On 22 December 2011 Snaige AB received a notification about disposal of voting rights in the company by KJK Fund SICAV-SIF, Firebird Republics Fund, Ltd., Firebird Avrora Fund, Ltd. and Amber Trust S.C.A. SICAV-SIF (the date of the transaction is 11 November 2011, the date of disposal of voting rights – 21 December 2011). 21-12-2011
Snaigė AB, legal entity code: 249664610, office address: Pramonės str. 6, Alytus. On 21 December 2011 Snaige AB received a notification about acquisition of voting rights in the company by UAB "VAIDANA" (the date of acquisition of voting rights – 21 December 2011). 21-12-2011
0.53970482 for a single share. At the moment the Purchaser holds 23,716,668 ordinary registered shares of the Company, constituting 59.86 percent of all shares and votes carried by them at the general meeting of shareholders of the Company. 16-12-2011
On 15 December 2011 Snaigė AB received a notification that UAB "VAIDANA", registered address Konstitucijos pr. 7,Vilnius, Lithuania, legal entity code 302473720 (hereinafter referred to as the "Offeror"), on 12 December 2011 acquired more than 1/3 (one third) of shares of Snaigė AB (legal form: public limited liability company, legal entity code 249664610, registered at Pramonės St. 6, Alytus, the Republic of Lithuania, data about the company are collected and kept in the Register of Legal Persons of the Republic of Lithuania) (hereinafter referred to as the Company) and hold 17 602 215 (seventeen million six hundred two thousand two hundred fifteen) ordinary registered shares of the Company with the par value of LTL 1 (one litas) each, constituting 44,43%(forty four and forty three hundredths percent) of shares and votes carried by them at the general meeting of shareholders of the Company.
The Offeror intends to submit a non-competitive mandatory tender offer to buy up the remaining 22 020 180 (twenty two million twenty thousand one hundred eighty) ordinary registered shares of the Company with the par value of LTL 1 (one litas) each, constituting 55.57% (fifty five and fifty seven hundredths percent) of shares and votes carried by them at the general meeting of shareholders of the Company. However, as it was announced in the notification on material event dated 12 December 2011, pursuant to the amendment of the purchase-sale of shares and convertible bonds of the Company, not later than by 26 December 2011, the same sellers shall transfer to the Offeror 6 114 453 (six million one hundred fourteen thousand four hundred fifty three) shares of the Company, i.e. 15.43% (fifteen and forty three hundredths percent) of all shares issued by the Company. Upon completion of such transfer the Offeror shall hold 23 716 668 (twenty three million seven hundred sixteen thousand six hundred sixty eight) ordinary registered shares of the Company, constituting 59.86% (fifty nine and eighty six hundredths percent) of shares and votes carried by them at the general meeting of shareholders of the Company. Therefore, the non-competitive mandatory tender offer shall be applicable to 15 905 727 (fifteen million nine hundred five thousand seven hundred twenty seven) ordinary registered shares of the Company with the par value of LTL 1 (one litas) each, constituting 40,14% (forty and fourteen hundredths percent) of shares and votes carried by them at the general meeting of shareholders of the Company.
Intended way of settlement for the securities to be bought up is in cash
27
On 15 December 2011 Snaige AB received a notification about disposal of voting rights in the company by ING LUXEMBURG S.A., Firebird Republics Fund, Ltd. and Firebird Avrora Fund, Ltd (the date of the transaction is 12 December 2011).
In the Board meeting on the 14th of December, 2011 Aleksey Kovalchuk had been elected to the position of the Chairman of the Board of Snaige AB.
On 14 December 2011 the Extraordinary General Meeting of Shareholders of the Company took place.
To revoke the Board of the Company in corpore.
To elect Robin Peter Walker, Andrey Dribny, Aleksey Kovalchuk, Mikhail Stukalo, Martynas Česnavičius and Robertas Beržinskas as the members of the Board for its new term of office.
To revoke the Audit Committee of the Company in corpore.
Snaige AB has received notifications on the transactions in issuer's securities concluded by the persons closely associated with the managers of the issuer.
On 12 December 2011 Snaige AB received a notification about acquisition of voting rights in the company by UAB "VAIDANA" (the date of acquisition of voting rights – 12 December 2011).
On 12 December 2011 Snaige AB received a notification about disposal of voting rights in the company by KJK Fund SICAV-SIF, Firebird Republics Fund, Ltd., Firebird Avrora Fund, Ltd. and Amber Trust S.C.A. SICAV-SIF (the date of the transaction is 11 November 2011, the date of disposal of voting rights – 12 December 2011).
On 12 December 2011, Russian company "Polair", indirectly acting through UAB "VAIDANA" (hereinafter, the "Buyer"), and KJK Fund SICAV-SIF, Amber Trust SCA SICAF-SIF, Firebird Republics Fund, Ltd and Firebird Avrora Fund, Ltd (hereinafter, the "Sellers") signed the amendment to the agreement for purchase-sale of shares and convertible bonds of the Company, dated 11 November 2011 (hereinafter, the "Agreement"), the signature of which was announced by the Company on 14 November 2011, by notifying the notification on material event. It was established by the amendment of the Agreement that shares of the Company held by the Sellers (i.e. 23,716,668 ordinary registered shares of the Company, constituting 59.86 percent of all shares and votes carried by them at general meeting of shareholders of the Company) will be transferred to the Buyer in two stages – on 12 December 2011 and not later than until 26 December 2011.
On 12 December 2011 the Buyer acquired the title to 17,602,215 shares of the Company (i. e. 44.43% of all the shares of the Company) from the Sellers. The Buyer paid to the Sellers in total EUR 9,500,000.28 for all the acquired shares of the Company (i. e. EUR 0.53970482 for a single ordinary registered share of the Company).
The remaining 6,114,453 units of shares of the Company, held by the Sellers (i. e. 15.43% of all the shares of the Company) shall be transferred to the Buyer paying EUR 0.53970482 for a single share not later than until 26 December 2011.
Following the acquisition of title to shares of the Company by the Buyer he is required, under the Lithuanian takeover regulations, to submit and implement a mandatory tender offer to buy up the remaining voting shares of the Company and its securities confirming the right to acquire voting securities, unless the Buyer would transfer the shares of the Company, which entitle to more than 1/3 of votes in its general meeting of shareholders under the terms of the applicable legal acts. According to the knowledge of the Company, after the acquisition of its shares by the Buyer, the Buyer will submit and implement the mandatory tender offer following the terms and conditions, set in the applicable laws.
On 14 December 2011 the Extraordinary General Meeting of Shareholders of Snaigė AB, the address of head office Pramonės str. 6, Alytus, the company code 249664610 (hereinafter, the "Company") is convened (hereinafter, the "Meeting").
The place of the meeting – main meeting hall of the Company, at the address Pramonės str. 6, Alytus, Lithuania. The Meeting commences – at 10 a.m. (registration starts at 9.30 a.m.). The Meeting's accounting day – 7 December 2011 (the persons who are shareholders of the Company at the end of accounting day of the General Meeting of Shareholders or authorized persons by them, or the persons with whom shareholders concluded the agreements on the disposal of voting right, shall have the right to attend and vote at the General Meeting of Shareholders). The Board of directors of the Company initiates and convenes the meeting. Agenda of the Meeting:
1) Revocation of the Board of the Company in corpore; 2) Appointment of the new Board of the Company;
3) Revocation of the Audit Committee of the Company in corpore. The Company shall not provide the possibility to participate and vote in the Meeting through electronic 25-11-2011
Refering to the announcement of the Government of Lithuania on 16 November 2011 to take over 100 per cent shares of Bankas Snoras AB for the needs of the society, please be informed, that this will have no effect to the performance of results of Snaige AB. 14-11-2011
On 14 November 2011 the Board of the Company decided to terminate the public tender for sale of 100% of shares of OOO Techprominvest (hereinafter, "TPI"), held by the Company (as it is indicated in the notification on material event of the Company, dated 3 October 2011), as during the tender no offer was received, in which the purchase price of shares of TPI would be not less than the minimal sale price of this asset, set by the Company. 14-11-2011
On 14 December 2011 the Extraordinary General Meeting of Shareholders of Snaigė AB, the address of head office Pramonės str. 6, Alytus, the company code 249664610 (hereinafter, the "Company") is convened (hereinaf-
ter, the "Meeting").
The place of the meeting – main meeting hall of the Company, at the address Pramonės str. 6, Alytus, Lithuania. The Meeting commences – at 10 a.m. (registration starts at 9.30 a.m.). The Meeting's accounting day – 7 December 2011 (the persons who are shareholders of the Company at the end of accounting day of the General Meeting of Shareholders or authorized persons by them, or the persons with whom shareholders concluded the agreements on the disposal of voting right, shall have the right to attend and vote at the General Meeting of Shareholders). The Board of directors of the Company initiates and convenes the meeting. Agenda of the Meeting:
1) Revocation of the Board of the Company in corpore 2) Appointment of the new Board of the Company. 14-11-2011
On 11 November 2011, Russian company "Polair", indirectly acting through UAB "VAIDANA" (hereinafter, the "Buyer"), entered into legally bounding agreement with the shareholders of the Company KJK Fund SICAV-SIF, Amber Trust SCA SICAF-SIF, Firebird Republics Fund, Ltd and Firebird Avrora Fund, Ltd (hereinafter, the "Sellers") on sale to the Buyer of all shares of the Company (i.e. 23,716,668 ordinary registered shares of the Company, constituting 59.86 percent of all shares and votes carried by them at general meeting of shareholders of the Company) and convertible bonds of the Company (i. e. 43,000 convertible bonds), held by the Sellers. The transfer of title to Company's shares to the Buyer has to be executed on 12 December 2011 or on earlier date, agreed by the parties. The Buyer shall pay to the Sellers in total EUR 12,800,000 for all the shares of the Company being sold (i. e. EUR 0.5397 for a single ordinary registered share of the Company) according to terms and conditions of the indicated agreement.
Following the acquisition of title to shares of the Company, the Buyer will be required, under the Lithuanian takeover regulations, to submit and implement a mandatory tender offer to buy up the remaining voting shares of the Company and its securities confirming the right to acquire voting securities, unless the Buyer would transfer the shares of the Company, which entitle to more than 1/3 of votes in its general meeting of shareholders under the terms of the applicable legal acts. According to the knowledge of the Company, after the acquisition of its shares by the Buyer as it is indicated above, the Buyer will submit and implement the mandatory tender offer following the terms and conditions, set in the applicable laws. Law firm TARK GRUNTE SUTKIENE acted as the legal counsel to the Sellers, law firm LAWIN Vilnius acted as legal counsel to the Buyer.
29
According to the unaudited non-consolidated data, during the 9 months of 2011, "Snaigė" AB achieved turnover in the amount of LTL 93.4 million, i.e. by 5 per cent more than in the same period of the last year, when the unaudited non-consolidated turnover amounted to LTL 88.7 million. Within the 9 months the company achieved LTL 552 million of total unaudited non-consolidated profit , when last year during the same period the company had incurred LTL 905 thousand unaudited non-consolidated loss.
During the first three quarters of the year "Snaigė" AB successfully introduced a new range of refrigerators with glass doors and a new refrigerator model with increased freezer compartment to Ukraine, Germany, Italy and other markets. These products have been positively evaluated by the company's customers and consumers.
With the help of implementation of cost reduction programs, the Company managed to reduce the operate costs during the first three quarters of the year by 10 percent.
According to Gediminas Čeika, "Snaigė" AB Managing Director, despite the successful delivery of products on the market and implemented cost saving programs, results of the three-quarters could be better. "Due to foreign currency exchange fluctuations, "Snaigė" AB had revaluated debts of closed factory in Kaliningrad. - said G. Ceika - "For this reason, the unaudited consolidated loss of "Snaigė" AB amounted to LTL 4.3 million".
G. Čeika's sales and sluggish growth slowing prognosis were proved in consumption of both European and Baltic markets. "I think that not only "Snaigė" AB, but also the majority of enterprises will not be satisfied with the significantly recovered sales this year. Contrary to initial expectations: the growth of consumption is slowing, while in some markets it is even decreasing." - said G. Ceika.
Rising costs of raw material and material also had a negative impact on the company's results during the third quarter.
According to the unaudited non-consolidated data EBITDA of "Snaigė" AB of the 9 months of 2011 amounted to LTL 7.8 million.
Consolidated non-audited turnover of the company totaled LTL 90.7 million, while consolidated unaudited EBITDA was LTL 4 million.
The Board of Snaigė AB (hereinafter, the "Company") in its meeting of 30 September 2011 adopted the following decisions:
To sell 100% of shares of OOO Techprominvest (hereinafter, "TPI"), held by the Company. In order to receive the maximum possible price for the shares of TPI being sold, it was decided to sell the indicated asset by way of public tender. The winner of the tender, which rules need to be prepared by the Manager of the Company, shall be recognised the participant of the tender, having offered the highest price for the shares of TPI. It is planned that the transaction regarding sale-purchase of TPI shares shall be closed by the end of month of October 2011.
To increase the authorised capital of TPI by not more than EUR 12 mill., recalculating the final amount of increase into rubbles according to official currency exchange rate of euro and rubbles o be announced by the Central Bank of the Russian Federation as on the date of increase of the authorised capital. The authorized capital of TPI shall be increased by not more than the aforementioned amount by additional cash contributions of the Company, by capitalising the whole debt of TPI payable to the Company or part thereof according to all and any arrangements, currently executed by the Company and TPI or to be executed in the future. Increase of the authorised capital of TPI shall be executed until sale of TPI shares.
According to AB "Snaigė" General Director Gediminas Čeika, until now, the company tried to sell only the real estate of the Kaliningrad company. "We believe that selling the entire company will be easier and faster." – stated G. Čeika. " A customer will purchase not only the property of the company, but also the ability to start business immediately without any additional permits and documents.
The company has long been trying to sell the factory in Kaliningrad, closed due to 2009 the ruble devaluation and economic downturn. Last year alone, for this factory "Snaigė" suffered losses of 2 mln LT.
In G. Čeika opinion, the public competition of potential buyers will help to get the highest price. It is also expected that according to capitalized debt of the company the number of the potential buyers will increase. 29-08-2011
Hereby Snaigė AB provides additional information related to the notification on material event of 24 August 2011 regarding the buyer of the Term Sheet of 18 July 2011 regarding sale-purchase of shares of the company. On 29 August 2011 Snaigė AB has received the information from the buyer according to the indicated Term Sheet TETAL GLOBAL LTD (hereinafter, the "Buyer") on the relations of the Buyer and the Russian company "Polair", according to which the controlling shareholder of the Buyer is Aleksei Kovalchuk, who also holds the controlling block of shares in the company "Polair".
Regarding the buyer of the Term Sheet regarding sale-purchase of shares of the company As it was indicated in the notification on material eventof 22 July 2011, on 18 July 2011 the shareholders of the company KJK Fund SICAV-SIF, Amber Trust SCA SICAF-SIF, Firebird Republics Fund, Ltd. and Firebird Avrora Fund, Ltd. entered into the Term Sheet with TETAL GLOBAL LTD (hereinafter, the "Buyer") on sale of all shares owned by the sellers in Snaigė AB (i.e. 23,716,668 ordinary registered shares of the company, constituting 59.86 percent of all shares and votes carried by them at general meetings of shareholders of Snaigė AB) to the Buyer, which established the main stages of the negotiations for the transaction and terms of their implementation. Hereby we confirm that the Buyer according to the indicated Term Sheet is TETAL GLOBAL LTD, and not Russian company "Polair" as it was not correctly indicated in the article "Lithuanian "Snaigė" shall be animated by Russians" of the daily "Lietuvos rytas" (No. 192) of 22 August 2011. Snaigė AB does not dispose official information on the question, whether the Buyer is associated with the indicated company "Polair", and on 22 August 2011 has provided the query to the Buyer, according to which it asks to provide the information on whether the Buyer is associated with the company "Polair"and, if so, of what character these relations are. Upon receipt of the answer to the indicated query, Snaigė AB shall announce the clarifying announcement on material event.
Unaudited activity result of Snaigė AB for the first half-year period of 2011 According to the unaudited non-consolidated data, during the I half-year 2011, Snaigė AB achieved turnover in the amount of LTL 56.2 million, i.e. by 19 per cent more than in the same period of the last year, when the unaudited non-consolidated turnover amounted to LTL 47.2 million. Within the first half-year the company incurred LTL 0.7 million of total unaudited non-consolidated loss, i.e. almost by 5 times lower than during the same period last year.
According to Gediminas Čeika, AB Snaigė CEO, during the first half-year this year the company succeeded to manage the impact of rising costs of raw material and material on the company's results. Decreasing sales in the West markets were compensated by increasing sales of Snaigė AB in the East. "A consolidated result of the company is worsened by a non-operating factory in Kaliningrad", states G.Čeika.
G.Čeika is concerned about the low consumption not only in the euro area, but also in Lithuania and Ukraine. "Within the I quarter this year sales of Snaigė AB grew by 30 per cent. During the II quarter – only by 10 per cent comparing with the same periods last year. These tendencies can remain till the end of the year", said G.Čeika. "I think that not only Snaigė AB, but also the majority of enterprises will not be satisfied with the significantly recovered sales this year. Contrary to initial expectations: the growth of consumption is slowing, while in some markets it is even decreasing."
According to the unaudited non-consolidated data EBITDA of Snaigė AB for I half-year of 2011 amounted to LTL 4.2 million, i.e. almost doubled the number carried out the previous year, when non-consolidated unaudited EBITDA comprised LTL 2.2 million.
A consolidated non-audited loss of Snaigė AB was LTL 2.2 million. Consolidated non-audited turnover of the company totaled LTL 54.4 million, while consolidated unaudited EBITDA was LTL 3.4 million. The consolidated non-audited interim financial reports for 6 months of 2011, Semi-annual consolidated financial statements for 2011 and the confirmation of accountable persons (attached). 22-07-2011
Term Sheet regarding sale-purchase of shares of the company is signed According to knowledge of Snaigė AB, on 18 July 2011 the shareholders of the company KJK Fund SICAV-SIF, Amber Trust SCA SICAF-SIF, Firebird Republics Fund, Ltd and Firebird Avrora Fund, Ltd. (hereinafter, the "Sellers") entered into the Term Sheet with TETAL GLOBAL LTD (hereinafter, the "Buyer") on sale of all shares owned by the Sellers in Snaigė AB (i.e. 23,716,668 ordinary registered shares of the company, constituting 59.86 percent of all shares and votes carried by them at general meetings of shareholders of Snaigė AB) to the Buyer, which established the main stages of the negotiations for the transaction and terms of their implementation. The Buyer is entitled to perform a legal, financial, technical, environmental and business due diligence of Snaigė AB until 18 October 2011, and in case the Buyer is satisfied with the results of the due diligence, negotiations would be conducted for the major and legally binding agreement on sale and purchase of shares in Snaigė AB. In case the agreement on sale and purchase of shares in Snaigė AB is signed, it will be implemented only if the investment committees and/or other corporate bodies of the Sellers approve the transaction. It is expected that the negotiations for the agreement on sale and purchase of shares in Snaigė AB will be completed approximately by 18 November 2011, and subject to positive decisions of the investment committees and/or other corporate bodies of the Sellers, it is expected that the transaction of sale and purchase of shares in Snaigė AB will be closed approximately by 18 November 2011. It is noteworthy that the Term Sheet signed between the parties is not a document legally binding on the parties – its main purpose is to state the parties' intentions to negotiate for conclusion of legally binding agreements, therefore, at this stage there is no certainty whether the transaction will actually be conducted.
31
On 12 May 2011 the amended Articles of Association of Snaigė AB with the increased up to LTL 39,622,395 (EUR 11,475,439) authorized capital was registered in the Register of Legal Entities. The authorized capital of the company was increased upon the requirement of the part of bondholders having converted shares to 23,386 units of convertible bonds which must be redeemed on 11 April 2011. The issue of 8,886,680 ordinary registered shares of LTL 1 nominal value each was issued for the increase of the authorized capital. 12-05-2011
Snaige AB has received notifications on the transactions in issuer's securities concluded by the manager of the issuer or the person closely associated with the manager of the issuer.
02-05-2011
On 2 May 2011 was signed and paid AB Snaige unadvertised convertible 43,000 bonds issue with nominal value of LTL 100 and 9 percent annual interest rate. Nominal value of the issue is LTL 4,300,000. Redemption of bonds is on 2 Маy 2013.
29-04-2011
Annual information as of financial year 2010 approved by ordinary shareholders meeting of Snaige, AB which took place on April 29, 2011.
The General Meeting of shareholders of Snaige AB was held on 29 April 2011. The meeting heard the consolidated annual report of the Company for the year 2010 and the Auditor's report for the year 2010.
At the meeting was made following resolutions:
1.To approve the set of financial statements of the company for 2010.
Non-distributed profit at the end of the last financial year: - LTL 13.028.614 (-EUR 3.773.347,43)
Share premium for covering of loss: LTL 13 028 614 (EUR 3 773 347,43)
Net result - profit (loss) of financial year: - LTL 671.517 (-EUR 194.484,77)
Transfers from reserves: LTL 1 860 000 (EUR 538 693,23)
Contributions of shareholders to cover loss: LTL 0 (EUR 0)
Share premium for covering of loss: 0
Distributable result- profit (loss) at the end of financial year: LTL 1.188.483 (EUR 344.208,46) Distribution of profit:
Portion of profit allocated to reserves foreseen by law: LTL 0 (EUR 0)
Portion of profit allocated to other reserves: LTL 0 (EUR 0)
For social and cultural needs: LTL 30 000 (8 688,6 EUR)
Portion of profit allocated for payment of dividends: LTL 0 (EUR 0)
Portion of profit allocated for payment of premiums: LTL 0 (EUR 0)
Portion of profit allocated for payment of tantiemes: LTL 0 (EUR 0)
Portion of profit allocated to reserve for acquisition of own shares: LTL 0 (EUR 0)
Portion of profit allocated to reserve for investments: LTL 1.158.483 (EUR 335.519,86)
Non-distributed result - profit (loss) at the end of financial year: LTL 0 (EUR 0)
To increase of members of the Board to 6 members.
To elect Kustaa Aima, Jaakko Salmelin and Harvey Sawikin for the members of the Board until the end of term of office of the Board.
To elect Antti Partanen and Steve Gorelik until the end of term of office of the Board.
To elect the audit firm "Ernst & Young Baltic" UAB for auditing purposes of financial statements for 2011by extending the agreement with this firm. To authorize (with the right to subdelegate) the Director General of the company to sign the extension of the agreement with the audit firm by establishing the terms of payment for the audit services and other terms.
To issue and distribute in private placements the issue of convertible bonds of the Company
total number of convertible bonds: 43.000 units;
nominal value of the convertible bond: LTL 100;
issue price per convertible bond: LTL 100;
total nominal value: LTL 4.300.000;
total amount of the issue: LTL 4.300.000;
the rights granted to holders of convertible bonds: according to the set order to receive interest from the Company; on redemption day to receive a redemption amount or to request to change convertible bonds to the shares at the end of redemption term; also, all other rights set to the creditors of the companies by the laws; - subscription and payment day: 2 May 2011;
inclusion into trading in the regulated market: the issue will not be involved into trading in the regulated market. 8. In order to fulfill Company's obligations related with the short-term financing of the Company by redeeming the previous issue of convertible bonds on 11 April 2011 and to distribute the new issue of convertible bonds within the shortest term possible, to withdraw for all the shareholders the pre-emption right to acquire convertible bonds of the new issue in proportion to the total par value of the shares, held by them. To grant the right to acquire all convertible bonds of the new issue to KJK Fund SICAF-SIF, Societe d'investissement a capital variable – fonds d'investissement specialise (head office is registered at the address 412F, route d'Esch L-1030, Luxemburg, registration No. B 86 728) – provided the right to acquire 22906 units bonds, Firebird Republic Fund, Ltd., the company established under the laws of Cayman Islands (head office is registered c/o Trident Trust Company (Cayman) Ltd., One Capital Place, P.O. Box 847 Grand Cayman, Cayman Islands) - provided the right to acquire 9110 units bonds, Firebird Avrora Fund, Ltd., the company established under the laws of Cayman Islands (head office is registered c/o Trident Trust Company (Cayman) Ltd., One Capital Place, P.O. Box 847 Grand Cayman, Cayman Islands) - provided the right to acquire 3847 units bonds, Amber Trust S.C.A., Societe d'Investissement a Capital Fixe Qualifying as fonds d'Investissement Specialise (head office is registered at the address 412F, route d'Esch L-1030, Luxemburg, registration No B 87 145) - provided the right to acquire 7137 units bonds. 9. In case holders of convertible bonds will require in a set order to change convertible bonds to shares 10 days before the redemption of convertible bonds (2 May 2013), to increase the authorized capital of the Company by the amount equal to total nominal value of shares, to which convertible bonds will be changed and to amend articles 4.1 and 5.1 of the Articles of Association accordingly;
As the number of Board members is increase to six members, the article 6.1.2 of the Articles of Association correspondingly is changed accordingly, a new edition of which after the amendment will be as follows: "6.1.2. The Board consists of six members and is elected for the term of office of four years".
To amend the article 12.1 of the Articles of Association of the company with the following new edition, which Lithuania".
is in compliance with the requirements of the Law on Companies of the Republic of Lithuania: "The Articles of Association of the company can be amended under the order set by the Law on Companies of the Republic of
to sign on behalf of the Company the convertible bonds subscription agreement and other documents, related to the convertible bonds issue;
to sign the amended Articles of Association and to register it in the Register of Legal Entities (authorization is valid for the amendment of the Articles of Association concerning the articles 6.1.2 and 12.1 and for the change of convertible bonds to shares under the set order and due to this reason changing the articles 4.1 and 5.1 of the Articles of Association).
Turnover of AB Snaigė rose by 30 per cent during the first quarter of this year According to unaudited unconsolidated data, during the first quarter of 2011, AB Snaigė achieved the turnover of 22.9 million litas, i.e. over 30 per cent more than in the same period of the last year, when the turnover was 17.6 million litas. During the first quarter, the company had 1.5 million litas of unaudited unconsolidated total loss, i.e. 2 times lower than during the same period last year. According to Gediminas Čeika, AB Snaige CEO, in the first quarter, the company's turnover has increased thanks to the recovery in the Ukrainian market and stronger sales in Lithuania and the new Uzbekistan and Tajikistan markets. "While sales and earnings were growing, profits from increased sales were not compensated the marked price increase of raw materials in the first quarter (especially metals and plastics)," G. Čeika says. "If the raw material price increases continue, the company's year may be less successful than we planned, despite growing sales."
In order to offset raw material price increases, the company intensified the programmes for reduction of production cost and expenditure, initiated comprehensive rearrangement of its procurement division continues to improve inventory management.
CONSOLIDATED ANNUAL REPORT 2010
33
According to unaudited, unconsolidated data, AB Snaigė's EBITDA on the first quarter of 2011 amounted to 0.99 million litas, i.e. almost 10 times more than last year during the same period, when the unaudited non-consolidated EBITDA amounted to 0.101 million litas.
Consolidated unaudited results of the company of the first quarter of 2011 were negatively affected by maintenance costs of the closed Kaliningrad plant, and currency fluctuations. Accordingly, the unaudited consolidated AB Snaigė's gross loss was 2.176 million litas. The company's unaudited consolidated turnover amounted to 22.3 million litas, unaudited consolidated EBITDA amounted to 0.68 million litas. 19-04-2011
On 18 April 2011 the issue of convertible bonds was subscribed and paid:
total amount of the issue: LTL 3,000,000;
the rights granted to holders of convertible bonds: according to the set order to receive interest from the Company; on redemption day to receive a redemption amount or to request to change convertible bonds to the shares at the end of redemption term; also, all other rights set to the creditors of the companies by the laws; - subscription and payment day: 18 April 2011;
duration: 725 days;
the redemption price per convertible bond: LTL 100;
payment of interest: once per quarter on the last day of the quarter (if the last day of the quarter is not a business day – the next business day), also on the redemption day or the day of change to the shares;
shares, for which the convertible bonds shall be changed: ordinary registered shares of LTL 1 nominal value, gran-
the ratio of change to shares: 1:100 (one convertible bond shall be changed to 100 shares);
inclusion into trading in the regulated market: the issue will not be involved into trading in the regulated market. During private placement all convertible bonds of the issue were subscribed and paid by Šiaulių banko turto fondas, UAB.
The following resolutions were made during the repeat Extraordinary General Meeting of Shareholders held on 18 April 2011:
total amount of the issue: LTL 3,000,000;
the rights granted to holders of convertible bonds: according to the set order to receive interest from the Company; on redemption day to receive a redemption amount or to request to change convertible bonds to the shares at the end of redemption term; also, all other rights set to the creditors of the companies by the laws; - subscription and payment day: 18 April 2011;
duration: 725 days;
shares, for which the convertible bonds shall be changed: ordinary registered shares of LTL 1 nominal value, granting its holders property and non-property rights set by the laws and Articles of Association of the Company;
the conditions of change of convertible bonds to shares: convertible bonds shall be changed to shares accordingly to the request of the holder submitted to the Company in written no later than 10 business days before
inclusion into trading in the regulated market: the issue will not be involved into trading in the regulated market. 2. In order to fulfill obligations related to Company's short term financing for redemption of the previous issue of convertible bonds on 11 April 2011 and to distribute the new issue of convertible bonds within the shortest term possible, to withdraw for all the shareholders the pre-emption right to acquire convertible bonds of the new issue in proportion to the total par value of the shares, held by them. To grant the right to acquire all convertible bonds of the new issue to "Šiaulių banko turto fondas"UAB, company code 145855439, the address of head office
the redemption day of convertible bonds;
gister of Legal Entities. 12-04-2011
In case holders of convertible bonds will require to change convertible bonds to shares, in a set order: - to increase the authorized capital of the Company by the amount equal to total nominal value of shares, to
to sign on behalf of the Company the convertible bonds subscription agreement and other documents, rela-
by changing convertible bonds to shares, to sign the amended Article of Association and to register it in the Re-
On 12 April 2011 Snaigė AB received a report from its shareholders KJK Fund SICAV-SIF, Firebird Republics Fund, Ltd. and Firebird Avrora Fund, Ltd. on the implementation of the mandatory non-competitive tender offer. Through the implementation period of the tender offer, the aforementioned shareholders bought-up 4,352,213 ordinary registered shares of Snaigė AB, with nominal value of LTL 1 each (ISIN code LT0000109274), which represent 14,16 percent voting rights at the general meeting of shareholders of the company. 12-04-2011
On 11 April 2011 Snaigė AB received a notification about acquisition of voting rights in the company by KJK Fund SICAV-SIF, Firebird Republics Fund, Ltd., Firebird Avrora Fund Ltd. and Amber Trust S.C.A. (the date of the transaction is 5 April 2011).
It was informed by the notification inter alia that the notifications of the acquisition of voting rights of ING Luxembourg S.A. and Firebird Republics Fund Ltd. dated 7 April 2011, were provided on behalf of separate persons, the votes of which to be calculated collectively (the shares of Snaigė AB, held by KJK Fund SICAV-SIF and Amber Trust S.C.A. are accounted on the securities account of ING Luxembourg S.A.), and the attached notification is provided on behalf of all the group of the indicated persons. Thus, the information on the voting rights held by the group of the mentioned persons, presented in the attached notification shall be deemed final and correct. 11-04-2011
On the 11th of April, 2011, Snaigė AB had fully redeemed the bonds LT1000401315 – 61 372 units, issued in 2010. The part of the bonds (23 086 units) was converted by Company's shareholders into Snaigė AB ordinary
Convocation of the General Meeting of Shareholders On 29 April 2011 the General Meeting of Shareholders of Snaigė AB, the address of head office Pramonės str. 6, Alytus, the company code 249664610 (further Company) is convened. The place of the meeting - main meeting hall of the Company, at the address Pramonės str. 6, Alytus, Lithuania. The Meeting starts - at 10 a.m. (registration starts at 9:45 a.m.). The Meeting's accounting day – 21 April 2011 (the persons who are shareholders of the Company at the end of accounting day of the General Meeting of Shareholders or authorized persons by them, or the persons with whom shareholders concluded the agreements on the disposal of voting right, shall have the right to attend and vote at the General Meeting of Shareholders). The rights accounting day – 13 May 2011 (the shareholders will use property rights arising from the resolutions accepted during the General Meeting of Shareholders on a ratio basis of number of shares at the end of the rights accounting day).
CONSOLIDATED ANNUAL REPORT 2010
CONSOLIDATED ANNUAL REPORT 2010
1 issue of agenda: Annual report of "Snaigė" AB on the company's activity for 2010;
2 issue of agenda: Auditor's conclusion on the company's financial statements for 2010;
3 issue of agenda: Approval of the set of financial statements of the company for 2010; 4 issue of agenda: Approval of distribution of profit (loss) of "Snaigė" AB;
5 issue of agenda: Increase of members of the Board to 6 members.
6 issue of agenda: Election of Board members till the end of term of office of the Board.
7 issue of agenda: Election of members of Audit Committee till the end of term of office of the Board.
8 issue of agenda: Election of the audit firm for auditing purposes of financial statements and establishment of
terms regarding the payment for audit services.
9 issue of agenda: Issuing of convertible bonds.
10 issue of agenda: Withdrawal of the shareholders' right of pre-emption to acquire convertible bonds.
11 issue of agenda: Increase of the authorized capital and amendment of the Articles of Association.
12 issue of agenda: Authorizations
The Company shall not provide the possibility to participate and vote in the Meeting through electronic communication channels.
08-04-2011
On the 8th of April, 2011, Kustaa Aima, the member of the Audit committee of "Snaige" AB, informed about the resignation from the members of the Audit committee from the 29th of April, 2011.
Snaige, AB received a notification about acquisition of voting rights from ING LUXEMBOURG S.A. and FIREBIRD REPUBLICS FUND, LTD.
On 18 April 2011 the Extraordinary General Meeting of Shareholders of Snaigė AB, the address of head office Pramonės str. 6, Alytus, the company code 249664610 (further Company) is convened.
The place of the meeting - main meeting hall of the Company, at the address Pramonės str. 6, Alytus, Lithuania. The Meeting starts - at 10 a.m. (registration starts at 9:00 a.m.).
The Meeting's accounting day – 11 April 2011 (the persons who are shareholders of the Company at the end of accounting day of the General Meeting of Shareholders or authorized persons by them, or the persons with whom shareholders concluded the agreements on the disposal of voting right, shall have the right to attend and vote at the General Meeting of Shareholders).
The rights accounting day – 3 May 2011 (the shareholders will use property rights arising from the resolutions accepted during the General Meeting of Shareholders on a ratio basis of number of shares at the end of the rights accounting day).
The Board of directors of the Company initiates and convenes the meeting.
Regarding the issue of the convertible bonds.
Regarding the withdrawal of the shareholders' right of pre-emption to acquire convertible bonds.
Regarding the increase of the authorized capital and amendment of the Articles of Association.
Regarding the authorization.
The Company shall not provide the possibility to participate and vote in the Meeting through electronic communication channels.
The Extraordinary General Meeting of Shareholders did not take place
The Extraordinary General Meeting of Shareholders of Snaigė AB did not take place on 4 April 2011 due to the absence of quorum.
24-03-2011
offer to buy shares of the company
The Board of Snaigė AB, having familiarised itself with the mandatory non-competitive tender offer material presented to it by the offerors KJK Fund SICAV-SIF, Firebird Republics Fund, Ltd. and Firebird Avrora Fund, Ltd., in its meeting held on 24 March 2011 made the following statement (attached).
On 14 March 2011, Snaigė AB received an announcement from the shareholders KJK Fund SICAV-SIF, Firebird Republics Fund, Ltd. and Firebird Avrora Fund, Ltd. about the decision of the Securities Commission of the Republic of Lithuania of 14 March 2011 to approve the circular of a non-competitive mandatory tender offer to buy up the remaining ordinary registered voting shares of Snaigė AB. The tender offer price is EUR 0.33 (thirty three euro cents) per 1 (one) ordinary registered share of Snaigė AB, LTL 1 (one litas) par value (ISIN code LT0000109274) each (equivalent in litas is equal to LTL 1.139424). Commencement of the implementation of the tender offer is on 18 March 2011, termination - on 31 March 2011. 14-03-2011
On 10 March, 2011, member of the Management Board Snaige AB Nerijus Dagilis presented the request on the resignation from the members of Management Board from 26th of April, 2011. 10-03-2011
On 4 April 2011 the Extraordinary General Meeting of Shareholders of Snaigė AB, the address of head office Pra-
monės str. 6, Alytus, the company code 249664610 (further Company) is convened. The place of the meeting - main meeting hall of the Company, at the address Pramonės str. 6, Alytus, Lithuania. The Meeting starts - at 10 a.m. (registration starts at 9:00 a.m.). The Meeting's accounting day – 28 March 2011 (the persons who are shareholders of the Company at the end of accounting day of the General Meeting of Shareholders or authorized persons by them, or the persons with whom shareholders concluded the agreements on the disposal of voting right, shall have the right to attend and vote at the General Meeting of Shareholders).
The rights accounting day - 18 April 2011 (the shareholders will use property rights arising from the resolutions accepted during the General Meeting of Shareholders on a ratio basis of number of shares at the end of the rights accounting day).
The Board of directors of the Company initiates and convenes the meeting. Agenda of the Meeting:
Regarding the issue of the convertible bonds.
Regarding the withdrawal of the shareholders' right of pre-emption to acquire convertible bonds. 3. Regarding the increase of the authorized capital and amendment of the Articles of Association.
Regarding the authorization.
The Company shall not provide the possibility to participate and vote in the Meeting through electronic communication channels. 08-03-2011
On 7 March 2011 Snaigė AB received a notification that the notification about the intention to submit a non-competitive mandatory tender offer to buy up the remaining shares of Snaigė AB (hereinafter referred to as the "Notification") on 8 February 2011 provided by KJK Fund SICAV-SIF, Luxembourg company Société d'investissement à capital variable – fonds d'investissement spécialisé, with its registered address at 412F, route d'Esch L-1030, Luxembourg, registration No. B 86 729, Firebird Republics Fund, Ltd., a company established according to laws of the Cayman Islands, with its registered address at c/o Trident Trust Company (Cayman) Ltd., One Capital Place, P.O. Box 847 Grand Cayman, Cayman Islands, and Firebird Avrora Fund, Ltd., a company established according to laws of the Cayman Islands, with its registered address at c/o Trident Trust Company (Cayman) Ltd., One Capital Place, P.O. Box 847 Grand Cayman, Cayman Islands (hereinafter jointly referred to as the "Offer Submitters") was prepared according to the incorrect data on the shares of Snaigė AB, held by the person, acting in concert with the Offer Submitters, Amber Trust S.C.A., Luxembourg Société d'Investissement à Capital Fixe Qualifying as fonds d'Investissement specialise, with its registered address at 412F, route d'Esch L-1030 Luxembourg, registration No. B 87 145, and voting rights, granted thereof, which were provided due to the technical mistake. Due to the indicated reason in the Notification it was incorrectly indicated the number of shares of the company, collectively held by the group members as well as the number of shares intended to be bought up during the mandatory tender offer, i. e. in the Notification it was indicated that the number of shares, intended to be bought up during the mandatory tender offer is 19,218,720, constituting 62.53% of shares and votes carried by them at the general meeting of shareholders of Snaigė AB, as well as that the Offer Submitters and Amber Trust S.C.A. collectively hold 11,516,995 shares of Snaigė AB, constituting 37.47% of shares and votes carried by them at the general meeting of shareholders of the company. The correct respective numbers are the following: 18,859,920, i. e. 61.36% (the number of the remaining shares of Snaigė AB and votes carried by them intended to be bought up during the mandatory tender offer) and 11,875,795, i.e. 38,64% (the number of shares of Snaigė AB and votes carried by them, collectively held by the Offer Submitters and Amber Trust S.C.A.).
37
On 7 March 2011 Snaige AB received an announcement that due to a technical mistake in the notification about acquisition of voting rights in the company by KJK Fund SICAV-SIF, Firebird Republics Fund, Ltd., Firebird Avrora Fund and Amber Trust S.C.A. (the notification was announced on 8 February 2011) incorrect number of shares of the Snaigė AB, held by Amber Trust S.C.A. and voting rights granted thereof were indicated – 2,732,825. The correct number is 3,091,625 shares and voting rights granted thereof.
Hereby we attach the aforementioned announcement and a revised notification about acquisition of voting rights in the company by KJK Fund SICAV-SIF, Firebird Republics Fund, Ltd., Firebird Avrora Fund and Amber Trust S.C.A. (the date of the transaction is 7 February 2011).
According to unaudited consolidated data, the consolidated unaudited turnover of Snaigė AB comprised LTL 113.84 million over 2010 and consolidated unaudited net loss of Snaigė AB
totaled LTL 2.6 million. In the same period of the previous year the consolidated unaudited net loss of the company was LTL 38.2 million.
Alytus factory incurred a consolidated unaudited loss only of LTL0.48 million in 2010.
According to the Director General Gediminas Čeika of Snaigė AB this loss could be avoided. "This loss is the maintenance expenses of a closed Kaliningrad factory of Snaigė AB and office in Moscow", stated G. Čeika. "Costs exceeded LTL 2 million and this directly affected our profitability figures. I am glad that in the nearest time the premises of Kaliningrad factory will be rented, therefore, the company will not incur loss due of these premises. Besides, we are expecting that the active search of potential purchaser of the factory, which is currently carried out, will be successful."
In Gediminas Čeika view, the company succeeded to overcome the most difficult years of economic recession. "Optimization of production and management, mobilization of capacity allowed not only to survive but also to maintain a stable operation, to retain a large part of its markets and marketability of production."
In 2010 Snaigė AB exported its products to 30 European and Asian countries. The largest number of Lithuanian refrigerators was acquired by Germany, Ukraine, France and Portuguese.
We did not forget our consumers: in May we presented new energy-efficient refrigerators Snaigė Ice Logic A++ (using twice as little energy). These refrigerators became very marketable not only in Lithuania, but also in many European countries".
Consolidated unaudited EBITDA of the company for 2010 totaled LTL 9.5 million, i.e. by LTL 23.9 million more than in the same period of the previous year. Non-consolidated unaudited EBITDA of Alytus factory comprised LTL 10.12 million. According to the Gediminas Čeika it is undoubtedly positive index evaluating the company's activity.
In 2011 Snaigė AB is going to invest LTL 3,7 million to new technology and new product development. 14-02-2011
Snaige AB has received announcement about the executive officer's transactions on theissuer's securities which have been made by the Managing director.
On 8 February 2011 Snaigė AB received a notification that KJK Fund SICAV-SIF, Luxembourg company Société d'investissement à capital variable – fonds d'investissement spécialisé, with its registered address at 412F, route d'Esch L-1030, Luxembourg, registration No. B 86 728, Firebird Republics Fund, Ltd., a company established according to laws of the Cayman Islands, with its registered address at c/o Trident Trust Company (Cayman) Ltd., One Capital Place, P.O. Box 847 Grand Cayman, Cayman Islands, and Firebird Avrora Fund, Ltd., a company established according to laws of the Cayman Islands, with its registered address at c/o Trident Trust Company (Cayman) Ltd., One Capital Place, P.O. Box 847 Grand Cayman, Cayman Islands (hereinafter jointly referred to as the "Offer Submitters"), pursuant to their Board decisions intend to submit a non-competitive mandatorytender offer to buy up the remaining 19,218,720 (nineteen million two hundred eighteen thousand seven hundred twenty) ordinary registered shares of Snaigė AB (legal form: public limited liability company, legal entity code 249664610, registered at Pramonės St. 6, Alytus, the Republic of Lithuania, data about the company are collected and kept in the Register of Legal Persons of the Republic of Lithuania) with the par value of LTL 1 (one litas) each, constituting 62.53% (sixty two and fifty three hundredths percent) of shares and votes carried by them at the general meeting of shareholders of Snaigė AB.
The Offer Submitters and Amber Trust S.C.A. acquired more that 1/3 (one third) of shares of Snaigė AB on 7 February 2011. The aforementioned companies collectively hold 11,516,995 (eleven million five hundred sixteen thousand nine hundred ninety five) ordinary registered shares of Snaigė AB with the par value of LTL 1 (one litas) each, constituting 37.47% (thirty seven and forty seven hundredths percent) of shares and votes carried by them at the general meeting of shareholders of Snaigė AB.
Intended way of settlement for the securities to be bought up is in cash.
Notification about acquisition of voting rights On 8 February 2011 Snaige AB received a notification about acquisition of voting rights in the company by KJK Fund SICAV-SIF, Firebird Republics Fund, Ltd., Firebird Avrora Fund and Amber Trust S.C.A. (the date of the transaction is 7 February 2011).
Notification about disposal of voting rights Snaige AB received a notification about disposal of voting rights from Sampo Fund Management Ltd. 12-01-2011
Snaige AB notification on purchase-sale agreement of bonds in issue
On 11 January 2011 Hermis Capital UAB signed an agreement to sell convertible bonds issued by Snaige AB (ISIN – LT1000401315, nominal value - 100 EUR, redemption date – 11 April 2011) for the following Snaige AB shareholders:
KJK Fund SICAV-SIF 6 617 bonds
Firebird Republics Fund, Ltd 1 629 bonds
Firebird Avrora Fund, Ltd 1 630 bonds The transaction and the transfer of ownership rights should be completed by 21 January 2011. The agreement also gives buyers the rights to acquire the remaining 22 411 convertible bonds, which can be exercised until 10 April 2011.
To increase competitive advantage of the Company by introducing new products and new technological
6. Disclosure form concerning the compliance with the Governance Code for the companies listed on the regulated market
1Provisions 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.
| PRI NCI PLE S/ R ECO MM END ATI ON S |
YES /NO /NO T APP LIC ABL E |
COM ME NTA RY |
|---|---|---|
| Prin ciple I: Ba sic P rovis ions The ridin g ob ject ive o f a c shou ld be te in to o over omp any pera com |
inte s of rest mon |
all t he s hare hold ers b timi zing r tim e sh areh olde r val y op ove ue. |
| 1.1. A shou ld ad nd m ake p ublic the any's deve lopm opt a ent com pany comp nd o bject by cl early dec larin g ho w th nds t ives inte strat egy a e com pany o the of its shar ehol ders and ize sh areh olde r valu inter optim meet ests e. |
YES | The C busi s list ed in the al re ly in the any's egy i strat port, part omp ness annu al ac well as in . The Com 's pu blish ed t, as ports annu coun som e pre ss re pany rial e s and also refle ct th e Com 's inve mate vent nts to stors ann ounc eme pany polic y. |
| 1.2. A ll ma t bod f a co ny sh ould in fu rther of th ies o act nage men mpa ance e decla red s bject f the d to hare hold gic o ives in vi optim ize s trate ew o nee er value |
YES | The o l stra of th nside red a nd ap ed by the iona e Com is co perat tegy pany prov Boar d of the C the s the need fitab le trate gy ta rgets to e omp any; nsur e pro perfo ith a n ult he sh areh olde rs' eq imat e vie incre uity. w to ase t rman ce w |
| The c lianc h the s of t he Co al str e wit ision ny's ation ateg omp prov mpa oper y of th is sup ervis ed by the Man e Com ager pany |
||
| 1.3. A 's sup ervis nd m nt bo dies shou ld ac t in c lose com pany ory a anag eme tion in or der t ain m axim um b enefi t for the c nd it o att co-o pera omp any a s share hold ers. |
NOT APPL ICAB LE |
The C any h t form ed th e Sup ory B oard as th e sha reho lders have ervis omp as no refus ed to form such |
| 1.4. A 's sup nd m nt bo dies s hould re th at th ervis com pany ory a anag eme ensu e right s and of p s oth er th an th 's sha reho lders (e.g inte rests erson e com pany loyee ditor pplie rs, cl , loca l com ity), ients parti cipat ing i emp s, cre s, su mun n ted w ith th 's op re du ly res d. erati pecte or co nnec e com pany on, a |
YES | Com ent b odie king that all p s wh to en pany man agem s see sure erson o are relat ed w ith Co parti cipat ing in Com 's act ivity ny's a ctiv pany or pe rsons mpa rd of ity ri ghts and i st wi ll be cted . The Boa the C onito ntere respe omp any m rs and he pe rform of Co d th e Com 's Ma r by ses t asses ance mpa ny an pany nage analy the fi ial st ubm itted by th e Com 's Ma r, also zing atem ent s nanc pany nage the o n of t he ac es, d n the chan izatio tiviti ges i uity ata o rgan n eq |
| nce f Prin ciple II: T he c rk rate orpo gov erna ram ewo fram The rk sh ould the tegi orat stra vern ance ewo ens ure |
f the idan ce o |
effe t of , the ctive rsigh the 's m ent com ove com ana |
| corp e go bod ies, pria te b alan nd d istri buti f fun ction s be twe an a ppro ce a on o |
c gu he c any' en t omp |
pany pany gem s bo dies ion o f the sha reho lder s' int tect ts. , pro eres |
| for in of th 2.1. Besid es ob ligat ory b odies ided the Law on Co nies prov mpa e Repu blic o f Lith uani eral s hare hold ers' m eetin g and the chief a – a gen exec offic ende d tha ny sh ould p bot h a c olle utive er, it is rec t a co set u omm mpa gial s y bo dy an d a c olleg ial m nt bo dy. T he se f visor tting uper anag eme up o colle gial b odies for s visio n and ent f acilit clear ratio ates uper man agem sepa n of m d sup ory f in th abilit ervis ions nt an unct ount anag eme e com pany , acc y and c l on t he pa rt of the c hief e ffice r, wh ich, i facil tive o n its ontro turn, xecu fficie d tra itate nt an rent ent p a m ore e nspa man agem roces s. |
YES | The c olleg ial m nt bo dy – the d is e lecte d by share hold Boar anag eme ers. the d n of t he Sh areh olde 06 th oard Upon ecisio rs sin ce M ay 20 e Sup ervis ory B t form ed. is no |
| 2.2. A colle gial ent b ody i ible f or th tegic e stra man agem s res pons man age t of t he co d pe rform s oth er ke y fun s of c ction rate men mpa ny an orpo gove r olleg ial su body sible for t he eff e. A c isory is re ectiv ervis ion nanc perv spon e sup of th 's ma t bod ies. e com pany nage men |
YES | The B oard of th sible for t he fo f the 's e Com is re ion o Com rmat pany spon pany al st n of the e nforc nt th f, the ation gani zatio rateg oper y, or eme ereo repr e and t he pr f the shar ehol der's tion ion o inte senta otect rest. |
| 2.3. W here choo o for ly on e col legia l bod y, it i ses t a com pany m on s rec om ded t hat i t sho uld b y bod . the ry bo ard. visor y, i.e rviso In men e a s uper supe for t he eff such e, th ervis ory b oard is re sible ectiv nitor ing a cas e sup spon e mo of th e fun ction form ed by the any's chie f exe cutiv e offi s per comp cer. |
NO | d is f n of Only the Boar d in t he Co ny (u he sh areh olde rs' de cisio pon t orme mpa May 2006 ). |
| 2.4. T he co llegia l sup ory b ody t o be elect ed by the ral sh areh old ervis gene g sho uld b nd sh ould n the ner d efine d in P ers' m eetin act i rin e set up a man ciple s III a nd IV . Wh sho uld d ecide a col legia l not to se t up ere a com pany ry bo dy b ther a col legia l ma t bod . the boa rd, rviso y, i.e ut ra supe nage men Princ iples nd IV shou ld ap ply t o the boa rd as long as th at do III a t con es no tradi ct th and f this bod e ess ence purp ose o y. |
YES | Thes e pri ncipl ply to the Boar d to t he ex they do n ntrad ict th tent ot co es ap e d the f the Boa rd. essen ce an purp ose o |
| 2.5. C any's nd su isory bod ies sh ould prise such ent a omp man agem perv com ber o f boa rd (e direc tors) and ory ( di tive ervis utive num xecu sup non- exec rs) bo ard m emb ers th indi vidu al or smal l gro up of indi vidu als ca recto at no n of th .2 dom inate deci sion- mak ing o n the ese b odies part |
YES | Ther emb f the rd an d in the o n of the s hare hold six M Boa pinio e are ers o ers this is suffi cient |
| 2.6. N tive d mbe rs of the s y boa rd sh ould be irect visor on-e xecu ors o r me uper inted for s pecifi ed te ubje indiv idua l re-e lectio maxi ct to n, at appo rms s mum vals ided for in the Lithu n leg islati ith a inter ania view ing to e prov on w nsur deve lopm f pro fessi onal rienc e and suffi cient ly fre ent o t nece ssary expe quen firma of th A po ssibi lity t hem shou ld als o be tion eir st atus. ove t recon o rem lated how this dure sho uld n ot be er th an th oval stipu easi ever proce e rem for a er of dure cutiv e dire emb the ent b oard ctor proce n exe or a m man agem |
NO | n of t Upon the d ecisio he sh areh olde rs sin ce M ay 20 06 th e Sup ervis ory B oard t form is no ed. |
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.
| he m echa of th e for f a co llegia l bod be el ected by a 3.1. T nism mati y to on o ral sh areh olde rs' m g (he fter i n thi s Prin ciple refe rred the eetin reina to as gene nd fa f the 'colle gial body ') sh ould bject ive a ir mo nitor ing o ens ure o com 's ma t bod ll as of m ty sh ies a ation inori sent pany nage men s we repre are hold ers. |
|---|
| Nam d sur es of the cand idate s to b mbe rs of a col le 3.2. es an nam ecom e me gial b ody, infor on ab heir e duca qual ificat rofes l bac k mati tion, ion, p siona out t nd, p ken a nd po al co nflict s of i st sh ould be di sclos ed ositio tenti ns ta ntere grou early ugh befo re th l sha reho lders ' mee so th at th e sha ting eno e ge nera re hold ould have suffi ake a n inf d vot ing d n. Al l cient time ecisio to m ers w orme facto rs aff g the cand idate 's ind denc e, th ple l ist of whi ch is ectin epen e sam Reco ndat .7, sh ould be a lso d isclo sed. The c olleg ial bo dy ut in ion 3 set o mme shou ld als o be infor med bseq chan n the ided infor ges i uent on a ny su prov he co llegia l bod y sho uld, arly basis , coll ect d rovid ed in mati on. T ata p on ye this mbe d dis close this in th 's an nual item on it rt. s me rs an e com pany repo |
| d for of a 3.3. Shou ld a n be inate bers colle gial body h perso nom mem , suc be f e of infor inati on sh ould ollow ed b y the disc losur mati di nom on o n can date 's pa rticu lar co levan his/h rvice he co llegi al tenc t to on t mpe es re er se body . In o rder s hare holde d inv able in wh ethe estor to as certa rs an s are r me m ber's nce i s furt her r eleva nt, th e col legia l bod y sho uld, i n its al pete com annu rt, di sclos e the info ion o n its ositio d pa rticu lar co rmat repo comp n an mpe es of indi vidu al m emb hich eleva thei ice o n the col tenc nt to ers w are r r serv legia l bod y. |
| 3.4 In orde r bala f the alific ainta in a p nce i ation r to m n ter nt qu rope ms o curre s ssed by its bers, the d d com f the colle gial b ody s hall esire posit ion o posse mem be d ined with rd to the 's str d act d ivitie eterm uctu rega com pany re an s, an have this dical ly ev aluat ed. T he co llegia l bod y sho uld e that perio it is nsure osed of m emb ho, a hole, have the r red d ity of know l equi ivers comp ers w s a w edge , jud d exp plete thei r task perly . The erien nt an ce to gme com s pro mem bers of th e aud llecti vely, sho uld h nt kn owle dge it com mitte e, co ave a rece and relev in th e fiel ds of fina g and /or a udit for ience untin ant e xper nce, acco the s tock exch liste d com t leas of th mbe rs of the r pani es. A t one ange e me e shou ld ha ve kn owle dge o f and he fie ld erati mmi rienc e in t ttee mun on co expe of re olicy erati mun on p |
| of th e off 3.5. A ll new bers e col legia l bod y sho uld b ered a tai lored mem pro focu sed o n int rodu cing mbe r wit h his /her dutie porat gram a me s, cor e org an izatio n and activ ities. The colle gial b ody s hould cond nual revie uct a w to n an ident ify fie lds w here its m emb eed t o upd heir s kills a nd kn owle dge. ate t ers n |
| 3.6. In or der t that all m ateri al co nflict s of inter elate d wi th a est r o en sure |
4The 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.
5It 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.
| Prin ciple III: T he o rder of t he fo tion of a coll egia l bod be e lecte y to rma The orde r of t he fo tion llegi al bo dy to be e lecte d by a Ge rma a co nera tabi lity o f thi s bo dy to the Sha reho lder d ob ject ive m onit orin coun s an |
d by a ge l Sha reho lder g of the Com |
l sha reho lder s' m eeti nera ng s' Me etin g sh ould atio n of min ority sha reho lder sent ens ure r epre s, ac . 3 's op ion a nd it t bo dies erat pany s ma nage men |
|---|---|---|
| of th e for f a co 3.1. T he m echa nism mati llegia l bod be el ected by a y to on o ral sh areh olde rs' m g (he fter i n thi ciple refe rred the eetin reina s Prin to as gene 'colle gial body ') sh ould bject ive a nd fa ir mo nitor ing o f the ens ure o com t bod ll as of m ty sh 's ma ies a ation inori sent pany nage men s we repre are hold ers. |
YES | The c olleg ial m nt bo dy – the Boar d is e lecte d in t he ge l mee t anag eme nera f sha reho lders rding the Law of Li thua blic. Besid esth ing o nian acco repu e cand idate he M emb f the rd int rodu ce th lves t o the shar Boa s to t ers o emse e hold rovid ing i nform ation of th sitio ns th ey ho ld in othe ers, p e po r com pa and t heir profe al qu alific nies ssion ation s. |
| Nam d sur es of the cand idate s to b mbe rs of a col le 3.2. es an nam ecom e me gial b ody, infor on ab heir e duca qual ificat rofes l bac k mati tion, ion, p siona out t nd, p ken a nd po al co nflict s of i st sh ould be di sclos ed ositio tenti ns ta ntere grou early ugh befo re th l sha reho lders ' mee so th at th e sha ting eno e ge nera re hold ould have suffi ake a n inf d vot ing d n. Al l cient time ecisio to m ers w orme facto rs aff g the cand idate 's ind denc e, th ple l ist of whi ch is ectin epen e sam ndat .7, sh ould be a lso d isclo sed. The c olleg ial bo dy ut in Reco ion 3 set o mme shou ld als o be infor med bseq chan n the ided infor ges i uent on a ny su prov mati on. T he co llegia l bod y sho uld, arly basis , coll ect d rovid ed in ata p on ye this item on it mbe d dis close this in th 's an nual rt. s me rs an e com pany repo |
YES | The S hare hold t a G al Sh areh olde rs' M g (w hen B oard bers eetin ers a ener mem lecte d) ar rodu ced w ith w ork e , edu n, th e oth e int ience catio er im are e xper form of t he ca ndid for t he B oard whi ch Co nt in ation porta ates ets mpa ny g abou t the Boa rd m emb ers. |
| 3.3. Shou ld a n be inate d for bers of a colle gial body h perso nom mem , suc inati on sh ould be f ollow ed b y the disc losur e of infor mati di nom on o n can date 's pa lar co levan his/h he co llegi al rticu rvice tenc t to on t mpe es re er se body . In o rder s hare holde d inv able in wh ethe estor to as certa rs an s are r me m ber's s furt her r eleva nt, th e col legia l bod y sho uld, i al nce i n its pete com annu rt, di sclos e the info d pa lar co ion o n its ositio rticu rmat repo comp n an mpe es of indi vidu al m emb hich eleva thei n the col ice o tenc nt to ers w are r r serv legia l bod y. |
YES | As ca ndid for t he B oard bers intro duce them selve s for the share ates mem hold nd th e sha reho lders whi le ele cting the boar d me mbe rs ha ve th ers, a e ity to deci de ab he ca ndid ates' nd su itabi lity t rtun out t pete oppo com nce a o share hold ers' in ts. In the C l repo ublis hed rt is p sent teres repre omp any a nnua the c cy (e duca k exp ork p ms) o f boa rd ch tion, erien ositio air eten omp wor ce, w and the n of t he bo ard. ositio man comp |
| orde r bala f the alific 3.4 In ainta in a p nce i ation r to m n ter nt qu rope ms o curre s ssed by its bers, the d d com f the colle gial b ody s hall esire posit ion o posse mem be d ined with rd to the 's str d act d ivitie eterm uctu rega com pany re an s, an have this dical ly ev aluat ed. T he co llegia l bod y sho uld e that perio it is nsure osed of m emb ho, a hole, have the r red d ity of know l equi ivers comp ers w s a w edge , jud d exp plete thei r task perly . The erien nt an ce to gme com s pro mem of th bers e aud it com mitte llecti vely, sho uld h nt kn owle dge e, co ave a rece e fiel ds of fina for and relev ience in th untin g and /or a udit ant e xper nce, acco of th rs of the s tock exch liste d com pani es. A t leas mbe the r t one ange e me e erati mmi shou ld ha ve kn owle dge o f and rienc e in t he fie ld ttee mun on co expe of re erati olicy mun on p |
YES | The C any's boar d and Aud it Com mbe rs ha fficie f ex mitte omp e me ve su ncy o nd sk ills, s uffic of k ledg erfor m th eir d perie iency uties e to p nce a now app ro ely. S hare hold ers d elec t the the d of direc priat ecisi Boar on to tors m as or Audi mbe ade a fter t heir read and t Com mitte rs is m iness ce is eten e me comp evalu ated . The has et dr the s alari Com mmi not y ttee. pany awn es co Shar ehol ders of th emb durin g sha reho lders e Co n 14 Dec er, 2 011 mpa ny o ing r evok ed th e aud it com mitte e in c re. Th aud it com mitte meet orpo e new e will be el ected duri hare hold eetin ext s ng n ers m g. |
| 3.5. A ll new bers of th e col legia l bod y sho uld b e off ered a tai lored mem pro focu sed o n int rodu cing mbe r wit h his /her dutie porat gram a me s, cor e org an n and The colle gial b ody s hould cond nual izatio activ ities. revie uct a w to n an ident ify fie lds w here emb eed t o upd heir s kills a nd kn owle dge. its m ate t ers n |
YES | The C akes nity f or th e Com 's Bo ard m emb take ortu ers to omp any m opp pany a loo k to t he co y, th wly e lecte d me mbe rs of the B oard ny's a ctivit mpa us ne is pro vide d a s uffic iency of k ledg d inf tion. Boa rd m emb ers' now e an orma skills and kno wled ly up date d wh ile th rform thei stant ge ar e con ey pe ance r func , dur ing b oard divid ually tions tings or in mee |
| In or der t that all m al co nflict s of elate d wi th a 3.6. ateri inter est r o en sure ber o f the colle gial b ody a olved erly, the c olleg ial bo dy sh ould mem re res prop suffi ber o f ind dent 5 me mbe rise a cient comp num epen rs. |
NO | Until the inde pend of th mbe rs of the B oard has not b now ence e me een a s d, an d the of th of "a dequ acy" of th e ind dent cont ents cept sesse e con epen of th bers e Boa rd ha bee n dis d. s not mem cusse The C any h t tak y dec ision ernin g the imp leme ntati on of omp as no en an conc thes the futur visio ns in e pro e. |
| 3Atten hould be dr o the fact t hat in the s on wh ere th e coll egial body electe d by t tion s ituati awn t ot of a f the ly of t ight n ll man ent bo dies o any, b he sin gle-p body ut on overs agem comp erson |
he ge neral of ma ent, i. nagem |
share holde is the board al tha t bein body it sho uld en rs' me eting , it is natur ment g a m anage sure chief fficer. ct of i e. the any's tive o This n ote sh all ap ply in tem 3 .1 as w ell. comp execu respe |
CONSOLIDATED ANNUAL REPORT 2010
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. NO NO The Board has not defined the concept of independence. No such practice exists.
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.
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 independence of the members of the collegial body, the company should require independent members to have their independence periodically re-confirmed.
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 remunerated from the company's funds.6 The general shareholders' meeting should approve the amount of such remuneration.
| Prin ciple IV: T he d utie d lia bilit ies o f a c olleg ial b ody elec ted by th s an The fram rk sh ould nd e ffect orat corp e go vern ance ewo ens ure prop er a ing, and the ed to the coll egia l bod y sh ould ffect rant pow ers g ens ure e of al l the 's sh areh olde com pany rs. |
l sha e ge nera ive f unct ive m onit |
reho lder s' m eeti ng ioni f the coll egia l bod y ele cted by t he g al sh areh olde rs' m eet- ng o ener g7 of orin the 's ma t bo dies and ion o f int tect ts com pany nage men pro eres |
|---|---|---|
| he co llegia l bod y ele cted by th eral s hare hold g (he 4.1. T ers' m eetin e gen re inaft er in this Princ iple r eferr ed to as th e 'col legia l bod y') sh ould re in ensu nd tr cy of the 's fin l stat nd th ity a ancia tegr nts a ansp aren com pany eme e ol sys The colle gial b ody s hould ndat to th issue ions contr tem. reco mme e com 's ma t bod ies a nd m onito r and rol th 's ma cont pany nage men e com pany n erfor ent p agem man ce. |
YES | Thes e fun perf d by the B oard elec ted b y the eral m ction eetin s are orme gen g of sh areh olde rs. Th rd sh all ap e and subm he ge l mee e Boa it to t ting prov nera of sh areh olde rs th nual the of th , fina activ ities e Com rt on e an repo pany n cial r aluat e the lts of the busin f the ctivit ies o Com ts, ev epor resu ess a pany and s the perf f the of th Man e Com asses orma nce o ager pany |
| 4.2. M emb f the colle gial b ody s houl d act od fa ith, w ith ca d re in go ers o re an sibili ty fo r the ben efit a nd in the f the and its sh inter ests o spon com pany are hold ith d gard he in ts of loyee s and pub lic w elfar to t teres ers w ue re emp e. Inde pend emb f the colle gial body sho uld ( a) un der a ll circ ent m ers o um depe nden ce of thei lysis, deci mak nd a ainta in in sion- ing a stan ces m r ana c (b) do n ek a nd a ustifi ed p rivile that migh tions unj ot se t any t ccep ges ise t heir inde pend , and (c) c learl their obje ction com prom ence y exp ress s shou ld a m emb nside r tha t dec of th e col legia l bod st th ision y is a gain er co e of th . Sho uld a colle gial b ody h assed deci inter sions in ests e com pany ave p depe nden mbe r has serio us do ubts abou t, the ber s houl d ma ke ad t me mem nclus ions. Sho uld a n ind dent ber r esign from his o ffice, te co equa epen mem he sh ould lain t he re lette r add d to the c olleg ial bo dy or s in a exp ason resse audit e and , if ne body mitte tive c ertai ning not-p com cessa ry, re spec omp any- (inst itutio n). |
YES | In pe rform ing t heir dutie s the bers of th e Bo ard a ided by th e in mem re gu ts of the C nd in beh alf of Sha reho lders teres omp any a |
| Each ber s houl d de suffi and erfor 4.3. cient time ntion vote atte to p mem m his d ber o f the colle gial body h me mbe r of t he co llegia l uties . Eac as a mem ofess ns of body shou ld lim it oth iona l obli gatio his ( in pa rticu lar an y di er pr rship s hel d in o ther anies ) in s uch a hey d inte rfere recto ner t o not comp man with rform of d of a ber o f the colle gial b ody. In th uties prop er pe ance mem e emb er of the c olleg ial bo dy sh ould be p t in le ss th half of t a m even resen an a gs of the fi ar of the m eetin the c olleg ial bo dy th hout ial ye the c roug nanc om , sha reho lders of th shou ld be fied. noti pany e com pany |
YES | bers of th ard a rdan ith th les o f Pro cedu re of the Mem e Bo ct in e Ru acco ce w d an d allo suffi for t he pe rform of th eir d Boar cient time uties cate ance |
| here decis of a colle gial body have a di ffere nt eff n the 4.4. W ions ect o may shar ehol ders, the c olleg ial bo dy sh ould t all s hare hold any's ers im trea comp parti ally a nd fa irly. I t sho uld e that shar ehol ders rly in form ed nsure are p rope on th 's aff , risk nd re solut f con airs, egies ion o strat ent a e com pany man agem flicts of in t. The shou ld ha clear ly est ablis hed r ole o f me teres com pany ve a m of th bers e col legia l bod y wh nicat ing w ith a nd co mmi tting to en co mmu share hold ers. |
YES | Ther e hav en't been of th flict of in ts be n the shar teres twee any cases e con e hold nd th e Boa rd. ers a The C any h lace t he pr oced f the of in form t in p ision ation omp as pu ure o prov to th e sha reho lders corda ith th e Law on C , and this has in ac anies nce w omp been ided in th icles of As of th e Art socia tion e Com prov pany |
| ded that ns (e ignifi due 4.5. It is r actio t ins trans cant to ecom men xcep ones their low valu lude d wh he rryin tine ation s in t t rou e or conc en ca g ou oper nder l con ditio ns), c onclu ded betw he co d its een t comp any u usua mpa ny an share hold emb f the g bod r oth rviso agin ies o t ers, m ers o supe ry or man er na ural o r lega l pers hat e fluen the c any's ert in ons t xert or m ay ex ce on omp man al of houl d be subj the colle gial body . The deci sion ent s ect t agem o ap prov ernin al of such sacti houl d be dee med ado pted only tran conc g ap prov ons s ided the f the inde pend emb f the colle gial body majo rity o ent m prov ers o d for such a de cisio vote n. |
NO | Ther e has been clude such o doc f asso stion to in poin ts int nts o no s ugge ume ciatio n. The C any's ent b odies onclu ding and sacti rovin tran omp man agem ons c app g g in b ehalf of Co cordi thua nd ar ticles of Co actin ng Li nian Law a mpa ny ac mpa ny |
| 4.6. T he co llegia l bod y sho uld b e ind dent in p assin g de cisio ns th at ar epen e fican t for the c any's d str y. Tak ely, t he signi ratio ateg parat omp ope ns an en se colle gial b ody s houl d be inde pend f the 's ma t bod ent o com pany nage men f the ies . M emb colle gial b ody s houl d act and decis ions with out a ers o pass n ide in fluen ce fro m th who have elec ted i t. Co nies shou ld outs e per sons mpa re th at th e col legia l bod d its ided with suffi ittee ensu y an comm s are prov adm d fin l reso to d ischa heir dutie cient inist rativ ancia s, in rge t e an urces |
YES | Since the colle gial m nt bo dy – the Boar d is e lecte d by the G al anag eme ener f Sha ing f Meet ing o reho lders , in it s dec ision mak ion t he B oard is in de unct pend ent f the M er of the Com . The Com 's Ma t rom anag pany pany nage men res th at th e col legia l bod y and its c ittee ided with suffi ensu omm s are prov cient rry th eir d uties to ca reso urces |
| 6It is n otable that c ly it is pletel y clea r, in w hat fo mbers of the visory urrent not y et com rm me super nia (O fficial Gazet te, 20 03, No 123-5 574) p rovide s that bers o f the s isory b oard o r the b mem uperv in the scribe d by A rticle 59 of this La w, i.e. from the co y's pro fit. Th ording ent w mann er pre mpan e curr (tantie ms) sh ould b e the o nly fo rm of the co y's com tion to bers o f the s isory b mpan pensa mem uperv the bo ard fo r their work in oth er form s, bes ides b s, alth ough this p ossibi lity is pressl not ex y state onuse 7See F te 3. ootno |
board or the board oard m ay be remun , cont rary to oard o r the b oard. d eith er. |
may b ted fo r their work in the se bod ies. Th e Law on Co ies of the Re public of Lit hua e rem unera mpan erated for th eir wo rk in t he sup erviso ry boa rd or t he boa rd by ent of al bon uses ( tantie ms) paym annu the w ording effect ive be fore 1 Janua ry 200 4, elim inates the e xclusiv ireme nt tha al bon t annu e requ uses So it s that t he Law ins no prohi bition mbers of the visory board conta to rem te me eems unera super or |
the board for their work in other forms, besides bonuses, although this possibility is not expressly stated either. 7See Footnote 3.
8See 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.
9It 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.
No such practice exists yet. NOT APPLICABLE
42
| cludi ng th ht to obta icula r from loyee s of t he co ll e rig in, in part emp mpa ny, a nform the n ary i ation seek inde pend ent l egal, untin or to ecess acco g or any othe r adv ice o n iss ertai ning he co e of the c olleg ial b ody to t tenc ues p mpe and . Wh he se s of a ultan h a v its co mmi ing t rvice t wit iew t ttees en us cons o obta info rket s tand ards for re s, the ining ion o erati rmat stem n ma mun on sy re erati mmi shou ld en that the c ltant d do ttee mun on co sure onsu conc erne es t the e adv ice th e hum es de di e tim utive not a partm ent, sam an re sourc exec colle gial m of th d. recto nt or rs or anag eme gans e com pany conc erne |
||
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| ies of 4.7. A ctivit the colle gial b ody s houl d be nized in a hat i ner t orga man n depe nden mbe rs of the c olleg ial bo dy co uld h ajor influ in re l t me ave m ence here chan f occ ce of confl f inte ry hig h. icts o t are rest a evan as w ces o urren re ve Such be co nside red a s hig hly r eleva f nom f e iss inati s to nt ar area ues o on o n of any's dire , det ermi natio direc tors' tion and rol ctors cont comp remu nera and a of co ny's a udit. There fore w hen t he m ned i entio ment ssess mpa ssues are attrib utab le to the c ce of the c olleg ial bo dy, it ende d tha is re eten t omp comm the c olleg ial b ody shou ld es tabli sh n , and aud omin ation ation it , rem uner ittee s. Co nies shou ld en that the f ions attrib utab le to the unct comm mpa sure and aud ried How inati tion, it com mitte out. nom on, r emu nera es ar e car ever they deci de to ge th ese f and p les s tha n thr ions unct set u may mer ee co m mitte es. In such ny sh ould expl ain in deta il rea beh ind t he case a co mpa sons selec tion of al tive oach and how the selec ted a ach c lies terna appr ppro omp with the obje fort h for the three diffe s. Sh ould the ctive ittee s set rent comm colle gial b ody o f the ll num ber o f me mbe rs, th e fun prise com pany com sma c erfor tions assi gned to th e thr mmi be p med by t he co llegia l ttees ee co may body itsel f, pro vided that advo cated for it m ositio uirem eets ents comp n req the c s and that adeq infor ided in th ittee mati on is is res In uate pect. omm prov such s of t his C ode r elati the s of t he co llegia l ision ittee ng to case prov comm body (in p artic ular with o the ir rol erati nd tr cy) ect t resp e, op on, a ansp aren shou ld ap ply, w here relev to th e col legia l bod a wh ole. ant, y as |
YES | The A udit Com mitte s ele cted in 20 09. C n 14 Dece mbe r, 20 11 e wa omp any o durin g sha reho lders ting revok ed th e aud it com mitte e in ore. T he mee corp audi mitte e wil l be e lecte d du ring share hold eetin g. Th t com next new ers m e Com 's dir mina tion and tion mitt ecto t pany rs no remu nera com ees a re no form ed. T he fu inted at th ll are leme nted by th e Boa rd nctio is ite m sti imp ns po with dicti in its juris on. If the shar ehol ders pt th e dec stab lish s uch c ision ittee s or i t is to e acce omm ired by th e law of th e Re publ ic of Lithu the uld b ania, ittee requ comm s wo e estab lishe d. |
| he ke y obj e of t he co effic of th 4.8. T ectiv mmi is to incr iency ttees ease e ac es of tiviti the c olleg ial bo dy by ring t hat d ecisio e bas ed on due ensu ns ar con sider ation , and to h elp o ize it rk w ith a view ing t hat t he to e rgan s wo nsur decis it tak e free of m al co nflict s of i st. Co shou ld ions ateri mmi ntere ttees es ar depe nden t jud nd in hen e its fu ise in tegri xerci sing nctio ent a ty w exerc gem ns ell as he co llegia l bod y wit h rec enda tions ernin g the ent t as w pres omm conc decis of th llegi al bo dy. N thele ss th e fin al de n sh all b ions cisio e co ever e adop ted b y the colle gial b ody. The r datio f com ion o mit creat ecom men n on nded le, to the c ce of the c olleg ial is no t inte , in p rincip trict tees eten cons omp body he m sider ed fr he pu rview of th e col legia l or to ove t atter om t rem s con body itsel f, wh ich re s full ible f or th e dec s tak its fi eld main ision en in y res pons of co tenc mpe e. |
YES | The C any's colle bod depe nden t and mak e sel f-con d giate ies a re in taine omp decis nflue nced by a nflict s of i d rem nsibl ions not i ain r ntere st an ny co espo e for d hich ward ed in limi ts of their abil ecisio ity. ns w are a |
| 4.9. C ittee ablis hed b y the colle gial b ody s houl d no rmal ly be s est omm com d of a t lea st th emb ers. I ith sm all nu mbe r of m pani pose ree m n com es w em bers of th e col legia l bod y, th uld e lly b d of tiona two ey co xcep e com pose bers. f the bers of ea ch co shou ld be ed Majo rity o mmi titut ttee mem mem cons from inde pend emb f the colle gial b ody. In ca hen t he co ent m ers o ses w mpa ny choo y boa rd, re d aud visor erati it com mit ot to set u ses n p a s uper mun on an shou ld be rely c rised of n tive d ors. C hairm ansh enti irect ip tees omp on-e xecu p of t and m emb ershi he co mmi shou ld be deci ded w ith d gard to th ttees ue re e need that ittee bersh ip is refre shed and that undu to en sure comm mem e re lianc ot pl aced ular indiv idua ls. Ch ansh d me mbe e is n artic airm ip an on p r ship of th es sh ould be d ecide d wi th du ard t o the d to mitte e com e reg nee refre re th mmi bersh ip is shed and that und lianc e is at co ttee ensu mem ue re laced ular indiv idua ls. artic not p on p |
YES | The c any h The Audi t Com erati mmi mitte ot re ttee. omp ave n num on co e con of th emb hich chair elec ted i n sha reho lders sists t ree m ers, w man was mee fter f his inde pend Sha reho lders of t he ing a eciat ion o crite rion. appr ence cemb 11 d shar ehol ders evok ed th Com on 1 4 De er, 20 uring ing r meet pany e audit re. Th aud e wil l be e lecte d du mitte e in c it com mitte ring com orpo e new share hold eetin next ers m g. |
| horit y of e ach o f the es sh ould be d ined by th e col 4.10 . Aut mitte eterm com rform legia l bod y. Co mmi shou ld pe thei r dut ies in line with auth ority ttees deleg ated to th nd in form the colle gial b ody o n the ir act ivitie s and em a per form gula r bas is. Au thori ty of ulati ng th e role mitte e stip ance on re ever y com and right s and duti es of the shou ld be mad e pub lic at leas ittee t onc comm e of th e inf r (as tion discl osed by t he co nual ly on its part a yea orma mpa ny an s and ). Com s sho uld a lso m ake tices panie rate g stru cture corpo overn ance prac publ nual ly a s ent b thei ic an y exi sting mitte posit ion, tatem com es on r com ber o f me s and ndan er th r, and thei eting in ac tiviti atte num ce ov e yea r ma es. Audi mitte e sho uld c onfir m th at it is sat isfied with the inde pend of t com ence the a udit d de scrib e bri efly t he ac it ha s tak h thi tions en to proce ss an reac s lusio conc n. |
NO | The p ce of still c tly b form ed. racti mitte es is eing com urren |
| f the 4.11 . In o rder inde pend and imp artia lity o mitte to en sure ence com es, bers of th e col legia l bod y tha emb f the mitte e sho uld t are not m mem ers o com only have ht to the m gs of the c only a rig icipa te in eetin ittee part comm omm if inv ited b y the e or d nd pa mitte e. A c ittee invit rticip ation com omm may ema in th eting of pa rticu lar offi Chai of ea ch of the c erts. e me cers o r exp rman om es sh ould have ssibi lity t n dir with the mitte intai unica tion ect c a po o ma omm share hold s wh ch ar be pe rform ed sh ould be s pecifi ed in ers. E vent e to en su the r egul s for ation ittee activ ities. comm |
NO | The a udit ittee will be el ected duri hare hold eetin g. Th ext s comm ng n ers m e ill co nstit ditio ns fo r the aud it com mitte ivity. ute p e act comp any w rope r con |
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.
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 balance of skills, knowledge and experience on the management body, prepare a description of the roles and capabilities required to assume a particular office, 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 appointment of senior management.
4.12.2. Nomination committee should consider proposals by other parties, including 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 management, chief executive officer of the company should be consulted by, and entitled to submit proposals to the nomination committee.
4.13. Remuneration Committee. 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 remuneration, performance-based remuneration schemes, pension arrangements, and termination payments. Proposals considering performance-based remuneration 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 collegial body;
• Make proposals to the collegial body on the individual remuneration for executive directors and member of management bodies in order their remunerations 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 affiliated companies;
• Ensure that remuneration of individual executive directors or members of management 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 members of management body, including the policy regarding share-based remuneration, and its implementation;
• Make proposals to the collegial body on suitable forms of contracts for executive directors and members of the management bodies;
• Assist the collegial body in overseeing how the company complies with applicable provisions regarding the remuneration-related information disclosure (in particular the remuneration policy applied and individual remuneration of directors);
• Make general recommendations to the executive directors and members of the management bodies on the level and structure of remuneration for senior management (as defined by the collegial body) with regard to the respective information provided by the executive directors and members of 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:
• Consider general policy regarding the granting of the above mentioned schemes, in particular stock options, and make any related proposals to the collegial body;
• Examine the related information that is given in the company's annual report and documents intended for the use during the shareholders meeting; • Make proposals to the collegial body regarding the choice between granting options to subscribe shares or granting options to purchase shares, specifying the reasons for its choice as well as the consequences that this choice has. 4.13.3. Upon resolution of the issues attributable to the competence of the remuneration committee, the committee should at least address the chairman of the collegial body and/or chief executive officer of the company for their opinion on the remuneration of other executive directors or members of the management bodies.
NOT APPLICABLE Not formed (explanation in Clause 4.7.).
NOT APPLICABLE Not formed (explanation in Clause 4.7.).
CONSOLIDATED ANNUAL REPORT 2010
44
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.
4.15. Every year the collegial body should conduct the assessment of its activities. The assessment should include evaluation of collegial body's structure, 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 information 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.
5.1. The company's supervisory and management bodies (hereinafter in this Principle the concept 'collegial bodies' covers both the collegial bodies of supervision and the collegial bodies of management) should be chaired by chairpersons of these bodies. The chairperson of a collegial body is responsible 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.
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 certain 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 company's supervisory board should be convened at least once in a quarter, and the company's board should meet at least once a month12.
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 meeting 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.
5.4. In order to co-ordinate operation of the company's collegial bodies and ensure effective decision-making process, chairpersons of the company's collegial 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 attend meetings of the company's supervisory board, especially where issues concerning removal of the board members, their liability or remuneration are discussed.
| The chair of b oard and he ation nizat ion t man ens ures prop er co nvoc orga boar d me s. Th n the eral o be ened nd eting ice o ing t is se e not meet gen conv mbe rs of boar d acc ordin he re gulat of th e boa rd. ing t ions g to t o me |
|---|
| Agen da an d all rials ired rding to th nda s hall b mate t to requ acco e age e sen |
|---|
| the M emb f the Boa rd by elec ail in adv rmal ly th ic m tron ers o ance ; no e |
| da is chan ged d unle solv e add uring tings ss it is ne cessi i not ty ao agen mee |
| l que tiona stion s. |
| YES | Boar d me calle d at ls to f eting opria te in ntinu ity o terva s are appr ensu re co tial c ed du e issu es. U t issu ring rate g essen orpo over nanc rgen es co nven eme r eting genc y me s. |
|---|---|
| YES | da an d all rials ired rding to th nda s hall b Agen mate t to requ acco e age e sen |
| Prin ciple VI: T he e quit able nt of sha reho lder d sh areh olde r rig hts trea tme s an The fram rk sh ould he e quit able nt of all s hare hold inclu ding min ority and fore ign s hare hold The orat ure t trea tme corp e go vern ance ewo ens ers, ers. cor ce fr k sh ould the righ ts of the sha reho lder te g tect pora over nan ame wor pro s. |
||
|---|---|---|
| ded t hat t he co l sho uld c t onl y of t he 6.1. It is r ny's c apita onsis ecom men mpa share s tha nt th hts t rship , divi dend and othe e rig ing, o t gra o vot e sam wne r right ll the ir ho lders s to a |
YES | The c l of t he Co mad of sh confe he h olde apita ny is rring to t mpa e up ares rs there of eq ual v and ershi hts, a nd th e righ e div idend oting p rig eceiv t to r own s. |
| info 6.2. It is r ded t hat i houl d hav o the ion tors s ess t rmat ecom men nves e acc ernin g the righ ache d to t he sh of th issue or th ose i d ts att conc ares e new ssue earli er in adva i.e. b efore they hase shar nce, purc es. |
YES | The C rovid info bout the r ights conf erred by es its inve ion a stors rmat omp any p the n ewly ed sh by m aking blic a o thi s effe issu ent t ct. ares a pu nnou ncem |
Not relevant, as the Supervisory Board is not formed. NOT APPLICABLE
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.
YES
46
| s tha he co d its share hold 6.3. T ction imp t are ortan t to t ransa mpa ny an ers, such ansfe nd p ledge of th othe r, inv 's ass as tr estm ent, a ets o e com pany r any r of e l of t bran ce sh ould be s ubje he g al sh type ct to ncum app rova ener are hold ers' m eetin g. A ll sha reho lders shou ld be furn ished with al op equ por tunit fami liariz e wit h an d pa rticip ate i n the dec ision -mak ing p y to roces s whe nifica inclu ding roval of tr s refe rred n sig te iss ction nt co rpora ues, app ansa to ab are d sed. iscus ove, |
NO | The les o f Ass f the do n ovid e for such righ Artic ociat ion o Com ot pr t pany ted t o the eral f sha reho lders ing o meet gran gen Shar ehold f the hich Com oving sacti oving is pr tran ers o pany appr ons w appr o vidin ordin g the Lith and the a rticle s of A uani an Co nnie' s Law ssoci g acc mpa . The rd of the ch de ithou t the ation Boa Com cisio pany pass es su ns w f the shar ehol ders. ent o cons |
|---|---|---|
| dure s of c and cond al sh areh olde rs' m 6.4. Proce ning uctin eet onve g a g ener houl d ens qual ties f or th e sha reho lders to eff ely p ing s rtuni ectiv ure e oppo ar t the and shou ld no judic e the righ d int s of ticip tings ate a t pre ts an erest mee of t the s hare hold ers. T he ve date , and time he sh areh olde rs' m eetin nue, g shou ld no t hin der w ide a ttend of th e sha reho lders ance |
YES | Infor mati bout shar ehol ders' tings is pu blish ed in the on a mee same way as it is r equi red b y the Law . Sha reho lders ' mee tings ened at th e Com 's conv pany resid , wh ich h t bee n cha nged sinc e the blish t of t he co esta ence as no men m pany |
| If is p ossib le, in orde shar ehol ders living abro ad th ht to 6.5. e rig r to e nsure he in form nded that docu the ation , it is s to t ts on acces reco mme men cours e of th l sha reho lders ' mee shou ld be plac ed o n the pub licly ting e ge nera ac ble w ebsit e of t he co t onl ithua lang , but cessi y in L nian in En mpa ny no uage g lish a nd /o r oth er fo lang dvan ende d tha t the reign s in a ce. It is re uage comm f the after minu eral shar ehol ders' ting sign ing t hem and /or tes o gen mee adop ted r esolu tions sho uld b e als o pla ced o n the pub licly sible web acces site o f the . See king the r ight of fo reign fam iliari to en ers to com pany sure ze with the infor hene ver f easib le, do ferre d to in th mati is rec nts re on, w cume enda shou ld be pub lishe d in Lithu n, En glish and /or o ther for tion ania omm lang s. Do refer red t this datio y be eign o in ents uage cum recom men n ma publ ished he p ublic ly ac ble w ebsit e of the c o the cessi on t any t exte nt omp that publ ishin g of thes e do t det ntal to th is no rime ents cum e com pany or the c any's ial se led. crets not r omp com merc are evea |
YES | All in form abo ut th ard m g, th d dra fts o f dec ation e Bo eetin ision e pro pose s, the t aken deci is ho sted in th bsite he Li thua sions e Com 's we nian on t pany and Engl ish la ngua ges. |
| 6.6. Shar ehol ders shou ld be furn ished with the ity to in th rtun vote oppo e ral sh areh older s' me eting in pe and i n abs entia . Sha reho lders shou ld gene rson not b ed fr in ad e by letin g the oting in w riting vent e pre om v vanc comp gen eral v ball oting ot. |
YES | f the The s hare hold Com cise their righ ts in divid ually in ers o pany may exer n, via thei xies also by vo ting in w riting in a dvan ce. T he Co perso r pro mpa ny confe its sh areh olde rs the righ ovide d for by th e Law on C anies rs to ts pr omp |
| ith a he sh areh olde rs' op 6.7. W view to in ing t nitie artic ipate portu s to p creas effec tivel share hold he co ded ers' m eetin nies y at gs, t to mpa are r ecom men se of nd u mod echn olog ies b y allo wing the share hold ic ern t ers to part expa ns of ipate and in ge l mee tings via e lectr onic icatio vote nera mea com mun n. In su ch ca ecuri ty of smit ted i nform ation and sibili iden tify tran ty to ses s a pos the i dent f the and shou ld be ed. ity o icipa ting votin part rante g pe rson gua More uld f h its share hold ially share hold pani urnis over, com es co ers, e spec ers living abro ad, w ith th h sha reho lder m gs by ity to eetin ortun watc e opp mea ns of m oder hnol ogies n tec |
NO | The C any d ot ha ve th hnica l pot entia l. e tec omp oes n |
| Prin ciple The idan ce of flict s of inte and thei r dis closu VII: rest avo con re The fram rk sh ould emb orat corp e go vern ance ewo enc oura ge m ers o effe ctive han ism of d isclo of c onfl icts of in gard ing m tere st re mec sure |
f the orat corp emb f the ers o |
e bo dies void flict s of inte and and to a rest tran ent con ass ure spar e bo dies orat corp |
| ber o f the and ent b ody 7.1. Any 's su isory mem com pany perv man agem flict shou ld av oid a situa tion, in w hich his/h l inte are i rests er pe rsona n con or be in confl ict w ith th 's int s. In such a sit uatio n did erest may e com pany case emb er of the 's su and ent b ody isory occu r, a m com pany perv man agem shou ld, w ithin onab le tim e, inf othe mbe rs of the s colle reas orm r me ame gial body he co body that has elect ed h im/h he co ny's or t r to t mpa er, o m of a confl ict of 's sha reho lders abo situa tion inte indic he ut a rest, ate t pany re of the c onfli d val here ible. natu ct an ue, w poss |
YES | Mem bers of th e Co ny's o fol low t he re ing t ent a re try mpa man agem com datio ns lis ted a t this le, bu t the gulat abou h artic ions t suc men re are no a ny re nd in form in th e Com ation rts a repo pany |
| 7.2. A emb er of the c any's d ma t bod rviso ny m omp supe ry an nage men y ma y ix the 's ass he us e of w hich has n ot be lly ag reed not m ets, t utua com pany en m h his /her nal a se th r the info hich , wit ion w ssets rmat upon perso or u em o he/s he le by vi of hi s/he ition ber o f a co te bo dy rtue arns r pos as a mem rpora for h is/he l ben efit o r for the b enefi t of a ny th ird p with out a r per sona erson nt of the ral sh areh olde rs' m ther prior eetin agre eme gene g or any o corp o body auth d by the m orize eetin rate g. |
YES | of th o fol Mem bers e Co ny's ing t low t he re ent a re try mpa man agem com datio ns lis ted a t this artic le, bu t the gulat ions abou h t suc men re are no a ny re form nd in ation in th e Com rts a repo pany |
| er of 7.3. A emb the c any's rviso d ma t bod ny m omp supe ry an nage men y ma y lude tion with the mbe r of a bod y of a tra orate conc nsac comp any, a me corp whic h he /she is. S uch a on (e ignifi due heir sacti t ins tran cant to t xcep ones low v alue nclud ed w hen the ing o utine ratio ns in ut ro or co carry ope com und ual c ondi ) mu st be ediat ely r ted i tions imm iting pany er us epor n wr or s of t rs of orall y, by rding this in th e mi he m eetin othe mbe nute g, to reco r me the s bod o the bod y tha t has elec ted h im/h orate y or t orate ame corp corp er the any's shar ehol ders. Tran pecifi ed in this sacti or to comp ons s recom men datio also subj enda tion 4.5 ect t n are o rec omm |
YES | Mem bers of th e Co ny's ing t o fol low t he re ent a re try mpa man agem com datio ns lis ted a t this le, bu t the gulat abou h artic ions t suc men re are no a ny re nd in form in th e Com ation rts a repo pany |
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).
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.
8.1. A company should make a public statement of the company's remuneration policy (hereinafter the remuneration statement) which should be clear and easily understandable. This remuneration statement should be published as a part of the company's annual statement as well as posted on the company's website.
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 remuneration policy in the previous financial year. Special attention should be given to any significant changes in company's remuneration policy as compared to the previous financial year.
8.3. Remuneration statement should leastwise include the following information: • Explanation of the relative importance of the variable and non-variable
components of directors' remuneration;
• Sufficient information on performance criteria that entitles directors to share options, shares or variable components of remuneration;
• An explanation how the choice of performance criteria contributes to the long-term interests of the company;
• An explanation of the methods, applied in order to determine whether performance criteria have been fulfilled;
• Sufficient information on deferment periods with regard to variable components of remuneration;
• Sufficient information on the linkage between the remuneration and performance;
• The main parameters and rationale for any annual bonus scheme and any other non-cash benefits;
• Sufficient information on the policy regarding termination payments;
• Sufficient information with regard to vesting periods for share-based remuneration, as referred to in point 8.13 of this Code;
• Sufficient information on the policy regarding retention of shares after vesting, as referred to in point 8.15 of this Code;
• Sufficient information on the composition of peer groups of companies the remuneration policy of which has been examined in relation to the establishment of the remuneration policy of the company concerned;
• A description of the main characteristics of supplementary pension or early retirement schemes for directors;
• Remuneration statement should not include commercially sensitive information.
Members of the Company's management are trying to follow the recommendations listed at this article. YES
8.4. Remuneration statement should also summarize and explain company's policy regarding the terms of the contracts executed with executive directors and members of the management bodies. It should include, inter alia, information on the duration of contracts with executive directors and members 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.
8.5. Remuneration statement should also contain detailed information on the entire amount of remuneration, inclusive of other benefits, that was paid to individual 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.
8.5.1. The following remuneration and/or emoluments-related information should be disclosed:
• The total amount of remuneration paid or due to the director for services per-
| NO | The ings of th 's em ploye es is the c onfid entia l info ion, rmat earn e com pany the c any's busi dditi on th t, in a ere is racti ce to omp ness secre no p prep are r e- abou t the 's ear s pol icy. Q bout the Code of R ning uesti port com pany ons a ec- ende d ear s and ben efits polic lann ed to disc n the futu ning y is p uss i omm re s of c f info fits f due t o the exch ondi tions . Brie ion a bout the bene rmat ange or the C nt bo dies is ava ilable in th e leg islati omp any m anag eme on. |
|---|---|
| NO | The r e sho wn i n Cla use 8 .1. easo ns ar |
The reasons are shown in Clause 8.1. 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. NO
| form | ed du ring the r eleva nt fin ancia l yea r, inc lusiv e of, whe levan re re |
t, att en |
|---|---|---|
| danc | e fee s fixe d by the a l gen eral s hare holde eting nnua rs me ; |
• 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:
| 8.6. W here the r polic ludes ble c ts of tion y inc varia emu nera omp onen remu tion, pani es sh ould limit the v ariab le co (s). T he set nent nera com s on mpo ble c t of r shou ld be suffi llow the varia tion cient to a non- omp onen emu nera hhol d var iable f rem whe form o wit ation any t nts o comp com pone uner n per crite ria ar e not met ance |
NO | The r e sho wn i n Cla use 8 .1. easo ns ar |
|---|---|---|
| of va f rem 8.7. A ward riabl ation shou ld be subj nts o ect to e com pone uner pre dete ed an d me ble p erfor rmin iteria asura man ce cr |
NO | The r e sho n Cla wn i use 8 .1. easo ns ar |
| nt of 8.8. W here iable ation is aw arde d, a m ajor part a var com pone rem uner of th iable nt sh ould be de ferre d for riod o f tim a mi nimu e var com pone m pe e. The of th iable bject to d eferm houl d be dete part nt su ent s e var com pone r d in r elati the relat eight of th iable red mine ive w on to nt co e var com pone mpa to th riabl nt of ation e no n-va e com pone rem uner |
NO | The r e sho n Cla wn i use 8 .1. easo ns ar |
| 8.9. C l arra with ing d houl d utive irect ontra ctua ents ngem exec or m anag ors s inclu de pr hat p t the claim ble c ovisi ermi varia ons t to re ts com pany omp onen of re on th arde d on the b f dat a wh ich su bseq ly erati asis o at we uent mun re aw ed to be m anife stly m ted. issta prov |
NO | The r e sho wn i n Cla use 8 .1. easo ns ar |
| . Term houl d not ed a fixed r fixe d nu 8.10 inati nts s unt o on pa yme exce amo m ber o f yea rs of al rem , whi ch sh ould al, no t be h ighe ation , in g annu uner ener r than of th able t of r r the -vari ion o equi two nerat years e non comp onen emu v |
NO | The r e sho n Cla wn i use 8 .1. easo ns ar |
• 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.
alent thereof.
| . Term shou ld no t be paid if the due 8.11 inati inati on is ents term to on p aym inad rform te pe equa ance |
NO | The r e sho n Cla wn i use 8 .1. easo ns ar |
|---|---|---|
| . The info nd d king duri 8.12 ion o ecisio rmat parat n pre ory a n-ma proce sses, ng whic h a p olicy of re on of direc s bei tabli shed , sho uld a lso be erati tors i mun ng es discl osed . Info houl d inc lude data , if a pplic able, utho and ion s rities rmat on a n of t he re d sur es of nal ositio erati mmi ttee, exter comp mun on co nam es an nam ultan ts wh es ha ve be ed in dete of th ervic rmin ation cons ose s en us e rem uner f sha ation polic ell as the role o reho lders ' ann ual g al me eting y as w ener |
NO | The r e sho n Cla wn i use 8 .1. easo ns ar |
| est fo after 8.13 . Sha res sh ould r at le ast th thei rd. not v ree y ears r awa |
NO | The r e sho n Cla wn i use 8 .1. easo ns ar |
| 8.14 . Sha tions her r ight quire shar to b ated ny ot to ac re op or a es or e rem uner on th e bas is of share price houl d no t be isabl e for at le nts s ast mov eme exerc three s afte r the ir aw ard. V estin g of s hares and the r ight ercise shar to ex year e optio othe r righ cquir e sha r to b ated on th e bas is t to a ns or any res o e rem uner of sh shou ld be subj pred ined and m rice m ents, ect to eterm are p ovem easu ra ble p erfor iteria man ce cr |
NO | The r e sho wn i n Cla use 8 .1. easo ns ar |
| . Afte ing, d rs sho uld re ber o f sha ntil t he en d of 8.15 irecto tain a r vest num res, u their date, subj the n eed t o fina lated of quisi tion ect to sts re to ac man nce a ny co the s hares . The ber o f sha be re d sho uld b e fixe d, fo mple taine res to num r exa , the value of to tal a l rem (the able plus the v twice ation -vari ari nnua uner non able ts). comp onen |
NO | The r e sho n Cla wn i use 8 .1. easo ns ar |
| of n ory d rs sh ould 8.16 . Rem ation tive o ervis irecto not i uner on-e xecu r sup n clude shar ions. e opt |
NO | The r e sho n Cla wn i use 8 .1. easo ns ar |
| . Sha reho lders ular i al sh areh older s, sho uld b 8.17 , in p artic nstit ution e enc our aged tend ral m eetin here opria d ma ke co nside red u to at te an gene gs w appr se of th eir vo gard ing d irecto rs' re erati tes re mun on. |
NO | The r e sho n Cla wn i use 8 .1. easo ns ar |
| 8.18 . Wit hout prej udice to th e role and nizat ion o f the relev ant b odies orga re sible for s ettin g dir s' rem ation s, the ation polic ector spon uner rem uner y or a ny othe r sign ifican t cha in re erati olicy shou ld be inclu ded into the nge mun on p da of the s hareh older s' ann ual g l mee ting. Rem ation state ment agen enera uner shou ld be put f ting in sh areho lders ' ann ual g l mee ting. The v ote m or vo enera ay be ei ther dato advis man ry or ory. |
NO | The r e sho wn i n Cla use 8 .1. easo ns ar |
| . Sch f dire in sh shar 8.19 anti cipat ing r ion o ions nerat ctors e opt emes emu ares, y oth ht to hase shar be re d on the b f sha er rig asis o erate or an purc es or mun re hould be s ubjec he pr l of s hare holde rs' an price ior ap nts s t to t mov eme prova nual ral m g by of a resol heir a dopt ion. T he ap eetin ution prio r to t gene way l of sc hem e sho uld b e rela ted w ith th e sch itself and o the not t t prova eme gran of su ch sh are-b ased bene fits u nder that sche indiv idual direc All si me to tors. g nifica nt ch chem ns sh ould also be su bject to sh areh older s' s in s visio ange e pro oval to th eir ad n; the oval decis hould be m ade i n sha prior optio ion s appr appr re holde nual ral m such shar ehold ers sh ould be no tified rs' an eetin g. In gene case on al l term s of s sted chan nd ge xplan on th f the ation e imp t an e act o ugge ges a ested chan sugg ges. |
NO | The C any d e the by d ocks actic ation irect ot pr or st omp oes n rem uner or op tions |
| The f 8.20. ollow ing is shou ld be subj oval by th e sha rehol ders' ect to sues appr an nual ral m eetin gene g: |
NO | No su ch pr e is b enfo rced in th e Com actic eing pany |
| • Gra nt of share -base d sch , incl udin g sha tions , to d irecto emes re op rs; |
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| • Det ermi natio n of m axim umb er of share s and mai ditio ns of shar um n n con e ting; gran |
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| • The with in wh ich o be e sed; ption xerci term s can |
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| • The cond s for ubse t cha in th of th if ition rcise ions, e opt any s quen nge e exe issibl e by law; perm |
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| • All othe r lon hem es fo r wh ich d elig ible a nd m in centi irecto g-ter ve sc rs are whic h are vaila ble to othe loyee s of t he co der s imila not a r term r emp mpa ny un s. al ge neral hould also set th e dea dline with in wh ich th e bod Annu ting s mee y re sible for re on of direc ard c liste d in t his erati tions tors m spon mun ay aw omp ensa le to indiv idual direc artic tors. |
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| . Sho uld n al law rticle s of A allow dis 8.21 ation ny's A ssoci ation or co mpa , any ted o ption nder whic h any righ ted t o sub scrib ent u ts are coun arra ngem gran e |
NO | ch pr e is b enfo rced in th No su actic eing e Com pany |
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 number of days preceding the date when the exercise price is determined, should also be subject to the shareholders' approval.
| NO | The r e sho wn i n Cla use 8 .1. easo ns ar |
|---|---|
| NO | The r e sho n Cla wn i use 8 .1. easo ns ar |
| NO | The r e sho wn i n Cla use 8 .1. easo ns ar |
| NO | The r e sho n Cla wn i use 8 .1. easo ns ar |
CONSOLIDATED ANNUAL REPORT 2010
| s of A rticle 9 and shou ld no t be a pplic able hem 8.22 . Prov ision s 8.1 8.20 to sc es allow ing fo unde ilar c ondit 's em ploye ticipa tion r sim ions t r par o com pany es or loyee s of a bsidi hose loyee eligib le to parti emp ny su ary c omp any w emp s are c in th e sch and w hich has b ved i n the shar ehold l ipate ers' a eme een a ppro nnua ral m eetin gene g. |
NO | ch pr e is b enfo rced in th No su actic eing e Com pany |
|---|---|---|
| 8.23. Prio he an nual ral m eetin g tha t is in tend ed to ider d ecisio r to t gene cons n stipu lated in Ar ticle 8.19, the s hareh older st be ided nity t portu s mu prov an op o fami liariz e wit h dra ft res oluti nd p rojec t-rela ted n otice (the doc nts on a ume shou ld be ed on the c any's web site). The notic e sho uld c in the full post onta omp f the share -base d rem tion s chem a des cripti on of their key t text o unera es or erms , ll as f ull na of th ticipa nts in the s chem es. N otice shou ld als as we mes e par o spe c ify th e rela tions hip o f the sche and t he ov erall ion p olicy of th nerat mes remu e direc Draft lutio st ha clear refe to th e sch itself tors. or to reso n mu ve a rence eme the s f its k Share holde st als o be nted with info ey te umm ary o rms. rs mu prese r how the c ds to ide fo r the share uired mati any i nten to m eet on on omp prov s req its ob ligati nder chem es. It shou ld be clea rly st ated whet her t he incen tive s ons u ds to buy share he m arket , hold the s hares any i s in t in re or iss nten comp serve ue . The re sh ould also be a n sch -rela ted e he ses t new ones summ ary o eme xpen ill suff er du he an ted a pplic of th e sch All in for ticipa ation e to t comp any w eme. n this le mu st be ed on the c any's web mati on gi ven i artic site. post omp |
NO | ch pr e is b enfo rced in th e Com No su actic eing pany |
| Prin ciple he ro le of stak eho lder s in IX: T orat corp e go vern ance The fram rk sh ould gniz e th e rig hts o orat corp e go vern ance ewo reco nd s take hold g th alue , job d fin ies a ers i atin com pan n cre e co mpa ny v s an ers" incl udes inve ploy cred itors plier s, cli , loc al co stor ents s, em ees, , sup |
f sta keho lder al su anci unit mm |
blish ed b y law and ctive tion bet esta s as enc oura ge a co-o pera wee n abil or th es of this ciple , the keho ld stain ity. F Prin "sta cept e pu rpos con d ot her havi in in st in the ed. erta tere y an pers ons ng c com pany con cern |
| 9.1. T he co fram k sho uld a that the right s of te go rpora vern ance ewor ssure |
YES | The m nt bo dies of th e Com seek the right s of a ll in to e anag eme pany nsure |
| stake hold hat a ed by law cted ers t otect re pr are r espe he co fram k sho uld c cond s for the 9.2. T ition te go reate rpora vern ance ewor stake hold icipa te in in th cribe d ers to part rate g corpo overn ance e ma nner pres by la w. Ex les o f me chan of st akeh olde isms ticip ation in co te amp r par rpora clude loyee in ad n of c n key deci ce in icipa tion optio ertai part gove rnan : emp sions for t he co lting the loyee orate mpa ny; c onsu emp s on corp gove rnan ce and othe mplo the any's shar r imp t issu artic ipati on in ortan es; e yee p comp e al; cr edito lvem n the f the capit r invo ent i nce i 's cont ext o n gov erna com pany insol y, etc venc |
YES | t hol ders and, ssibl kes t heir opin ion in teres to an exte nt po e, ta to ac t. coun Inter est h older auth orise d to p artic ipate in th of th e Com ment s are e ma nage and in th of ta king the d levan he as this ecisio is pro t to t pany e pro cess ns re vided rding the of Lit huan epub lic an d wh en th Law ian R ticip ation acco e par of em ploye es he lps to mak e im nt Co ny's d ecisio porta mpa ns |
| Whe akeh olde n the 9.3. rticip ate i re st orate rs pa corp gov erna nce p roces s, they shou ld ha levan t info ion. to re rmat ve ac cess |
YES | Thes uirem lied w ith to the quire d by the l of ents exte nt re e req are c omp aws the R epub lic of Lith uani a. |
| Prin ciple form atio n dis closu d tra X: In re an nspa renc y The fram rk sh ould hat t ime ly an d ac orat ure t corp e go vern ance ewo ens clud ing t he fi cial situa tion form and of th nan , per ance gov erna nce e co 10.1 . The shou ld dis close info ion o rmat com pany n: • The fina ncial and ults o f the ratin ope g res com pany ; • Com obje ctive pany s; hold ing b y the righ t of o rship rol of a blo ck of shar • Per or in cont sons wne es in th e com pany ; mbe rs of the c any's d ma t bod hief e • Me rviso ies, c omp supe ry an nage men x ive o ffice r of t he co d the ir rem ation ecut mpa ny an uner ; l fore ble r isk fa • Ma teria ctors seea ; • Tran sacti ons b en th and ected ll as t etwe e com pany conn pers ons, as we rans nclud ed ou tside the e of t he co ny's r egul actio erati ns co cours mpa ar op ons; |
te d cura mpa ny. YES |
isclo is m ade ll ma teria l info tion ardi he c in ng t sure on a rma reg omp any, The C any d isclos es th e rele info ion, i n the blish ed m vant rmat esta omp anne r, to Lie s ban kas, V ilnius NAS DAQ OMX Vilni us St ock E xcha nd th e dai ly tuvo nge a "Kau no d iena" |
| • Ma teria l issu gard ing e mplo and othe r stak ehol ders; es re yees • Gov and s truct trate erna nce s ures gy. This list s houl d be deem ed as a mi nimu enda tion, whi le th m re comm e com ged o lim it the msel o dis closu re of the i nform pani not t ves t es ar e enc oura a ified tion in th is list spec . It is nded to th , wh ich is the nt of othe 10.2 reco mme e com pany pare r com |
YES | The c any k this princ iple. omp eeps |
| f the pani es, th nsoli date d res ults o who le gr o wh ich th at co oup t e com pany belo houl d be disc losed whe n inf ified of R tion in it em 1 ngs s orma spec ec |
ommendation 10.1 is under disclosure.
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 information 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. 10.4. It is recommended that information about the links between the company 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. 10.5. Information should be disclosed in such a way that neither shareholders nor investors are discriminated with regard to the manner or scope of access 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. 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 technologies should be employed for wider dissemination of information, for instance, by placing the information on the company's website. It is recommended that information should be published and placed on the company's website not only in Lithuanian, but also in English, and, whenever possible and necessary, in other languages as well. 10.7. It is recommended that the company's annual reports and other periodical 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. 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 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 auditors to the general shareholders' meeting. 11.3. It is recommended that the company should disclose to its shareholders the level of fees paid to the firm of auditors for non-audit services ren-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.
Company's board.
| NO | This is a p racti ce th doe loy. s not e com pany emp |
|---|---|
| YES | The C s the and e xped of th form ition e giv en in ation omp any e nsure accu racy |
| YES | The C plian ith th nt, th e inf equi tion omp any e nsure s com ce w ese r reme orma |
| ced i huan nd En glish is an n Lit ian a noun |
|
| YES | The C plian ith th equi nt. omp any e nsure s com ce w ese r reme |
| YES | The r datio n is b follo wed partl y, be inde pend ent fi eing ecom men caus e an rm of au ditor rts of the s is n ise in terim Com ot su perv repo pany |
| YES | The a udit d to the g al m g of share hold ers b y the rd is pro eetin Boa pose ener of th e Com pany |
|---|---|
| YES | The infor lly d isclo sed t o sha reho lders lable for t he mati on is , it is avai usua |
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 general shareholders' meeting.
Sincerely,
Managing Director, Gediminas Čeika
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